United States District Court, D. Delaware
LIQWD, INC. and OLAPLEX LLC, Plaintiffs,
L'ORÉAL USA, INC., L'ORÉAL USA PRODUCTS, INC., L'ORÉAL USA S/D, INC., and REDKENS 5TH AVENUE, NYC, L.L.C., Defendant.
MEMORANDUM AND ORDER
F. Bataillon Senior United States District Judge
matter is before the Court on the following post-trial
1. Motion For Approval of Stay of Any Execution or
Enforcement of the Judgment by Bond, D.I. 1089,
filed by defendants;
2. Motion to Alter Judgment or Amend the August 20th Judgment
(D.I. 1078), D.I. 1093, filed by
3. Defendants' Renewed Motion for Judgment as a Matter of
Law Pursuant to Federal Rule of Civil Procedure
50(b), D.I. 1095;
4. Motion to Enhance Patent and Trade Secret Damages,
D.I. 1097, filed by plaintiffs;
5. Motion for new trial, D.I. 1098, filed by
6. Motion for Attorney Fees, D.I. 1101, filed by
7. Motion to Alter Judgment Defendants' Motion to Alter
or Amend the Judgment, D.I. 1102, filed by
8. Defendants' Motion for Trial on Their Unclean Hands
Defense, D.I. 1106, filed by defendants.
Court conducted a trial in this case. The jury issued a
verdict on August 12, 2019. D.I.'s 1059-1060. The Court
thereafter signed a Memorandum and Order denying
defendants' motions for a judgment as a matter of law
(JMOL), D.I. 1051 and 1055. D.I. 1064. The
Court also entered a permanent injunction. D.I.
1073. The Court then signed a memorandum and judgment.
D.I. 1078. On August 12, 2019, the jury returned a
verdict finding L'Oréal liable for willful trade
secret misappropriation, willful patent infringement, and
breach of contract. D.I. 1060. The verdict form
specified damages of $22, 265, 000 for the trade secret
claims and breach of contract claims, $21, 818, 000 for
infringement of U.S. Patent No. 9, 498, 419 and $24, 960, 000
for infringement of U.S. Patent No. 9, 668, 954. Id.
The jury rejected each of L'Oréal's patent
invalidity claims. Id. On August 20, 2019, the Court
entered a Memorandum and Judgment in favor of Plaintiffs
Olaplex LLC and Liqwd, Inc. (“Olaplex”) and
against L'Oréal USA for $49, 920, 000.00 (D.I.
Motion For Approval of Stay of Any Execution or
Enforcement of the Judgment by Bond, D.I. 1089,
filed by defendants.
requests that it be permitted to post a $60, 000, 000 bond
and to obtain a stay of any execution or enforcement of the
judgment, pending resolution to its post-trial motions herein
and its appeal. Federal Rule of Civil Procedure
62(b) provides that “[a]t any time after judgment
is entered, a party may obtain a stay by providing a bond or
other security. The stay takes effect when the court approves
the bond or other security and remains in effect for the time
specified in the bond or other security.”
L'Oréal USA has obtained a bond in the amount of
$60, 000, 000.00 with Liberty Mutual Insurance Company.
D.I. 1089, Ex. A. The amount of the bond includes
the amount of damages awarded in the Judgment, $49, 920,
000.00, plus an additional 20%, which is more than sufficient
to cover one year of interest using the interest rate set
forth in 28 U.S.C. § 1961. This interest rate
is 1.77%, based on the weekly average for the 1-year constant
maturity Treasury yield for the week ending August 16, 2019
(the calendar week preceding the August 20, 2019, Judgment).
do not oppose this motion. The Court will grant this motion.
Defendants' shall post the $60, 000, 000.00 bond and the
Court will stay any execution or enforcement of judgment.
Motion to Alter Judgment or Amend the August 20th
Judgment (D.I. 1078), D.I. 1093, filed by
Rule of Civil Procedure 59(e) permits a party to move
“to alter or amend a judgment.” Fed. R. Civ.
P. 59(e). Such a motion “must rely on one of three
major grounds: (1) an intervening change in controlling law;
(2) the availability of new evidence not available
previously; or (3) the need to correct clear error of law or
prevent manifest injustice.” Evonik Degussa GmbH v.
Materia, Inc., 305 F.Supp.3d 563, 575 (D. Del. 2018)
ask this Court to amend the August 20, 2019 judgment,
D.I. 1078, against the defendants. In particular,
the plaintiffs ask the Court to amend its August
20thJudgment to recognize the jury's full
damages award, $22, 265, 000 for the trade secrets claims.
Further, plaintiffs contend that the reducing the damages is
neither procedurally nor substantively proper.
agree that the overlapping portion of the two patent
infringement awards are duplicative within the same period of
time. The plaintiffs also agree that the Court appropriately
treated the breach of contract as coextensive with damages
for misappropriation of trade secrets. However, plaintiffs
argue that the Court treated the trade secret
misappropriation as subsumed by the patent damages, and the
Court also overruled the jury's trade secret award by
57%. The Court erred, argues plaintiffs, when it prorated the
trade secret damages by dividing $22, 265, 00 by the number
of days in the twenty-month period x 9 months. This
calculation, contends plaintiffs, reduced the jury's $22,
265, 000 trade secret award to $9, 499, 732.48.
also contend that the Court should amend this judgment to
correctly calculate non-duplicative compensatory recover for
the claims. Plaintiffs argue that the total non-duplicative
compensatory damages are $37, 410, 000, and the Court should
eliminate overlapping time periods of damages but should
allow non-duplicative damages representing unique periods of
time not subsumed into each other be allowed. In addition,
argue the plaintiffs, the defendants failed to move for JMOL
regarding the trade secret damages. Second, when long after
trial the defendants did move for JMOL, plaintiffs contend
they did not do so on the two-player market, thus not arguing
that trade secrets are limited to a period before
publication. Delaware courts have adopted this approach to
the “head-start” doctrine. See, e.g.,
Agilent Techs., Inc. v. Kirkland, 2010 WL 610725, at
*26 & n.230 (Del. Ch. Feb. 18, 2010).
regard to the amount of damages, plaintiffs contend that
under a chronological approach, plaintiffs are entitled to
$97, 085, 000. D.I. 1094 at 14-16. Under the award
size approach, plaintiffs contend they are entitled to $87,
270, 000. Id. at 15-18.
plaintiffs request that the Court amend the judgment so as to
include both prejudgment and post-judgment interest. Under 35
U.S.C. § 284, “[u]pon finding for the claimant the
court shall award the claimant damages adequate to compensate
for the infringement, . . . together with interest . .
.” (emphasis added). For patent infringement,
“prejudgment interest should ordinarily be
awarded.” Gen. Motors Corp. v. Devex Corp.,
461 U.S. 648, 655 (1983); accord Comcast IP Holdings I
LLC v. Sprint Comms. Co., L.P., 850 F.3d 1302, 1313
(Fed. Cir. 2017). “Delaware courts award
prejudgment interest as a matter of right.” Beard
Research, Inc. v. Kates, 8 A.3d 573, 620 (Del. Ch. 2010)
(awarding pre-judgment interest on recovery for trade secret
purpose of pre-judgment interest is “to ensure that the
patent owner is placed in as good a position as he would have
been had the infringer entered into a reasonable royalty
agreement.” Gen. Motors Corp. v. Devex Corp.,
461 U.S. 648, 655 (1983). In a patent case,
“[g]enerally, the interest rate should be fixed as of
the date of infringement, with interest then being awarded
from that date to the date [the judgment is actually
paid.]” Exmark Mfg. Co. Inc. v. Briggs &
Stratton Power Prod. Grp., LLC, No. 8:10CV187, 2016 WL
6246590, at *2 (D. Neb. May 11, 2016).
interest may be permitted on attorneys' fees where the
court determines there is bad faith or other exceptional
circumstances. Mathis v. Spears, 857 F.2d 749, 761
(Fed.Cir.1988) (quoting General Motors Corp. v. Devex
Corp., 461 U.S. 648, 653, 103 S.Ct. 2058, 2061, 76
L.Ed.2d 211 (1983)). The District Court has an inherent
equitable power to determine the appropriateness of an award
under those circumstances. Id.; Water Tech.
Corp. v. Calco Ltd., 714 F.Supp. 899, 909-910 (N.D. Ill.
1989). “Since the defendants' willful infringement
made it necessary for the plaintiffs to bring this suit, an
award of prejudgment interest is proper to fully compensate
the plaintiffs for the expenses they incurred during
litigation.” Id. at 910. As stated in
The plaintiff also seeks prejudgment interest on the portion
of its requested attorneys' fees and costs that has
already been expended. The amount of such interest is
calculated by the plaintiff to be $679, 004. The Court,
however, declines to grant such prejudgment interest on the
attorneys' fees and costs. An award of attorney's
fees and costs under section 285 is not compensatory, but
rather is punitive in nature. Granting such an award is a
“fee shifting sanction” imposed in exceptional
circumstances. See, e.g., L.E.A. Dynatech, Inc. v.
Allina, 49 F.3d 1527, 1533-34 (Fed.Cir.1995) (Judge
Schall, concurring in part and dissenting in part). Because
pre-judgment interest is only to be awarded on the
compensatory portion of a damage award, Beatrice
Foods, 923 F.2d at 1580, in the Court's view, it is
improper to grant prejudgment interest on any portion of the
plaintiff's attorneys' fees and costs.
Stryker Corp. v. Intermedics Orthopedics, Inc., 898
F.Supp. 116, 123 (E.D.N.Y. 1995).
Court has discretion when determining how pre-judgment
interest should be awarded. While the Court finds the award
of pre-judgment interest on the compensatory damages is
appropriate in this case, the Court finds that pre-judgment
interest in this case on the attorneys' fee award is
unnecessary. The pre-judgment interest award is to make the
patent owner whole. General Motors Corp. v. Devex
Corp., 461 U.S. 648, 655-56 (1983). However, the purpose
of pre-judgment interest is to compensate and make whole the
patent holder, not to punish the infringer. In this case, the
Court believes the combination of the jury verdict, the
enhanced awards and the finding of willfulness, and the award
of attorney fees fully compensates and makes whole the patent
holder. Accordingly, the Court determines that there is no
need to further award pre-judgment interest on the
§ 284 absent some justification for withholding such an
award”). For trade secret and contract damages
plaintiffs ask the Court to amend the judgment and give the
jury's full damages in the amount of $22, 265, 000 for
the trade secret claims. Further, plaintiffs request a rate
of 5.25 % compounded quarterly from the beginning of the
damages period. Further, plaintiffs indicate that the Court
should specify in its amended judgment that Olaplex is also
entitled to this pre-judgment interest on any award of
attorneys' fees, to ensure that Olaplex is fully
compensated for the money it had to spend prosecuting this
action. See, e.g., Regeneron Pharmas., Inc. v.
Merus N.V., 2018 WL 3425013, at *7 (S.D.N.Y. June 25,
2018) (awarding pre-judgment interest on attorneys' fee
award because doing so was “necessary to make [the
prevailing party] whole, as [it] lost capital in defense of
this litigation”); Norwest Fin., Inc. v.
Fernandez, 121 F.Supp.2d 258, 263 (S.D.N.Y. 2000)
(approving costs for business-class airfare and “first
class” but not “luxurious” hotels); Ply
Gem Indus., Inc. v. Argonaut Ins. Co., No. 87-cv-7327,
1988 WL 132911, at *2 (S.D.N.Y. Dec. 6, 1988) (“Air
fare may be business class or equivalent....”).
interest pursuant to 28 U.S.C. § 1961 is mandatory.
In re USN Comms., Inc., 280 B.R. 573, 602 (Bankr. D.
Del. 2002). “‘Any judgment' in
Section 1961 includes a judgment awarding attorney
fees.” Mathis v. Spears, 857 F.2d 749, 760
(Fed. Cir. 1988). Courts in this district apply the prime
rate in patent cases absent a reason to do otherwise.
See, e.g., Godo Kaisha IP Bridge 1 v. TCL Comm.
Tech. Holdings Ltd., 2019 WL 1877189, at *5 (D. Del.
April 26, 2019); Hologic, Inc. v. Minerva
Surgical, Inc., 2019 WL 1958020, at *10 (D. Del. May 2,
2019) (“The Court agrees with Hologic and finds
prejudgment interest at the prime rate, compounded quarterly,
from and after August of 2015 to the date of judgment is
appropriate (D.I. 536, Declaration of Christopher C.
Barry at 8-10; Schedule D).”) “[I]t is not
necessary that a patentee demonstrate that it borrowed at the
prime rate in order to be entitled to prejudgment interest at
that rate.” Uniroyal, Inc. v. Rudkin-Wiley
Corp., 939 F.2d 1540, 1545 (Fed.Cir.1991) (citation
conclusion, plaintiffs ask this court to grant its motion to
amend and permit $97, 085, 00 in damages plus pre- and
disagree on all issues requested by plaintiffs. Defendants
argue that plaintiffs are attempting to shift their
lost-profit damages to its trade secret claim, based on the
wrong period of head-start months, and the duplicative
damages. Defendants contend the verdict on damages must be
thrown out and defendants must be granted JMOL on at least
head-start damages or remit the verdict to the maximum
royalty rate as is supported by the evidence.
increased damages, defendants argue that while a court may
reduce an excessive jury award. Gasperini v. Ctr. for
Humanities, Inc., 518 U.S. 415, 433 (1996), the
Constitution “forb[ids] the court to increase the
amount of damages awarded by a jury in actions such as
th[is].” Dimick v. Schiedt, 293 U.S. 474, 482
(1935). Defendants also contend that the 7th
Amendment bars the Court from making its own findings on
issues of fact, particularly on materials not admitted into
trial as evidence. In re Lower Lake Erie Iron Ore
Antitrust Litig., 998 F.2d 1144, 1183 (3d Cir.
1993); see also McLaughlin v. Fellows Gear
Shaper Co., 786 F.2d 592, 596 (3d Cir. 1986)
(“[F]acts as found by the jury cannot be redetermined
by a court”). Further, defendants argue that the court
was correct in subsuming trade secret damages into patent
damages. Additionally, the defendants argue plaintiffs are
not entitled to prejudgment interest, arguing it would be
inequitable to do so. Prejudgment interest is only
appropriate where “the underlying liability is
reasonably capable of ascertainment . . . where liability and
the amount of damages are fairly certain.” Anthuis
v. Colt Indus. Operating Corp., 971 F.2d 999, 1010 (3d
Cir. 1992) (citation omitted). Further, argues defendants,
prejudgment interest must be at the Treasury Bill rate which
is currently 1.58% - rather than the prime rate. “In
federal question cases, the rate of prejudgment interest is
committed to the discretion of the district court.”
Sun Ship, Inc. v. Matson Navigation Co., 785 F.2d
59, 63 (3d Cir. 1986); see also Montgomery Cellular Hldg.
Co. v. Dobler, 880 A.2d 206, 226 (Del. 2005) (same).
“The Court may be guided by the rate set out in 28
U.S.C. § 1961, ” i.e., the T-Bill rate. Sun
Ship, 785 F.2d at 63.
the defendants urge this Court to deny plaintiffs' motion
to alter or amend the judgment.
on the arguments of the plaintiffs, the Court agrees that
there was plenty of evidence at trial to support the period
of secrecy plus a period of time during the misappropriation.
The Court is of the opinion that the damages calculations
made by this Court are an accurate assessment of the damages
found by the jury, less duplicative recovery. For the reasons
stated in its previous Memorandum and Order, D.I.
1078, the Court determines that the damages assessment
is accurate and complete. The Court does not believe it
“subsumed” the damages into one category. On the
contrary, the Court carefully calculated the dates that
overlapping occurred and subtracted those amounts.
Accordingly, the Court will deny plaintiffs' motion to
alter or amend.
regard to the interest issues, the Court rules as follows.
Plaintiff is entitled to prejudgment issue at a rate to be
determined by the district court. Sun Ship, 785 F.2d
at 63. The Court will allow it to accrue at the prime rate as
determined in the Hologic case. Sun Ship, 785
F.2d at 63. In addition, the Court finds that in order
to make plaintiffs whole, they will be permitted to collect
this same interest on their attorneys' fees.
regard to the post-judgment interest, plaintiffs are entitled
to this recovery as a matter of law. 28 U.S.C. § 1961.
The Court will order that this interest be at the prime rate.
See, e.g., Godo Kaisha IP Bridge 1 v. TCL Comm.
Tech. Holdings Ltd., 2019 WL 1877189, at *5 (D. Del.
April 26, 2019); Hologic, Inc. v. Minerva Surgical,
Inc., 2019 WL 1958020, at *10 (D. Del. May 2, 2019).
Motion Defendants' Renewed Motion for Judgment as a
Matter of Law Pursuant to Federal Rule of Civil Procedure
50(b)], D.I. 1095, filed by defendants.
renew their motion for judgment as a matter of law pursuant
to Fed. R. Civ. P. 50(b) for judgment as a matter of
law concerning damages, willful patent infringement, trade
secret misappropriation, willful and malicious trade secret
misappropriation, breach of contract, and patent invalidity.
The Court has carefully reviewed the briefs and arguments by
counsel. The Court will deny the motion. The Court will
uphold the jury verdict in this case, the record made by the
Court at trial, and on the memorandum and orders by the Court
on these issues, and the Court does not find grounds for a
JMOL on any of the issues set forth by the defendants.
Motion to Enhance Patent and Trade Secret Damages, D.I.
1097, filed by plaintiffs.
move to support the Court's findings that enhancement of
the patent and trade secret damages are appropriate in this
case. Plaintiffs want to confirm the exemplary damage awards
set forth in the August 20, 2019 Memorandum and Judgment
(D.I. 1078), awarding an aggregate two times
enhancement of patent damages and three times enhancement of
trade secret damages.
Court instructed the jury regarding willful and exemplary
damages, and the jury found the plaintiffs' patents valid
and found willful infringement by the defendants. D.I.
1060. The jury also found that defendants willfully
misappropriated plaintiffs' trade secrets. Id.
The jury's verdict awarded Olaplex $22, 265, 000 in
damages for trade secret misappropriation, $21, 810, 000 in
damages for infringement of the '419 Patent, and $24,
960, 000 in damages for infringement of the '954 Patent.
The Court awarded exemplary damages in the amount of twice
the award in the verdict (so two times plus the exemplary).
D.I. 1078 at 3-4. The Court also awarded damages of
one time the verdict for exemplary damages thus ordering an
additional $24, 960.000.
contend that the Court's ruling on these damages was
premature. D.I. 1103 at 2-7. Defendants also contend
that the amount already rewarded - $24.96 million - is
greatly inflated, particularly since the Court found that the
“lost profits” damages were skinny. Modi Decl.,
Ex. A at 1277:13-19. Defendants argue that the plaintiffs
would have received even less under a reasonable royalty