Wednesday, March 08, 2017

CAFC has interesting take on prejudgment interest in Comcast v. Sprint

Sprint lost a jury verdict of patent infringement and filed
for JMOL/new trial and lost the appeal thereof at the CAFC.

The district court
then denied Sprint’s motion for judgment as a matter of
law (JMOL), or in the alternative, for a new trial, and
added prejudgment interest to the damages award.
Sprint has appealed various rulings from the district
court. Because we see no error in these rulings, we affirm
the district court’s entry of judgment against Sprint.

Teva gets cited as to "claim construction":

The proper construction of a patent’s claims is an issue
of Federal Circuit law, and we apply the framework
set forth in Teva Pharmaceuticals USA, Inc. v. Sandoz,
Inc., __ U.S. __, __, 135 S. Ct. 831, 840–42 (2015). E.g.,
Power Integrations, Inc. v. Fairchild Semiconductor Int’l,
Inc., 843 F.3d 1315, 1326 (Fed. Cir. 2016). Under that
framework, intrinsic evidence and the ultimate construction
of claim terms are reviewed de novo, and underlying
factual determinations concerning extrinsic evidence are
reviewed for clear error. See id. “Where an infringement
verdict relies on incorrect construction of the disputed
claim terms, this court may grant JMOL or order a new
trial to correct the error, depending on the degree of
difference between the incorrect construction and the
correct construction.” Finisar Corp. v. DirecTV Grp., Inc.,
523 F.3d 1323, 1333 (Fed. Cir. 2008). “If no reasonable
jury could have found infringement under the proper
claim construction, this court may reverse a district
court’s denial of JMOL without remand.” Id. (

As to damages prior to issue of patent:

The district court rejected Sprint’s argument, observing
that “both sides’ experts opined that the reasonable
royalty should be a lump sum resulting from a single
hypothetical negotiation that took place in 2006” if Sprint
were found to infringe all three patents. Id. at 66 (citing
trial transcript). Based on that agreement, the district
court concluded that “[a] hypothetical negotiation in 2006
would include each of the asserted patents, even if they
issued later
, and the resulting negotiation would include
the fact that two of the patents issued later.” Id. (citing, Inc. v. Lansa, Inc., 594 F.3d 860, 872 (Fed.
Cir. 2010)). Moreover, because of the agreed-upon methodology
of using a lump sum award for infringement of all
of the patents, the district court noted the practical problem
of assessing prejudgment interest on a per patent
basis where the lump sum verdict did not apportion the
damages for each patent. See id.

The CAFC also rejected the argument of Sprint:

Sprint contends that the district court erroneously
charged Comcast prejudgment interest from 2006 forward
even though neither the ’008 Patent nor the ’046 Patent
had issued at that point. Appellant Br. at 57–64. Specifically,
because neither of those two patents had issued yet,
there could be no infringement as a matter of law for
them in 2006. In Sprint’s view, accordingly, the district
court’s award of prejudgment interest was an abuse of
discretion because the court should have calculated prejudgment
interest from the time of first infringement of
each of the three infringed patents until judgment. In
other words, Sprint contends the district court should
have apportioned the prejudgment interest calculations
based on the royalty periods covered by the individual
patents. See id. While in other contexts Sprint’s contentions
might be well taken, they are not here.

The parties’ experts agreed that any damage award
should take the form of a lump sum royalty payment.
And, the jury was told that the lump sum royalty payment
should run from the date of the earliest relevant
hypothetical negotiation.

The jury was also told that the hypothetical
negotiators would have employed the “book of wisdom,”
looking forward in time from the date of the first
hypothetical negotiation to account for “all information
that would have been relevant to the parties in coming to
and arriving at a deal.” Id. at 66; id. at 4594–95. Both
experts agreed that this information would have included
the issuance of any later patent relating to the same
technology. Id. at 4593–95; id. at 5002–03.

Prejudgment interest runs from the earliest date of
infringement for any patent issued at the time of the
hypothetical negotiation; here, the ’916 Patent indisputably
had been issued by 2006. We see no abuse of discretion
in the district court’s assessment of prejudgment
interest against Sprint based on the entire royalty award.
See Bio-Rad Labs., Inc. v. Nicolet Instrument Corp., 807
F.2d 964, 969 (Fed. Cir. 1986) (“[T]he purpose of prejudgment
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.’”
(quoting Gen. Motors Corp., 461 U.S. at 655)); cf.
Stickle v. Heublein, Inc., 716 F.2d 1550, 1561 n.8 (Fed.
Cir. 1983) (“Since the parties treated the mechanical and
process patents as a unitary licensing property, we need
not consider damages for infringement of each patent
individually. Under other circumstances it may well be
necessary to determine damages separately for each such
patent since a patent owner has every right to demand
royalties for each patent he holds.”).



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