Chamberlain Grp., Inc. v. Techtronic Indus. Co.
Chamberlain Grp., Inc. v. Techtronic Indus. Co.
Opinion of the Court
Plaintiff Chamberlain Group, Inc. ("Chamberlain") won a jury verdict against Defendants Techtronic Industries Co., Ltd., Techtronic Industries North America, Inc., One World Technologies, Inc., *986OWT Industries, Inc., Et Technology (WUXI) Co. Ltd., and Ryobi Technologies (collectively, "TTI"), in which the jury found that TTI willfully infringed two of Chamberlain's patents, U.S. Patent Nos. 7,224,275 ("the '275 patent") and 7,635,966 ("the '966 patent"). Both parties have filed post-trial motions. This opinion presumes familiarity with the case's background, as described in this Court's previous rulings. (See, e.g. , Dkt. 104 (preliminary injunction opinion); Chamberlain Grp., Inc. v. Techtronic Indus. Co., No.
I. TTI's Renewed Motion for Judgment as a Matter of Law
The Court "should render judgment as a matter of law when a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Reeves v. Sanderson Plumbing Prods.,
In its renewed Motion for JMOL, TTI argues it is entitled to judgment because: (1) the asserted '275 patent claims are directed to ineligible subject matter under Alice Corp. Pty. v. CLS Bank Int'l, --- U.S. ----,
A. Ineligibility of Asserted '275 Patent Claims
Anyone who "invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof" may obtain a patent.
To begin the Alice analysis, the court must "articulate what the claims are directed to with enough specificity to ensure the step one inquiry is meaningful."
Here, TTI claims that wireless transmission of content is an abstract idea, and that the asserted '275 patent claims are directed to nothing more. First off, the cases TTI cites in support of this proposition do not hold that wireless transmission is an abstract idea. Affinity Labs of Tex., LLC v. DIRECTV, LLC,
"The Supreme Court has not established a definitive rule to determine what constitutes an 'abstract idea' sufficient to satisfy the first step of the [ Alice ] inquiry," and as such the appropriate analysis "compare[s] claims at issue to those claims already found to be directed to an abstract idea in previous cases."
*988Enfish, LLC v. Microsoft Corp.,
Chamberlain, of course, argues the '275 patent claims are not directed to abstract ideas as in the cases above and should pass muster under § 101. In doing so, Chamberlain relies in large part on Chamberlain Group, Inc. v. Linear LLC,
Both of these rationales have met with disagreement, however. First, another court in this district observed that Linear did not benefit from the guidance of the Federal Circuit's later decision in Vehicle Intelligence & Safety LLC v. Mercedes-Benz USA, LLC,
Neither of these critiques compels the Court to find patent-ineligible subject matter, however. The Vehicle Intelligence decision does not cite Linear nor express any opinion on it. And TTI itself points out that Linear "involved a different Chamberlain patent...that solved a different problem and recited limitations different from those in the claims asserted here." (TTI's Reply in Supp. of Summary Judgment at 1, Dkt. 546.) Unlike Joao's characterization of the claims in Linear, the *989claims asserted here are not directed to an abstract idea that merely happens to make use of physical equipment. And as for the Chargepoint critique, the technological improvements of the asserted '275 patent claims are not limited to the introduction of network connectivity. Rather, the asserted '275 claims are directed to a particular improvement over prior art which uses a particular manner of sending and experiencing data. This particularity distinction matters. In Core Wireless, the Federal Circuit affirmed the district court's patent-eligibility finding for claims directed to "an improved user interface for computing devices."
Thus, the Federal Circuit's case law suggests that particular and unconventional improvements to prior art are § 101-eligible. Such guideposts protect against overbroad patents preempting "the use of the underlying [abstract] ideas." See, Alice,
Chamberlain's '256 patent claims recite such particular and unconventional improvements. The moveable barrier operator ("MBO," often used interchangeably in the briefing with garage door opener, or "GDO") taught by the '275 patent does not merely receive transmissions, as did MBOs in the prior art; instead, Chamberlain's MBO experiences-via an onboard controller-status conditions and then transmits them to other devices. This improvement eliminated the need for a "physical interface...to support numerous potentially utilized peripheral devices," thus cutting out "undesired additional cost when part of the [otherwise, necessarily installed] interface goes unused in a given installation." ( '275 Patent 1:55-63, Dkt. 1-2).) In addition, the improvements taught by the '275 patent brought new compatibility to the MBO; the prior art, by contrast, "fail[ed] to permit compatible support of a given peripheral," and precluded users from coupling *990their prior-art MBO with a new function "not specifically supported by a given [MBO]." (Id. at 2:4-16.)
Thus, contrary to TTI's assertions, the '275 patent claims are unlike the ones in Vehicle Intelligence, which merely specified the abstract idea of testing operators of moving equipment for impairment and indicated that such testing could be conducted more quickly, accurately, and reliably by using an "expert system" that the claims failed to define. Vehicle Intelligence,
The asserted claims are directed to patent-eligible subject matter under § 101, so the Alice analysis ends before we reach step two. Elec. Power Grp., LLC v. Alstom S.A.,
B. Invalidity of the '275 Patent
1. Anticipation
Under
These claims recite:
1. A movable barrier operator comprising:
a controller having a plurality of potential operational status conditions defined, at least in part, by a plurality of operating states;
a movable barrier interface that is operably coupled to the controller;
a wireless status condition data transmitter that is operably coupled to the controller, wherein the wireless status condition data transmitter transmits a status condition signal that: corresponds to a present operational status condition defined, at least in part, by at least two operating states from the plurality of operating states; and
comprises an identifier that is at least relatively unique to the movable barrier operator, such that the status condition signal substantially uniquely identifies the movable barrier operator.
5. The movable barrier operator of claim 1 wherein the plurality of operating states includes at least one of:
moving a movable barrier in a first direction;
moving the movable barrier in a second direction;
*991reversing movement of the movable barrier;
halting movement of the movable barrier;
detecting a likely presence of an obstacle to movement of the movable barrier;
detecting a likely proximal presence of a human;
receiving a wireless remote control signal;
receiving a wireline remote control signal;
receiving a learning mode initiation signal;
a lighting status change;
a vacation mode status change; detecting a likely proximal presence of a vehicle;
detecting the identification of a proximal vehicle; and
receiving an operating parameter alteration signal.
15. The method of claim 14 wherein detecting at least one predetermined condition includes detecting at least one of:
moving a movable barrier in a first direction;
moving the movable barrier in a second direction
reversing movement of the movable barrier;
halting movement of the movable barrier;
detecting a likely presence of an obstacle to movement of the movable barrier;
detecting a likely proximal presence of a human;
receiving a wireless remote control signal;
receiving a wireline remote control signal;
receiving a learning mode initiation signal;
a lighting status change;
a vacation mode status change;
detecting a likely proximal presence of a vehicle; and
receiving an operating parameter alternation signal.
( '275 Patent 8:5-21, 8:30-46, 9:39-55, Dkt. 1-2.) Claim 1 identifies a movable barrier operator comprising both a controller and a transmitter. (Id. at 8:5-21.) But TTI did not present any evidence that the Menard GDO 1000-as opposed to an add-on module to that GDO-contained a controller or wireless transmitter. Indeed, Chamberlain's technical expert, Dr. Rhyne, presented evidence showing that the Menard GDO 1000 and the system 10000 (the aforementioned module) each have their own, separate controllers and power supplies. (Id. 1297:16-1299:8.) In response to this, TTI emphasizes that the Chamberlain claims do not require the controller to be housed in the GDO's head unit. (See, Chamberlain's Resp. to JMOL Mot. at 9, Dkt. 651 (Chamberlain admitting its asserted claims do not require "the controller, the movable barrier interface, and the wireless status condition transmitter to be located in a single housing.").) But Chamberlain explains that the key limitation in its claims is not whether the controller and transmitter share a housing, but instead whether they are part of the GDO at all, instead of-as in Menard's system 10000-part of a separate module that can send signals to the GDO. Chamberlain presented evidence of this distinction through Dr. Rhyne's testimony:
A: [T]he...Menard module...has a separate module that you add on top of the garage door and, as a result, the controller in the module is what sends out the state signal, not the controller in the GDO.
...
*992Q: Dr. Rhyne, you were asked a couple questions about whether the Menard module, that modular system we discussed, system 10000, can send control signals to the GDO 1000. In your opinion, is that-does that make the module in Menard a movable barrier operator under the Court's constructions?
A: No. It's not the movable barrier operator in Figure 37. That movable barrier operator is the GDO 1000 down in the bottom. The top guy is not a movable barrier operator.
Q: And can a smartphone also send control signals to open and close a door on a garage door opener?
A: Yes.
Q: And is a smartphone a movable barrier operator?
A: Not in that sense, no, any more than the pushbutton switch, the 6500 is a movable barrier operator.
(Rhyne Tr. 1310:18-21, 1374:9-22.) This is substantial evidence that Chamberlain's asserted claim 1 claims limitations not present in the prior art, so JMOL is not appropriate as to TTI's anticipation argument as to claim 1.
As for claims 5 and 15, Chamberlain contends that JMOL is not appropriate because both claims recite a limitation that is not disclosed in the Menard prior art. Specifically, claim 5 depends from claim 1's recitation of "a controller having a plurality of potential operational status conditions defined, at least in part, by a plurality of operating states," and claim 15 depends from claim 14's recitation of "a movable barrier operator detecting at least one predetermined condition as corresponds to a present operational status defined, at least in part, by at least two operating states[.]" (See, Rhyne Tr. 1309:21-22; Foley Tr. 871:5-8 (both citations describing dependent relationships of claims).) In contrast, the Menard prior art does not explain how its signals are defined:
Q. Do [Dr. Foley's slides concerning the Menard prior art] show a condition defined by a plurality of states as claimed?
A. They show things that the Menard module can report like whether the door is open, closed, or partially closing, freezing, normal, overheating on the temperature of the unit, but it doesn't-there's no disclosure of how those things are defined, and there are other ways to do it than having states that would define those conditions.
Q. Can you provide us one example?
A. A good one would be door position. You can report the number of times the motor has turned, so the rotations. And every rotation incrementally pulls the door up or, if it's going the other way, it lets it down a little bit. And then you can leave it up to the receiver at the other end to decide how many rotations is it going to take to get the door open, how many is it going to take to get the door to close. And if it sees the rotations coming at a different speed, it knows that it's partially closing. Those are not reporting specific states in the message itself.
(Rhyne Tr. 1307:16-1308:9.) Simply put, the jury heard substantial evidence that while the Menard PCT status conditions could be defined in a number of ways, Chamberlain's '275 claims limit its status conditions to one type of definition. Because that limitation appears only in the asserted claims, the Menard prior art does not anticipate them. See, Liebel-Flarsheim Co.,
2. Obviousness
TTI also contends that the Cohen prior art renders the asserted claims obvious. Under
TTI contends that a person of ordinary skill in the art would have been motivated to combine the Menard PCT door-position prior art discussed earlier with the Cohen prior art, which TTI maintains teaches the signal format recited in the '275 patent. But at trial, Chamberlain presented evidence showing that the Cohen prior art does not claim sending status conditions defined by two or more states. (Rhyne Tr. 1312:3-9 ("All [the Cohen reference] does is it talks about a state signal that indicates in a way that is not described that the door is opening, closing, opening, or closing. And as I said, there are certainly ways to do it that doesn't involve sending a state-a status condition signal that gives you two states as, for example, that rotational information as an alternative.").) Further, Dr. Rhyne explained that just like the Menard prior art, the Cohen reference teaches an add-on modular device, meaning that once again a controller in the module sends out the signal-not the controller in the GDO itself. (Rhyne Tr. 1310:11-21.) Because, according to Dr. Rhyne's testimony, this combination does not teach the limitations of the '275 patent claims, the jury heard substantial evidence supporting a finding of nonobviousness. See, Hearing Components, Inc. v. Shure Inc.,
C. Literal Infringement of the '275 Patent
This argument is nothing new. TTI moved for pre-trial summary judgment of non-infringement of the '275 patent, and the Court denied that motion. (June 21, 2017, Order, Dkt. 397.) TTI posits once more that the Ryobi signal does not "correspond[ ] to a present operational status condition defined, at least in part, by at least two from the two or more operational conditions being experienced by the controller," as recited in claims 1 and 24. Chamberlain,
Claim 1 recites a transmitter that transmits "a status condition signal that: corresponds to a present operational status condition defined, at least in part, by at least two operating states from the plurality of operating states..." ( '275 Patent 8:13-17, Dkt. 1-2.) At trial, Chamberlain's evidence demonstrated that the Ryobi GDOs (both the GD200 and the revised, GD200A) do exactly that. Dr. Rhyne explained that in both versions of the Ryobi GDO, the device "send[s] a signal corresponding to a present operational status condition." (Rhyne Tr. 288:4-5.) Such a signal (for example, "light on") is defined both by the status condition it carries and the potential, but not present, condition(s) it necessarily precludes (in this example, "light off"). (See, June 21, 2017, Order at 4, Dkt. 397 (indicating that Court's Markman order did not limit the operational conditions that are "experienced by the controller and capable of defining its operational status condition(s)" to only potential or to only present status conditions).) Dr. Rhyne explained as much to the jury:
[N]otice this light state [in the Ryobi electronic system architecture and design specifications]. This is the status condition on the light, and it's got two states. Remember, we had to have a plurality of states, two or more: Off and on. This is the status condition for the door. It's got five states: Closed, open, closing, opening, or a fault....[Y]ou can see here are those five states that are available. So I've got a status for the door defined by five possible states, the same words [as in the '275 patent ].
(Rhyne Tr. 275:15-20, 277:14-17.) Chamberlain presented the jury with substantial evidence that accorded with the Court's claim constructions showing that the device taught by the '275 patent and the Ryobi GDOs send signals defined in the same way. A reasonable jury hearing this testimony could find literal infringement, so the Court will not grant TTI's JMOL and vacate that finding.
D. Doctrine of Equivalents Infringement of the '275 Patent
"The doctrine of equivalents allows the patentee to claim those insubstantial alterations that were not captured in drafting the original patent claim but which could be created through trivial changes." AquaTex Indus., Inc. v. Techniche Sols.,
1. Prosecution History Estoppel
We have seen TTI's first argument before, in rebuttal to Chamberlain's pretrial motion to enforce the Court's preliminary injunction. (Dkt. 228 at 10-11.) Once more, the argument runs like this: Under Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,
In the relevant amendment and remarks, the Applicant traversed Doyle by citing to Figure 2 of the Doyle and its associated text, which disclose a mercury switch oriented within a radio frequency ("RF") transmitter where the mercury bead only causes transmission of the RF signal when the garage door is in an intermediate position . The Application contrasted this facet of Doyle, in which the transmitted RF signal is keyed to a single position or state of Doyle's garage door , with its amended claims, which "require a wireless status condition data transmitter to transmit a status condition signal that corresponds to a present operational status condition defined, at least in part, by at least two operating states from the plurality of operating states."
Chamberlain,
The problem with TTI's argument is that even if Chamberlain's prosecution amendments narrowed the '275 patent, TTI's Ryobi GD200A does not fall "between the broader and the narrower language." Festo,
Q: So I asked you this question [in your deposition], Dr. Rhyne. "So if we're talking about the present operational status condition," present operational status condition, "of the door, at any point in time, it is only defined by one of the states that the door can be in, correct?" And you asked me, "One of the operating states?" I said, "Correct." And your answer was, "Yes," correct?
A: I interpreted what you asked me to mean as I did the previous one, what's in that transmitted status condition that's sent out by the data transmitter. There's always only one in the message. There's not two.
Q: That's right, because the signal is defined by the one state that the door can be in, as your answer said here, correct?
A: When you transmit the present operational status condition, you transmit only one of the states.
Q: And that's what defines that signal, correct?
*996A. At that time, you send out that one.
(Rhyne Tr. 354:4-22.) As Dr. Rhyne's clarification makes clear, he did not opine that the Ryobi devices operated based on status conditions defined at a given time by only one state; rather, Dr. Rhyne simply described the signal format of the GD200A device, which sends several discrete pings of data seriatim rather than sending a single batch, as does the pre-revision GD200. To the extent Chamberlain narrowed its claims during prosecution, TTI has not shown that its Ryobi GDOs fall between the broader and narrower language. See, Festo,
2. Substantial Evidence of Equivalents
Next, TTI argues that Chamberlain failed to present the jury with substantial evidence on the doctrine of equivalents theory. Such evidence must establish "equivalency on a limitation-by-limitation basis by particularized testimony and linking argument as to the insubstantiality of the differences between the claimed invention and the accused device or process." Akzo Nobel Coatings, Inc. v. Dow Chem. Co.,
Here, TTI argues that Chamberlain failed generally to provide evidence showing equivalents for claims 5 and 14 and failed specifically to provide equivalency evidence of the unique identifier limitation required in claims 1 and 14. These assertions do not accurately describe the evidence presented as trial. Dr. Rhyne clearly articulated the basis for his belief concerning equivalency for claim 1. (Rhyne Tr. 267:16-296:9 (concluding with "[w]e have [now discussed every element of claim 1], and I've explained why in my opinion each and every element is met either literally under the way I think the claim ought to be interpreted or under the doctrine of equivalents under the way TTI thinks it should be interpreted.").) Claim 5 incorporates all of the limitations of claim 1, which Dr. Rhyne explained at trial: "[Claim 5] basically is what's called a dependent claim. So it starts out by saying 'the movable barrier operator of Claim 1.' So to infringe claim 5, you've got to meet all the limitations of claim 1." (Rhyne Tr. 296:13-16.) At trial, then, Chamberlain needed to present evidence of infringement under the doctrine of equivalents for all limitations of claim 1-which, as discussed, it did-as well as for the limitation unique to claim 5. That remaining limitation concerns the '275 patent's reliance on a "plurality of operating states [that] includes at least one of" any of the fourteen listed states, including, for example, "moving a movable barrier in a first direction; moving the movable barrier in a second direction;...halting movement of the movable barrier;...receiving a wireless remote control signal;...[and] a lighting status change." ( '275 Patent 8:30-36, Dkt. 1-2.) There was no shortage of evidence at trial concerning the Ryobi GDO's equivalent use of a "plurality of operating states." (See, e.g., Rhyne Tr. 275:15-20 (reciting operating states in Ryobi GDO, including light states and door position states), 354:4-22 (discussing plurality of operating states in Ryobi GDO).)
As to claim 14: Dr. Rhyne testified that claim 15 depends from claim 14. He also testified that the Ryobi devices infringe on all of the elements in claim 14, including the two elements that do not also appear in claim 1. (Rhyne Tr. 298:23-299:24.)
*997TTI's final argument-that Chamberlain failed to present evidence concerning the unique identifier limitation required in claims 1 and 14-similarly ignores testimony and thus fails. (Rhyne Tr. 294:15-295:3 (explaining the unique identifier recited in claim 1 and describing a similar unique identifier employed by the Ryobi devices).) In sum, TTI's characterizations of the evidence produced at trial are not accurate. Through Dr. Rhyne, Chamberlain produced substantial evidence in support of its doctrine of equivalents theory on a limitation-by-limitation basis. See, Akzo Nobel,
E. TTI Induces Infringement of the '275 Patent
TTI has no argument here. "Inducement can be found where there is '[e]vidence of active steps taken to encourage direct infringement,' which can in turn be found in 'advertising an infringing use or instructing how to engage in an infringing use.' " Takeda Pharm. U.S.A., Inc. v. W.-Ward Pharm. Corp.,
F. Willful Infringement of the '275 Patent
The Court will not overturn the jury's finding that TTI willfully infringed the '275 patent. As set forth in greater detail below, the jury heard evidence that TTI knew before it developed the Ryobi GD200 that: (1) Chamberlain had a broad GDO-related patent portfolio, (2) as such, development in the GDO space would be hazardous, and (3) the '275 patent existed and covered Chamberlain's GDO. (See, infra at Part IV.) TTI's repeated assertion that its engineers who deconstructed the Chamberlain GDO "did not see" the '275 patent marking on the device is at this point feckless. (Mem. in Supp. of JMOL at 26, Dkt. 618.) The jury heard this, too, and apparently found it incredible or at least not exculpating in light of the many other ways TTI was put on notice of the '275 patent and the general dangers of possibly treading on Chamberlain's GDO IP. (See, infra at Part IV.) TTI's JMOL Motion is denied as to the jury's willfulness determination.
G. Invalidity of '966 Patent Based on Prior Art
1. Craftsman Prior Art-Anticipation
At trial, the parties' experts debated whether a Craftsman GDO in prior art anticipated the '966 patent. Through related testimony, the jury heard substantial evidence of a limitation recited by the '966 claims that is not disclosed by the Craftsman prior art.
Claim 9 recites:
9. A battery charging apparatus, comprising:
a battery charging station in electrical communication with a rechargeable battery *998and in electrical communication with a head unit of a barrier movement operator for supplying power to at least one rechargeable battery, the at least one rechargeable battery being removably connectable to electrically powered equipment other than and physically separate or separable from the barrier movement operator to provide power to the electrically powered equipment; and
circuitry electrically connected to the battery charging station to supply power from the at least one rechargeable battery to the head unit.
( '966 Patent 8:8-22, Dkt. 1-1.) Although claim 9 recites a "removably connectable" battery, the Craftsman GDO recites no such limitation. The Court construed "removably connectable" as "configured to allow a user to insert, plug in, or otherwise manually attach and detach." Chamberlain,
I think [that in explaining his position as to why the Craftsman battery is removable connectable, Dr. Foley] said, 'Well, I could go up there and undo the screws or something.' That certainly isn't something that the typical garage door user-think about it for yourself. Are you going to go up there, back your car out, get up on a ladder, and go up and unscrew it just so you can move it to another garage door, maybe if you have a two-car garage, especially when that other door already has a battery bolted on top of it to start with. That's just not-that's not a reasonable interpretation of the claim.
(Rhyne Tr. 1317:16-24.) The jury apparently credited Dr. Rhyne's interpretation, which the Court agrees provided substantial evidence from which the jury reasonably could have concluded that the Craftsman prior art did not anticipate the '966 patent. See, Akamai Techs., Inc. v. Cable & Wireless Internet Servs., Inc.,
But there is more. There is another limitation in claim 9 which the parties debate at length. That claim discloses a battery removably connectable "to electrically powered equipment other than and physically separate or separable from the barrier movement operator." ( '966 Patent 8:15-17, Dkt. 1-1.) At trial, Dr. Foley opined that the other electrically powered equipment disclosed here could be a second GDO, and that such an arrangement is possible under the Craftsman prior art. Dr. Rhyne disagreed, and relied on the specification for his conclusion that the other equipment cannot simply be a second GDO, and thus the '966 patent discloses a limitation not present in Craftsman. (Rhyne Tr. 1315:10-1316:11.) "[W]hen there is conflicting testimony at trial, and the evidence overall does not make only one finding on the point reasonable, the jury is permitted to make credibility determinations and believe the witness it considers more trustworthy." MobileMedia Ideas, LLC v. Apple Inc.,
*9992. Crusius Prior Art-Anticipation and Obviousness
Parallel problems doom TTI's JMOL Motion concerning the Crusius prior art. As with Craftsman, TTI maintains that Crusius anticipates the '966 patent. But Dr. Rhyne testified that Crusius does not invalidate any of the '966 claims because the Crusius patent "covers essentially the same thing as the Craftsman battery." (Rhyne Tr. 1324:7-19.) He added that the Crusius patent does not disclose a "removably connectable" battery nor any separate equipment that could be powered by the battery. (Id. ) Dr. Foley contradicted this latter finding in much the same way as he did Dr. Rhyne's opinions on Craftsman, that is, by explaining that the Crusius battery could be plugged into a second GDO and thereby satisfy the "powered equipment other than and physically separate or separable from" limitation. Again, Dr. Rhyne explained that the '966 specification required "separate" equipment other than a second GDO, and the jury was entitled to credit his interpretation over Dr. Foley's competing one. MobileMedia Ideas,
As for obviousness, TTI does not articulate any justification for its belief that no reasonable jury could have failed to find that the Crusius prior art renders obvious the asserted claims. And to any extent, Chamberlain points out that Dr. Rhyne testified regarding secondary considerations of nonobviousness which the jury may, and apparently did, choose to credit. See, Transocean Offshore Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc.,
Q: Okay. And then the last topic for you, Dr. Rhyne, secondary considerations with respect to the '966 patent. Have you seen any secondary considerations to show that the '966 claims are not obvious?
A: Yes.
...
[Introducing the internal patent disclosure]
...
A. [Reading from the disclosure:] "Our idea is to power the garage door opener from one or more removable battery packs such as a power tool battery....Another facet of this invention is the ability to potentially charge the battery packs while inserted into the garage door." They're saying they thought that this was something, evidence of a long-felt need. Unfortunately, it was. It's just that the need had already been met by Chamberlain.
Q. Exactly. And just for clarity, this is a form by TTI that was filled out, I guess, before or after the '966 patent ?
A. After.
(Rhyne Tr. 1324:20-1326:2 (emphasis added).) According to Dr. Rhyne, TTI's internal patent disclosure demonstrated an industry-perceived, long-felt need for a GDO using a removably connectable, rechargeable battery, which is exactly what the '966 patent teaches. Chamberlain thus presented the jury with a nexus between the evidence and the merits of the claimed invention as required for the jury to accord these secondary considerations of nonobviousness substantial weight. FastShip, LLC v. United States,
*1000In sum, because the jury heard substantial evidence that the Crusius prior art neither anticipated nor rendered obvious the '966 patent claims, TTI has no basis for JMOL relief stemming from Crusius.
3. Weik Prior Art-Anticipation and Obviousness
TTI's contentions concerning the Weik prior art ultimately meet with the same outcome as the other prior art arguments considered above. The Weik patent teaches a motor-operated door, and discloses "two different embodiments, one of which has a portable battery and no charger and one of which has a non-portable battery but does have a charger." (Rhyne Tr. 1322:2-1323:3.) TTI does not argue that either embodiment, on its own, anticipates or renders obvious the '966 patent. Instead, TTI argues these problems arise for the '966 patent once the two Weik embodiments are combined. Neither of these arguments meets the high bar required to merit JMOL.
First, to obviousness: "Combining two embodiments disclosed adjacent to each other in a prior art patent does not require a leap of inventiveness"; accordingly, such combinations can render an asserted patent obvious. Boston Sci. Scimed, Inc. v. Cordis Corp.,
Next, to anticipation: TTI correctly points out in its reply that whether prior art "teaches away" from combinations is only a part of the obviousness analysis and "is not relevant to an anticipation analysis." Krippelz v. Ford Motor Co.,
H. Literal Infringement of '966 Patent
Dr. Rhyne walked through each element of each of claims 9, 14, and 15-18 of the '966 patent and explained that the Ryobi GDO infringes each one. (Rhyne Tr. 318:11-328:1.) Against this evidentiary backdrop, TTI argues that a reasonable jury still could not find TTI literally infringed because the '966 patent recites "a battery charging station in electrical communication with a rechargeable battery " and "a method of power flow between at least one rechargeable battery, a barrier movement operator, [and] electrically powered equipment other than and physically separate or separable from the barrier movement operator. ( '966 Patent 8:10-11, 40-44, Dkt. 1-1 (emphasis added).) TTI maintains, not for the first time, that because it does not sell the Ryobi GDOs with rechargeable batteries or any other," separate electrical equipment, they cannot be found to have infringed the '966 patent.
While "one may not be held liable under § 271(a) for 'making' or 'selling' less than a complete invention," Rotec Indus., Inc. v. Mitsubishi Corp.,
Here, Chamberlain presented evidence that the Ryobi GDOs and the Ryobi battery are configured to fit and operate together, and that both the GDOs' packaging and a video on the Ryobi website suggest coupling the GDO and the battery. (Rhyne Tr. 407:10-408:21.) Dr. Rhyne further testified that "[This is] the way Ryobi advertises. It's part of all of the benefits and features of this system. It's important to *1002have that battery in there to give you backup in case the AC power goes out." (Id. 408:18-21.) In addition, Dr. Rhyne testified that at some point (though no longer) Ryobi gave consumers a free battery when they purchased a GDO. (Id. 328:18-24.) From this testimony, a reasonable jury could conclude that TTI's sale of its GDO and battery comprise a complete system which infringes the '966 patent.
Finally, TTI's argument that Chamberlain failed to produce substantial evidence showing the Ryobi GDOs infringe the limitation in claims 15-18 concerning a method of power flow between a rechargeable battery, a barrier movement operator, and "electrically powered equipment other than and physically separate or separable from the barrier movement operator " fairs no better. Dr. Rhyne testified that the Ryobi system provided power from the battery to other electrically powered equipment such as "drills, saws, and flashlights." (Rhyne Tr. 326:14; accord id. at 327:23-328:1.) TTI's Motion for JMOL on literal infringement of the '966 patent is denied.
I. Induced Infringement of '966 patent
To win a claim for induced infringement, a plaintiff must prove specific intent and action to induce infringement. Cleveland Clinic Found. v. True Health Diagnostics LLC,
Here, Dr. Rhyne testified that TTI encourages consumers to use a Ryobi One+ battery with the Ryobi GDO. Specifically, Dr. Rhyne described how TTI advertised, including on the Ryobi GDO packaging, that the GDO was battery compatible and that the two should be combined. (Rhyne Tr. 328:2-330:15.) This suffices for substantial evidence from which a reasonable jury could conclude that TTI took action directed to promoting infringement. See, AstraZeneca,
J. Willful Infringement of the '966 Patent
As with the '275 patent, the Court declines to overturn the jury's finding that TTI willfully infringed the '966 patent. The jury heard evidence that TTI investigated possible IP pitfalls and learned about the '966 patent as far back as 2010. (See, e.g., Huggins Tr. 609:23-611:10.) And yet, as described more fully below, the jury heard very little, if any, evidence of TTI taking steps to avoid infringing the '966 patent, even though TTI was well aware of it. (See, infra at Part IV.) A reasonable jury could well conclude from this evidence that TTI willfully infringed the '966 patent, so the Court will not grant JMOL on this ground.
*1003K. Damages Verdict
At last, TTI challenges the jury's finding that Chamberlain is entitled to lost profits damages. One useful, but non-exclusive method to establish a patentee's entitlement to lost profits is the Panduit test, which requires four showings: (1) "demand for the patented product"; (2) "absence of acceptable noninfringing substitutes"; (3) "manufacturing and marketing capability to exploit the demand"; and (4) "the amount of profit that...would have [been] made." Georgetown Rail Equip. Co. v. Holland L.P.,
Q. And so at least as far as Home Depot is concerned, that system is acceptable?
A. It's-it's an alternative. It's an alternative that they make available for their customers, provide an additional choice.
Q. It's an acceptable alternative to Home Depot?
A. I would agree that it's acceptable to Home Depot. I wouldn't expect them to sell products that they don't think are acceptable at some level.
(Hansen Tr. 492:2-10.) But all Hansen says here is that Home Depot finds the Aladdin Connect to be an acceptable product to stock and sell. Absent from this selection is any indication that this product, beyond being an acceptable "alternative," is an acceptable substitute for the infringing Ryobi GDOs. The "[m]ere existence of a competing device does not make that device an acceptable substitute." TWM Mfg. Co. v. Dura Corp.,
On the basis of this evidence, a reasonable jury could find "a reasonable probability" that the Ryobi GDO sales would not have been made but for the infringement. See, Presidio Components, Inc. v. Am. Tech. Ceramics Corp.,
II. TTI's Motion for a New Trial
Under Federal Rule of Civil Procedure 59, a new trial may be granted where "the verdict is against the weight of *1004the evidence, the damages are excessive, or if for other reasons the trial was not fair to the moving party." Mid-Am. Tablewares, Inc. v. Mogi Trading Co.,
A. Whether the Jury Determined the Scope of the Claims
This marks the latest instantiation of TTI's argument that the '275 patent claims require transmitting two conditions/states occurring at the same time. The heart of the matter is the meaning behind this language, from claim 1: "a present operational status condition defined, at least in part, by at least two operating states from the plurality of operating states." ( '275 Patent, 8:15-17, Dkt. 1-2.) TTI points to the Court's end-of-trial statement that "there was a clear dispute between the experts on what 'defined' means" (Tr. 1391:1-3) to argue that there was thus a "fundamental dispute regarding the scope of a claim term," which must be resolved by the Court and not the jury. O2 Micro Int'l Ltd. v. Beyond Innovation Tech. Co.,
The Court does not see the parallel between those cases and this one. In both of those cases, the parties "presented a clear dispute regarding the proper scope of the claims" during pre-trial claim construction. NobelBiz,
But the pattern present in NobelBiz and O2 Micro is not present here. TTI did not press for a construction of "defined"; rather, the parties sought a construction of the encapsulating claim language "a controller having a plurality of potential operational status conditions defined, at least in part, by a plurality of operating states." This the Court provided, to wit: "a programmable platform (such as, for example, a microprocessor, a microcontroller, a programmable logic or gate array, or the like), that can obtain, though self-awareness or through externally developed information (e.g., from sensors), two or more potential operational status conditions defined, at least in *1005part, by two or more operational conditions being experienced by the controller [programmable platform] ." Chamberlain,
Ultimately, TTI's complaint is not directed to some purported failure by the Court to define the scope of these claims. Rather, TTI is simply relitigating its already-defeated grievance that the Court's construction of claim 1 was different than what TTI urged. As described, TTI urged the Court to construe the recited status condition as defined by actions performed by the controller. But the Court declined to do so in light of the specification, observing that the " 'operating states' recited in dependent claim 5 [cannot] be read as uniformly or as broadly" as TTI suggested.
In its new trial Motion, TTI basically argues that even though the parties did not propose or seek a construction of "define," the Court's construction of the encapsulating claim language did not provide sufficient clarification as to the scope of claims. (Mem. in Supp. of New Trial at 5, Dkt. 620 ("The Court provided little guidance....").) This is odd. If TTI believed the Court's constructions were not sufficient, TTI should have requested further construction. Yet this TTI never did, even as discovery progressed and the parties' experts began tendering their reports. Now TTI maintains that these experts testified not to the meaning of the construed language, but rather to the claim scope, and that the Court then submitted those competing interpretations of law to the jury for deliberation.
There is problem with TTI's argument. Put simply, beyond TTI's initial, and quickly abandoned, suggestion that the Court construe "defined by" as "determined by," TTI never requested that the Court construe this now-challenged phrase, nor suggested that some allegedly lacking construction could open the door to legal error. TTI did not object while Chamberlain's experts testified-TTI would now presumably argue inappropriately-concerning the meaning of "experienced by," nor when the Court instructed the jury and placed this question in their hands. "[L]itigants waive their right to present new claim construction disputes if they are raised for the first time after trial." Broadcom Corp. v. Qualcomm Inc.,
*1006And that is what TTI is attempting to do. TTI leans on the Court's close-of-trial (but pre-jury-deliberation) comment that a "clear dispute" existed between the experts on what "defined" means, but in making that remark, the Court was thinking only of the factual dispute between experts concerning the meaning of the claim term. If a misapprehension of this comment struck TTI like a lightning bolt and for the first time caused TTI to see some legal deficiency in the Court's constructions, TTI should have said so. Because TTI did not, TTI has waived this claim construction argument. TTI never requested that the district court construe the complained-of term and did not offer a construction; instead, TTI waited until "after the presentation of all of the evidence to the jury [to] even suggest that claim construction might be helpful to determine the proper scope of the claimed invention." Eli Lilly & Company v. Aradigm Corporation,
B. Evidentiary Rulings.
Before trial, TTI moved in limine to exclude that the Patent Trial and Appeal Board ("PTAB") declined to institute inter partes reviews ("IPRs") of the asserted patents. The Court denied that motion, and TTI now argues that permitting this evidence to go to the jury created prejudice and juror confusion that necessitates a new trial. The PTAB relied on different claim constructions than did this Court, and TTI argues that allowing this evidence risks that the jury could have improperly substituted the PTAB decisions-or Chamberlain's characterization of those decisions-for the jury's own findings. The Court disagrees. In Microsoft Corp. v. i4i Ltd. Partnership,
TTI also argues that the Court erred by applying Local Patent Rule 3.4's good cause standard in barring the tardily-disclosed Kikuya reference and the Weik device. But the Federal Circuit has explained that the use of local patent rules falls within a district court's "broad power to control its docket and enforce its order." Keranos, LLC v. Silicon Storage Tech., Inc.,
*1007TTI's assertion that this excluded prior art would have been relevant to the case does not change the fact of its proscriptively tardy disclosure.
C. Doctrine of Equivalents Grounds
TTI argues a new trial is warranted if the Court agrees, as TTI sets out in its JMOL Motion, that the theory of equivalents should not have gone to the jury. As described above, however, the Court does not agree, so this first argument fails.
TTI next argues that because literal infringement and doctrine-of-equivalents infringement were mutually exclusive options for the jury, the jury's finding of liability on both theories suggests a new-trial-worthy inconsistency. True, infringement under the doctrine of equivalents is an equitable doctrine intended to apply 'in situations where there is no literal infringement[,] but liability is nevertheless appropriate." Hormone Research Found., Inc. v. Genentech, Inc.,
D. The Court's Refusal to Transfer Venue
Once more, TTI raises a venue argument predicated upon the Supreme Court's recent decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, --- U.S. ----,
This ruling raised eyebrows for parties like TTI, who by the time of the TC Heartland decision were deeply enmeshed in patent litigation in a forum where none of the domestic, corporate defendants were *1008incorporated. A month after the TC Heartland opinion came out and two months before this trial was set to begin, TTI moved this Court to transfer the case to South Carolina. The Court denied that motion, finding that because TC Heartland did not represent a change in the law, TTI had waived objections to venue by (1) failing to contest venue in its answer and (2) twice admitting that venue was proper here. Chamberlain,
That might have been the end of it. But since the Court's ruling, the Federal Circuit published In re Micron Technology, Inc.,
Finding waiver is appropriate here. By the time the Supreme Court announced TC Heartland, the Chamberlain/TTI trial date was only three months away. Still, TTI waited another month before filing its TC Heartland motion to transfer. (Dkt. 392.) This unnecessary delay is problematic for two reasons. First, with the trial date fast approaching, the parties continued to burn resources in discovery and pre-trial motion practice, and the Court expended its own energies mediating these disputes. The parties exchanged discovery, submitted expert reports, answered one another's claims, and attended two in-court hearings. Second, TTI's counsel chose not to delay in raising a TC Heartland argument in another matter. During the month-long interregnum in the instant litigation, TTI's counsel moved-a mere eight days after the Supreme Court published TC Heartland - to transfer venue in another case pending in the Eastern District of Virginia. See, Cobalt Boats,
III. Chamberlain's Motion for a Permanent Injunction
To obtain a permanent injunction, a plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. eBay Inc. v. MercExchange, L.L.C.,
A. Irreparable Injury and Remedies Available at Law
Much of TTI's rebuttal to Chamberlain's sought-after injunctive relief turns upon TTI's promise that it has abandoned the production of infringing GDOs and has pulled all remaining units from Home Depot's shelves. Although TTI intends to sell off its remaining stock of infringing units, TTI claims it will soon sell only non-infringing GDOs. But TTI's "cessation of the production and sales of the [GDOs] is not-in and of itself-a sufficient reason to deny a permanent injunction. Instead, there must also be some persuasive evidence that further infringement will not take place." Black & Decker,
So long as TTI continues to sell infringing GDOs, Chamberlain will suffer *1010injury without an available, adequate remedy. Chamberlain has and will continue to suffer harm to its market share, especially given the relatively inelastic nature of GDOs. The evidence bears this out: From April 2016-April 2017, TTI sold more than 62,000 GDOs, about a quarter of Chamberlain's total sales over a two year period, April 2015- April 2017. (Hanson Tr. 438:5-439:2.) TTI was not a GDO-market participant prior to its '275 -infringing sales. "Direct competition in the same market is certainly one factor suggesting strongly the potential for irreparable harm without enforcement of the right to exclude." Presidio Components, Inc. v. Am. Tech. Ceramics Corp.,
Further, continuing infringing sales may cause Chamberlain to suffer "ecosystem" effects, whereby Ryobi GDO purchasers will continue to buy Ryobi products and recommend them to others. Apple Inc. v. Samsung Elecs. Co.,
Finally, Chamberlain's unwillingness to license the patent also weighs in favor of finding irreparable injury. See, Presidio Components,
Beyond showing irreparable harm and the absence of an adequate remedy, Chamberlain must also show that the harm bears a causal nexus to the infringing activity. Apple Inc. v. Samsung Elecs. Co.,
B. Balance of Hardships
The balance weighs in favor of granting the injunction. TTI is relatively new to the GDO market, and TTI's damages expert testified that TTI has not earned any gross or operating profit from the sale of the Ryobi GDO as of July 2017. (Corrected Supp. Expert Rpt. at 49, Dkt. 468-2.) Aside from their GDO sales, TTI maintains a multibillion dollar business. In contrast, GDO sales make up the core of Chamberlain's business. (Sept. 15, 2016, Mem. Op. and Order at 17, Dkt. 107.) Beyond this, TTI is "not entitled to continue infringing simply because it successfully exploited its infringement." i4i Ltd. P'ship v. Microsoft Corp.,
C. Public Interest
"In general, public policy favors the enforcement of patent rights." Black & Decker,
D. Breadth of the Injunction
The Court finds a permanent injunction is appropriate, and now permanently enjoins TTI from infringing or inducing infringement of claims 1, 5, or 15 of the '275 patent by making, using, selling, or offering to sell in the United States, or importing into the United States the Ryobi GD200, GD200A, and any device no more than colorably different therefrom, until the expiration of the '275 patent, including any patent term adjustments and extensions. Beyond this, Chamberlain also requests a Court-approval condition, under which TTI cannot introduce any WiFi-capable GDO without prior permission from the Court. TTI responds that this proposed condition is overbroad and impermissibly deters legitimate design-around efforts. See, TiVo, Inc. v. EchoStar Corp.,
IV. Chamberlain's Motion for Enhanced Damages
When there is a finding of infringement, the Court may increase the damages up to three times the amount found or assessed.
Though not a required part of the analysis, the nine so-called Read factors provide useful guideposts for the Court's consideration. Presidio Components, Inc. v. Am. Tech. Ceramics Corp.,
(1) whether the infringer deliberately copied the ideas or design of another;
(2) whether the infringer, when he knew of the other's patent protection, investigated the patent and formed a good-faith belief that it was invalid or that it was not infringed;
(3) the infringer's behavior as a party to the litigation;
(4) the infringer's size and financial condition;
(5) the closeness of the case;
(6) the duration of the misconduct;
(7) the remedial action by the infringer;
(8) the infringer's motivation for harm; and
(9) whether the infringer attempted to conceal its misconduct.
See, Read Corp.,
Here, Chamberlain says TTI acted egregiously. TTI, of course, disputes the characterization, claiming instead that this litigation arose from a simple business dispute and that its attorneys permissibly litigated with zeal. Before the Court takes up the Read factors, it notes the relevant background: First, during the time that TTI developed the Ryobi GDO 200, TTI was acutely aware that the enterprise could trespass on IP rights if TTI were not careful. TTI's primary customer, Home Depot, acknowledged as much (Dkt. 642-5 at 2 (Trial Ex. No. PTX-188) (describing IP research as "the main area of concern" with the Ryobi GDO development) ), and TTI's internal documents described possible IP problems as high risk, meaning "[t]he project is going to be adversely impacted by th[e] issue if it is not addressed. Multiple risk reduction plans are necessary." (Dkt. 642-7 at 35, 37 (Trial Ex. No. PTX-67).)
But TTI's awareness of possible IP issues was not limited to the abstract. Several events put TTI on notice of both the '275 and the '966 patents specifically. As to the former: TTI engineers acquired Chamberlain GDOs which practice the *1013'275 patent ; these engineers disassembled the devices and used the internal parts to make a demo of the Ryobi device that TTI presented to Home Depot. (Huggins Tr. 601:17-603:2.) At the time the TTI engineers took apart Chamberlain's GDO, it was marked, in a place plainly visible upon deconstructing the device, as practicing the '275 patent. (Huggins Tr. 605:9-606:12.) Despite admitting both the visibility of this marking and the fact that TTI took apart the Chamberlain unit (see,
A. Read Factors
Deliberate Copying. Here, "the evidence show[s] that [TTI] was aware of [Chamberlain's GDO] and intended to develop a product with similar capabilities." Polara Eng'g, Inc. v. Campbell Co.,
Good Faith Belief of Invalidity of Noninfringement Predicated upon Investigation of Patent. As set forth above, TTI not only knew that development in the wireless/WiFi-capable GDO space could raise IP problems, TTI also knew of '275 and the '966 patents specifically. And yet, despite being aware of the risk of infringement, there is no suggestion that TTI did anything to avoid colliding with it head-on. Cf. Apple Inc. v. Samsung Elecs. Co.,
TTI's Litigation Behavior. Both parties make much of this factor and spend many pages contesting whether and when TTI misbehaved in litigation. The Court will not nitpick each of these contests now, though it will note one moment in which TTI behaved less than admirably. Chamberlain moved for a preliminary injunction and the Court granted it on September 15, 2016. (Mem. Op. and Order, Dkt. 104.) But the Court did not actually enter that injunction until five days later. (Order, Dkt. 111.) In that brief interim, TTI sold off *1014approximately 6,000 of the original GD200s to Home Depot. (See, Ex. J to Enhanced Damages Mot., Dkt. 624-11.) TTI thus unloaded (since-determined-to-be) infringing stock despite the Court's announcement that it intended to halt all such sales imminently. That the Federal Circuit later vacated the preliminary injunction is no defense; possible vacatur on appeal is no excuse for disregarding a court order. This factor also weighs in favor of enhanced damages.
TTI's Size and Financial Condition. TTI is a multibillion dollar company with the means to absorb $11.4 million in treble damages. See, Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings,
Closeness of the Case. This case was not close. TTI lost on every issue at trial after less than two hours of jury deliberation. See, SRI Int'l, Inc. v. Cisco Sys., Inc.,
Duration of Misconduct. TTI's infringing behavior has spanned the whole of TTI's participation in the GDO marketplace to date. (TTI's Resp. to Enhanced Damages Mot. at 13 n.10, Dkt. 645 (admitting that TTI continues to sell infringing Ryobi GDOs to date, and adding that TTI intends to account for said sales and compensate Chamberlain accordingly).) This factor weighs in favor of enhanced damages.
TTI's Remedial Actions. "Courts have concluded that continuing to sell the infringing products after notice of infringement and during the course of litigation supports enhancement." Polara,
TTI's Motivation for Harm. The evidence suggests that TTI recognized the peril of infringement and yet moved forward with its GD200s anyway. TTI's actions during the development and release of both the GD200 and the GD200A suggest that TTI wanted to enter the market quickly and, if possible, displace Chamberlain's hold on it. This preference for risk of infringement over the more labor-intensive creation of a non-infringing design weighs in favor of enhancing damages. Funai Elec. Co., Ltd. v. Daewoo Elecs. Corp.,
Attempts by TTI to Conceal Its Misconduct. First, as described above, TTI evaded the preliminary injunction by unloading its GDOs to Home Depot after the Court's opinion foretelling the injunction against *1015the same. Second, TTI contacted Home Depot in October 2016, a month after the Court entered the preliminary injunction but three months before the Federal Circuit vacated it, offering to sell Ryobi GDOs despite the Court's command not to do so. (Cameron Dep. Designations 209:21-210:25, Dkt. 625-10.) This factor weighs in favor of enhanced damages. See,
In sum, considering the jury's verdict and the Read factors, the Court finds that Chamberlain has shown by a preponderance of the evidence that enhanced damages are appropriate here. Halo Elecs.,
V. Chamberlain's Motion for Prejudgment Interest and Supplemental Damages
A. Prejudgment Interest
Given Congress' overriding purpose of affording patent owners complete compensation, prejudgment interest should ordinarily be awarded in patent cases. Gen. Motors Corp. v. Devex Corp.,
The parties dispute which rate the Court should apply. Chamberlain argues for the prime rate (between 3.5 and 4.25% in this case), and TTI argues for the treasury bill rate (approximately 0.62%). "The prime rate of interest is the benchmark rate for the banks' most credit-worthy customers, but even blue-chip debtors are more likely to default than is the United States government, so the prime rate exceeds the T-Bill rate...[b]ecause the prime rate includes some compensation for the risk of non-payment...." Koopmans v. Farm Credit Servs. of Mid-America, ACA,
Next, courts "have recognized that compounding is necessary to fully compensate the patentee." Sealant Sys. Int'l, Inc. v. TEK Global S.R.L., No. 11 CV 00774,
B. Supplemental Damages
Chamberlain asks the Court to amend the judgment pursuant to Federal Rule of Civil Procedure 59(e) to account for new information not available at trial concerning TTI's sales of infringing products between May 1, 2017 and September 5, 2017. Courts may account for such pre-verdict sales not presented at trial. See, e.g., Finjan, Inc. v. Secure Computing Corp.,
TTI contends that none of these supplemental damages is appropriate because TTI has begun and intends to complete buying back from Home Depot all remaining stock of infringing Ryobi GDOs. But TTI cites no legal authority explaining why its repurchasing plan erases the harm done to Chamberlain or annuls damages TTI would otherwise owe. As Chamberlain correctly notes, Chamberlain suffered lost profits at the time TTI made the initial, infringing sales to Home Depot; a later-implemented buy-back plan does not undo that harm. Beyond this, TTI states that its intent in repurchasing the infringing GDOs is simply to sell those GDOs directly to consumers, rather than use Home Depot as a middle man. Chamberlain is entitled to supplemental damages for both lost profits and royalties for TTI's infringing sales occurring from May 1, 2017 to September 5, 2017.
However, the calculus might not be so simple for the supplemental damages for lost future sales of GDO accessories. By using an "accessory attach rate" of 0.75, Chamberlain's damages expert concluded that Chamberlain "lost or is likely to lose in the future sales of 11,442 accessory units associated with the lost GDOs, resulting in additional lost profits of $134,496 for accessories." (J. Hansen Decl. ¶ 2, Dkt. 630-1.) So unlike the supplemental damages for lost profits or royalties associated with GDO sales, these accessory-sales damages are predicated upon downstream purchases by consumers. Thus, to the extent TTI's buy-back strategy removes infringing Ryobi GDOs from the market, Chamberlain may not *1017recover for now-prevented, would-have-been purchases of accessories. But again, TTI has announced its intention to re-sell the repurchased GDOs directly to consumers. If TTI has already repurchased and resold all of Home Depot's remaining stock, this digression is moot and Chamberlain is entitled to supplemental damages for accessory lost profits. (See TTI's Opp. to Enhanced Damages at 13 n.10, Dkt. 645 (acknowledging TTI's intent to sell its remaining inventory of infringing Ryobi GDOs and predicting selling out all on-hand stock within six months of October 18, 2017).) But as discussed above, the Court now grants Chamberlain's Motion for a permanent injunction. As such, any repurchased product on-hand at TTI may not be sold to future consumers. Thus, it is only that stock-stock which no consumer will ever use-that may decrease the supplemental accessory damages TTI must pay.
Given the above, the Court grants Chamberlain's Motion for supplemental damages in part and awards the following:
1. Prejudgment interest of $42,347.00, calculated by using the 52-week treasury bill rate, compounded monthly;
2. For the '275 patent, $900,793.00 in GDO lost profits; $54,672.00 in royalties; and $134,496.00 in accessory lost profits, unless TTI has some repurchased GDO stock still on hand, in which case TTI may move the Court within fourteen days to reduce the accessory lost profits damages accordingly;
3. For the '966 patent, $18,224.00 in royalties.
VI. Chamberlain's Motion for Attorneys' Fees
A. Whether to Award Fees
"The court in exceptional cases may award reasonable attorney fees to the prevailing party."
Before Octane Fitness, the Federal Circuit remarked that "[w]hile a finding of willful infringement does not require a finding that a case is exceptional, our cases uniformly indicate that the willfulness of the infringement by the accused infringer may be a sufficient basis in a particular case for finding the case exceptional for purposes of awarding attorney fees to the prevailing patent owner." Golight, Inc. v. Wal-Mart Stores, Inc.,
Here, the jury found TTI willfully infringed both asserted patents. And, though reliance on this finding alone still appears permissible under controlling authority, the Court's finding that this case is exceptional is bolstered by the conduct of TTI and its counsel, as described above. (See, supra at Part IV.A.) Most prominent in the Court's eyes are TTI's efforts to circumvent the preliminary injunction. (See, id. ) Under the totality of the circumstances, the Court believes an exercise of its discretion is appropriate here: It finds this case exceptional and accordingly awards Chamberlain reasonable attorneys' fees.
B. What Fees to Award
Chamberlain and TTI tussle over whether TTI's objections to the sought-after fees were untimely under Local Rule 54.3 and thus waived. The shortest version of the dispute is this: The Court required the parties to file their Joint Statement by November 21, 2017. Chamberlain produced 562 pages of invoices to TTI about two months in advance of that deadline, but did not provide any further breakdown or summary of those fees until the November 21st due date. In the Joint Statement, TTI maintains that because Chamberlain tardily produced this breakdown, TTI lacked the information necessary to provide specific objections to Chamberlain's invoices, which "contained numerous categories of fees and costs that [are] not compensable." (Joint Statement at 10, Dkt. 690.) Still, TTI then waited until January 3, 2018 to articulate its objections in its response to Chamberlain's motion for fees. Though both parties make much of this quarrel, Local Rule 54.3 does not mandate waiver in such circumstances, and here TTI's delayed articulation has not prejudiced the Court's ability to settle the fee dispute. The Court will accordingly consider TTI's objections as it weighs which fees to award in this case.
Chamberlain requests $8,033,942.73 in attorneys' fees (Reply at 13, Dkt. 717 (explaining that since Chamberlain filed its Motion for fees requesting $8,286,135.93, Chamberlain received updated information regarding its legal expenses in this case and adjusted its request accordingly).) In support of its request, Chamberlain provides a breakdown of the billing rates for each attorney who *1019worked on this matter. (M. Brody Decl. at 5-6, Dkt. 704-2.) The Seventh Circuit has "defined a reasonable hourly rate as one that is 'derived from the market rate for the services rendered.' [Further, the court of appeals] presume[s] that an attorney's actual billing rate for similar litigation is appropriate to use as the market rate." Pickett v. Sheridan Health Care Ctr.,
Having determined that the rates are reasonable, the Court must decide whether it should subtract any sums from Chamberlain's requested total. Chamberlain provides the following breakdown of its attorneys' fees:
Firm Total Paid Total Paid Total Paid (-6097 Related (-6097 (-6097 IPRs) Litigation) Litigation & Related IPRs) Winston & $0 $1,737,490.30 $1,737,490.30 Strawn Fish & $870,437.82 $5,426,014.61 $6,296,452.43 Richardson
(Reply, Dkt. 717 at 13.) First, the Court will not award Chamberlain the $870,437.82 it spent on counsel for IPR proceedings. Fees related to a separate legal proceeding cannot be recovered. See, e.g., Hickory Farms, Inc. v. Snackmasters, Inc., No.
Nor can Chamberlain recover fees for efforts that ultimately failed. Prime among these is TTI's ultimately victorious appeal to the Federal Circuit from this Court's Order instituting the preliminary injunction. Chamberlain did not win that appeal, and the Federal Circuit has taken issue with district courts awarding fees related to court-of-appeals proceedings. Phonometrics, Inc. v. Choice Hotels Int'l, Inc.,
True, Chamberlain won fleeting victories on its motions for a preliminary injunction and for contempt. But the aforementioned Federal Circuit decision vacated those victories. The Court will not award Chamberlain for these unsuccessful motions, even if this Court at first agreed with Chamberlain's arguments. Cf. Eli Lilly & Co. v. Zenith Goldline Pharm., Inc.,
To the remaining, sought-after attorneys' fees: TTI levies two objections the Court finds somewhat meritorious. In some instances, partners could have kept fees lower by delegating tasks such as responding to discovery requests and drafting simple motions to more junior, and thus less expensive, attorneys. Prather v. Sun Life & Health Ins. Co.,
*1021As described above, the final fee award turns upon a calculation the parties must make concerning what fees Chamberlain expensed in litigating its preliminary injunction and contempt motions. Once the parties submit a joint status report detailing that sum, Chamberlain's fee award will be calculated and ordered as follows: $8,033,942.73 (Chamberlain's amended fee request), less $870,437.82 (incurred via Patent Office proceedings), less $250,289.69 (incurred via Federal Circuit appeal), less sum-to-be-determined (incurred via ultimately unsuccessful motions), less a 5% overall reduction of the resulting figure.
Finally, Chamberlain seeks $1,221,021.74 in "non-taxable expenses," which includes "all costs claimed on its Bill of Costs." (Mot. for Attorney's Fees at 11-12, Dkt. 704.) The Court addresses these expenses below and will not award on this motion any amounts beyond those allowed from the bill of costs. (See, infra at Part VII.)
VII. Chamberlain's Bill of Costs
Federal Rule of Civil Procedure 54(d)(1) provides that a prevailing party may obtain reimbursement for certain litigation costs at the conclusion of a lawsuit. The Rule establishes a "presumption that the prevailing party will recover costs, and the losing party bears the burden of an affirmative showing that taxed costs are not appropriate." Beamon v. Marshall & Ilsley Trust Co.,
Here, Chamberlain's bill of costs and associated exhibits often fall short of a portrait of clarity. The Court will make calculations where possible and, where figures were missing or were not sufficiently itemized in Chamberlain's materials, the Court will rule how the remaining calculations are to be performed. Chamberlain shall submit a revised bill of costs within fourteen (14) days including those still-required calculations. No further briefing from either side is necessary.
A. Fees Paid to the Clerk and for Service of Process
Chamberlain requests $1,463.00 under
B. Transcript Copies, Expedited Transcripts, and Realtime Services for Evidentiary Hearings and Trial
Chamberlain seeks costs for transcript copies, all ordered on a daily, hourly, or expedited basis, for all status hearings and motion presentments in the case, as well as for Realtime services and laptop rentals. Where the party seeking costs does not provide "any explanation as to *1022why [it] obtained a copy of a daily transcript," it "may only recover costs at the ordinary transcript rates." Se-Kure Controls, Inc. v. Vanguard Prod. Grp., Inc.,
C. Deposition-Related Fees
Chamberlain seeks $9,469.27 for Realtime and associated computer rentals, as well as $6,798.74 for rough, condensed, computer-based, and expedited transcripts, all related to nearly 30 pretrial depositions. Though TTI correctly points out that both types of expenses are generally considered to be obtained for convenience rather than out of necessity, see, Cascades Computer Innovation, LLC v. Samsung Elecs. Co., No.
*1023D. Video
Chamberlain seeks costs for video depositions of all of its own and TTI's witnesses. But generally, "[c]ourts in this circuit will not award costs for videotaping depositions where a transcript was also purchased." Martinez v. City of Chicago, No. 14 CV 369,
E. Digitization and Synchronization
Chamberlain also seeks costs for the digitation and synchronization of several video depositions. These costs will be taxed for those four videotaped depositions mentioned above that were played at trial.
F. Fees for Witnesses
Chamberlain seeks $6,443.13 for attendance fees, travel costs and lodging for its expert witnesses, of which TTI objects to $853.30 in first class and duplicative airfare and to $2,268.00 for unnecessary lodging charges.
G. Exemplification
Chamberlain seeks $77,394.53 in exemplification costs, including time billed by Michael Ko, the on-site technician Chamberlain used at trial, and Joshua Rider, a Winston & Strawn employee, who created demonstratives and provided technical support. As an initial matter, the costs of preparing exhibits may be recovered, Trading Techs. Int'l, Inc. v. eSpeed, Inc.,
Chamberlain submits a summary sheet and three invoices describing its exemplification expenses. (See, Dkt. 638-4.) But the entries are generic and provide the Court no basis to determine whether the labored-over demonstratives were reasonably necessary. When the invoices actually list a specific-enough item that might be taxable (e.g., "rhyne slides," referring to demonstratives used during the testimony of Chamberlain's technical expert, Dr. Rhyne), those items are lumped together with other either non-taxable or else under-detailed items, thus making it impossible for the Court to determine appropriate costs. See, Fox v. Will Cty., No.
H. Copying
Copying costs are recoverable but must be reasonable and "necessarily obtained for use in the case." See,
These invoices also include non-recoverable expenses such as "general pickup and delivery" (Dkt. 638-5 at 6) and "delivery charge" (id. at 9; see, Chi. Bd. Options Exch., Inc. v. Int'l Sec. Exch., LLC, No. 07 CV 623,
Given the above, the Court awards copying costs as follows: Chamberlain is entitled to costs for three copies of each of the deposition and trial documents described in its exhibits. If the invoices submitted do not already reflect this reduction- from seven copies to three-Chamberlain shall make the appropriate calculation in its revised bill of costs. Costs shall be calculated on a $0.10/page rate for black and white copies, and $0.60/page rate for color copies (the latter apparently the going rate at Ricoh, see, Dkt. 638-5 at 3). Chamberlain shall not be awarded costs for the remaining, untaxable or otherwise under-explained, miscellaneous items in these invoices, including delivery charges, binders, and tabs.
I. E-Discovery Fees
Chamberlain seeks $61,680.65 in costs for optical character recognition ("OCR"), Bates stamping, and general document scanning. (See, E-Disc. Expenses Summary, Dkt. 639-1.) OCR expenses are "typically not recoverable as prevailing-party costs under
VIII. CONCLUSION
For the reasons stated herein, the Court orders the following:
1. TTI's Motion for Judgment as a Matter of Law is denied (Dkt. 573);
2. TTI's Motion for a New Trial is denied (Dkt. 619);
3. Chamberlain's Motion for a Permanent Injunction is granted (Dkt. 622);
4. Chamberlain's Motion for Enhanced Damages is granted (Dkt. 624, 625), and the Court accordingly awards Chamberlain $11.4 million in treble damages;
5. Chamberlain's Motion for Prejudgment Interest and Supplemental Damages is granted in part (Dkt. 630), and the Court awards the following:
a. Prejudgment interest of $42,347, calculated by using the 52-week treasury bill rate, compounded monthly;
b. For the '275 patent, $900,793 in GDO lost profits; $54,672 in royalties;
*1026and $134,496 in accessory lost profits, unless TTI has some repurchased GDO stock still on hand, in which case TTI may move the Court within fourteen (14) days to reduce the accessory lost profits damages accordingly;
c. For the '966 patent, $18,224 in royalties.
6. Chamberlain's Motion for Attorneys' Fees is granted in part (Dkt. 703, 704), though the Court will not order any fees until the parties submit, within fourteen (14) days, a joint report as described in this ruling;
7. Chamberlain's Bill of Costs is granted in part (Dkt. 634), though the Court will not order any costs until Chamberlain submits, within fourteen (14) days, a revised bill of costs in accordance with this ruling.
IT IS SO ORDERED.
Reference
- Full Case Name
- The CHAMBERLAIN GROUP, INC. v. TECHTRONIC INDUSTRIES CO., LTD., Techtronic Industries North America, Inc., One World Technologies, Inc., Owt Industries, Inc., et, Technology (Wuxi) Co. Ltd., and Ryobi Technologies, Inc.
- Cited By
- 6 cases
- Status
- Published