Centricut v. Esab Group CV-99-039-M 10/23/03 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Centricut, LLC, Plaintiffs

v. Crvrl No. 99-039-M Opinion No.

Esab Group, Inc., Defendants

v.

Centricut, LLC (New Hampshire) and Centricut, LLC (Delaware), Counterclaim Defendants

O R D E R

Before the court are Esab's motions to Amend and/or

Supplement Memorandum Order and Judgment (document no. 8 6) and

for Entry of Permanent Injunction (document no. 91). Centricut

objects to both motions. For the reasons given below, Esab's

motion to amend is granted in part and denied in part, and its

motion for an injunction is granted.

Motion to Amend and/or Supplement

In its motion to amend and/or supplement the order and

judgment, Esab seeks additional damages, in the form of lost profits, as well as prejudgment interest. In addition to

contesting Esab's motion on substantive grounds, Centricut argues

that relief should be denied because Esab's motion is untimely.

Timeliness of Esab's motion. Esab filed a motion pursuant

to F e d . R. C iv P. 59(e) within ten days after entry of judgment,

but that motion failed to comply with LR 7.1(c). Conseguently,

Esab was directed, by order dated July 25, 2003, to file a

document curing the defect by August 4. Esab did so. Centricut

argues that the court is without authority to extend Rule 59(e)'s

ten-day limit, due to the rule's jurisdictional nature. However,

even if that deadline is not subject to extension (and it

probably is), this court may nevertheless grant the relief

reguested in an untimely Rule 59(e) motion, under its "inherent

power to correct errors in its own decrees." Air Line Pilots

Ass'n v. Precision Valiev Aviation, Inc.,

(1st

Cir. 1994) (citing Jusino v. Zavas,

, 989-90 & n.3

(1st Cir. 1989)). Accordingly, while Esab's failure to strictly

comply with LR 7.1(c) could, potentially, have implications with

respect to the duration of the appeal period and, ultimately, the

jurisdiction of the court of appeals, it does not bar this court

2 from considering the merits of Esab's requests for relief. See

Air Line Pilots Ass'n,

.

Lost Profits. According to Esab, Centricut's Silverline

electrode was not a non-infringing substitute within the meaning

of the second element of the Panduit1 test because the Silverline

was available only for a brief period during the time that

Centricut was infringing Esab's patent. Due to the lack of a

non-infringing substitute, Esab argues, its patented electrodes

competed with Centricut's infringing electrodes in a two-supplier

market, which makes lost profits the appropriate measure of

damages. Esab's argument fails for two reasons. First, while

the market for electrodes may have had only two manufacturers,

Esab and Centricut, it actually had four suppliers, Esab and

Centricut plus the two companies to which Esab sold its

electrodes for resale, American Torch Tip and Zap

Plasmatherm/Thermacut. Second, the measure of damages employed

in this case is more accurate than either of those typically

used. Both traditional measures of patent infringement damages -

a reasonable royalty and lost profits - are necessarily

1 Panduit Corp. v. Stahlin Bros. Fibre Works, Inc.,

(6th Cir. 1978).

3 speculative to a degree. Here, however, because Esab itself set

the price it was willing to accept from other parties interested

in selling its patented electrodes, there exists a very reliable

means of establishing the proper award of damages. Accordingly,

the court declines to amend the award of damages to reflect lost

profits.

Preiudgment interest. Both parties agree that in patent

infringement cases, prejudgment interest is typically awarded.

See General Motors Corp. v. Devex Corp.,

(1983)

("We hold . . . that prejudgment interest should be awarded under

[35 U.S.C.] § 284 absent some justification for withholding such

an award."). Centricut argues, however, that: (1) Esab waived

its claim to prejudgment interest by failing to reguest it in its

proposed findings of fact and conclusions of law; (2) Esab is not

entitled to prejudgment interest because of its undue delay in

prosecuting its infringement claim; and (3) even if Esab is

entitled to prejudgment interest, it has not shown good cause for

using an interest rate other than the weekly average one-year

constant maturity treasury yield, nor has it shown good cause for

awarding compound rather than simple interest.

4 Esab did not waive its claim to prejudgment interest.

" [P]rejudgment interest [is] the rule, not the exception."

Crystal Semiconductor Corp. v. Tritech Microelectronics Int'l,

Inc.,

(Fed. Cir. 2001). Yet, despite that

"default" rule, Esab did specifically seek prejudgment interest

in its counterclaim. (Def.'s Answer & Countercl. at 7). Thus,

Esab was entitled to presume that the court would award

prejudgment interest as a matter of course should it prevail.

Centricut's reguest for findings of fact and rulings of law, by

contrast, did not offer any justification for making an exception

to the general rule that prejudgment interest should be awarded

in patent infringement cases. Moreover, unlike the patent holder

in Crystal Semiconductor, who did not even contact the infringer

until two years after it had determined that there was

infringement, see

, Esab contacted Centricut

promptly after it determined Centricut was infringing, and filed

suit approximately one year after that first contact. In other

words, unlike the situation in Crystal Semiconductor, this case

does not present the sort of undue delay in prosecution that

would justify a denial of prejudgment interest. Esab is entitled

to the statutory rate of interest; nothing counsels persuasively

5 in favor of awarding any other amount. See

.

Accordingly, Esab is entitled to prejudgment interest on its

damage award, at the statutory rate, "from the date of

infringement to the date of payment." Bio-Rad Labs., Inc. v.

Nicolet Instr. Corp.

(Fed. Cir. 1986)

(citations omitted). To that extent only, Esab's motion to amend

and/or supplement the order and judgment is granted.

Motion for an Injunction

Esab also moves for a permanent injunction against any

further infringement by Centricut. Centricut counters that

Esab's motion is both moot (because Centricut has ceased its

infringing activities) and untimely (because it was filed

substantially after the ten-day limit stated in Rule 59(e)) .

While Esab's motion purports to be filed pursuant to

and F e d . R. C i v . P. 65, it is, in reality, another

Rule 59(e) motion. As such, it is untimely, having been filed

more than ten days after entry of judgment. However, as with

Esab's reguest for prejudgment interest, untimeliness is not

6 necessarily a bar to awarding the relief Esab seeks. See Air

Line Pilots Ass'n,

.

Turning to the merits of Esab's reguest for an injunction,

"[i]t is the general rule that an injunction will issue when

infringement has been adjudged, absent a sound reason for denying

it." Richardson v. Suzuki Motor Co.,

(Fed.

Cir. 1989) (citing W.L. Gore & Assocs., Inc. v. Garlock, Inc.,

(Fed. Cir. 1988)). Centricut's claim that it

is not now engaged in any infringing activity, even if true, is

not a sound reason for denying Esab an injunction.

"The fact that the defendant has stopped infringing is generally not a reason for denying an injunction against future infringement unless the evidence is very persuasive that further infringement will not take place." Garlock, Inc.,

. "If the defendant be honest in his protestations [that he will not infringe again, then] an injunction will do him no harm; if he be dishonest, the court should place a strong hand upon him . . . ."Id. at 1282 (guoting General Electric Co. v. New England Electric Mfg. Co.,

(2d Cir. 1904)).

Genentech, Inc. v. Wellcome Found. Ltd.,

(D. Del. 1993). Because Centricut has advanced no sound reason

7 for denying Esab an injunction against future infringement,

Esab's reguest for an injunction is granted.

In addition to opposing Esab's reguest for an injunction,

Centricut objects to the following injunctive language, proposed

by Esab: . . together with any colorable imitation or

eguivalent thereof." In Centricut's view, that language is too

imprecise. Centricut proposes the following alternative phrase

". . . together with any alteration in the device which is merely

colorable and obviously made for the purpose of evading the

decree without essential change in the nature of the device."

Neither of the proposed phrases is guite right. Esab's

language sweeps too broadly (colorably eguivalent electrodes

should not be enjoined, but only electrodes that are merely

colorably different from the patented electrodes), while

Centricut's language introduces an element of intent that is

legally unnecessary for a finding of infringement by an

eguivalent. Accordingly, the injunction to which Esab is

entitled is as follows: Centricut (including its officers, agents, employees,

attorneys, and those in active concert or participation with

them) shall be, and is hereby enjoined from making, using,

selling, offering to sell, or importing into the United States,

products encompassed by Claim 1 of the '425 patent or the claim

of the '682 patent, until the expiration of said patents or

unless or until this injunction is modified or terminated. This

prohibition specifically covers Centricut electrode part nos.

CIO-963, C47-986, CIO-966, and C47-886, together with any

electrodes which are similarly infringing because they are

essentially identical, i.e., eguivalent, to the four listed

electrodes.

Conclusion

For the reasons given above, Esab's motion to amend and/or

supplement the order and judgment (document no. 86) is granted in

part and denied in part, and Esab's motion for a permanent

injunction (document no. 91) is granted. The court's July 9,

2003, order (document no. 80) is amended to include an award of

prejudgment interest, at the statutory rate, from the time of infringement to the time of payment. And, Centricut is hereby

enjoined as follows:

Centricut (including its officers, agents, employees, attorneys, and those in active concert or participation with them) shall be, and is hereby enjoined from making, using, selling, offering to sell, or importing into the United States, products encompassed by Claim 1 of the '425 patent or the claim of the '682 patent, until the expiration of said patents or unless or until this injunction is modified or terminated. This prohibition specifically covers Centricut electrode part nos. CIO-963, C47-986, CIO-966, and C47-886, together with any electrodes which are similarly infringing because they are essentially identical, i.e., equivalent, to the four listed electrodes.

An amended judgment consistent with this order shall be

entered.

SO ORDERED.

Steven J. McAuliffe United States District Judge

October 23, 2003

cc: Edward A. Haffer, Esq. Michael J. Bujold, Esq. Neal E. Friedman, Esq. John R. Hughes, Jr., Esq. Bias P. Arroyo, Esq.

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