Tuesday, November 27, 2007

N.D. Cal.: "Close" Case VItiates Willful Infringement under Seagate

Informatica Corp. v. Business Objects Data Integration, Inc. (02-03378) N.D. Cal., October 29, 2007

Jury trial in this patent infringement case commenced on March 12, 2007 and concluded with a verdict in favor of Informatica in the amount of $25,240,000 on April 2, 2007. On August 16, 2007, the Court denied Defendant’s Renewed Motion for JMOL and granted Defendant’s Motion for New Trial on damages unless Plaintiff accepted the Court’s remittitur in the amount of $12,115,200. On September 10, 2007, Informatica accepted the remittitur.

In the meantime (Aug. 20), the CAFC decided In re Seagate (link), which raised the threshold for finding willful infringement. On August 28, Defendant BODI filed a Renewed Motion for Judgment as a Matter of Law or in the Alternative, for the Court to Decline Enhancement of Damages or to Grant a New Trial on Willfulness based on the Seagate decision.

While the court denied BODI's motions, Judge Laporte went ahead to deny any enhancement of damages in the case.

Informatica argued that the district court did not have jurisdiction over the motion because it was not filed within the prescribed time (10 days) after the entry of judgment. The court rejected this argument, stating that no final judgment was made that divested the court of jurisdiction:

[T]he Court has not yet rendered a decision on all the issues as required for a final judgment that may not be revisited unless a party files an appropriate motion within ten days. Moreover, acceptance of Plaintiff’s argument that the Court may only set the amount of enhanced damages at something greater than zero, but may not reconsider Plaintiff’s entitlement to any amount even in light of an intervening change in the law, would elevate form over substance and ignore the wise admonition of Rule 1 of the Federal Rules of Civil Procedure to construe the Rules “to secure the just, speedy and inexpensive determination of every action.” Indeed, the parties agree that if and when the final judgment in this case is appealed to the Federal Circuit, the appellate court will scrutinize the jury’s finding of willfulness under Seagate. The result could be an unnecessary remand and retrial of willfulness under the new legal standard, hardly a speedy or inexpensive result.

On the issue of willful infringement, the court viewed the evidence "in the light most favorable to Plaintiff and drawing all reasonable inferences in its favor," and found that BODI nevertheless willfully infringed Informatica's patent. Nevertheless, in light of Seagate, the court denied any enhanced damages:
Although willful infringement may authorize the award of enhanced damages, “a finding of willful infringement does not mandate that damages be enhanced, much less mandate treble damages.” . . . In this case, the jury found willfulness based on now-obsolete case law. In Seagate, the Federal Circuit overruled the due care standard for evaluating willful infringement adopted in Underwater Devices Inc. v. Morrison-Knudsen Co. . . . and applied by the jury in this case to determine Defendant’s willfulness. Instead, the Seagate court held that “proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness.”

Considering the totality of the circumstances in light of Seagate, which significantly raised the bar for a finding of willfulness, the Court now declines to award any enhancement in this case. Even at the time when the Court determined that a modest enhancement was appropriate, one of the primary Read factors [Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992)] weighing against a substantial enhancement was the closeness of the case.

Under the Seagate standard, the issue of willfulness becomes even closer; had the Seagate standard been used in this case, Plaintiff might well have lost on willfulness. Moreover, the Court has since determined and Plaintiff accepted a remittitur that represented the high end of damages that a jury might have awarded . . . Based on the totality of the circumstances and in light of Seagate, the Court does not award any enhanced damages in this case.

Read/download the opinion here (link)

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