Patent Lawyer Blog
After a jury awarded the Trustees of Boston University (“BU”) a $9.3 million dollar one-time lump-sum payment from Epistar and a $4 million dollar one-time lump-sum payment from Everlight, the district court denied the defendants’ motions for judgment as a matter of law and/or a new trial, other than with respect to the issue of damages. On the damage issue, the district court granted a remittitur because the lump-sum damages awards were not supported by the evidence.
After the district court denied a motion for reconsideration, BU notified the district court that it elected to have a new trial on damages or, in the alternative, to permit an interlocutory appeal.
The district court determined here that it would be appropriate to permit such an appeal: the Court agrees with the plaintiff that there is a controlling issue of law on whether the Court must uphold the jury’s choice of a lump-sum format for a reasonable royalty in determining the maximum recovery for which there is evidentiary support. Both the First Circuit and the Federal Circuit follow the “‘maximum recovery rule,’ which remits an excessive jury award to the highest amount the jury could ‘properly have awarded based on the relevant evidence.'” Shockley v. Arcan, Inc., 248 F.3d 1349, 1362 (Fed. Cir. 2001) (quoting Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512, 519 (Fed. Cir. 1995)); see also Trainor v. HEI Hosp., LLC, 699 F.3d 19, 33 (1st Cir. 2012).
The district court then concluded that the evidence at trial would have supported damages awards in the form of running royalties in the amounts the jury awarded, but the evidence did not support the amount of damages based on the lump-sum calculation the jury actually chose: In Lucent, the Federal Circuit emphasized that “certain fundamental differences exist between lump-sum agreements and running-royalty agreements.” 580 F.3d at 1330. “For a jury to use a running-royalty license agreement as a basis to award lump-sum damages . . . some basis for comparison must exist in the evidence presented to the jury.” Id. In the present case, the plaintiff’s expert did not provide a basis for comparison between his running royalty framework and a lump-sum award.
The district court also analyzed whether it would be appropriate for the Federal Circuit to hear an appeal that would avoid the potential of a new trial on damages: If the Federal Circuit determines that this Court violated the maximum recovery rule by relying on the jury’s choice of a lump-sum format, then the Federal Circuit’s decision would avoid the necessity of a new trial on damages. This Court has not found a case where the Federal Circuit squarely addressed the issue of whether a district court can correct a damages figure on a motion for remittitur by extrapolating a royalty rate and base from the jury’s lump-sum award without express expert testimony explaining how to do so. Therefore, the Court finds that the second requirement of ยง 1292(b), that the question of law presents substantial ground for difference of opinion, is met.
Finally, an immediate appeal of this issue would materially advance the ultimate termination of the litigation. A successful determination for BU could forestall the need for a new trial on damages. This case has been hard fought, lengthy, contentious, and expensive. It seems counterproductive to retry damages only to have one of the other issues necessitate a remand. Because this Court has now issued final judgment on all other issues in this litigation, an interlocutory appeal of the remaining damages issue is particularly appropriate.
Trustees of Boston Univ. v. Everlight Electronics Co., LTD., Case No. 12-11935-PBS (D. Mass. Aug. 2016)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.