Tuesday, March 7, 2017

Federal Circuit Affirms Prejudgment Interest Award Running from Date of First Infringement of Three Patents

Three Federal Circuit damages opinions within the last seven days--when it rains it pours.  Today's opinion, Comcast IP Holdings I LLC v. Sprint Communications Co., addresses the question of whether, in a case in which the defendant is found to have infringed multiple patents and a lump-sum is awarded for them collectively, the court may award prejudgment interest running from the date the first patent was infringed rather than a separate interest award for each patent.  More precisely, the jury found that Sprint infringed three telecommunications-related patents.  Sprint began infringing one of the three patents in 2006, but the other two didn't issue until 2012.  The jury awarded a lump-sum royalty of $7.5 million, and the court awarded prejudgment interest starting from the date of the hypothetical negotiation (2006).  The court (per Judge Chen) rejects Sprint's argument that the interest award should have been apportioned per patent:
Sprint contends that the district court erroneously charged Comcast prejudgment interest from 2006 forward even though neither the ’008 Patent nor the ’046 Patent had issued at that point. . . . Specifically, because neither of those two patents had issued yet, there could be no infringement as a matter of law for them in 2006. In Sprint’s view, accordingly, the district court’s award of prejudgment interest was an abuse of discretion because the court should have calculated prejudgment interest from the time of first infringement of each of the three infringed patents until judgment. In other words, Sprint contends the district court should have apportioned the prejudgment interest calculations based on the royalty periods covered by the individual patents. . . . While in other contexts Sprint’s contentions might be well taken, they are not here.
The parties’ experts agreed that any damage award should take the form of a lump sum royalty payment. And, the jury was told that the lump sum royalty payment should run from the date of the earliest relevant hypothetical negotiation. [The court then quotes testimony from both parties' experts.] 
. . .  The jury was also told that the hypothetical negotiators would have employed the “book of wisdom,” looking forward in time from the date of the first hypothetical negotiation to account for “all information that would have been relevant to the parties in coming to and arriving at a deal.” . . . Both experts agreed that this information would have included the issuance of any later patent relating to the same technology. . . .
As the verdict form reflects, the jury found that claims in all three of the Low patents were infringed. . . . And as it was invited to do, the jury then awarded Comcast a lump sum royalty in the amount of $7.5 million. . . . That award necessarily was predicated on a hypothetical negotiation occurring in 2006. Because the jury found the ’916 Patent infringed and the hypothetical negotiation to have occurred in 2006 there was only one damage award for the district court to consider when assessing the dollar figure against which prejudgment interest should be measured and the date from which it was to run. There was, accordingly, neither a basis for the district court to apportion prejudgment interest nor a need for the district court to undertake such apportionment. . . .
Prejudgment interest runs from the earliest date of infringement for any patent issued at the time of the hypothetical negotiation; here, the ’916 Patent indisputably had been issued by 2006. We see no abuse of discretion in the district court’s assessment of prejudgment interest against Sprint based on the entire royalty award (pp. 18-21).
It seems plausible to me that, at least on the facts of this case, apportioning damages and interest among the three patents probably wouldn't have been worth the candle.

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