Post-Verdict Infringing Sales Exceptional, But Not Willful

Posted on July 3, 2007 by R. David Donoghue

Lexion Medical, LLC v. Northgate Techs., Inc., No. 04 C 5705, Slip Op. (N.D. Ill. May 29, 2007).*

Judge Rosenbaum (a visiting judge, who is the Chief Judge for the District of Minnesota) granted in part plaintiff’s Fed. R. Civ. P. 59(e) and 60(a) motion to alter or amend the judgment, altering the judgment to include all post-verdict sales of infringing product. The court held a trial in October 2006 resulting in a jury verdict that defendants’ insufflator (a device that blows a powder, gas or vapor into a body cavity) infringed plaintiff’s patent, but that the infringement was not willful. The Court entered judgment in February 2007. Shortly after the judgment, defendant Northgate Technologies (“Northgate”) informed plaintiff that after the verdict, but before the judgment was entered, Northgate sold its remaining inventory. Plaintiff sought damages for the post-verdict sales and argued that the Court should find the post-verdict sales willful and declare the case exceptional. The Court held that the post-verdict sales infringed the patent, but that they were not willful because Northgate received an oral opinion of counsel prior to shipping any post-verdict product. The oral opinion was based upon three factors: 1) a belief that the jury’s verdict was unreasonable; 2) the fact that the Court had not yet entered a permanent injunction; and 3) Northgate’s post-trial arguments that were pending before the Court. The Court noted that the second factor could not support Northgate’s decision. But the remaining justifications were not “so flawed as to alert Northgate to reject [the oral opinion] as ‘obviously bad legal advice.”

But because Northgate’s decision to sell infringing product post-verdict “needlessly multiplied” the case, the Court held that the post-verdict sales were exception and awarded plaintiff’s attorneys fees and costs incurred by the post-verdict sales motion. Additionally, the Court entered a permanent injunction.

*You can read the opinion here.

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Untimely Rule 59 Motion Considered Under Rule 60

Posted on May 10, 2007 by R. David Donoghue

Scholz Design Inc. v. Jaffe, __ F. Supp.2d __, 2007 WL 1276910 (N.D. Ill. Apr. 24, 2007) (Grady, J.).

Judge Grady treated plaintiff's untimely motion to reconsider as a Fed. R. Civ. P. 60(b) motion to vacate judgment (Judge Grady's previous order is discussed in the Blog's archives) and denied the motion because it simply rehashed previously rejected arguments.  After a bench trial, the Court entered judgment on behalf of defendants because they had neither directly nor contributorily infringed plaintiff's copyrighted home design.  The Court held that, while defendants approved the design, any actual copying of the copyrighted design was done by defendants' architects without defendants knowledge.  In the instant motion, plaintiff argued that defendants infringed its copyrighted designs as a matter of law because the Court had deemed admitted -- for failure to respond to requests for admission -- that the interior and exterior designs of the house at issue were derivative works based upon plaintiff's design.  But the Court explained that the admission of infringement did not include an admission as to which parties committed the infringement.  As a result, the Court denied plaintiff's motion and allowed its prior judgment to stand.

Practice tip:  Read the Federal Rules and watch your filing deadlines.  Had plaintiff filed its motion within ten (10) days of entry of the Court's judgment, its motion could have been considered pursuant to the more lenient Rule 59 standards.  Although this case's outcome would likely have been the same, in other cases the application of the Rule 59 standard could be outcome-determinative.
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