Filewrapper®

Remittitur without new trial requires legal error, not error as a matter of law

October 29, 2008
Post by Blog Staff

In a recent decision, the Federal Circuit reversed a district court's reduction of the jury's damages award, remanding the case for a new trial on damages, and affirmed the jury's verdict of willful infringement and the district court's award of attorney fees under § 285.

The district court held there was insufficient evidence as a matter of law to support the jury's damages award, so it reduced the award from over $1 million down to just over $50,000. However, the court did not offer the patentee the option of a new trial. The Federal Circuit held this violated the Seventh Amendment, which requires a new trial unless the award was based on legal error, not present here.

Further, the Federal Circuit held the district court's jury instruction on the issue of actual notice under § 287 was legally incorrect, as it improperly foreclosed a finding of actual notice before the discovery of the defendant's infringement. As a result, the Federal Circuit remanded the case for a new trial on damages to address both the amount and the date from which damages should be calculated.

Floyd M. Minks is an inventor and president of Minks Engineering, a manufacturer, designer and supplier of electronic equipment for automotive equipment, including all terrain vehicles (ATVs). Among his inventions is U.S. Patent No. 4,664,080, directed to an electrical reverse speed limiter circuit, a device which restricts the speed of an internal combustion engine ATV when the vehicle is in a reverse gear.

Polaris is a manufacturer and retailer of ATVs. In 2005, Minks sued Polaris for infringement. Before Minks brought suit, Polaris had licensed products from Minks Engineering since about 1970. In 1996, Polaris engaged Minks Engineering regarding its ability to purchase the reverse speed limiting component from another supplier. Minks Engineering informed Polaris that the concept was covered by its '080 patent, and any other manufacturer would necessarily infringe the patent. Polaris eventually did purchase the component from another manufacturer, assuring Minks that the new component would not infringe the '080 patent. Minks purchased a Polaris ATV, discovered the infringing component, and brought the present suit.

The jury awarded Minks $1,294,620.91. The district court examined the evidence on the record to determine a reasonable royalty rate, number of infringing sales, and royalty base. The court then calculated a "reasonable" royalty based on this information and reduced Minks' damages to $27,904.80, which was doubled to $55,809.60 for willful infringement. The district court stated that because the jury award was not supported by the evidence, the damages were in error as a matter of law, and refused to offer Minks a new trial.

The Seventh Amendment states (in part) that "no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of common law." The Supreme Court's decision in Hetzel v. Prince William County requires that a defendant be offered a choice between accepting the reduced award for damages and a new trial on damages. The Eleventh Circuit (whose law applies to this non-patent issue) applies an exception to this rule if the reduction is premised on "legal error," such as where a portion of the amount is not permitted by law or where the award of punitive damages violates the Due Process Clause.

Here, the Federal Circuit held the reduction was not a "legal error," as the district court in deciding to reduce the award examined the evidence in the record and determined there was no legally sufficient basis for the jury's award. This was not an instance where the applicable law did not permit an award, but an instance where, according to the district court, the facts did not support the jury's award. As a result, under Hetzel, the district court was obligated to grant Minks a new trial.

In addition, the Federal Circuit held the district court's jury instruction on the issue of actual notice was legally defective. The instruction given was:

The date notice was given is the date on which Minks communicated to Polaris a specific charge that one of its products may infringe claim two of the '080 patent.

Minks objected that this instruction improperly precluded a finding of notice before he discovered the infringement, and requested the following instruction:

The date notice was given is the date on which Minks communicated to Polaris a specific charge that one of its products infringed or would infringe claim two of the '080 Patent.

The Federal Circuit agreed with Minks, noting "as long as the communication from the patentee provides sufficient specificity regarding its belief that the recipient may be an infringer, the statutory requirement of actual notice is met." Here, there were several potential instances before Minks actually discovered the infringement where such specificity could conceivably be found, so the court instructed the issue to be considered on remand at the new damages trial.

Polaris appealed on the issue of infringement, arguing it did not infringe as a matter of law. The relevant claim is a means-plus-function claim. The parties did not dispute that the accused product differed from the disclosed structure in the patent. However, the court affirmed the district court's determination that the jury's verdict was supported by substantial evidence. There was sufficient evidence of identity of function and equivalent structure between the claimed invention and the accused device to support the verdict.

Polaris argued it was entitled to judgment as a matter of law on the issue of willfulness, given the intervening Seagate decision adopting an objective recklessness standard for willfulness. The Federal Circuit disagreed, holding no plain error was shown as required under Eleventh Circuit law, given the district court's statements that the issue of willfulness was "not close," and it was "fairly clear" Polaris copied the patented invention.

To read the full decision in Minks v. Polaris Indus., Inc., click here


Post Categories

Comments (0)
Post a Comment



Captcha Image
Return to the Filewrapper Blog

Search Posts

Purpose

The attorneys of McKee, Voorhees & Sease, P.L.C. designed this blog as an informational and educational resource about intellectual property law for our clients, other attorneys, and the public as a whole. Our goal is to provide cutting-edge information about recent developments in intellectual property law, including relevant case law updates, proposed legislation, and intellectual property law in the news.

Disclaimer

McKee, Voorhees & Sease, P.L.C. provides this blog for general informational purposes only. By using this blog, you agree that the information on this blog does not constitute legal or other professional advice and no attorney-client or other relationship is created between you and McKee, Voorhees & Sease, P.L.C. Do not consider this blog to be a substitute for obtaining legal advice from a qualified, licensed attorney. While we try to revise this blog on a regular basis, it may not reflect the most current legal developments. We consciously refrain from expressing opinions on this blog and instead, offer it as a form of information and education, however if there appears an expression of opinion, realize that those views are indicative of the individual and not of the firm as a whole.

Sign Up For Our Newsletter

Enter your name and email address to receive the latest news and updates from us and our attorneys.

Subscribe to: MVS Newsletter

Subscribe to: Filewrapper® Blog Updates

  I have read and agree to the terms and conditions of McKee, Vorhees & Sease, P.L.C.