First published in LES Insights

Abstract

A prevailing patent owner's request for a higher amount of patent-infringement damages than awarded by the jury was denied because the patent owner's inaction contributed to the alleged deficiency in the jury's award. The court found that although the infringer failed to produce its financial records for part of the relevant damages period, the prevailing party should have asked the court to compel the disclosure of those records to ensure that the jury was presented with all evidence necessary to compute damages. In denying the patent owner's request for supplemental damages, the court also noted that the patent owner could have asked the court for a separate and subsequent trial on that portion of its damages or otherwise could have asked the jury to extrapolate the evidence actually presented for the allegedly omitted time period. Finally, the court pointed out, the jury itself may have extrapolated the infringer's sales for the entire pre-verdict damages period such that any disturbance of the jury's award would improperly invade the jury's right to determine appropriate compensatory damages.

When a patent owner prevails against an accused patent infringer, the owner is entitled to "damages adequate to compensate for the infringement." During trial, each side typically presents expert-witness testimony to explain to the jury the amount of damages it claims is adequate to compensate for the infringement. The precise rationale behind the jury's actual damages calculation, however, may be unclear, leaving the parties to speculate over what evidence the jury found persuasive in reaching its decision. If the prevailing party believes that the jury's award did not account for the full time period of infringement leading up to the verdict, it might ask the court to award it supplemental damages to compensate for the allegedly omitted time period. Recently, in TransPerfect Global Inc., v. MotionPoint Corp.,1 the United States District Court for the Northern District of California denied a prevailing patent owner's request for pre-verdict, supplemental damages, finding that the jury's award may have accounted for the full period of infringement and that any potential deficiency in the award was due at least in part to the patent owner's inaction. The court's decision illustrates steps that a patent owner may take to increase the odds that it will recover damages accounting for all compensable infringing sales.  

Background

TransPerfect and MotionPoint, competing providers of language-translation services, brought claims against each other for patent infringement. Ultimately, in July 2013, the jury found that MotionPoint's accused product infringed one of TransPerfect's patents and awarded TransPerfect roughly one million dollars in total damages. Because of its belief that the jury failed to compensate it for pre-verdict infringement occurring after 2011, TransPerfect asked the court to modify the award to include supplemental damages for that time period.  

The TransPerfect Decision

According to TransPerfect, MotionPoint failed to produce its post-2011 financial records. The parties' experts were therefore unable to analyze the amount of damages during that time period. Consequently, TransPerfect asserted, the jury could not have included post-2011 damages in its verdict, entitling TransPerfect to supplemental damages for that period. The court, however, highlighted several facts cutting against TransPerfect's position. First, during discovery TransPerfect did not ask the court to order MotionPoint to disclose those financial records. The court therefore reasoned that if the jury was not presented with all of the necessary damages evidence, TransPerfect contributed to that deficiency.

Second, although TransPerfect purportedly reserved the right in its complaint and pretrial statement to seek post-2011 damages after trial, the court saw this as an attempt to take the question of damages away from the jury. In the court's view, if TransPerfect desired to address post-2011 damages separately, it would have had to obtain the court's permission to bifurcate that portion of damages for a separate trial or reach an agreement to that effect with MotionPoint. Alternatively, the court noted, to ensure that the jury accounted for all periods of infringement, TransPerfect could have asked the jury to extrapolate post-2011 damages from the earlier financial records.

Third, the court noted that the jury award may have in fact accounted for post-2011 damages because the verdict form asked the jury for TransPerfect's "total damages." The court reasoned that the jury itself might have extrapolated MotionPoint's post-2011 infringing sales, but nevertheless found the damages to be less than the number TransPerfect's expert proffered. The court then concluded that disturbing the jury's award would improperly invade the jury's right to determine appropriate compensatory damages.

The court thus denied TransPerfect's motion for supplemental damages.  

Strategy and Conclusion

This case shows that courts may be reluctant to award supplemental damages beyond the amount awarded by a jury if a plaintiff's inaction contributed to any alleged deficiency in the jury award.