Case Cite

Smith & Nephew, Inc. v. Interlace Medical, Inc., No. 10-10951-RWZ, slip op. (D. Mass. June 27, 2013).

IPDQ Commentary

In Smith & Nephew, a jury question and a verdict form once again presented a conundrum. When a jury asked a question, then returned an unexpected mixed verdict of lost profits and reasonable royalty damages, the court was left with few options for calculating damages. The court turned to the parties for input. The lesson here is to think hard about the verdict form and what a jury question might mean.

Case Summary

Plaintiff sued Defendant for infringement. A jury found the asserted claims valid and infringed, and awarded damages. Id. at 1, 21.

Because the evidence at trial suggested either lost profits or a reasonable royalty might be available on some infringing sales, the jury’s verdict form included four questions: (1) whether Plaintiff was entitled to lost profits; (2) the amount of lost profits; (3) the reasonable royalty rate; and (4) for sales for which lost profits were not available, the amount of reasonable royalty damages. Id. at 21.

During deliberations, the jury’s question indicated, that while it had come to a royalty rate, it could not “come to a dollar figure due to inability to find financial information.” Id. The parties assuming the jury intended only to award royalty damages. Because there was no dispute regarding the royalty base from which damages could be easily calculated, the parties agreed the judge should tell the jury that if it had answered all of the questions except the final one, it should return its verdict. Id.

The jury, however, returned a mixed award providing for $4 Million in lost profits and a 16% royalty. Id. at 22. Noting that Plaintiff was not entitled to both lost profits and royalty damages on a single sale, the court said it was impossible to determine from the verdict which fraction of Defendant’s sales the award of lost profits was intended to cover. Id.

Because it was left with no measure of damages to award, the court saw three options: (1) the parties could agree on the appropriate measure of damages; (2) the court could hold a bench trial to determine damages; or (3) the court could hold a jury trial to determine damages. Id. at 23. The court directed the parties to confer and report on how they wished to proceed. Id.

The court also denied motions for pre-verdict damages and prejudgment interest as premature. Id. at 24-25.