Fujifilm Corporation v. Benun, No. 2009-1487 (Fed. Cir. May 27, 2010).

The patent involved single use cameras. After the camera was used, the alleged infringer purchased the camera’s shell and refurbished the camera for an additional use. The district court granted the patentee’s motion for partial summary judgment on infringement, and a jury awarded damages. On appeal, the Federal Circuit affirmed.

The patentee contended that the alleged infringer waived its arguments on appeal. A party can only appeal issues presented to the jury which were “included in an earlier motion for JMOL under Fed. R. Civ. P. 50(a), and properly renewed in a Fed. R. Civ. P. 50(b) post-trial motion.” In this case, the patentee asserted that the alleged infringer waived two appellate issues. As to the first appellate issue, the patentee failed to preserve the waiver argument by not objecting to the alleged infringer’s inclusion of the argument in its Rule 50(b) post-trial motion. But the alleged infringer waived the second appellate issue by failing to raise it in either the Rule 50(a) or Rule 50(b) motions.

The alleged infringer asserted that it was not liable as the patent was exhausted by the original sale of the camera. The court explained that the exhaustion requirement includes a territorial requirement. Thus, a patent is not exhausted by a sale outside of the United States. In this case, some of the cameras were originally sold outside of the United States, and these sales did not exhaust the patentee’s patent rights within the United States.

The alleged infringer also argued that the damages were excessive. In particular, the patentee’s expert calculated the same total damages using two different models. In these models, the royalty rate changed inversely to royalty-base changes. The court affirmed the finding that the jury was permitted to consider evidence of “bundling and convoyed sales in determining the proper scope of the royalty base.”

A copy of the opinion can be found here.