Case Cite

DDR Holdings LLC v. Hotels.Com, L.P., No. 2:06-cv-42-JRG, 2013 WL 3187161 (E.D. Tex. June 20, 2013); DDR Holdings LLC v. Hotels.Com, L.P., No. 2:06-cv-42-JRG, 2013 WL 3187163 (E.D. Tex. June 20, 2013).

IPDQ Commentary

Prejudgment interest took center stage in DDR Holdings. The court allowed an NPE to recover prejudgment interest, even during the pendency of a stay occasioned by a reexamination requested by the patent holder.

Case Summary

Plaintiff DDR sued multiple Defendants for patent infringement in January 2006. DDR Holdings, 2013 WL 3187161 at *1. The case was stayed for almost four years pending reexamination of the two patents-in-suit. Id. Ultimately, a jury trial resulted in a finding of infringement, and they were awarded $750,000 in damages for the period from the date the patent issued, January 31, 2006, through the date of the verdict in October 2012. DDR Holdings, 2013 WL 3187163 at *1.

The court awarded pre- and post-judgment interest (Id. 2013 WL 3187163 at *3-4) and resolved four issues relating to prejudgment interest:

  • Interest Began at Hypothetical Negotiation – Defendant argued Plaintiff’s damages expert had calculated damages only for the time period from 2010 to 2012, so prejudgment interest should not run from the date of the hypothetical negotiation (first infringement) in January 2006. Id. at *1. But, the court had instructed the jury to award damages from the date of the hypothetical negotiation, which all parties agreed was in January 2006. Id. Thus, the court concluded the jury award constituted damages from January 2006, and interest ran from that date. Id.
  • Interest Ran During Stay – While acknowledging that withholding interest is the exception rather than the rule, Defendants asked the court to toll prejudgment interest during the stay occasioned by the reexamination Plaintiff (not Defendants) had requested. Id. at *2. The court disagreed, and awarded interest throughout the stay because it had “conserved the resources of the parties and the court” and it was “not unreasonable or unjustified” for Plaintiff to seek the stay. Id. at *3 (relying on Krippelz v. Ford Motor Co., 670 F.Supp. 2d 815, 819-20 (N.D. Ill. 2009).
  • NPE Entitled to Interest – Defendants argued Plaintiff, as a non-practicing entity, was not entitled to prejudgment interest because interest would be a “windfall.” Id. at *3. The court found no justification or analysis to preclude Plaintiff from recovering prejudgment interest solely because it was an NPE. Id.
  • Interest Calculated at Prime Rate – The court concluded prejudgment interest would be awarded at the average prime rate compounded annually. Id.

The same day in a separate opinion, the court denied Defendant’s Rule 50 motion to find Plaintiff’s damages model unsupportable as a matter of law, saying the model was sufficiently linked to the facts of the case. DDR Holdings, 2013 WL 3187161 at *9.