Case Cite

Presidio Components, Inc. v. American Technical Ceramics Corp., No. 08-cv-335-IEG-NLS, 2013 WL 4068833 (S.D. Cal. Aug. 12, 2013).

IPDQ Commentary

Rejecting both parties’ proposed supplemental damage proposals, the Presidio Components court calculated supplemental damages on a per-sale basis in a case where the jury had awarded lost profits.

Case Summary

After a jury awarded $1.05 million in lost profits based on the sale of 782,000 infringing products, Plaintiff sought supplemental damages for infringement between the date of the verdict and entry of judgment. Id. at *9-*10. Supplemental damages typically are calculated consistent with the damages awarded by the jury. In most cases, the award is for a reasonable royalty. Id. at *10.

So, based on the ratio of damages to sales, Plaintiff sought $1.34 per unit sold in supplemental sales of the accused product. Id. at *11. But the court rejected that argument because:

  • Plaintiff improperly relied on Federal Circuit case law holding royalty rates (not lost profits) are typically increased on post-verdict infringing sales;
  • The $1.34 rate was never found by the jury, but was a weighted average;
  • The jury adopted the position of Plaintiff’s expert that lost profits had to be calculated on a year-to-year basis, and sales prices and profit margins had decreased over time;
  • Awarding $1.34 per unit sold would result in an unsubstantiated windfall to Plaintiff. Id. at *11-*12.

In the absence of case law or reasoning to support Defendant’s proposed $0.25 per unit rate, the court rejected that option. Id. at *12.

The court then conducted a lengthy analysis of the infringed unit’s average selling price, gross profit margin (and cost of goods), and other incremental costs over time to conclude the proper supplemental rate should be $0.78 per unit. That was the amount the court used to calculate a final supplemental damages award. Id. at *13-*16.