Ollnova Technologies Limited v. Ecobee Technologies, ULC d/b/a/ Ecobee
E.D. Tex.9/6/2024
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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
OLLNOVA TECHNOLOGIES LIMITED, §
§
Plaintiff, §
§
v. § CIVIL ACTION NO. 2:22-CV-00072-JRG
§
ECOBEE TECHNOLOGIES ULC d/b/a §
ECOBEE, §
§
Defendant. §
MEMORANDUM OPINION AND ORDER
Before the Court is the Motion for New Trial Based on the Improper Infringement Question
in the Verdict Form or, in the Alternative for an Amended Judgment Setting the Appropriate Start
Date for Prejudgment Interest (the âMotionâ) filed by Defendant ecobee Technologies ULC d/b/a/
ecobee (âecobeeâ). (Dkt. No. 247.) In the Motion, ecobee moves for a new trial on the basis that
âthe verdict form improperly combined the issues of infringement of thirteen claims . . . into a
single question that asked whether ecobee infringed any claim of any of the four patents.â (Id.)
Further, ecobee moves to amend the judgment under Fed. R. Civ. P. 59(e) so prejudgment interest
accrues from no earlier than March 8, 2022. For the following reasons, the Court finds that the
Motion should be DENIED.
I. BACKGROUND
Plaintiff Ollnova Technologies Limited (âOllnovaâ) alleged that ecobee infringes claims
1, 11, 12, and 20 of
U.S. Patent No. 7,746,887
(the ââ887 Patentâ); claims 1 and 2 of
U.S. Patent
No. 7,860,495
(the ââ495 Patentâ); claims 1, 3, 6, and 21 of
U.S. Patent No. 8,224,282
(the ââ282
Patentâ); and claims 1, 5, and 17 of
U.S. Patent No. 8,264,371
(the ââ371 Patentâ) (collectively,
the âAsserted Patentsâ). After a jury trial, the jury returned a unanimous verdict finding that ecobee
infringed one or more of the asserted claims of the Asserted Patents, and that Ollnova was entitled
to $11,500,000.00 in a lump sum royalty.
II. LEGAL STANDARD
A. New Trial
Rule 59 provides that a new trial may be granted on all or part of the issues on which there
has been a trial by jury for âany reason for which a new trial has heretofore been granted in an
action at law in federal court.â Fed. R. Civ. P. 59(a). Notwithstanding the broad sweep of Rule 59,
âcourts do not grant new trials unless it is reasonably clear that prejudicial error has crept into the
record or that substantial justice has not been done, and the burden of showing harmful error rests
on the party seeking the new trial.â Metaswitch Networks Ltd. v. Genband US LLC,
2017 WL
3704760
, at *2 (E.D. Tex. Aug. 28, 2017); Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co.,
276 F. Supp. 3d 629, 643
(E.D. Tex. 2017). âA new trial may be granted, for example, if the district
court finds the verdict is against the weight of the evidence, the damages awarded are excessive,
the trial was unfair, or prejudicial error was committed in its course.â Smith v. Transworld Drilling
Co.,
773 F.2d 610
, 612â13 (5th Cir. 1985); see also Laxton v. Gap Inc.,
333 F.3d 572, 586
(5th
Cir. 2003) (âA new trial is warranted if the evidence is against the great, and not merely the greater,
weight of the evidenceâ). Furthermore â[u]nless justice requires otherwise, no error in admitting
or excluding evidenceâor any other error by the court or a partyâis ground for granting a new
trial . . . the court must disregard all errors and defects that do not affect any partyâs substantial
rights.â Fed. R. Civ. P. 61.
III. DISCUSSION
A. Whether the Verdict Satisfied the Requirements for a Valid Verdict
ecobee argues that the verdict form in this case failed to satisfy the requirements for a valid
verdict form. (Dkt. No. 247 at 4.) First, ecobee argues that since Ollnova raised four separate
causes of action for infringement as to four asserted patents, the general verdict form should have
at least included separate infringement questions for each patent. (Id.) ecobeeâs argument is based
on Ninth Circuit and Tenth Circuit caselaw stating that a general verdict must, at a minimum,
âannounce[] the ultimate legal result of each claim.â Zhang v. Am. Gem Seafoods, Inc.,
339 F.3d
1020, 1031
(9th Cir. 2003); see Johnson v. ABLT Trucking Co.,
412 F.3d 1138, 1142
(10th Cir.
2005). ecobee contends that the single infringement question in this case failed to announce the
result of each of Ollnovaâs four distinct claims for infringement and each of ecobeeâs four
counterclaims. (Id.)
Second, ecobee argues that the verdict form violated its right to a unanimous verdict.
According to ecobee, the verdict form âpermittedâand, in fact, instructedâthe jury to find ecobee
liable for infringement regardless of whether all jurors agreed that ecobee was infringing the same
patent claim.â (Id. at 5.) Specifically, ecobee contends that asking whether Ollnova proved that
ecobee infringed any of the claims would âerroneously require[] an affirmative answer even in a
situation where all jurors did not agree that the same patent was being infringed.â (Id. at 6.) As
ecobee interprets the verdict form, â[a]s long as each juror believed some claim of some patent
was infringed, the jury would have been required to answer âYesââeven if the various jurors
believed that ecobee was infringing a different asserted patent.â (Id.) ecobee argues that the
Courtâs references to unanimity in the jury instructions did not remedy this alleged error.
According to ecobee, the jury could abide by the Courtâs instruction that âyour answers and your
verdict must be unanimous,â find different patents infringed, and answer âYesâ as to infringement.
(Id. at 6-7.)
In response, Ollnova contends that these same arguments were advanced and rejected by
this Court in Optis Wireless Tech., LLC v. Apple Inc., No. 2:19-cv-00066-JRG, Dkt. No. 667 (E.D.
Tex. Aug. 9, 2021). Further, Ollnova argues that ecobeeâs Ninth and Tenth Circuit caselaw are
inapposite in light of the applicable Federal and Fifth Circuit caselaw that ecobee largely ignores.
Ollnova notes that both the Federal Circuit and the Fifth Circuit hold that â[t]he specificity of the
verdict is within the discretion of the trial judge.â (Dkt. No. 260 at 3 (quoting Hoechst Celanese
Corp. v. BP Chems. Ltd.,
78 F.3d 1575, 1581
(Fed. Cir. 1996))). Ollnova argues that the Federal
Circuit has further confirmed that âa trial court may, with proper instructions, present a patent case
to a jury for a general verdict encompassing all of the issues of validity and infringement.â (Id. at
4 (quoting Structural Rubber Prod. Co. v. Park Rubber Co.,
749 F.2d 707, 720
(Fed. Cir. 1984)
(citation omitted))).
Concerning unanimity, Ollnova argues that ecobee waived its arguments by failing to
object before or during trial that the verdict form would violate its right to a unanimous jury verdict.
(Id.) According to Ollnova, ecobee simply argued that the single question would be âconfusing to
the jury and incomplete.â (Id. (quoting Trial Tr. at 1212:12)). On the merits, Ollnova argues that
ecobeeâs unanimity arguments fail because the jury was repeatedly instructed that its answers must
be unanimous, and it was instructed to assess infringement on a claim-by-claim basis. (Id. at 5.)
Ollnova argues that â[t]he only reasonable way for the jury to understand these instructions is that
the jury was required to assess each patent claim individually (âclaim-by-claimâ) and to
unanimously agree on which claim or claims were infringed.â (Id.) Finally, Ollnova argues that
ecobeeâs unanimity arguments cannot be squared with its own proposal that the verdict form
should have a single infringement question about each patent, and not a separate question for each
asserted claim. (Id.)
In reply, ecobee contends that Ollnova never meaningfully disputes its central argument:
that the verdict form was deficient because it did not announce a result for each individual cause
of action and counterclaim. (Dkt. No. 265 at 1.) ecobee argues that the fact that its supporting case
law comes from the Ninth Circuit Court of Appeals is not a reason for its arguments to fail because
the Tenth Circuit Court of Appeals also reiterates the same principles. (Id.)
According to ecobee, it did not waive its unanimity objection because it generally objected
to the verdict formâs inclusion of only a single infringement question that encompassed all four
asserted patents. (Id. at 2.) On the merits, ecobee argues that the mere use of the words
âunanimousâ and âclaim-by-claimâ in the jury instructions did not cure the alleged error because
âneither the instructions nor verdict form required unanimity on the requisite element for liability.â
(Id.) Further, ecobee contends that its own proposed jury instruction with a question for each
patent, but not for each claim, âwould not have run afoul of the requirement that each cause of
action and counterclaim be addressed on the verdict form,â since there would be a separate
question for each count of infringement. (Id.)
In sur-reply, Ollnova notes that ecobee does not dispute that this Court in prior cases has
rejected substantially similar arguments. Optis, No. 2:19-cv-00066-JRG, Dkt. No. 667; Solas Oled
Ltd. v. Samsung Display Co., No. 2:19-cv-00152-JRG,
2021 WL 4950308
, at *23 (E.D. Tex. Oct.
25, 2021). Further, Ollnova argues that ecobee rests its arguments entirely on Ninth and Tenth
Circuit caselaw involving non-patent cases but fails to cite any Federal Circuit and Fifth Circuit
cases rejecting forms like the verdict at issue here. (Dkt. No. 272 at 1.) Finally, Ollnova argues
that ecobee fails to meaningfully rebut that its unanimity arguments are waived and fail on the
merits. (Id. at 1-2.)
The Court agrees with Ollnova. ecobee contends that to comply with Rule 48(b)âs
requirement of jury unanimity, a general verdict must âat a minimum, âannounce[] the ultimate
legal result of each claim.ââ (Dkt. No. 247 at 4 (citing Zhang v. Am. Gem Seafoods, Inc.,
339 F.3d
1020, 1031
(9th Cir. 2003)). Zhangâan employment law case from the Ninth Circuitâdoes not
state that the jury should return a separate verdict as to each claim, as ecobee contends. Rather,
Zhang states: âA jury may return multiple general verdicts as to each claim, and each party, in a
lawsuit, without undermining the general nature of its verdicts.â Zhang,
339 F.3d at 1031
(emphasis added). ecobeeâs Ninth and Tenth Circuit caselaw is inapposite, especially in light of
the Federal Circuit and Fifth Circuit caselaw that ecobee largely ignores.
âThe specificity of the verdict is within the discretion of the trial judge.â Hoechst Celanese
Corp. v. BP Chemicals Ltd.,
78 F.3d 1575, 1581
(Fed. Cir. 1996). Indeed, as the Federal Circuit
has stated, âa trial court may, with proper instructions, present a patent case to a jury for a general
verdict encompassing all of the issues of validity and infringement.â Structural Rubber Prods.,
749 F.2d at 720
(emphasis added). It follows that if it is proper to present a case to a jury for a
general verdict âencompassing all of the issues of validity and infringement,â then presenting a
single question for infringement is also proper.
Concerning ecobeeâs arguments related to unanimity, the Court finds that ecobee has
waived its objections. During the Courtâs formal charge conference with the partiesâat which
time the parties were to lodge all objections they had to the verdict form and jury instructionsâ
Defendants provided only the following objection to the Courtâs infringement question (Question
No. 1):
ecobee objects to Question No. 1 as presented as confusing to the jury and
incomplete in view of the instructions and evidence regarding patent-by-patent
analysis. Moreover, Ollnovaâs theories, both for infringement and damages, differ
amongst the four patents as previously stated. A single question as presented is
likely to cause significant prejudice for the parties in post-trial proceedings,
including Rule 50(b) motions and appeal, if necessary. ecobee further notes that the
partiesâ proposed questions separately listed the four asserted patents.
Accordingly, ecobee respectfully submits Question 1 should list each patent
separately.
Trial Tr. at 1212:11-23. Notably, ecobee did not argue, as they do now that â[t]he verdict form . . .
deprived ecobee of its right to a unanimous decision.â (Dkt. No. 247 at 6.) It is well-established
that âa party may not object to an instruction on one ground at trial and then attempt to rely on a
different ground on appeal.â Wright v. Ford Motor Co.,
508 F.3d 263, 272
(5th Cir. 2007) (citing
Coastal Distributing v. NGK Spark Plug Co.,
779 F.2d 1033, 1039
(5th Cir.1986)). The same
applies for motions for new trial, as ecobee seeks here. ecobeeâs objection that the verdict formâs
infringement question should be split into four, separate questions wholly failed to inform the
Court as to any concerns regarding jury unanimity regarding any given claim. See Palmer v.
Hoffman,
318 U.S. 109, 119
,
63 S. Ct. 477, 483
,
87 L. Ed. 645
(1943) (âIn fairness to the trial
court and to the parties, objections to a charge must be sufficiently specific to bring into focus
the precise nature of the alleged error. Where a party might have obtained the correct charge by
specifically calling the attention of the trial court to the error and where part of the charge was
correct, he may not through a general exception obtain a new trial.â). Indeed, ecobeeâs own
proposed verdict formâproposing patent-by-patent instead of claim-by-claim infringement
questionsâwould seem to run into the same concerns regarding jury unanimity now raised, further
underscoring ecobeeâs waiver.1 See Hoechst Celanese Corp. v. BP Chemicals Ltd.,
78 F.3d 1575,
1581
(Fed. Cir. 1996) (finding that plaintiff, âby its acquiescence in and indeed by its proposal of
the verdict form [question disputed on appeal,] waived objection to the verdict formâ). As such,
1 ecobeeâs argument that its own proposal âwould not have run afoul of the requirement that each cause of action and
counterclaim be addressed on the verdict formâ is not persuasive. (See Dkt. No. 265 at 2.) By ecobeeâs logic, even
submitting the questions of infringement to the jury on a patent-by-patent basis could result in some jurors concluding
that one claim of a patent was infringed with other jurors concluding that a different claim was infringedâresulting
in the jurors answering âYesâ for infringement of that patent when the jury did not agree on which asserted claim was
infringed. Again, given the Courtâs instructions, the Court disagrees that this scenario was bound to occur in either
scenario, whether infringement was presented as a single question or on a patent-by-patent basis. However, following
ecobeeâs logic to its natural conclusion does not avoid the concerns it raises regarding unanimity, thereby highlighting
that these arguments are both unpersuasive and waived.
the Court finds that ecobee has waived the materially broader objection it now brings regarding
jury unanimity.
Even if ecobee has not waived this objection by failing to raise it during trial, the Court
finds that its concerns regarding the unanimity of the verdict form fail on the merits. It is black-
letter law that â[a] jury always and necessarily makes findings (albeit unwritten) before it reaches
its general verdict,â and that âa jury necessarily reaches a legal conclusion, presumably in accord
with the judgeâs instructions on the law, before it reaches its general verdict.â R.R. Dynamics,
Inc. v. A. Stucki Co.,
727 F.2d 1506, 1514
(Fed. Cir. 1984). ecobee completely ignores that the
jury is presumed to have followed this Courtâs jury instructions, which repeatedly make it clear
that infringement is decided on a claim-by-claim basis and that the juryâs determinations must be
unanimous.
For example, the Court instructed the jury that their verdict had to be unanimous:
A verdict form has been prepared for you, and youâll take this verdict form with
you to the jury room. And when you have reached a unanimous agreement as to
your verdict, you will have your foreperson fill in the blanks in that form reflecting
those unanimous decisions, date it, sign it, and then advise the Court Security
Officer that you have reached a verdict. Answer the questions as directed in the
verdict form from the facts as you find them to be. Do not decide who you think
should win this case, ladies and gentlemen, and then answer the questions to reach
that result. Again, your answers and your verdict must be unanimous.
Trial Tr. at 1220:11-21.
Answer each question in the verdict form based on the facts you find them to be,
following the instructions the Court has given you on the law. Again, do not decide
who you think should win this case and then answer the questions to reach that
result. One more time let me remind you that your answers and your verdict in this
case must be unanimous.
Trial Tr. at 1303:24-1304:4.
The Court further instructed the jury that they were to go claim-by-claim and agree as to
which claims were infringed. Trial Tr. at 1236:8-9 (âNow, you must determine separately for each
asserted claim whether or not there is infringementâ); Trial Tr. at 1232:7-8 (âThe coverage of a
patent is assessed on a claim-by-claim basisâ); Trial Tr. at 1237:13-15 (âAs with direct
infringement, you must determine whether there has been active inducement on a claim-by-claim
basisâ).
To avoid any reasonable doubt, the verdict form specifically instructed the jury that
damages could be awarded âONLY as to any Asserted Claim that you [the jury collectively] have
found to be infringed . . . AND not ineligible . . . AND not invalid.â (Dkt. No. 226 at 7.) The Court
provided similar instructions in its charge to the jury:
Now, if you decide that any asserted claim has been infringed and is neither
ineligible for patent protection or invalid, youâll then need to decide what amount
of money damages, if any, to be awarded to Ollnova to compensate it for that
infringement.
Trial Tr. at 1229:8-12. Thus, ecobeeâs argument that the jury could have answered âYesâ as to
infringement âas long as each juror individually believed at least one . . . patent was infringedâ
absent the required . . . agreement as to the specific infringed patent(s)â is without merit.
B. Whether the Verdict Form Prejudiced ecobee
ecobee also contends that it was prejudiced by the verdict form, and thus it argues that a
new trial is warranted. (Dkt. No. 247 at 7.) First, ecobee argues that the verdict form obscures the
basis for the juryâs liability finding, forcing ecobee to approach post-trial arguments without
knowing which patents formed the basis for the juryâs infringement and damages decisions. (Id.)
According to ecobee, Ollnova has an âunfair advantageâ in post-trial briefing because it may
attempt to overturn the juryâs invalidity finding concerning the â282 Patent with precision, while
ecobee is forced to address every patent to overturn the infringement finding. (Id. at 7-8.) Second,
ecobee contends that the verdict form vitiates estoppel protections by failing to identify which
issues were decided as part of the juryâs infringement finding. (Id. at 8.) For example, ecobee
contends that the jury might have decided that ecobee infringed the â495 Patent, but not the â371
Patent, in which case, ecobee would be entitled to estoppel, but would not know on which points.
Finally, ecobee argues that the verdict form violated its Due Process Rights under the Fifth
Amendment of the Constitution. (Id. at 8-9.) Specifically, ecobee contends that it has been
deprived of its property without notice because it does not know which acts constituted
infringement.
In response, Ollnova argues that ecobee fails to identify any prejudice that would warrant
a new trial. (Dkt. No. 260 at 6.) It argues that Ollnova was not given an âunfair advantageâ to
overturn the invalidity findings and further that ecobeeâs concern about Ollnovaâs âunfair
advantageâ is moot because Ollnova is not seeking to overturn the invalidity of the â282 Patent.
Ollnova also asserts that ecobeeâs argument is contrary to well-settled law that a general verdict
will be upheld âif there was sufficient evidence to support any of the plaintiffâs alternative factual
theories,â on the assumption that âthe jury considered all the evidence and relied upon a factual
theory for which the burden of proof was satisfied.â (Id. (quoting i4i Ltd. Pâship v. Microsoft Corp.,
598 F.3d 831, 849
(Fed. Cir. 2010))). In other words, Ollnova argues that ecobee having to address
all patents in a JMOL motion is not a basis for a new trial. Ollnova also notes that ecobee does not
identify any authority supporting an award of new trial based on a purported âunfair advantageâ
created by a general verdict. (Id.)
Ollnova further argues that ecobee does not identify any authority that would support a
new trial based on a general verdict purportedly undermining collateral estoppel effects or for
allegedly violating Due Process rights. (Id. at 6-7.) These arguments, according to Ollnova, are
ânovel,â âcontrary to the well-settled law approving of general verdicts,â and should be rejected
for the same reasons as ecobeeâs previous arguments. (Id.) ecobee does not address any of these
arguments in its reply, instead focusing exclusively on its unanimity and prejudgment interest
arguments.
The Court agrees with Ollnova. As explained, â[t]he specificity of the verdict is within the
discretion of the trial judge,â (Hoechst Celanese Corp. v. BP Chemicals Ltd.,
78 F.3d 1575, 1581
(Fed. Cir. 1996)), and it is well-settled that general verdicts may be used in patent cases. First, the
Court is not persuaded that the verdict form gives Ollnova an âunfair advantage.â ecobee notes the
differences between validity and infringement on the verdict form but ignores the fact that both
parties have an incentive to overturn the juryâs validity findings and are both equally âadvantagedâ
with respect to the validity question. While the â282 Patent was found to be invalid, the â495 Patent
was not. Further, while ecobee makes its so-called âadvantageâ argument as to the specificity of
the validity question concerning the â495 Patent, Ollnova declines similarly to challenge the
invalidity of the â282 Patent. Accordingly, it is unclear exactly how Ollnova has an âunfair
advantage.â Regardless, ecobee does not provide any legal basis for overturning the verdict and
requiring a new trial based on âprejudice.â
Next, ecobee fails to support its argument with any legal authority that the Court should
overturn the verdict in this case on the grounds that it denies ecobee estoppel protections and
violates its Due Process rights. As previously explained herein, general verdicts like the one used
in this case may be used in patent cases. The Court finds no compelling reason to order a new trial
on these grounds.2
C. ecobeeâs Remaining Arguments for New Trial
ecobee argues that granting any one of its three JMOL/New Trial Motions (Dkt. Nos. 243,
244, and 246), in whole or in part, will require a new trial on any surviving infringement and
2 ecobeeâs decision to drop these arguments entirely from its reply brief in the face of Ollnovaâs arguments that ecobee
could not support its arguments with any authority is a testament to the weakness of these arguments.
damages issues. (Id. at 9.) For example, ecobee argues that âif ecobee were to prevail on JMOL or
appeal on its patent ineligibility argument for the â495 patent, but not prevail on its other JMOL
motions, it would be necessary to conduct a new trial on infringement and damages on the â887
and â371 patents, since it is possible that the jury verdict on infringement was based on the damages
figure that Ollnovaâs expert, Mr. Bergman, presented for the â495 patent alone. (Id. at 10.) Further,
ecobee contends that retrying damages alone without retrying infringement would not be possible,
as the damages jury would not know which patent(s) were infringed. (Id.)
In response, Ollnova argues that ecobee is incorrect that a new trial is needed on all issues
if the Court grants any single issue raised by ecobee. (Dkt. No. 260 at 7.) Since â[t]he critical
question is whether the evidence, taken as a whole, was sufficient to support the juryâs verdict,â
see Northpoint Tech., Ltd. v. MDS Am., Inc.,
413 F.3d 1301, 1310-11
(Fed. Cir. 2005), Ollnova
argues that the Court may uphold the verdict so long as there was sufficient evidence to support a
finding of infringement of âanyâ patent. (Id.) Accordingly, Ollnova contends that even if the Court
were to grant JMOL of noninfringement of any asserted claim, there is substantial evidence to
uphold the juryâs verdict as to the other asserted patent claims such that a new trial is not warranted.
(Id. (citing Walther v. Lone Star Gas Co.,
952 F.2d 119, 126
(5th Cir. 1992))). Concerning ecobeeâs
argument that a retrial on damages would require a retrial of infringement, Ollnova argues that its
damages theory presented at trial based on comparable licenses could be supported even if the jury
found infringement of just a single patent. (Id.) The partiesâ reply and sur-reply briefs do not
substantially add to these arguments.
This argument by ecobee is conditioned on the Court granting at least one of its Motions
for JMOL, at least in part. However, the Court has not granted any of ecobeeâs motions for JMOL,
and this issue is moot.
D. Prejudgment Interest
Even if a new trial is not granted, ecobee argues that the judgment should be amended to
set the start date for any prejudgment interest as of March 8, 2022, the filing of Ollnovaâs
complaint. (Dkt. No. 247 at 11.) According to ecobee, damages did not begin to accrue until this
date. ecobee notes that Ollnova alleged only indirect infringement for the asserted claims of the
â495 Patent and one asserted claim of the â371 Patent, and since Ollnova did not provide notice of
these patents prior to this litigation, its damages for indirect infringement of these claims cannot
begin to accrue prior to the filing of the complaint. (Id.) Concerning Ollnovaâs claims for direct
infringement, ecobee contends that Ollnovaâs failure to mark precludes pre-complaint damages
and interest.
In response, Ollnova argues that the Final Judgment should not be modified because it
correctly stated that prejudgment interest accrues âfrom the date [] the infringement began.â (Dkt.
No. 260 at 8 (quoting Dkt. No. 237 ¶¶ 3, 4)). Ollnova notes that this language from the Final
Judgment tracks Federal Circuit caselaw. For example, Ollnova notes that in Comcast IP Holdings
I LLC v. Sprint Commcâns Co., L.P.,
850 F.3d 1302
(Fed. Cir. 2017), the jury awarded a lump sum
royalty running from a 2006 hypothetical negotiation, and defendant Sprint complained that,
because two of the three infringed patents did not issue until six years after the 2006 hypothetical
negotiation, it was improper to award prejudgment interest starting from 2006. However, the
Federal Circuit disagreed and considered that the jury of was told to use the book of wisdom,
âlooking forward in time from the date of the first hypothetical negotiation to account for âall
information that would have been relevant to the parties in coming to and arriving at a deal.ââ
Id.
at 1314
. Accordingly, Ollnova argues, the Federal Circuitâs ruling concerning prejudgment interest
was identical to this Courtâs ruling in the Final Judgment: âPrejudgment interest runs from the
earliest date infringement for any patent issued at the time of the hypothetical negotiation.â
Id. at
1315
. Ollnova notes that the jury here decided to award the damages in the form of a lump sum
royalty, meaning that ecobee owed Ollnova $11.5 million as of the April 2012 hypothetical
negotiation. Since the April 2012 hypothetical negotiation coincides with when infringement
began, LaserDynamics, Inc. v. Quanta Computer, Inc.,
694 F.3d 51, 76
(Fed. Cir. 2012), Ollnova
argues that interest properly accrues starting in April 2012, when ecobee was to have fully paid
the lump sum amount of $11.5 million.
In reply, ecobee argues that Ollnova now seeks interest for periods prior to the statute of
limitationsâ cut-off (March 8, 2016). (Dkt. No. 265 at 4.) According to ecobee, Ollnova
overreaches by misinterpreting the Comcast decision. (Id.) ecobee contends that Comcast is
inapposite because it did not involve any disconnect between the damages period/statute of
limitations and the hypothetical negotiation (i.e., damages there began accruing within the six
years prior to the filing of the complaint). (Id.) Since interest runs from the dates that the damages
started to accrue, ecobee argues that the earliest date from which interest can run is the date that
damages started to accrue (March 8, 2016). (Id.)
While, the Court finds that it is not necessary to amend the Final Judgment, the Court does
not embrace fully Ollnovaâs interpretation of the relevant authority on damages and interest. The
Patent Act does not expressly provide the time period for calculating interest. See Transmatic, Inc.
v. Gulton Indus., Inc.,
180 F.3d 1343, 1347
(Fed. Cir. 1999) (holding that
35 U.S.C. § 284
âonly
prescribes damages and interest as a remedy for patent infringementâ and does not state â[w]hen
interest beings or endsâ). Instead,
35 U.S.C. § 284
awards a patentee âdamages adequate to
compensate for the infringement . . . together with interest and costs as fixed by the court.â The
Supreme Court has held that § 284 thus âgives a court general authority to fix interest and costs.â
Devex, 461 U.S. at 653. Typically, this general authority should âensure that the patent owner is
placed in as good a position as he would have been in had the infringer entered into a reasonable
royalty agreement.â Id. at 655; see also Bio-Rad Labs., Inc. v. Nicolet Instrument Corp.,
807 F.2d
964, 967
(Fed. Cir. 1986) (acknowledging that the award of prejudgment interest should be from
the date of infringement to the date of final judgment, âsince only such award will satisfy
âCongressâ overriding purpose [in section 284] of affording patent owners complete
compensationââ (quoting Devex, 461 U.S. at 655)). However, the purpose of prejudgment interest
is to compensate the patent owner for infringement and âcan apply only to the actual damages
portion of the judgment.â Imperium IP Holdings (Cayman), Ltd. v. Samsung Elecs. Co., Ltd., No.
4:14-CV-00371,
2017 WL 1716589
, at *3 (E.D. Tex. Apr. 27, 2017) (citing Beatrice Foods Co. v.
New Eng. Printing & Lithographing Co.,
923 F.2d 1576, 1580
(Fed. Cir. 1991)).
Actual patent infringement damages are limited by
35 U.S.C. § 286
. This statute provides
that âno recovery shall be had for any infringement committed more than six years prior to the
filing of the complaint or counterclaim for infringement in the action.â Accordingly, the Court
instructed the jury that the damages in this case began no earlier than March 8, 2016. Trial Tr. at
1257:1-9. Prejudgment interest cannot extend prior to the damages period. The Court also finds
that whether or not the jury awarded a lump sum or a running royalty does not control.3
Nonetheless, the Court is not persuaded that the Final Judgment should be amended as
ecobee contends. The Final Judgment provides the following:
3 Here, and in its response to ecobeeâs Motion for Judgment as a Matter of Law of No Damages or, in the Alternative,
for a New Trial Regarding Damages (Dkt. No. 246), Ollnova seems to argue that the statutory limits to damages under
35 U.S.C. § 286
and 287 somehow do not apply when the jury awards damages in the form of a lump sum. This
interpretation seems to be born out of the misunderstanding that the jury awards what was âowed . . . as of the []
hypothetical negotiationâ (Dkt. No. 260 at 9) and that the amount is ânot tied to units sold or time frameâ (Dkt. No.
259 at 18). However, the juryâs award of $11.5 million does not necessarily represent the âamount paid at the 2012
hypothetical negotiationâ (id.) as Ollnova contends, but rather is the amount of money âto compensate Ollnova for
any infringement that [the jury] may findâ during the damages period. Further, a lump sum award differs from a
running royalty in that a lump sum award compensates Ollnova for future damages in addition to past damages. It
does not allow Ollnova to reach beyond the statutory limits for its past damages, and it does not moot the requirements
of the marking statute.
Pursuant to
35 U.S.C. § 284
and Supreme Court guidance that âprejudgment
interest shall ordinarily be awarded absent some justification for withholding such
an award,â the Court awards pre-judgment interest to Plaintiff to be recovered by
Plaintiff from Defendant and applicable to all sums awarded herein, calculated at
the five-year U.S. Treasury Bill rate, compounded monthly, adjusting the effective
rate with each and every change in said five-year U.S. Treasury Bill rate from the
date [] the infringement began;
(Dkt. No. 237 at § 4.) â[F]rom the date [] the infringement beganâ does not mean the agreed upon
hypothetical negotiation date. It refers to the infringement for which the âsums [were] awardedââ
i.e., the infringement during the applicable damages period, as instructed by the Court.
Accordingly, the Court finds that prejudgment interest accrues from March 8, 2016. The Final
Judgment sufficiently ties the prejudgment interest to the damages accrued in this case. Given this
language, and the Courtâs guidance, there is no need to amend the Final Judgment.
Concerning ecobeeâs contentions that interest could not have accrued prior to March 2022,
the Court finds that ecobee merely repeats arguments that the Court has already rejected in
ecobeeâs Motion for Judgment as a Matter of Law of No Damages or, in the Alternative, for a New
Trial Regarding Damages (Dkt. No. 246). Accordingly, the Court will not amend the Final
Judgment on these grounds for the same reasons as stated in the Courtâs Order denying that motion.
IV. CONCLUSION
For the foregoing reasons, the Court finds that ecobeeâs Motion should be and hereby is
DENIED.
So ORDERED and SIGNED this Sth day of September, 2024.
RODNEY GILSTRAP \
UNITED STATES DISTRICT JUDGE
16Case Information
- Court
- E.D. Tex.
- Decision Date
- September 6, 2024
- Status
- Precedential