Opinion
No. C98-0110 MJM.
October 26, 1999.
ORDER
This matter comes before the court pursuant to defendant's July 16, 1999 motion to bifurcate trial (docket number 25) and brief in support thereof (docket number 26). Plaintiff filed a response and supporting brief on August 2, 1999 (docket number 29). For the reasons set forth below, defendant's motion is denied.
Defendant (CMI) argues that, pursuant to Fed.R.Civ.P. 42(b), the pending patent infringement suit should be separated into three parts. Specifically, CMI urges the court to first conduct a bench trial on its affirmative defenses of laches and equitable estoppel. CMI also moves the court to bifurcate any subsequent jury trial into a liability phase and a damages phase. CMI has requested that the issue of willfulness be determined in the damages phase of the trial. Plaintiff (Cedarapids) resists CMI's motion, claiming that one jury trial should be held on all issues. Cedarapids emphasizes that the pending case is not a complex patent infringement case involving multiple patents, products, and defendants which would typically warrant bifurcation. The court agrees with Cedarapids.
Separation of Trials Pursuant to Rule 42(b)
Federal Rule of Civil Procedure 42(b) provides,
The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party claims, or issues, always preserving inviolate the right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States.
Whether or not to bifurcate a trial is left to the sound discretion of the trial court. O'Dell v. Hercules Incorp., 904 F.2d 1194, 1200 (8th Cir. 1990); General Patent Corp. Int'l v. Hayes Microcomputer Prods. Inc., 44 U.S.P.Q.2d 1954, 1956 (C.D. Cal. 1997); Kennecott Corp. V. Kyocera Int'l Inc., 7 U.S.P.Q.2d 1911, 1912 (S.D. Cal. 1988); IPPV Enter. v. Cable/Home Communication Corp., 26 U.S.P.Q.2d 1714 (S.D. Cal. 1993). Courts traditionally consider the following factors when deciding whether to order separate trials: (1) the complexity of the damages issue; (2) potential for juror confusion; (3) overlap of the issues to be tried; and (4) prejudice to either party. IPPV, 26 U.S.P.Q.2d at 1715. In addition, courts may consider (1) whether the issues are triable by the court or by jury; (2) whether discovery has been directed to one trial on all issues; (3) whether the evidence for each issue is substantially different; and (4) the effect bifurcation would have on settlement negotiations. Kimberly-Clark Corp. v. James River Corp. of Virginia, 131 F.R.D. 607, 608-609 (N.D. Ga. 1989). The burden to demonstrate that bifurcation is warranted lies with the moving party. IPPV, 26 U.S.P.Q.2d at 1715. As "[a] single trial generally tends to lessen the delay, expense, and inconvenience to all concerned . . . separate trials should be the exception, not the rule." THK America, Inc. v. NSK Co. Ltd., 151 F.R.D. 625, 631 (N.D. Ill. 1993). See also Fuji Mach. Mfg. Co., Ltd. v. Hover-Davis, Inc., 982 F. Supp. 923, 924 (W.D.N Y 1997); Kennecott, 7 U.S.P.Q.2d at 1912; IPPV, 26 U.S.P.Q.2d at 1715 (same).
CMI moves the court to order a separate bench trial be held first to determine the potentially dispositive issues of laches and equitable estoppel. CMI claims that a bench trial deciding only these issues would be in the interest of judicial economy, efficiency, and convenience. CMI claims that separate trials would reduce juror confusion, given the complexity of the issues to be decided, and would increase the potential for settlement. CMI further argues that a separate trial on laches and estoppel would avoid prejudice to Cedarapids as the issues and supporting evidence in the first bench trial would be substantially different than the issues or evidence in the subsequent trials, thereby avoiding significant overlapping of evidence. Moreover, CMI claims that if only one trial is held, evidence of its alleged egregious conduct would be introduced in an attempt to establish the willfulness of CMI's alleged infringement, thereby biasing CMI.
After careful analysis of all relevant considerations, the court finds that trifurcating or bifurcating this case is not warranted. CMI has asserted the affirmative defenses of laches and equitable estoppel. CMI argues that a finding in its favor on these issues would obviate the need for further proceedings. Although the court recognizes that a trial on liability and damages may be unnecessary if CMI were to prevail on the estoppel issue, the potential economic savings is tempered by the fact that, aside from CMI's bald assertion that it "feels strongly that there is a high probability of success on its . . . equitable estoppel defense," coupled with a generic application of the elements of equitable estoppel to the facts of this case, CMI has made no real showing that success on the merits of its equitable estoppel claim is likely, let alone highly probable. See Figgie, 1987 WL 13574 at *1 (noting that the "import of this potential economy" in first deciding issues of laches and estoppel is diminished by the court's finding that defendant's affirmative defenses are "substantially lacking in merit"). Moreover, a showing of willful infringement may "preclude the alleged infringer from obtaining equitable relief." Wang Laboratories Inc. v. Mitsubishi Elec. America Inc., 31 U.S.P.Q.2d 1139, 1141 (C.D. Cal. 1994). See also Odetics, Inc. v. Storage Tech. Corp., 919 F. Supp. 911, 924 (E.D. Va. 1996) (noting that proper exercise of trial court's discretion on laches issue takes into consideration whether the party asserting laches defense is itself guilty of inequitable conduct, such as willful infringement).
As laches precludes only damages occurring prior to the filing of the suit, a determination favorable to CMI on this issue may nonetheless necessitate a second trial to determine liability for any infringement occurring after the lawsuit was filed. Figgie Int'l, Inc. v. Wilson Sporting Goods Co., 1987 WL 13574 *1 (N.D. Ill. 1987).
Cedarapids argues that its Seventh Amendment right to a jury trial precludes the court from conducting a bench trial on CMI's defenses of laches and equitable estoppel before a jury decides the issue of willful infringement. CMI argues that because Cedarapids has no right to a jury trial on the issues of laches and equitable estoppel, those issues should be tried separately to the bench. The court, while unable to find authority to support Cedarapids' contention that constitutionally, a court may never decide equitable defenses before holding a trial on the issue of willfulness, does find that this factor weighs against separate trials in this case.
While laches and equitable estoppel are equitable defenses committed to the sound discretion of the trial judge, the issue of whether the infringement was willful is a question of fact. A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1028 (Fed. Cir. 1992); Fuji Machine, 982 F. Supp. at 925 n. 2; THK America, Inc., 151 F.R.D. at 629. Because CMI has chosen to assert the equitable defenses of laches and estoppel, willfulness bears not only on the amount of damages if infringement is proven, but also on whether Cedarapids should be equitably estopped. Wang Laboratories, 31 U.S.P.Q.2d at 1141. In asserting the defenses of laches and estoppel, CMI is claiming that Cedarapids knew of its allegedly infringing conduct for years, yet failed to assert patent infringement claims. Cedarapids, on the other hand, claims that the patent at issue is undeniably valid and enforceable, especially in light of a prior permanent injunction enjoining CMI from any further infringement on the patent at issue, and therefore, CMI's actions were willful. Determining whether CMI's actions were willful requires assessment of factors such as the deliberateness of CMI's behavior, whether CMI investigated the scope of the patent, and whether CMI formed a good faith belief regarding the infringement. See Haworth v. Herman Miller Inc., 32 U.S.P.Q.2d 1365, 1368 (W.D. Mich. 1993) (listing relevant factors to consider in determining willfulness).
A finding of willful infringement allows the court to award up to treble damages. Wang Laboratories, 31 U.S.P.Q.2d at 1141 (citing 35 U.S.C. § 284). See also Fuji Machine, 982 F. Supp. at 925 n. 2 ("the question of whether a willful infringer is liable for enhanced damages is to be determined solely by the court").
In this case, the issues of laches, estoppel, and willfulness are intertwined with common factual determinations. The laches and estoppel issues will require the court to examine the scope of the patent, which will also be necessary in proving infringement. Therefore, the court finds that separate trials would be a waste of judicial time and resources. See id.; Figgie, 1987 WL 13574 at *2, 3;
Moreover, the court finds CMI's argument that it will be prejudiced by Cedarapids' attempts to introduce evidence before the jury regarding CMI's alleged egregious conduct unless separate trials are held unpersuasive in light of the fact that the jury decides the issue of willfulness. Finally, the court has considered the impact separate trials would have on settlement negotiations and juror confusion and finds that CMI has not met its burden of showing that these factors weigh sufficiently in support of separate trials. Order
While the court is denying defendant's motion for separate trials at this time, such denial is without prejudice. If this lawsuit evolves so that CMI can demonstrate that bifurcation is warranted, the court will again consider ordering separate trials on the issues of liability and damages.
Defendant's July 16, 1999 motion to bifurcate trial (docket number 25) is denied.