Opinion
18 Civ. 5290 (CM)
07-30-2024
GEIGTECH EAST BAY LLC, Plaintiff, v. LUTRON ELECTRONICS CO., INC., Defendant. LUTRON ELECTRONICS CO., INC., Counterclaim-Plaintiff, v. GEIGTECH EAST BAY LLC and JAMES GEIGER, Counterclaim-Defendants.
DECISION AND ORDER
McMahon, J.
The facts and procedural history of this case are set out in more detail in the court's prior opinions, familiarity with which is presumed. See Trade Dress Opinion (Dkt. No. 499); Claim Construction Decision (Dkt. No. 163); and Preliminary Injunction Decision (Dkt. No. 141). In brief, Plaintiff and Counterclaim Defendant Geigtech East Bay LLC (“GeigTech”) brought this action against Defendant and Counterclaim Plaintiff Lutron Electronics Co., Inc. (“Lutron”) alleging trade dress and patent infringement In response, Lutron asserted, inter alia, a counterclaim for defamation against GeigTech and Counterclaim Defendant James Geiger.
Lutron brought additional claims that were dismissed before trial on a motion to dismiss. (See Dkt. No. 82).
Lutron sells, among other things, a brand of window shades (the “Palladiom Shades”) which use brackets (the “Palladiom Brackets”) to secure the shade system to a ceiling or a wall. GeigTech, a competitor shade company, alleged that various aspects of the Palladiom Brackets infringe, on U.S. Patent No. 10,294,717, (the “‘717 Patent”), which is owned by GeigTech. PX 1. The asserted patent claims (the “Asserted Claims”) were the ‘717 Patent's Independent Claim 1 (and its Dependent Claim 2) and Independent Claim 8 (and its Dependent Claims 10,11, 12).
Following a thirteen-day trial, the jury found that the Palladiom Brackets willfully infringed all of the Asserted Claims, and that none of the claims was invalid. As a result of Lutron's infringement, the jury awarded compensatory damages of $34,600,000. See Jury Verdict (Dkt. No. 467). The jury rejected Lutron's claim that GeigTech and Mr. Geiger had defamed it. See id.
In a separate bench trial, this court issued findings of fact, conclusions of law and a verdict dismissing GeigTech's trade dress claims. (Dkt. No. 499).
Lutron now moves for attorney's fees, judgment as a matter of law (“JMOL”), a new trial, or, as an alternative to a new trial, a conditional order of remittitur. GeigTech cross-moves for enhanced damages, fees and costs, and a permanent injunction.
Lutron's JMOL and New Trial Motions
I. Legal Standard
Judgment as a matter of law may be entered against a party only if “a reasonable jury would not have a legally sufficient basis to find for [a] party on that issue.” Fed.R.Civ.P. 50(a). A Rule 50 motion may only be granted “if there exists such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise and conjecture, or the evidence in favor of the movant is so overwhelming that reasonable and fair minded [persons] could not arrive at a verdict against [it].” Tepperwien v. Entergy Nuclear Operations, Inc., 663 F.3d 556, 567 (2d Cir. 2011) (quoting Brady v. Wal-Mart Stores, Inc., 531 F.3d 127,133 (2d Cir. 2008) (alterations in original)). “In assessing the sufficiency of evidence to support a jury verdict, [the Court] must view the record in the light most favorable to the opposing party, assuming all reasonable inferences were drawn and all credibility disputes resolved in its favor.” Advance Pharm., Inc. v. United States, 391 F.3d 377, 390 (2d Cir. 2004).
Entirely separate from Lutron's Rule 50 motion is its motion for a new trial under Fed.R.Civ.P. 59(a). The standard on such a motion is different than the standard for granting judgment as a matter of law, and Lutron has a lower hurdle to surmount.
A new trial under Rule 59(a) “may be granted even if there is substantial evidence supporting the jury's verdict, and ... a trial judge is free to weigh the evidence himself, and need not view it in the light most favorable to the verdict winner.” Manley v. AmBase Corp., 337 F.3d 237,244-45 (2d Cir. 2003) (quoting DLC Mgmt. Corp. v. Town of Hyde Park, 163 F.3d 124,13334 (2d Cir. 1998)). To order a new trial on this basis, the Court must conclude that “the jury has reached a seriously erroneous result or ... the verdict is a miscarriage of justice,” that is, “it must view the jury's verdict as ‘against the weight of the evidence.'” Id. at 245 (alterations in original) (internal quotation marks omitted) (quoting DLC Mgmt. Corp., 163 F,3d at 133).
Lutron's JMOL and New Trial Motions challenge the jury's findings on three of the same grounds - literal infringement, willful infringement, and damages - and make the same arguments in support thereof. Lutron's New Trial Motion also separately challenges the jury's findings on defamation and invalidity.
II. Literal Infringement
Lutron moves under Rule 50 for JMOL as to the jury's verdict of literal patent infringement. In the alternative, Lutron moves for a new trial under Rule 59 on the same ground. Both Motions challenge the jury's infringement findings based on two limitations contained in Independent Claims 1 and 8 of the ‘717 Patent: (1) the “Recess Limitation”; and (2) the “Concealment Limitation.” Lutron argues that since there was no sufficient evidentiary basis for the jury to find that either of these Limitations was met, a finding of JMOL - or at the very least a new trial - on patent infringement is required. See Microsoft Corp. v. GeoTag, Inc.,817F.3dl305, 1313 (Fed. Cir. 2016) (“To establish literal infringement, every limitation set forth in a claim must be found in an accused product, exactly.”).
A. The Recess Limitation
Claim 1 of the ‘717 patent refers to a “passage” extending through a bracket to allow electrical wiring to pass from a support surface to power a motor on a roller shade assembly. PX 1, Tr. 10:28-47, 12:7-27. Specifically, Claim 1 of the ‘717 Patent states that:
“Tr.” as used herein refers to the trial transcript.
“the passage includes a first recess and a second recess, wherein the first recess extends away from the support surface and the second recess extends away from the roller window shade assembly when the bracket is coupled to the support surface and supports the roller window shade assembly, wherein the first recess intersects the second recess . ...” (the “Recess Limitation”).PX 1 at 10:40-46 (emphasis added).
Nancy Perkins, GeigTech's patent infringement expert, testified that she considered the drilled hole within the Palladiom Bracket to be the bracket's “first recess.” See Tr. 938:15-939:3. She further testified that the bracket's drilled hole intersected a “second recess,” which was the bracket's “circular area.” Id. at 939:4-941:6. Based on these structural assignments, Ms. Perkins testified that the Palladiom Bracket satisfied the ‘717 Patent's Recess Limitation. Id.
Lutron's expert, Dr. Eric Maslen, disagreed. He testified that the Palladiom Bracket's “teardrop-shaped area” was the “first recess.” Tr. 1522:15- 1523:13. Dr. Maslen further testified that the “teardrop-shaped area” did not intersect with the bracket's “second recess”, i.e., the bracket's “circular area.” Tr. 1522:21-1523:4. Accordingly, Dr. Maslen concluded that the Palladiom Bracket did not satisfy the Recess Limitation. Id.
The jury ultimately found that the Palladiom Bracket met the Recess Limitation and infringed on the Asserted Claims.
In its post-trial motions, Lutron does not dispute that GeigTech proffered evidence that the Palladiom Bracket satisfied the Recess Limitation, i.e., Ms. Perkins' testimony. It argues that her opinion relies on an incorrect construction of two terms within the Recess Limitation: “passage” and “recess.” Accordingly, Lutron argues that the court should enter JMOL or order a new trial on infringement. See Finisar Corp. v. DirecTV Grp., Inc,, 523 F.3d 1323, 1333 (Fed. Cir. 2008)(“ Where an infringement verdict relies on incorrect construction of the disputed claim terms, this court may grant JMOL or order a new trial to correct the error, depending on the degree of difference between the incorrect construction and the correct construction.”)
Neither the term “passage” nor the term “recess” was construed by the court. That is because the parties never asked the court to construe either of those terms. As a result, the jury was instructed to interpret these terms using their ordinary meaning - an instruction to which no party objected.
In evaluating whether the jury's verdict is supported by the evidence I note that Claim 1 uses the term “passage,” while Claim 8 uses the term “opening,” and the parties agree that “passage” and “opening” are used synonymously in Claims 1 and 8. The remaining relevant language in these two claims is identical. (See Dkt. Nos. 520 at n.l; 526 at n.l). Accordingly, the court's discussion of Claim 1 's “passage” applies equally to Claim 8's “opening.”
1. Lutron Has Waived Its JMOL and New Trial Claim Construction Arguments
Lutron makes two claim construction arguments in support of its JMOL and New Trial Motions concerning the Recess Limitation. First, it argues that Ms. Perkins relied on an incorrect construction of the term “recess” because the term should be construed as “the difference between one surface and another surface at two different planes.” (Dkt. No, 507 at 5-6). Second, it argues that Ms. Perkins' relied on an incorrect construction of the term “passage” because the term should be construed as “there is something other than the ‘first recess' and ‘second recess' that forms a part of the ‘passage.'” (Dkt. No. 509 at 5).
a. Lutron has waived its argument that “recess” must be construed as “the difference between one surface and another surface at two different planes”
Lutron argues that Ms. Perkins relied on an incorrect construction of the term “recess” because “recess” should be construed as “the difference between one surface and another surface at two different planes.” (Dkt. No. 507 at 5-6). Lutron further asserts that under this “accepted definition,” the evidence conclusively established that the only structural features of the Palladiom Bracket that can be classified as a “first recess” and “second recess” are the features Dr. Maslen identified, i.e., the “teardrop-shaped area” and the “circular area.” Thus, since the “teardrop-shaped area” in the Palladiom Bracket does not intersect with the bracket's “circular area,” (Tr. 1019:1-9; 1522:21-1523:4), Lutron concludes that it was against the weight of the evidence for the jury to conclude that the “the first recess intersects the second recess” in the Palladiom Bracket.
But Lutron has waived the right to make this argument, by failing either to ask the court to construe the term at trial or to object to the court's instruction to the jury that it use the term's ordinary meaning.
“Recess” was not a term that the parties asked this court to construe, nor did they ever stipulate as to its meaning. “Consequently, the court did not instruct the jury to apply a specific meaning for the term.” dm. Tech. Ceramics Corp. v. Presidio Components, Inc., 490 F.Supp.3d 593, 618 (E.D.N.Y. 2020). Instead, this was a question left to the jury. The court instructed the jury to interpret the term “recess” - along with all other unconstrued terms- in accordance with its “plain and ordinary meaning as understood by a person of ordinary skill in the art.” Tr. 1991:1519. There is no indication that the jury considered the “plain and ordinary meaning” of “recess” to be “the difference between one surface and another surface at two different planes.” Nor was there any requirement, based on the weight of the evidence, that the jury had to accept that definition.
I am hardly one skilled in the art of bracket creation, but had I been the trier of fact and told to give the term its “ordinary meaning,” I would likely have concluded that the ordinary meaning of “a recess” was “an indentation” - a definition used by no witness.
Ignoring these issues, Lutron is now asking the court to construe “recess” today, after the trial has ended, and compare that construction with the jury's verdict. The court cannot and will not entertain such an argument.
The Federal Circuit has “repeatedly explained, [that] ‘litigants waive their right to present new claim construction disputes if they are raised for the first time after trial.'” Lazare Kaplan Int'l, Inc. v. Photoscribe Techs., Inc., 628 F.3d 1359, 1376 (Fed. Cir. 2010) (quoting Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683,694 (Fed. Cir. 2008)); accord Alarm.com, Inc. v. SecureNet Techs., LLC, No. CV 15-807-RGA, 2019 WL 3996883, at *8 (D. Del. Aug. 23, 2019) (“Plaintiffs did not [request that the court further modify or clarify the construction], and thus are attempting to present a new claim construction dispute for the first time after trial. Plaintiffs have waived that right.”). Lutron is “essentially [proffering] a claim construction argument regarding the meaning of the term [recess] ... in the guise of a challenge to the sufficiency of the evidence of infringement.” Comcast IP Holdings I LLC v. Sprint Commc'ns Co., L.P., 850 F.3d 1302, 131112 (Fed. Cir. 2017) (quoting ePlus, Inc. v. Lawson Software, Inc., 700 F.3d 509, 520 (Fed. Cir. 2012)). If Lutron “desired such a narrow definition it could and should have sought a construction to that effect.” Id.', see also Broadcom Corp., 543 F.3d at 694 (Fed. Cir. 2008) (“litigants waive their right to present new claim construction disputes if they are raised for the first time after trial.”). “In the absence of such a construction ... the jury was free to rely on the plain and ordinary meaning of the term .,,.” Comcast, 850 F.3d. at 1311-12; see also Hewlett? ackard Co. v. Mustek Sys., Inc., 340 F.3d 1314, 1321 (Fed. Cir. 2003) (“[W]here the parties and the district court elect to provide the jury only with the claim language itself, and do not provide an interpretation of the language in the light of the specification and the prosecution history, it is too late at the JMOL stage to argue for or adopt a new and more detailed interpretation of the claim language and test the jury verdict by that new and more detailed interpretation.”).
So Lutron has waived this argument for the purposes of its post-trial motions.
Moreover, as noted above, had the argument not been waived, neither Ms. Perkins nor the jury was required to accept Lutron's interpretation of the term.
b. Lutron has waived its argument that “passage” must be construed as “there is something other than the ‘first recess' and ‘second recess' that forms a part of the ‘passage.'”
Lutron next argues that Ms. Perkins relied on an incorrect construction of the term “passage” because her assignment of the Palladiom Bracket's bored hole as the “first recess” creates a “passage” in the bracket that is comprised of only a first and second recess. Lutron urges the court to adopt a claim construction of “passage” as “there is something other than the ‘first recess' and ‘second recess' that forms a part of the ‘passage.'” (Dkt. No. 509 at 5).
Once again, Lutron asks the court to undertake post-trial claim construction, which is impermissible at this stage. See, e.g., Comcast, 850 F.3d at 1311- 12. The parties never asked the court to construe “passage,” and thus the court instructed the jury to interpret the term “passage” by using its plain and ordinary meaning within the ‘717 Patent. There was no additional requirement or instruction that a “passage” must be something other than two “recesses.” Nor was there any requirement, based on the weight of the evidence, that the jury had to accept Lutron's expert's definition. The court thus cannot and will not now read additional limitations into the term.
Additionally, I note that the parties (which means Lutron) agreed that “passage” as used in Claim 1 is synonymous with “opening” in Claim 8. (See Dkt. Nos. 520 at n.l; 526 at n.l). A hole bored into an object creates an “opening,” so there would appear to be ample basis in the claim language itself to allow the jury to conclude that the “passage” consisted of the first and second recesses identified by GeigTech's witnesses.
2. Ms. Perkins' Testimony Did Not Rely on the Bracket's “Recess ” and "Passage" Being the Same Structure
Finally, Lutron argues that no reasonable juror could have relied on Ms. Perkins' testimony because she impermissibly conflated the bracket's “passage” and “recess” as being the same. Perkins' testified on cross-examination as follows:
Q. And isn't it true a recess is when one surface is offset a distance from another surface?
A. That's one way to look at it, but a recess is to me - the passage and a recess is the same thing.
Q. So a passage and a recess and an opening is all the same thing?
A. Yes.Tr. 1014:13-19.
However, Ms. Perkins repeatedly testified that she considered the Palladiom Bracket's “passage” to include the first and second “recess,” not that those structural elements were the same thing. See, e.g., Tr. 937:6-17 (“The element claim 1 is describing how the passage for wiring includes two parts that intersect: A first recess that extends away from the support surface; and a second recess that extends away from where the roller shade assembly fits onto the bracket. . . . [T]he wire goes from [the first recess area] through the bracket and comes out into what we call the second recess area. This part of the passage allows for the electrical wiring to go from the support surface and routed through the bracket”); Tr. 938:17-19 (“the passage includes a first recess, which is an opening in the bracket that is itself recessed from the portion of the bracket that's mounted to the support surface”); Tr. 939:23-940:1 (The first recess “ends where it joins the second recess. And I've shown also in the illustration below the configuration of that passage through the bracket”); Tr. 942:24-943:2 (“the recess element says the passage includes two parts, a first recess and second recess.”).
And I again note that the parties agreed that “passage” and “opening” as used in Claims 1 and 8 were synonymous terms - a point Lutron simply ignores.
If there were any contradictions in Ms. Perkins testimony, the jury was free to weigh them during deliberations. However, the weight of Ms. Perkins' testimony was that the Palladiom Bracket's “passage” included the first and second “recess.” The jury could have reasonably relied on this testimony in determining that the Palladiom Bracket infringed on the Recess Limitation, and ignored any seemingly contradictory answers she gave.
Finally, assuming that, for any reason, the jury could not rely on Ms. Perkins' testimony, it still had a sufficient evidentiary basis to find infringement of the Recess Limitation based on other evidence - notably the bracket itself, which was in evidence and available for the jury's inspection. “The evidence the jury was free to credit, and on which it could base its finding of infringement, begins with the [‘717] patent and the [Palladiom Bracket] itself.” See Ironburg Inventions Ltd. v. Valve Corp., 64 F.4th 1274, 1292 (Fed. Cir. 2023). “[N]either party proposed that jurors be instructed they could not base their infringement decision on their own perception of the device.” Id. The terms “recess” and “passage” - as used in the ‘717 Patent - are not industryspecific or complex scientific terms that the jury needed expert testimony to interpret and understand; if they were, I assume the parties would have asked that they be construed, which they never did. Lutron “identifies no reason why jurors would have been unable to determine for themselves whether” the Palladiom Bracket's bored hole was a “recess,” whether the bracket used a “passage” that “included[d]” two recesses, or whether any of the other requirements of the Asserted Claims were met. See Ironburg, 64 F.4th at 1292. Comparing the patent with Lutron s Palladiom Bracket afforded a sufficient evidentiary basis to support the jury's finding of infringement. See id. (“The jury could therefore have reached its decision on infringement by ignoring all of the expert testimony and focusing solely on the patent and the accused device.”).
B. The “Concealment Limitation”
Claims 1 and 8 of the ‘717 Patent require that “the bracket is configured to obscure the electrical wiring when the bracket is coupled to the support surface and supports the roller window shade assembly” (the “Concealment Limitation”). (PX 1 at 10:36-38; 12:18-21). During claim construction, the court construed the phrase “configured to obscure the electrical wiring” to mean “you can't see the wires because the bracket is configured to hide them.” (Dkt. No 163 at 19). The court explained that “Wiring that can be seen - from any view - is not ‘obscured' by the bracket. . . . Therefore, if the wiring can be seen from certain vantage points, it does not fall within the claim language used in [the Accused Claims].” Id. The court added that “it is simply not possible to construe this particular language as extending to a bracket that is not configured to hide the ugly wires from view.” Id. at 21. Finally, the court stated that “The jury will be told that the phrase means ‘you can't see the wires because the bracket is configured to hide them.'” Id. (emphasis added).
During trial, the parties again submitted competing constructions of the term “configured to obscure the electrical wiring;” this time for the court's jury instructions. GeigTech proposed a definition, properly taken from the court's claim construction decision, of “you can't see the wires because the bracket is configured to hide them.” (Dkt. No. 448-1 at 3). Lutron proposed a modified definition of “you can't see the wires from any vantage point because the bracket is configured to hide them completely and not because the roller shade plays any role in the concealment.” Id. The court declined to expand its construction and informed the parties that it was sticking with its previous construction of “you can't see the wires because the bracket is configured to hide them.” See Claim Construction at 21 (“The jury will be told that the phrase means ‘you can't see the wires because the bracket is configured to hide them.'”) (emphasis added).
Towards the end of trial, the parties once again brought up this term's construction. The following colloquy ensued;
THE COURT: The bracket, you can't see the wire for the bracket. But the rest of the words in the patent are when the bracket is coupled - you didn't ask me to construe those words, folks.
GEIGTECH: I know we didn't ask you.
THE COURT: A bracket hides the wiring when the bracket is coupled to the support surface. It doesn't hide the wiring when it's sitting there on the desk.. . . I'm going to read the patent and I'm going to say, ladies and gentlemen, I have construed the phrase wherein the bracket is configured to obscure the electrical wiring, but I have not read out of the patent the rest of the words. No one asked me to construe those words. And had I been asked, I assure you, I would have said they have their ordinary meaning.
GEIGTECH: And we're not asking for a construction.Tr. 1474:25-1475:23 (emphasis added).
Lutron did not object to this approach; neither did it ask for an additional construction of the phrase “when the bracket is coupled to the support surface and supports the roller window shade assembly.”
For the avoidance of doubt as to the jury's understanding of this claim, the court instructed the jury:
You must always consider the claims as a whole, giving meaning to every word used therein. You must consider the entire claim language, both the words I construed and the words that bear their plain meaning, when you're deciding whether a claim is infringed. You cannot read any of the words that I was not asked to construe out of the patent. To take one example, you can't consider whether the bracket is configured to obscure the electrical wiring without assuming that the bracket is coupled to the support surface and is supporting the roller shade.Tr. 1993:1-10 (emphasis added).
Lutron now argues that there was no evidence demonstrating that the Palladiom Brackets meet the Concealment Limitation. GeigTech counters that there is substantial evidence establishing that the Palladiom Brackets meet this limitation.
First, GeigTech points to the testimony of Dave Kirby, the mechanical engineer who designed Palladiom. Mr. Kirby testified that:
Q. And then we see the wire goes into the roller shade to attach to the motor; right?
A. Yes.
Q. And so, when this is fully installed like this, no - you can't see the wire that's coming from the wall to the motor; right?
A. When it's fully installed, the shade covers it, yes.Tr. 590:21-591:2.
Mr. Kirby's testimony was that the window shade - not the bracket - concealed the wiring when installed. Accordingly, his testimony does not establish that the Palladiom Bracket meets the Concealment Limitation, i.e., that when fully installed the bracket obscures the wire.
Next, GeigTech argues that Ms. Perkins' testimony provided a sufficient evidentiary basis for the jury to find infringement of the Concealment Limitation. However, GeigTech has no business making such an argument, because it well knows that Perkins offered no testimony on the subject on direct and it knows the reason why, which is that the court barred her from testifying on the subject in its Daubert decision. (Dkt. No. 308 at 53). As a result of that decision, Ms. Perkins offered no expert testimony on this particular subject as part of GeigTech's case in chief; she was not allowed to offer any such opinion, and she refrained from doing so in her direct testimony. GeigTech never argued to the jury that Perkins had offered any such opinion, and correctly so. It is not now permitted to argue otherwise.
It is true that, on cross examination, Lutron - not content to leave well enough alone after winning this point prior to trial badgered Perkins about whether she had “earlier” offered an opinion on that subject. Perkins answered those questions accurately:
Q. So, if you look at claim 1, Ms. Perkins, do you see the clause that says "wherein the bracket is configured," starts with that?
A. Yes.
Q. You understand that every claim that's asserted by GeigTech in this patent infringement claim has that claim element in it, right?
A. We can go back and compare, but I'll agree. I mean, there is a lot of language here.
Q. It is a simple question. I want to confirm you did not provide any opinion earlier about whether Palladiom met that claim element, right, the one about configured to obscure, correct?
A. We did discuss that.
Q. You are not providing an opinion in this case that any Palladiom bracket meets that claim element, bracket is configured to obscure, correct? You talked about recess. You didn't talk about this claim element, right? You are not opining on this claim element. I want to confirm that.
A. We discussed claim 1. And that was all part of what I read.
Q. You are not opining in this case that the bracket is configured to obscure the electrical wiring, correct? You don't have an opinion on that in your testimony in this case, right?
A. The bracket is -
THE COURT: The question is, is it your opinion, have you testified in this case that it is your opinion that the bracket is configured to obscure the wire?
THE WITNESS: Yes.
THE COURT; She says she has so testified. Next question.
Q. We didn't see any slides in that big long slide deck where you said that, right?
THE COURT: Please. Stop with the slide deck. Come on. Move on to something real.(Tr. 1011:22 - 1013:8) (emphasis added)
The problem was created by Lutron's questions. He asked Ms. Perkins if she had “earlier' opined that the bracket was configured to obscure the wiring. She had not so testified on direct (which was the expert opinion offered to the jury), but she had in fact earlier so testified - in her expert report. Ergo, she was technically correct to answer, “We did discuss it,” and to respond to the court's question, “Yes.” I admit that the court's follow up question was inexpertly phrased; Ms. Perkins could easily have interpreted it to mean, “Have you testified at any time during this case” rather than “Have you so testified here at this trial ?' As a result, this entire exchange is less than clear, and I certainly failed to help matters by asking a question that turned out to be anything but clarifying. But Lutron did nothing to clarify the point it was trying to make, which was that Perkins had not offered such an opinion during the trial. Lutron failed to move to strike Perkins answer, or to remind the court that Perkins had in fact not offered such an opinion on direct, in compliance with the court's pre-trial ruling to that effect. It did not even ask for a sidebar, or raise the matter at the end of the day, to ask the court to correct any misimpression with which the jurors might have been left.
So the fact remains that Perkins did not testify on direct that the Palladiom Bracket infringed the Concealment Limitation. It was not part of her expert opinion. GeigTech did not argue otherwise at the trial and cannot argue otherwise now.
GeigTech next points to two exhibits shown to the jury: (1) Lutron's specification sheet for Palladiom that describes “brackets that completely conceal wiring” and refers to “fully concealed wiring” in the Palladiom Bracket (PX 200 at 1, 8); and (2) a document drafted by Lutron product manager Margaret Block stating, “The [Palladiom] brackets are on show, the wiring to provide power and communication to the drive is completely hidden away” PX 152 at 2 (emphasis added). Lutron counters that these exhibits are not sufficient to establish infringement because they do not specifically “address whether it is the bracket alone that is responsible for hiding the wires.” (Dkt. No. 526 at 7). The court disagrees. The jury could have reasonably inferred from this evidence that it is the bracket that hides the wiring. Lutron's own document says, “The brackets .. . completely conceal wiring;” there are no caveats and no suggestion that anything other than the brackets conceal the wiring.
Moreover, the jury did not consider these exhibits in isolation, but did so in combination with the ‘717 Patent and the Palladiom Bracket. See Ironburg, 64 F.4th at 1292. Perception forms the central concept of the Concealment Limitation, i.e., whether “you can't see the wires because the bracket is configured to hide them” when the bracket is coupled to the support surface and is supporting the roller shade. See Claim Construction at 21. The jury was shown the Palladiom Brackets and wiring - both installed and uninstalled from the wall and window shade - many times during trial. The jury was also inundated with evidence - by way of testimony, demonstrations, illustrations, and animations - of how the wiring fed through the Palladiom Bracket and how the Bracket was coupled to the wall and window shade device. See, e.g, Tr. 933:20 - 950:14. Accordingly, based on this evidence, the jury had a more than adequate basis to consider on the basis of its own observation whether or not this limitation was met.
Lutron argues, albeit without citing any supporting authority, that GeigTech still needed expert testimony to explicitly asserted that the Concealment Limitation had been met, because “No juror here had personal experience or opportunity to install the Accused Products.” (Dkt. No. 526 at 8). And, as noted above, Perkins did not provide any such expert testimony.
However, the Concealment Limitation has nothing whatever to do with how one installs the Palladiom Brackets, but rather whether wiring can or cannot be seen post-installation due to the bracket's configuration. A juror can decide that question just as well as a mechanical engineer can. See Claim Construction at 3 (“This [Concealment Limitation] language is so clear you don't even need one skilled in the art to interpret it. There is no ambiguity to it.”). After all, the idea behind concealment of the wiring is to appeal to the customer who wants a “clean” look; the jurors, not experts, are the equivalent of “customers” for purposes of this trial.
Ultimately, the jury was aided by voluminous amounts of evidence about the wiring's path through the wall, Palladiom Bracket, and window shade roller. More important, the jury was never instructed that it needed expert testimony to support a finding of infringement on any of the ‘717 Patent's limitations, and Lutron did not ask the court to give any such instruction, so it is too late for Lutron to insist on one now. Therefore, Lutron “identifies no reason why jurors would have been unable to determine for themselves whether” the Palladiom Brackets met the Concealment Limitation. See Ironburg, 64 F.4th at 1292. The fact that Lutron proffered some evidence to the contrary, (Tr. [Geiger] 216:17-20; Tr. [Kirby] 644:16-20; Tr. [Maslen] 1515.22-1517.22, 1609.69), does not render the jury's finding either unsupported or against the weight of the evidence. See Ironburg, 64 F.4th at 1292.
For the above reasons, Lutron's post-trial motions are denied insofar as they are directed to the jury's finding of patent infringement.
III. Willful Infringement
Lutron moves next for JMOL, or in the alternative a new trial, on the jury's finding of willful infringement of the ‘717 Patent.
“Willful infringement is a question of fact reviewed for substantial evidence following a jury trial.” Polara Eng'glnc. v. Campbell Co., 894 F.3d 1339, 1353 (Fed. Cir. 2018). To establish willfulness, the patentee must show the accused infringer had a specific intent to infringe at the time of the challenged conduct.” Bayer Healthcare LLC v. Baxalta Inc., 989 F.3d 964, 987 (Fed. Cir. 2021). Intent “must be inferred from all the circumstances. Hence a party cannot be found to have ‘willfully' infringed a patent of which the party had no knowledge.” Gustafson, Inc. v. Intersystems Indus. Prod., Inc., 897 F.2d 508, 51011 (Fed. Cir. 1990).
The court instructed the jury that:
A patent is willfully infringed if the evidence shows that it is more likely than not that Lutron knew of the '717 patent and infringed it intentionally. You may not conclude that the infringement was willful just because Lutron was aware of the ‘717 patent and infringed it. The concept of willfulness requires you to find that the infringement was deliberate or intentional. To determine whether Lutron acted willfully, consider all the facts that you know about how Lutron came to infringe the patent.Tr. 1995:5-14.
As an initial matter, Lutron concedes that it was aware of the ‘717 Patent upon its issuance. See Tr. 1896:22-25. Lutron disputes ohly the evidentiary basis for the second element of willful infringement: whether there was sufficient evidence for the jury to find that Lutron's infringement was willful.
A. The Court May Consider Pre-Issuance Conduct as Evidence of Willful Infringement If It Speaks to Lutron's Post-Issuance Intent
Lutron concedes that its post-issuance sales are some evidence of post-issuance willfulness, but argues that this evidence alone cannot establish a finding of willful infringement. Lutron is correct about that: There is no “universal rule that to avoid willfulness one must cease manufacture of a product immediately upon learning of a patent, or upon receipt of a patentee's charge of infringement, or upon the filing of suit.” Gustafson, 897 F.2d at 511. “Exercising due care, ... a party may continue to manufacture and may present what in good faith it believes to be a legitimate defense without risk of being found on that basis alone a willful infringer.” Id. (emphasis added) (citing Kaufman Co. v. Lantech, Inc., 807 F.2d 970, 979 (Fed.Cir.1986)). Accordingly, evidence of Lutron's continued sales of Palladiom Brackets post-issuance does not - standing alone - create a sufficient evidentiary basis for a finding of willful infringement if Lutron believed in good faith that it had a legitimate defense to infringement.
GeigTech asserts that, notwithstanding the foregoing rule, there was still a sufficient evidentiary basis for a finding of willful infringement, based on Lutron's pre-issuance conduct -specifically Lutron's copying of GeigTech's brackets as part of the industrial espionage project known to the jury as “Snowy Owl.” Lutron argues that evidence of pre-issuance conduct cannot support a finding of post-issuance willfulness. Lutron is incorrect about that.
Pre-issuance conduct can indeed be relevant to a determination of willful infringement. “Whether an act is ‘willful' is by definition a question of the actor's intent, the answer to which must be inferred from all the circumstances.” Gustafson, 897 F.2d at 510-11 (emphasis added). Accordingly, “although willfulness is generally based on conduct that occurred after a patent issued, pre-patent conduct may also be used to support a finding of willfulness.” Minnesota Min. & Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1581 (Fed. Cir. 1992) (emphasis added) (citing Kaufman, 807 F.2d at 978-79); see also WCM Indus., Inc. v. IPS Corp., 721 Fed.Appx. 959, 970 (Fed. Cir. 2018); SIMO Holdings Inc. v. Hong Kong uCloudlink Network Tech. Ltd, 396 F.Supp.3d 323, 334 (S.D.N.Y. 2019), modified in part, No. 18-CV-5427 (JSR), 2019 WL 7816487 (S.D.N.Y. Dec. 11, 2019), clarified on denial of reconsideration, No. 18-CV-5427 (JSR), 2020 WL 498200 (S.D.N.Y. Jan. 22,2020). "Pre-patent copying of the invention, for example, is relevant to the defendant's state of mind after issuance.” Bioverativ Inc. v. CSL Behring LLC, No. CV 17-914-RGA, 2020 WL 1332921, at *2 (D. Del. Mar. 23, 2020) (emphasis added) (citing Milgo Elec. Corp. v. United Bus. Commc'ns, Inc., 623 F.2d 645, 665-66 (10th Cir. 1980)); accord Nox Med. Ehfv. Natus Neurology Inc., No. CV 15-709-RGA, 2018 WL 4062626, at *4 (D. Del. Aug. 27, 2018), on reconsideration, No. 1:15-CV-00709-RGA, 2018 WL 6427686 (D. Del. Dec. 7, 2018). Accordingly, to the extent that any of Lutron's pre-patent conduct is relevant to Lutron's state of mind posZ-May 21, 2019, it can permissibly be relied on to support the jury's finding of willful infringement.
The jury was instructed to determine willfulness based on Lutron's intent to infringe after May 21, 2019. Tr. 1995:3-7. However, the court did not instruct the jury that it could not consider pre-issuance evidence to make this determination. Lutron neither asked for such an instruction nor objected to the court's not giving such an instruction. Accordingly, the court can and will consider evidence about Snowy Owl when deciding these Motions.
B. There Was Sufficient Evidence to Allow the Jury to Find That Lutron Willfully Infringed the ‘717 Patent
The court instructed the jury that, “Factors that you may consider [to determine willful infringement], assuming they are supported by credible evidence, include, but are not limited, to: (1) Whether or not Lutron acted consistently with the standards of behavior for its industry; (2) Whether or not Lutron intentionally copied a product of GeigTech that is covered by the ‘717 patent; (3) Whether or not Lutron reasonably believed it did not infringe or that the ‘717 patent was invalid; and (4) Whether or not Lutron tried to cover up its infringement.” Tr. 1995:14-24.
Lutron argues that JMOL or a new trial on willful infringement is required because GeigTech did not present competent evidence on any of these four factors. That is incorrect.
During trial, Glenn Laverty, a Lutron engineer, and Vladislav Pejic, a Lutron Project Design Leader, admitted to lying in order to gain access to GeigTech's showroom in New York to investigate GeigTech's shade brackets. Tr. 720:17-724:4; 1351:8-1352:7. Laverty and Pejic also admitted to having third party homeowners lie on Lutron's behalf in order to have GeigTech products installed in their homes for Lutron to review. Tr. 690:3- 692:19; 729:6-749:15; PX 81; PX 90; PX 97; PX 117. Pejic and Laverty's conduct was part of project “Snowy Owl”, Lutron's internal project designed to copy GeigTech's brackets in order to create what would eventually become the Palladiom Bracket.
Lutron argues that these incidents are not evidence that Lutron acted inconsistently with industry standards. Lutron acknowledges that there are “understandable concerns about the manner in which certain Lutron employees attempted to obtain information about GeigTech's shading systems,” but argues that this evidence is not probative of willfulness. (Dkt. No. 509 at n.6).
An infringer's pre-issuance “copying activities evidence[] that its conduct in manufacturing and selling infringing [products post-issuance is] intentional and deliberate, in willful disregard of [the patentee's] rights, rather than merely accidental or negligent. [An infringer's] copying activities belie its contention that it proceeded to manufacture and sell [its product] with a good-faith belief that there was no infringement.” Milgo, 623 F.2d at 666. While Pejic and Laverty's conduct pre-dated the ‘717 patent's issuance, Lutron remained aware that the lies of its employees - and the information gleaned about GeigTech's brackets as a result -contributed to the development of the Palladiom Bracket. Knowing that it had (arguably) copied the bracket, Lutron continued to sell its Palladiom Brackets after the issuance of the ‘717 Patent. Accordingly, it would not be unreasonable for the jury to have found that this evidence supported a finding of willful infringement post-issuance.
Additionally, the jury also heard evidence of Lutron's dishonest conduct part-issuance. Mr. Pejic admitted at trial that he had lied during his deposition by denying that Lutron had solicitated third party homeowners to get GeigTech blinds installed so that Lutron could study them. See, e.g., Tr. 691:19-692:19. That lie is “consciousness of guilt” type evidence, which the jury was perfectly free to consider when making a finding of willfulness.
Next, Lutron argues its conduct is not probative because it was consistent with industry standards to gather information about a competitor's products. Lutron points out that James Geiger admitted that he thinks it's “good” to “gather information about competitive products”, that he doesn't think it was wrong for him to “monitor the shading product marketplace”, and that he had “pretty good experience” in those activities. Tr. 205:10-21. Lutron also points out that its President, Ed Blair, explained that “flying blind” by not doing market research or obtaining competitor's products could lead a would-be innovator to “accidently end up copying something or not be differentiated.” Id. at 1204:2-10. Finally, Lutron argues that GeigTech never offered evidence to define the relevant industry standards, so the jury could not properly conclude that Lutron had violated these standards.
The court disagrees. One competitor's gathering information about another's product may be perfectly appropriate, but that does not make engaging in lying and deceit acceptable. Lutron argues that GeigTech did not offer expert testimony about industry standards on monitoring competitor products. But the jury did not need an expert to explain that lying is not acceptable; nor did it need testimony to clarify that this universal standard of professional conduct applies in the window shade industry. In fact, there was ample evidence in the record about Lutron's failure to follow industry standards - and it all came from Lutron's witnesses. Lutron's President, Ed Blair, testified that he was “extremely disappointed” to hear his employees had lied in order to get access to GeigTech products and their actions were “not who we are.” Tr. 1215:12-1216:2. Mr. Pejic admitted he felt “uncomfortable” because he “was not honest,” and that “if I could have done it differently, I would have done it differently today.” Tr. 722:15-723:14. Finally, Mr. Laverty admitted that he was also “uncomfortable” with “not telling the truth,” and that other Lutron employees advised him not to go to the GeigTech showroom. Tr. 1351:13-1352:7. The jury could infer from this testimony that Lutron violated industry standards for acquiring information about a competitor's product.
Lutron did not offer a scintilla of evidence that its conduct during Snowy Owl did in fact conform to industry standard. Accordingly, there was no need for GeigTech to present evidence explicitly defining the applicable industry standards of behavior in order to prevail on the question of willfulness. And while GeigTech had the burden of proof on the issue of willfulness, once it came forward with evidence that could lead to such a finding, it was incumbent on Lutron to rebut that evidence, Lutron did not do so. The jurors could draw an appropriate inference on the basis of their common knowledge and experience, coupled with Lutron's admissions.
Lutron also argues that none of GeigTech's proffered “copying” evidence is probative as GeigTech never provided testimony that the copied GeigTech brackets satisfied each of the Asserted Claims of the ‘717 Patent, and the jury was instructed (without objection) to base its willfulness finding on credible evidence that showed, “Whether or not Lutron intentionally copied a product of GeigTech that is covered by the ‘717 patent.” Tr. at 1952:6-7 (emphasis added).
This argument fails for three separate reasons.
First, throughout trial, the jury was shown the GeigTech brackets themselves, as well as testimony, witness demonstrations, diagrams, and animations as to the brackets structural features. See, e.g., PPX 4, PPX 6, PX 4, PX 5, DX 1072, DX 1074, DX 1075. In addition to that evidence, the jury was provided with the ‘717 Patent, with which the jury could compare GeigTech's brackets. As with the Palladiom Brackets, GeigTech's brackets were simple enough for the jury to determine whether they practiced some or all of the Asserted Claims of the ‘717 Patent. See Ironburg, 64 F.4th at 1291-92.
Second, there was expert testimony tending to support a finding that GeigTech's brackets were covered by the ‘717 patent. Ms. Perkins testified that GeigTech's brackets practiced the claims of the ‘717 patent. Tr. 981:8-987:3 (“claim 1 here of the ‘717 patent is practiced by GeigTech's end and center motor brackets”; “this ... end bracket of GeigTech's .... [has] the flat side that claim 2 claims”; “GeigTech's end and center motor brackets practice claim 3 of the ‘717 patent”; “GeigTech's end and center motor brackets also practice claim 4 of the ‘717 patent”; “that surface with the rounded shape [from claim 5], that's the U shape of the GeigTech bracket that's on the opposite side of the mounting side”; “a report [I] submitted earlier in this case actually shaded in photos of GeigTech's end and center brackets to show how the ‘717 patent claimed various features of the GeigTech brackets in the rounded shape”; “some of these claims in the ‘717 patent claimed the various surfaces and shapes of the GeigTech brackets”; “the GeigTech brackets actually practice some of these claims by having [the ‘717 Patent's] shapes”).
Third, the record evidence showed that Lutron not only copied GeigTech's brackets, but that Lutron also copied GeigTech's ‘821 patent as well - which was, in relevant part, almost identical to the ‘717 Patent. Lutron admitted that, as part of its development of the Palladiom Bracket, it inputted Figure 21 of U.S. Patent No. 9,237,821 (“the '821 patent”) into its own computer aided design (“CAD”) software in order to render 3-D specimens of the GeigTech bracket and develop the Palladiom system. Tr. 572:12-575:8; 1352:17-1353:8; 1896:1-11; PX 91; PX 93. Lutron claims this evidence is irrelevant because the 3-D specimens were based on the ‘821 Patent and not the ‘717 Patent. However, while the ‘821 Patent is not the patent-in-suit, the ‘717 patent is a continuation patent that claims priority back to the '821 patent. PX 1; PX 91; Tr. 293:22-295:17. A comparison of the '821 patent and the ‘717 patent shows that the specifications and figures of these patents are virtually identical. Moreover, both patents provide an exceedingly similar figure (Figure 21 in both patents), which discloses the preferred embodiment for the inventions claimed in the patents. Additionally, both patents provide identical descriptions of these Figures in the patent specifications. Cf PX 91 at Fig. 21, 7:42-56 with PX 1 at Fig. 21, 8:52-67. After the ‘717 patent issued, Lutron remained indisputably aware of these patents, the similarity of the figures and specification contained therein, and the manner of its development of Palladiom during Project Snowy Owl. Therefore, this evidence is relevant to the issue of willfulness.
In addition to all of the above, there was extensive additional evidence supporting a finding of willful infringement:
1. Lutron's manager of engineering, Evan Graham, admitted to reverse engineering J Geiger's products. PX 97 (“Do we think we have learned enough by the reverse engineering and modeling we did from the Geiger patents and literature?”); see also Tr. 725:3-729:4.
2. Dave Kirby, the lead mechanical engineer on Snowy Owl, described the project as “look[ing] into designing a system similar to J. Geiger's brackets for our shades.” PX 316 at 3.
3. Another engineering member of the Snowy Owl team, Max Hakkarainen, stated in his engineering notebook that the purpose of the project was to create “Geiger-esque” shades. PX 79 at 2.
4. Lutron admitted to extensively studying GeigTech's website, brochures, and the '821 patent as part of the development of the Palladiom Bracket. Tr. 719:13-18; 527:2-16; 720:10-16; 1352:17-1353:8; PX 63, PX 91; PX 193.
Accordingly, the jury's finding of willfulness is adequately supported by evidence of both intentional copying and lack of compliance with industry standards. It was not necessary for GeigTech to offer evidence of all four categories; the four categories of evidence listed in the in the jury charge were a non-exclusive list of the types of evidence the jury was free to consider in its willfulness determination. See SiOnyx, LLC v. Hamamatsu Photonics K.K., 330 F.Supp.3d 574, 610 (D. Mass. 2018) (concluding that “there is no bright-line rule as to what level of knowledge is sufficient” for willfulness). “Substantial evidence supports the jury's finding that subjective recklessness led to willful infringement in this case. The jury heard evidence that [Lutron]... believed that it was infringing the patent.....[based on] circumstantial evidence that [Lutron] copied [GeigTech's] technology.” See Georgetown Rail Equip. Co. v. Holland L.P., 867 F.3d 1229, 1245 (Fed. Cir. 2017) (internal citations omitted); see also WCMIndus., 721 Fed.Appx. at 971 (upholding jury's finding of willfulness based in part on “a culture of copying” at infringer company).
However, I note that there was evidence in the record tending to support a finding that Lutron did not have a reasonable belief that it was not infringing and that there was no “cover up.” As to the former, the jury rejected Lutron's arguments that it did not infringe, and that the patent was invalid. Whether or not the jury credited Lutron's belief in its non-infringing arguments as “reasonable” was a factual determination that the jury was charged with making, based on a totality of the credible evidence. The court finds that, largely based on the voluminous amount of copying evidence, it would have been reasonable for the jury to conclude that Lutron did not have a “reasonable” belief that it was not infringing the ‘717 Patent.
Finally, Lutron argues that there was no evidence that it tried to” cover up” its infringement. The court and GeigTech both agree; Lutron sold the Palladiom Shades openly. But Lutron certainly tried to “cover up” Snowy Owl - even to the extent of allowing a witness to lie about it during his deposition. And there was more than sufficient evidence of other relevant factors to support a finding of willful infringement.
Lutron's JMOL and New Trial Motions are denied insofar as they relate to willful infringement.
IV. Invalidity
Lutron next argues that the jury's verdict on the invalidity of the ‘717 patent was against the weight of the evidence. Lutron argues that Dr. Maslen's testimony on obviousness was unrebutted. Tr. 1526:13-1551:17. “However, as the Court instructed the jury during the trial, the jury was not required to accept testimony of an expert merely because he or she is an expert.” Common Fund for Non-Profit Organizations v. KPMG Peat Marwick LLP, No. 96 CIV. 0255 (GBD), 2003 WL 1108493, at *5 (S.D.N.Y. Mar. 12, 2003). “The fact that [GeigTech] did not rebut [Dr. Maslen's] opinion with a[n] . . . expert of [its] own did not immunize [Dr. Maslen's] testimony from the jury's evaluation of whether it was credible. On the contrary: it is well established that a lay jury can refuse to credit an expert's opinion, even if another expert was not called to rebut it.” Giles v. Rhodes, 171 F.Supp.2d 220, 226 (S.D.N.Y. 2001) (citing Powers v. Bayliner Marine Corp., 83 F.3d 789, 798 (6th Cir. 1996)).
In this case, the lay jury was perfectly within its right to conclude, based on all the evidence, that the patented invention was not obvious. Again, I say: Snowy Owl. The extensive evidence about the industrial espionage that Lutron apparently required in order to learn about the various features of the J. Geiger shade contradicts Dr. Maslen's opinion. Nothing more was required -especially because it was Lutron's burden to prove, by clear and convincing evidence, that the ‘717 Patent was invalid for obviousness.
V. Damages
Lutron next moves for JMOL or a New Trial as to damages; in the alternative, Lutron requests the court grant a conditional order of remittitur as to the same. Here Lutron stands on firm ground. This motion the court readily grants, in the form of a conditional order of remittitur.
The two categories of compensation for infringement are a patentee's lost profits and the “reasonable royalty he would have received through arms-length bargaining.” Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009). The only measure of damages sought in this case was a reasonable royalty, which “seeks to compensate the patentee ... for its lost opportunity to obtain a reasonable royalty that the infringer would have been willing to pay if it had been barred from infringing.” AstraZeneca AB v. Apotex Corp., 782 F.3d 1324, 1334 (Fed. Cir. 2015) (citing Lucent Techs., 580 F.3d at 1325). GeigTech did not seek lost profits damages. It argued to the jury that the only measure of its damages was a reasonable royalty. And the Court instructed the jury accordingly:
The damages you award must be adequate to compensate GeigTech for its losses, if any, as a result of the infringement. They are not meant to punish the infringer. Your damages award, if you reach this issue, should put GeigTech in approximately the same financial position it would have been in if the infringement had not occurred. . . . While GeigTech is not required to prove the amount of its damages with mathematical precision, it must prove them with reasonable certainty. You may not award damages that are speculative, damages that are only possible, or damages that are based on guesswork. In this case, GeigTech seeks as damages what we call a reasonable royalty.... In calculating a reasonable royalty, you must be careful to assure that the award is no more and no less than the value of the patented invention. A reasonable royalty is a royalty that would have resulted from and you heard testimony about this - a hypothetical licensing negotiation between GeigTech and Lutron.Tr. 2003:24 - 2004:24 (emphasis added).
At trial, both sides offered evidence on damages. GeigTech's expert, Mr. Jeffrey Baliban, testified that he calculated a reasonable royalty as $3,843,986, Tr. 1126:6-12, whereas Lutron's expert, Dr. Christine Meyer, testified that she calculated a reasonably royalty as no more than $194,000. Tr. 1869:19-24. The parties reiterated this testimony during their respective summations. Tr. 1931:17-22; 1940:5-7; 1972:14-15.
In spite of this evidence, the parties positions at trial, and the court's instructions, the jury awarded damages of $34.6 million - an amount almost ten times the maximum amount requested by GeigTech and supported by any evidence. See Jury Verdict (Dkt. No. 467). GeigTech never sought anything like $34.6 million in damages, and there is no basis in the evidence for such an outlandish award - even though the jury found willful infringement (for which the court, not the jury, establishes the penalty). And while I can only guess why the jury did what it did, it is not illogical to infer that the jury ignored my instruction that reasonable royalty damages were not designed to “punish the infringer,” since $34.6 million in the context of this case is a highly punitive number.
Lutron's Rule 59 motion is granted to the extent of vacating the damages award.
A. Lutron's New Trial Motion on Damages Is Granted Because the Jury's Verdict was Excessive
Lutron argues that it is entitled to a new trial on two grounds: the jury's verdict is grossly excessive, and Mr. Baliban's damages methodology was flawed. The court agrees with Lutron's first argument and so does not need to reach the merits of the second, except insofar as it relates to the amount of any remittitur.
The court's discretion to grant a new trial “includes overturning verdicts for excessiveness and ordering a new trial without qualification, or conditioned on the verdict winner's refusal to agree to a reduction (remittitur).” Lore v. City of Syracuse, 670 F.3d 127, 152 (2d Cir.2012) (quoting Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 433 (1996)). “The court's review of a jury's compensatory damage award for excessiveness is ‘narrow', and it may set aside such an award ‘ only when the award is so high as to shock the judicial conscience and constitute a denial of justice.'” Leo v. Long Island R. Co., 307 F.R.D. 314, 321 (S.D.N.Y. 2015) (quoting Turley v. ISG Lackawanna, Inc., 774 F.3d 140, 167-68 (2d Cir.2014)). In assessing whether the award is excessive, “the court must ‘accord substantial deference to the jury's determination of factual issues.'” Frank Sloup and Crabs Unlimited, LLC v. Loeffler, 745 F.Supp.2d 115, 136 (E.D.N.Y.2010) (quoting Martell v. Boardwalk Enters., 748 F.2d 740, 750 (2d Cir.1984)). However, a court “‘may not abandon analysis for sympathy for a suffering plaintiff and treat an injury as though it were a winning lottery ticket.'” Scala v. Moore McCormack Lines, Inc., 985 F.2d 680, 684 (2d Cir.1993) (quoting Nairn v. Nat'l R.R. Passenger Corp., 837 F.2d 565, 568 (2d Cir. 1988)). In short, the court must discern “an upper limit” and assess whether the jury has surpassed it. See Sloup, 745 F.Supp.2d at 136 (quoting Dagnello v. Long Island R.R. Co., 289 F.2d 797, 806 (2d Cir. 1961)). “Although [calculation of a reasonable royalty] necessarily involves an element of approximation and uncertainty, a trier of fact must have some factual basis for a determination of a reasonable royalty.” Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512, 517 (Fed. Cir. 1995).
In this case, the jury completely surpassed the “upper limit” of damages. The jury's award of $34.6 million amounted to a royalty of nearly 10 times any amount requested by GeigTech or supported by the evidence of its expert, who analyzed the parties' sales data, licensing history, and relationship in the market, in addition to the other Georgia-Pacific factors. Tr. 1094:24 - 1144:12. While GeigTech argues that the jury's verdict was reasonable, its position is belied by its comments to the jury during summations. Tr. 1940:5-7 (“You have to fill out how much of a reasonable royalty is GeigTech asking for. [GeigTech is] asking for $3,843,986. Not a penny more, not a penny less.”) (emphasis added).
Before turning to GeigTech's arguments, it is important to note what GeigTech is not arguing. GeigTech does not argue that there is any evidence in the record to support a reasonable royalty of $34.6 million. Instead, GeigTech raises a number of other arguments, none of which the court finds convincing and some of which are clearly precluded by its trial strategy.
First, GeigTech argues that there is no legal rule that a verdict is necessarily excessive if it is more than the reasonable royalty a plaintiff requested, and that - while the jury's award may have exceeded Lutron's total revenue for Palladiom - Lutron's revenues do not cap GeigTech's damages as a matter of law. While both things may be true, they do not warrant a conclusion that the jury's damages award is not excessive. The jury's award is not excessive simply because it exceeds Lutron's reasonable royalty request or Lutron's revenues. The award is excessive because it is far beyond any number that is supported by the evidence introduced at trial. See Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1313 (Fed. Cir. 2018) (“A jury may not award more than is supported by the record . . . .”) The highest estimate of a reasonable royalty presented at trial was $3.8 million, and GeigTech points to nothing in the record that bridges the $31 million gap between the jury's award and the evidence. “[A] jury's choice simply must be within the range encompassed by the record as a whole. Here, it was not within that range.” Unisplay, 69 F.3d at 519.
Additionally, while Lutron's revenues from its sales of the infringing product do not cap GeigTech's damages as a matter of law, it defies both common sense and the evidence that is in the record to conclude that Lutron would have agreed to pay a royalty for use of the patented brackets that exceeded its revenues on the entire shading system - some of which was not covered by GeigTech's patent - thereby leaving it with no profit. See Lindemann Maschinenfabrik GmbH v. Am. Hoist & Derrick Co., Harris Press & Shear Div., 895 F.2d 1403, 1408 (Fed. Cir. 1990) (Patentee's damage expert's “opinion that [defendant] would agree to pay a royalty in excess of what it expected to make in profit was, in light of all the evidence in this case, absurd.”).
Next, GeigTech argues that the jury's verdict cannot be excessive because “the question that needs to be answered in determining damages is how much had the patent holder suffered by the infringement. And that question [is] primarily: had the infringer not infringed, what would [the] patent holder have made?” Lam, Inc. v. Johns-Manville Corp., 718 F.2d 1056, 1067 (Fed. Cir. 1983) (internal quotations omitted). GeigTech does not elaborate on why this principle renders the jury's verdict reasonable, and I cannot see any reason why it would. The court instructed the jury, in line with the principle announced in Lam, that “Your damages award, if you reach this issue, should put GeigTech in approximately the same financial position it would have been in if the infringement had not occurred.” Tr. 2004:2-5. The court then instructed the jury to determine those damages by way of a reasonable royalty. In other words, GeigTech's “suffering” was to be measured by a reasonable royalty not a penny more, not a penny less. The jury was not free to measure what GeigTech “suffered by the infringement” in some other way.
Next, GeigTech claims that “the evidence supports the jury's reasonable decision to award J Geiger the profits it expected to earn under the Savant agreement.” (Dkt. No. 520 at 3). However, GeigTech did not seek to recover “lost profits” at trial and never argued to the jury that the profit it expected from the Savant arrangement should be part of its damages calculation. While both Linthicum and Nix testified about the profits GeigTech hoped to realize from its arrangement with Savant, (see, e.g., Tr. 1051:15-25), the jury was never told that it could render a verdict based on lost profits - much less on GeigTech's “expected profits,” which is something else entirely. It was specifically instructed to calculate only the reasonable royalty that a patent user in Lutron's position would have agreed to pay. Accordingly, GeigTech's “expected profits theory is completely irrelevant to the issue raised by Lutron's motion - which is whether $34.6 million was excessive as a reasonable royalty. A reasonable royalty, must reflect use made of the invention by the infringer,” 35 U.S.C. § 284, not profits GeigTech hoped to earn under a deal with some third party:
The reasonable royalty theory of damages ... seeks to compensate the patentee not for lost sales caused by the infringement, but for its lost opportunity to obtain a reasonable royalty that the infringer would have been willing to pay if it had been barred from infringing. In determining what such a reasonable royalty would be, the [jury] was required to assess [GeigTech's] injury not according to the number of sales [GeigTech] may have lost to [Lutron], but according to what [GeigTech] could have insisted on as compensation for licensing its patent[] to [Lutron] as of the beginning of [Lutron's] infringement....AstraZeneca AB v. Apotex Corp., 782 F.3d 1324, 1334 (Fed. Cir. 2015) (cleaned up); see also Rodime PLC v. Seagate Tech., Inc., 174 F.3d 1294, 1308 (Fed. Cir. 1999) (“Having elected to pursue only a reasonable royalty, [GeigTech] cannot... bootstrap evidence of its lost profits back into the case by reference to royalties.”) (citation omitted); Syneron Med. Ltd. v. Invasix, Inc., No. 8:16-CV00143,2018 WL 4696969, at *4 (C.D. Cal. Aug. 27,2018) (The Georgia-Pacific analysis “does not authorize the direct setting of the reasonable royalty in the amount of the licensor's lost profits .... Otherwise, a patent owner could always sidestep the heightened requirements of proving lost profits by recasting his request for lost profits as a reasonable royalty in the amount of his lost profits.”) Accordingly, GeigTech's proffered “expected profits” evidence does not support the jury's verdict.
Had “expected profits” from the Savant deal been pursued as a theory of damages, there would undoubtedly have been a great deal of argument about the propriety of awarding them. For example, in Kenford Co. v. Erie Cnty., 67 N.Y.2d 257 (1986), the New York Court of Appeals held: “If it is a new business seeking to recover for loss of future profits, a stricter standard is imposed for the obvious reason that there does not exist a reasonable basis of experience upon which to estimate lost profits with the requisite degree of reasonable certainty” Id. at 261. Since Kenford, New York courts routinely have rejected lost profits claims asserted with respect to unproven businesses or products when such profits cannot be predicted with reasonable certainty. See, e.g., Olsenhaus Pure Vegan, LLC v Electric Wonderland, Inc., 116 A.D.3d449,450 (Ist Dep't 2014); Awards.com, LLC v Kinko's, Inc. 42 A.D.3d 178, 185 (1st Dep't 2007), affd 14 N.Y.3d 791 (2010). Lutron would undoubtedly have made this or a similar argument had GeigTech pursued an “expected profits” theory of damages based on a deal about which there was no experience. But as GeigTech did not make such an argument, Lutron had no reason to rebut it and the court had no opportunity to pass on it.
The other evidence cited by GeigTech is completely irrelevant to the determination of a reasonable royalty. For example, GeigTech points to evidence that Lutron was “consistently hearing about J Geiger brackets,” that “Palladiom was a flagship product,” and that “Visible screws, visible hardware, visible wires, were problems with Lutron's existing hardware that was solved with Palladiom.” (See Dkt. No. 520 at 5-6). None of this evidence has anything to do with the calculation of a reasonable royalty, nor does GeigTech argue that it does. What it does tend to go to is the punitive aspect of damages that the jury was specifically told it could not award.
The jury was tasked with determining a hypothetical licensing negotiation between GeigTech and Lutron, a subject upon which both parties entered evidence in the form of expert testimony. In rendering its verdict, the jury rendered a damages awards that far outstripped the highest estimate of that evidence. This conclusion “shock[s] the conscience of the court, and “constitutes a denial of justice.” See Leo, 307 F.R.D. at 321.1 conclude that the jury's award was grossly excessive.
B. $3,843,986 Is the Maximum Amount That Would Be Upheld by the Trial Court as Not Excessive
“If a district court finds that a verdict is excessive, it may order a new trial, a new trial limited to damages, or, under the practice of remittitur, may condition a denial of a motion for a new trial on the plaintiffs accepting damages in a reduced amount.” Tingley Sys., Inc. v. Norse Sys., Inc., 49 F.3d 93, 96 (2d Cir.1995) (citing Phelan v. Local 305 of the United Ass'n of Journeymen and Apprentices of the Plumbing & Pipefitting Indus., 973 F.2d 1050, 1064 (2d Cir. 1992), cert, denied, 507 U.S. 972, (1993)). Remittitur is “the process by which a court compels a plaintiff to choose between reduction of an excessive verdict and a new trial.” Earl v. Bouchard Transp. Co., 917 F.2d 1320, 1328 (2d Cir.1990) (quoting Shu-Tao Lin v. McDonnell Douglas Corp., IM F.2d 45, 49 (2d Cir. 1984)). “With respect to jury awards that are ‘intrinsically excessive,' [courts] appl[y] the least intrusive standard for calculating remittitur, reducing the verdict ‘only to the maximum amount that would be upheld by the trial court as not excessive. Trademark Rsch. Corp. v. Maxwell Online, Inc., 995 F.2d 326, 337 (2d Cir. 1993) (quoting Earl, 917F.2dat 1330).
The parties disagree about what the “amount” of remittitur should be. I find neither side's argument persuasive.
Lutron argues that the proper remittitur amount is no more than $777,860. While Lutron acknowledges that Mr. Baliban testified that he calculated a reasonable royalty as $3,843,986, Tr. 1126:6-12, it argues that Mr. Baliban's testimony must be discounted because he did not apportion the value of the non-patented features of Palladiom. However, the jury was not required to apportion the value of the non-patented features of Palladiom when awarding damages. The court instructed the jury that it could choose between Lutron's “apportionment theory and GeigTech s (and Mr. Baliban's) “entire market value” theory of damages, which permits a patentee to base its royalties on the entire value of the patented article “where the patented feature creates the ‘basis for customer demand' or ‘substantially create[s] the value of the component parts'” Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1318 (Fed. Cir. 2011). The Federal Circuit has sustained the “entire market value” theory when “the invention inextricably worked with outer components of [the product] as a single functioning unit . . . improved the performance . . . contributed substantially to the increased demand . . . [and] was integral to the overall performance of the product. Bose Corp. v. JBL, Inc., 274 F.3d 1354, 1361 (Fed. Cir. 2001). The Federal Circuit reiterated that conclusion where “[t]he evidence at trial portrayed general industry demand for” a certain type of product (e.g., aesthetically pleasing exposed shade brackets) and “the patented technology furthers these goals.” Funai Elec. Co., Ltd. v. Daewoo Elecs. Corp., 616 F.3d 1357, 1375 (Fed. Cir. 2010). And Lutron did not object to the court's instruction that the jury could consider that theory.
As a result, a jury award that credited Mr. Baliban's testimony and awarded damages based on his “entire market value” theory of damages “would be upheld by the trial court as not excessive.” Trademark, 995 F.2d at 337. To the extent Lutron is once again asking the court to weigh the expert testimony and revisit previously decided Daubert arguments attacking Mr. Baliban's methodology, the court declines to do so on remittitur; that would not accord with the “the least intrusive standard for calculating remittitur.”
Lutron next argues that Mr. Baliban's damages calculations were flawed as a matter of law, thereby rendering them insufficient upon which to base a jury verdict. GeigTech counters that Lutron is improperly using its Motion as a vehicle to reargue arguments rejected by the court in its Daubert briefing. GeigTech is correct that Lutron's arguments are simply an ill-disguised attempt to reargue its Daubert motion. As Lutron admits, its JMOL arguments attacking Mr. Baliban s methodology were previously raised and rejected. (Dkt. No 509, p. 15-16). Therefore, “The court rejects [Lutron's] . . . arguments as improperly raised. Under the guise of sufficiency of the evidence, [Lutron] questions the admissibility of [GeigTech's] expert testimony and whether his damages model is properly tied to the facts of the case. Such questions should be resolved under the framework of the Federal Rules of Evidence and through a challenge under Daubert . . . .” Versata Software, Inc. v. SAP Am., Inc., 717 F.3d 1255,1264 (Fed. Cir. 2013); see also Rembrandt Wireless Techs., LP v. Samsung Elecs. Co., 2016 WL 362540, at *3 (E.D. Tex. Jan. 29, 2016), ajfd, 853 F.3d 1370 (Fed. Cir. 2017) (Post-verdict briefing “is not the appropriate context for renewing attacks on an expert's methodology.”) Lutron's challenges to Mr. Baliban s testimony have already been resolved. As the court explained in its Daubert opinion, “Lutron seeks to exclude Baliban's reasonable royalty opinions on multiple grounds. All of them go to the weight; none persuasively suggests preclusion.” (Dkt. No 509, p. 80). Mr. Baliban s opinion that the proper measure of a reasonable royalty would be calculated using the Entire Market Value Rule was adequately supported by evidence. See, e.g., Tr. 555:21-556:2,578:10-22,632:17-633:22,989.21990:12, 1090:1-1176:9, 1246:16-25, 1374:1-1377:8, 1487:22-1488:1, PX 73, PX 98; see also pp. 51-56 infra.
GeigTech for its part argues that the proper remittitur amount is at least $24 million, because the court must apply a profit margin of 50% to GeigTech's expected profits of $48 million from the Savant partnership. As previously discussed supra, “lost profits” (or “expected profits”) were not sought by GeigTech and are not the proper measure of damages; the court could not have upheld any damages verdict based on that theory of recovery.
GeigTech argues, in the alternative, that a remittitur amount of at least $10,349,532 is proper. GeigTech reaches this number by using a 40% royalty rate and applying it to Lutron's infringing sales of $25,873,830. However, GeigTech's own expert, Mr. Baliban, used a 14.86% royalty rate, not the 40% royalty rate GeigTech now proffers. Moreover, Mr. Baliban having testified that $3.8 million would be a reasonable royalty, GeigTech argued to the jury in closing that it was seeking “not a penny more, not a penny less” than its own expert found to be reasonable. GeigTech does not point to anything in the record - or by way of legal authority - that would to permit this ex post facto application of a 40% royalty rate.
Accordingly, the court concludes that a damages award of $3,843,986 represents the “maximum amount that would be upheld by [this] court as not excessive.” Trademark, 995 F.2d at 337.
If GeigTech does not accept a remittitur in the amount of $3,843,986, the case will be retried solely on the issue of damages for patent infringement. GeigTech must notify the court in writing of its election within fourteen business days from the date this decision issues.
As the court is remitting on damages for patent infringement, there is no basis for granting an award of enhanced damages due to willfulness at this point; I have no idea what the damages are, so I cannot possibly reach a conclusion on whether or not to enhance them. Therefore, GeigTech's motion for enhanced damages is denied without prejudice to renewal after damages are set either by acceptance of the remittitur or at a new trial.
VI. Defamation
Lutron argues that the jury's verdict on defamation was against the weight of the evidence because the jury could not have determined that Mr. Geiger's June 2018 statement that “Lutron opted to poach (GeigTech's) patented designs and intellectual property” was true. (See Dkt. No. 467). Lutron does so on the basis that it could not have “poach[ed] (GeigTech's) patented designs” because the ‘717 Patent had not been issued at the time of the statement. That is true, but the statement does not define which patented design was poached, and the ‘821 Patent had been issued at the time of this statement. To which I say: SNOWY OWL! Indeed, it would be hard for this court to conclude that the statement was not true in light of the admissions of Lutron's executives.
Moreover, the motion must be denied because the jury concluded that Mr. Geiger's statements were not defamatory. As I explained to the parties after the verdict, Since the jury concluded that nothing in the accused statement was defamatory, GeigTech and Mr. Geiger are entitled to a verdict on the defamation claim without regard to any unnecessary ancillary findings, and the jury should have stopped right there (as we did when reading the verdict).” (See Dkt. No. 467 at 1).
Lutron's motion to set aside the defamation verdict is denied.
Lutron and GeigTech's Cross Motions for Attorney's Fees and Costs
The parties cross move for attorney's fees and costs. Lutron moves under Section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a), and GeigTech under 35 U.S.C § 285. Under both statutes, a court “may award reasonable attorney's fees to the prevailing party in exceptional cases. An “‘exceptional' case ... is simply one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014)). Courts are given wide latitude in the “case-by-case exercise of their discretion, considering the totality of the circumstances[,]. .. frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Id. at 554.
A party seeking an award of attorneys' fees must prove a case is exceptional by a preponderance of the evidence. Id. at 557. Neither party has done so here. The parties' litigation positions in this action and manner of litigation were not “objectively unreasonable.
I. The Jury's Willfulness Verdict Does Not Mandate an Award of Attorney's Fees Against Lutron
GeigTech argues that the jury's finding of willfulness alone supports an award of attorneys fees. However, while willfulness is “among the reasons that a court may find a case to be exceptional,” Therasense, Inc. v. Becton, Dickinson & Co., 745 F.3d 513, 516 (Fed. Cir. 2014), “an attorney fee award is not mandatory when willful infringement has been found.” SiOnyx LLC v. Hamamatsu Photonics K.K., 981 F.3d 1339, 1355 (Fed. Cir. 2020); see also Stryker Corp. v. Zimmer, Inc., 837 F.3d 1268, 1279 (Fed. Cir. 2016) (holding that “it does not necessarily follow that the case is exceptional” from a willfulness determination). Accordingly, while the jury's willfulness finding weighs in support of awarding fees, the court will still consider the reasonableness of Lutron's litigating position and the manner in which the case was litigated.
II. The Parties' Litigation Positions Were Not Objectively Unreasonable
A. Lutron's Litigation Positions Were Reasonable
GeigTech argues that this case is exceptional because Lutron maintained substantively weak patent defenses throughout the case in bad faith. The court disagrees.
First, GeigTech points to the jury's finding of willfulness as proof that Lutron's defenses were objectively unreasonable. However, while Lutron's willfulness defenses ultimately failed, “it is the ‘substantive strength of the party's litigating position' that is relevant to an exceptional case determination, not the correctness or eventual success of that position. A party's position on issues of law ultimately need not be correct for them to not ‘stand[ ] out,' or be found reasonable.” SFA Sys., LLC v. Newegglnc., 793 F.3d 1344, 1348 (Fed. Cir. 2015) (citing Octane Fitness, 572 U.S. at 554).
GeigTech argues that the Snowy Owl evidence shows the substantive weakness of Lutron's patent defenses. However, this evidence speaks only to obviousness and willfulness and does not convince the court that Lutron'spatent infringement defenses (e.g., non-infringement and invalidity) were unreasonable - which is especially pertinent given that a finding of infringement is required for a finding of willfulness. Nor does the court find that the Snowy Owl evidence rendered Lutron's willfulness defenses frivolous or unreasonable. Accordingly, the court finds that Lutron's copying does not rise to the level necessary to make this an exceptional case warranting attorneys' fees. See Willis Elec. Co. v Polygroup Ltd, No. 15-CV-3443 (JNE/DTS), 2024 WL 1007893, at *2 (D. Minn. Mar. 8, 2024) (finding that plaintiffs “copying evidence, while concerning, does not definitively show egregious infringement” warranting enhanced damages).
Moreover, even in light of Snowy Owl, the court finds that Lutron vigorously pursued meritorious invalidity and willfulness defenses throughout the course of litigation. “[W]here a party has set forth some good-faith argument in favor of its position, it will generally not be found to have advanced ‘exceptionally meritless' claims.” Hockeyline, Inc. v. STATS LLC, No. 13-CV-1446 (CM), 2017 WL 1743022, at *5 (S.D.N.Y. Apr. 27, 2017) (citing Small v. Implant Direct Mfg. LLC, No. 06 CIV. 683 NRB, 2014 WL 5463621, at *3 (S.D.N.Y. Oct. 23, 2014), affd, 609 Fed.Appx. 650 (Fed. Cir. 2015). Lutron's patent defense arguments resulted in, among other things, (i) GeigTech's withdrawal of two patents-in-suit and numerous claims of the '717 Patent; (ii) GeigTech's failure to secure a preliminary injunction because Lutron raised substantial questions on the merits; (iii) Lutron's successful invalidation of several claims of the 717 Patent through PGR; and (iv) the Court's denial of GeigTech's motion for summary judgment of noninfringement. Again, while the jury ultimately found in favor of GeigTech, Lutron's defenses were meritorious and not exceptional. Stragent, LLC v. Intel Corp., No. 6:ll-cv-421, 2014 WL 6756304, at *3, 4 (E.D. Tex. Aug. 6, 2014) (“awards of attorney's fees in patent cases should be reserved for rare and unusual circumstances”); see also Metso Minerals, Inc. v. Power screen Int'l Distribution Ltd, 833 F.Supp.2d 333, 354 (E.D.N.Y. 2011) (“While the jury has found that the infringing conduct was willful, there are no other factors that would mark this case as exceptional, such as offensive litigation tactics, including vexatious or unjustified litigation or frivolous filings, being employed; or that the losing party litigated in bad faith.”).
As the Federal Circuit has noted, “[t]he legislative purpose behind § 285 is to prevent a party from suffering a ‘gross injustice': ‘The exercise of discretion in favor of [awarding attorney fees] should be bottomed upon a finding of unfairness or bad faith in the conduct of the losing party, or some other equitable consideration of similar force, which makes it grossly unjust that the winner of the particular lawsuit be left to bear the burden of his own counsel fees.'” Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 858 F.3d 1371, 1376 (Fed. Cir. 2017) (quoting committee report). The court makes no such finding here. At no point during nearly eight years of litigation has this court ever found Lutron to be pursuing its defenses in bad faith or found that those defenses were unreasonable. I decline to make such a finding now. This was a hard fought, hotly contested case - the sort that does not cry out for an award of attorneys fees.
B. GeigTech's Litigation Positions Were Reasonable
Lutron argues that this case is exceptional because GeigTech maintained substantively weak trade dress claims throughout the case in bad faith. The court disagrees for essentially the reasons discussed above. A few additional points bear mentioning.
Lutron relies heavily on the court's bench trial verdict to support its claim for fees. However, nothing in the court's bench trial verdict gave any indication that this court found GeigTech's trade dress claims to be unreasonable or to have been pursued in bad faith; nor has that ever been the court's opinion during the pendency of this litigation. The arguments Lutron now raises in its attorneys' fees motion are principally squabbles over the weight of the evidence offered in support of GeigTech's trade dress claims; those arguments in no way impact the court's conclusion that this is not an exceptional case.
Although GeigTech did not ultimately succeed in proving any of requisite elements for trade dress, that does not render this case exceptional. Trade dress claims require “the application of a fact-intensive, multifactor analysis ... making it difficult for [parties] to predict the likelihood of success on the merits." Louis Vuitton Malletier, S.A. v. My Other Bag, Inc., No. 14-CV-3419 (JMF), 2018 WL 317850, at *2 (S.D.N.Y. Jan. 8, 2018), affd, 764 Fed.Appx. 39 (2d Cir. 2019). GeigTech clearly had an objectively reasonable belief in the veracity of these claims. In fact, GeigTech's trade dress was credited by this court as “one of the best-pleaded examples of a trade dress infringement claim' it had ever reviewed.” (Dkt. 65 at 6) (emphasis added). While the court ultimately disposed of these claims, it only did so after these claims had been thoroughly and reasonably litigated over the course of six years. The claims survived Lutron's motion to dismiss, motion for summary judgment, and motion for judgment as a matter of law. The Court then held thirteen days of trial with an expansive evidentiary record and well-reasoned legal arguments on both sides. These are not the hallmarks of a frivolous case.
III. The Parties Did Not Litigate this Case in An Unreasonable Manner
This case is not one where either party “engaged in litigation misconduct,” or “abused the litigation process and needlessly consumed the scarce time of the court” which would merit an extraordinary case finding. Cf. Astrazeneca AB v. Dr. Reddy's Lab'ys, Ltd., No. 07 CIV. 6790 (CM), 2010 WL 1375176, at *9 (S.D.N.Y. Mar. 30, 2010) (finding such circumstances). In fact, this case was quite the opposite. There were many instances on the record where the court thanked the parties for their professionalism and commended them for their reasonable manner of litigation. See, e.g, Tr. 1898:9-11 (“Although I must say, once again, with the help of these tremendous lawyers, we have simplified [this case for the jury] a lot.”); Tr. 2027:24 (“You did a great job [in litigating this case], folks.”).
Sadly there is now one exception to this statement: GeigTech's motion mentions that “we cannot find a case where a defendant was dumb enough to model a figure in a patent owned by another, then faced with a lawsuit decided to keep infringing during the lawsuit. Lutron did exactly that here.” (Dkt. No. 501 at 7). This comment is completely unnecessary and unprofessional. The parties will refrain from making these sorts of remarks in the future.
Both parties claim that their opponent unreasonably dragged out litigation despite knowing that their claims and/or defenses were frivolous. There is not a shred of support for this argument. As previously explained, both parties had a reasonable and good faith belief in their claims and litigated this case in accordance therewith. The court sees no reason, nor do the parties point to anything persuasive, to conclude that either party pursued its positions in bad faith.
GeigTech also argues, without support, that a fee award is warranted because Lutron had “an affirmative duty of due care” to obtain and present at trial an opinion of counsel regarding patent infringement. (Dkt. No. 501 at 9.) But the Federal Circuit has “abandon[ed] the affirmative duty of due care . . . reemphasiz[ing] that there is no affirmative obligation to obtain opinion of counsel,” and a 2011 federal statute codified that change. See In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc) abrogated on other grounds by Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 103-04 (2016); 35 U.S.C. § 298. Accordingly, Lutron had no obligation to obtain an opinion of counsel, and there is no authority requiring a party to present such an opinion at trial. Nor does the court find that Lutron's failure to seek such an opinion (if that is even the case - Lutron maintains that it is not) warrants a finding that Lutron litigated this case in an unreasonable manner.
Finally, GeigTech claims that this is an exceptional case because Lutron infringed the ‘717 Patent before and after the commencement of litigation and should have known it was doing so the entire time. The court rejects this argument out of hand. Lutron was defending itself in good faith during the entire pendency of its infringement.
In sum, this is simply not an exceptional case that warrants attorneys' fees. “[E]xceptionality requires more . . . and that more is wanting here. [The parties] have not shown that [their opponent] used ‘unreasonable litigation tactics' ... or that [they were] otherwise ‘guilty of any litigation misconduct,' that needlessly swelled their expenses.” Universal Church, Inc. v. Universal Life Church/ULC Monastery, No. 14 CIV. 5213 (NRB), 2019 WL 4601741 at *4-5 (S.D.N.Y. Sept. 19, 2019); see also Louis Vuitton, 2018 WL 317850, at *3 (“Most cases awarding fees .. . involve substantial litigation misconduct.”); Beastie Boys v. Monster Energy Co., 112 F.Supp.3d 31, 46 (S.D.N.Y. 2015) (same).
This case was well litigated by both parties. Each party can and should pay its own attorneys' fees. The motions are DENIED.
GeigTech's Permanent Injunction Motion
GeigTech requests that the court issue a permanent injunction enjoining Lutron from infringing, directly or indirectly, the Asserted Claims of the ‘717 patent. Lutron requests that the injunction includes, at a minimum, that Lutron should be enjoined from making, using offering for sale, selling, importing (into), or installing in the United States the Palladiom end and center brackets or any similar products that are configured to infringe the Asserted Claims of the ‘717 patent. GeigTech argues that injunctive relief is proper because GeigTech and Lutron are direct competitors in the market for high-end exposed motorized roller window shades, and Lutron's infringing activities have caused and will continue to cause irreparable harm - in the form of lost market share and direct competition - to GeigTech if Lutron is not enjoined.
Under 35 U.S.C. § 283, courts “may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.” A plaintiff seeking a permanent injunction “must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). To satisfy the irreparable harm standard, a patentee must establish that, “absent an injunction, it will suffer irreparable harm, and that a sufficiently strong causal nexus relates the alleged harm to the alleged infringement.” Apple Inc. v. Samsung Electronics Co., Ltd., 735 F.3d 1352, 1359-60 (Fed. Cir. 2013) (Apple III”) (emphasis added).
GeigTech succeeds in establishing all four required eBay factors. The injunction is therefore granted with the limitations discussed infra.
I. GeigTech Has Established It Will Suffer Traditional Irreparable Harm
Irreparable harm can be shown by evidence of direct competition and loss in market share. See Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1152-54 (Fed. Cir. 2011). “Where two companies are in competition against one another, the patentee suffers the harm-often irreparable-of being forced to compete against products that incorporate and infringe its own patented inventions.” Douglas Dynamics, LLC v. Buyers Prods. Co., 717 F.3d 1336, 1345 (Fed. Cir. 2013).
The court has already found that Lutron and GeigTech are direct competitors in the window shade market. The court's trade dress verdict stated that “Lutron engaged in a program designed to develop a product that could compete directly with Geiger's shades - which program unquestionable involved ‘industrial espionage' and copying (with some modification) the look that was beginning to attract customers at the high end of the marketplace (Snowy Owl).” (Dkt. 499 at 7). Moreover, the evidence at trial overwhelmingly established the same. See, e.g., Tr. 123:2-124:15, 285:1-13, 519:9-12, 749:21-23, 834:9-837:4, 916:20-917:6, 1067:10-20, 1070:911, 1109:9-17, 1212:10-25, 1397:3-7, 1399:11-14. GeigTech also has presented sufficient evidence that it has lost significant market share to Palladiom. PX 227, DX 1022, DX 1027, Tr. 136:1-3; 297:24-298:12; 297:24-298:12,1051:15- 1052:1, 1059:23-1060:17.
Lutron does not dispute any of this evidence nor the court's previous finding that the parties are “direct competitors.” Instead, Lutron argues that the parties are no longer “direct competitors” based on its claim that GeigTech no longer sells window shades. Lutron's sole proffered support for this claim is a December 11, 2023, press release from Savant Systems, Inc. (“Savant”) disclosing that Savant “completed a transaction to acquire assets from J Geiger Shading.” (Dkt. 366-1). Lutron asks for post-trial discovery so that it can look into the GeigTech-Savant deal in order to ascertain whether GeigTech still sells window shades.
Lutron's request was already raised before this court and rejected. (See Dkt. No. 372). The court does not appreciate Lutron's renewed attempt to relitigate this issue, especially since there is no new evidence in support of its argument. The very press release to which Lutron cites states that customers will “continue to have access” to GeigTech shades. (Dkt. No. 366-1) (emphasis added). Additionally, the evidence revealed since Lutron last raised this issue only establishes that Lutron's renewed argument is baseless. GeigTech's CEO, Mr. Nix, and its founder, Mr. Geiger, repeatedly testified during trial, without contradiction, that GeigTech was still m the business of selling “high-end exposed shading systems.” See, e.g., Tr. 81:7-82:8; 258:4-6. Moreover, counsel for GeigTech has repeatedly reassured the court that their client “is still in the business of selling its novel patent protected shading system and Lutron is still a direct competitor.” (See, e.g., Dkt. No. 528). Accordingly, the court finds that these parties are still direct competitors in the window shade business. Lutron's request to reopen discovery is denied.
Lutron next argues that GeigTech fails to establish traditional irreparable harm because Lutron no longer sells the infringing end and center brackets. Lutron claims that it stopped shipping its old design bracket - the one found by the jury to be infringing - on March 20,2024, and started shipping a new design on March 25,2024. (Dkt. No. 516 at ¶¶ 3-4). However, a redesign is not a valid reason for denying an injunction to prevent future infringement, “unless the evidence is very persuasive that further infringement will not take place.” W.L. Gore & Assocs., Inc. v. Gar lock, Inc., 842 F.2d 1275, 1281-82 (Fed. Cir. 1988) abrogated on other grounds by eBay, 547 U.S. at 126; see also Rosco, Inc. v. Mirror Lite Co. No. CV-96-5658,2006 WL 2844400, at *4 (E.D.N.Y. Sept. 29,2006) (“Cessation of production and sales is not in and of itself sufficient sound reason to deny a permanent injunction”); General Elec. Co. v. New England Elec. Mfg. Co., 128 F. 738, 740 (2d Cir. 1904); SIMO Holdings, 396 F.Supp. at 346. Here, Lutron fails to present any such evidence.
Obviously the court can take no position as to whether or not this new design infringes the ‘717 Patent.
Lutron does not represent that it will never sell infringing brackets again, that it lacks the capacity to create them again, or that it will not or has not created an alternative bracket that arguably infringes the ‘717 Patent and restarts this entire litigation process. See W.L. Gore, 842 F.2d at 1282 (granting a permanent injunction under similar circumstances). Additionally, the lone piece of evidence in support of Lutron's claim - a declaration from its Senior Engineering Director -is not “very persuasive that further infringement will not take place.” See Rosco, Inc., 2006 WL 2844400, at *4 (“In this case, the only evidence of [infringer's] cessation of infringement is its own statement that it has done so. If this sufficed for the ‘very persuasive' evidence that infringement had permanently ceased, few permanent injunctions would issue.”). Finally, “[i]f the defendant be honest in his protestations an injunction will do him no harm.” W.L. Gore, 842 F.2d at 1282 (quoting Gen. Elec. Co., 128 F.738 at 740).
Next, Lutron argues that certain aspects of GeigTech's litigation conduct evinces a lack of irreparable harm.
First, Lutron points out that GeigTech did not file the ‘717 Patent until six years after its original 2012 patent application; and that, in order to prosecute the infringed patent claims, GeigTech had to amend the patent's written description itself to discuss the concept of a “passage” comprising an intersecting “first recess” and “second recess.” Lutron points to no authority that establishes this weighs against a finding of “irreparable harm,” nor can the court discern any reason why these facts are relevant. GeigTech has not been idly sitting on its patent rights. It has been vigorously litigating against Lutron since it discovered the Palladiom Shades.
Second, Lutron points out that GeigTech never sought a preliminary injunction based on the ‘717 patent. However, while a patent owner's choice about whether to seek interim relief can be relevant to the irreparable-harm inquiry, there are various reasons why a patent owner may choose to forgo a request for preliminary injunction “independent of any implied concession that the infringement-caused injury is not actually irreparable.” Genband U.S. LLC v. Metaswitch Networks Corp., 861 F.3d 1378,1385 (Fed.Cir. 2017). GeigTech provides the perfectly reasonable explanation that “Given its size and limited resources, J Geiger declined to seek a preliminary injunction after it failed to achieve one with the '821 patent a few months prior.” (Dkt. No. 524 at 3-4). Accordingly, the court finds Lutron's argument unpersuasive.
Third, Lutron points out that GeigTech also did not seek the patent infringement remedy of lost profits. Lutron argues that this “suggests an implied concession that the purported infringement of the narrow, asserted patent claims could not be shown to explain any harm to its market share.” (Dkt. No. 514 at 13). Lutron provides no legal or factual support for this claim, and the court finds it unpersuasive. “A patentee may find a royalty to be the most appropriate remedy for past infringement: it may best measure those harms which are reliably measurable. That does not mean, however, that there do not exist the kinds of hard-to-measure harms, such as impaired goodwill and competitive position, that can justify injunctions to prevent them before they occur (precisely because they are hard to quantify later).” Tex. Advanced Optoelectronic Sols., Inc. v. Renesas Elecs. Am., Inc., 895 F.3d 1304,1331 (Fed. Cir. 2018). Accordingly, there is no basis for the court to conclude that forgoing lost profits waives a party's right to an injunction.
Finally, Lutron argues that GeigTech failed to present evidence about any ongoing competition between itself and Lutron. In support, Lutron repeats its previous argument that GeigTech no longer sells shades. The court has already rejected this argument supra, and sees no reason to defy the unrebutted weight of evidence and alter its previous conclusion that Lutron and GeigTech remain direct competitors in the window shade market.
Accordingly, GeigTech has established that it will suffer irreparable harm in the traditional sense if no injunction issues. See Presidio Components, Inc. v. Am. Technical Ceramics Corp., 702 F.3d 1351, 1363 (Fed. Cir. 2012) (“Direct competition in the same market is certainly one factor suggesting strongly the potential for irreparable harm without enforcement of the right to exclude.”); see also Cognex Corp. v. Microscan Sys., Inc., No. 13-CV-2027, 2014 WL 2989975, at *1 (S.D.N.Y. June 30, 2014) (evidence of direct competition and loss of market share prove irreparable harm). But that only gets GeigTech halfway home. It cannot obtain an injunction unless it has established “a sufficiently strong causal nexus [that] relates the alleged harm to the alleged infringement.” Apple III, 735 F.3d at 1359-60.
II. GeigTech Has Established a Sufficiently Strong Causal Nexus that Relates the Alleged Harm to the Alleged Infringement
In order to establish “a sufficiently strong causal nexus [that] relates the alleged harm to the alleged infringement,” GeigTech must prove that the “infringing feature drives consumer demand for the accused product.” Apple Inc. v. Samsung Elecs. Co., 695 F.3d 1370, 1375 (Fed. Cir. 2012) (“Apple IT'). The court's “inquiry should focus on the importance of the claimed invention in the context of the accused product, and not just the importance, in general, of features of the same type as the claimed invention.” Apple III at 1364. “However, these principles do not mean [GeigTech] must show that a patented feature is the one and only reason for consumer demand.” Id. “Consumer preferences are too complex-and the principles of equity are too Hexible-for that to be the correct standard.” Id. “Thus, rather than show that a patented feature is the exclusive reason for consumer demand, [GeigTech] must show some connection between the patented feature and demand for [Lutron's] products.” Id. (some emphasis in original, some added).
Here, the infringed claims speak to a window shade bracket that hides unsightly wiring when coupled to a support surface. See PX 1 at Claims 1, 2, 8, 10, 11, 12. In turn, these features result in a more aesthetically pleasing shading system. Id. at 21 (“Current brackets and mounts for roller window shades are typically bulky, visible, and may detract from the aesthetics of the shade system. Hence, there remains a need for improved assembly for mounting shades and shade systems, including motorized shades.”). The purpose of the “intersecting recesses” in the bracket is to form a passage to allow wiring to pass through the bracket so the wiring will be obscured from view. See, e.g, PX 1, claim 1. Thus, the invented feature of the ‘717 Patent makes it possible to have an aesthetically pleasing exposed shade system by hiding the wires. The court has previously found the same: “The idea behind [the ‘717] patent[] is to make window shade installations more aesthetically pleasing by hiding the ‘ugly,' unsightly parts that are used to mount or to power the window shade. The ‘Background' section of the patent[] .. . makes that perfectly clear.” Claim Construction Decision at 17.
GeigTech argues that the Palladiom Brackets' infringing features drove consumer demand for the product. The court agrees that three types of evidence supports the conclusion that the patented feature - a bracket that hid the wires when coupled to a support surface - drove consumer demand for the Palladiom product.
First and foremost is Lutron's marketing material for Palladiom, which is logically dictated by what Lutron perceives consumers will want. The marketing material highlights the clean look of the shading system and the fact that the brackets can be exposed yet hide unsightly features, such as the wiring. See PX 200 (“Lutron Palladiom Motorized Roller Shades are ideal for exposed applications. Controlled by an ultra-quiet, precision Sivoia QS Palladiom drive, these shades are mounted on solid aluminum brackets that completely conceal wiring and offer a refined aesthetic in a variety of finishes to match any setting”); PX 195 (“The Palladiom Shading System redefines the beauty of daylight control. Available as a wired or wire-free, battery-operated system, these shades look beautiful from every angle and are designed to be installed without a fascia, pocket, or recess in exposed applications.”); PX 152 (“What makes [Palladiom Shades] different from what we have today? The system is designed to be exposed, not hidden away in a pocket. The brackets are on show, while the wiring to provide power and communication to the drive is completely hidden away.”). The fact that GeigTech marketed its exposed bracket shade by emphasizing the very same thing - a “clean look” created by use of the patented bracket, which hid the ugly wiring without having to use a valence or some other architectural feature -underscores the importance of this aspect of Lutron's marketing materials. See, e.g., PX 21 at 5 (“Nothing to hide. No visible fasteners or screws. Just the cleanest, simplest shading system in the world.”) and 26 (“Nothing to see here but the view, J Geiger's patented shading system trade unsightly screws and wires for a sleek, modem design.).
Of course, Lutron's marketing materials also tout other aspects of the Palladiom shading system, including the silent motor, the decorative hembar and the precision controls. But it bears repeating that consumer demand does not have to be driven solely by the patented feature. So the fact that Palladiom has other desirable features that might appeal to consumers does not mean that its highlighting of the hidden wires, e.g., “the wiring to provide power and communication to the drive is completely hidden away;” “these shades look beautiful from every angle;” and “these shades are mounted on solid aluminum brackets that completely conceal wiring and offer a refined aesthetic” - a feature achieved by use of the infringing bracket - is not evidence that consumers find this particular feature desirable. And the record is devoid of evidence that any of these features were important to consumers.
Add to this a second type of evidence: the fact that Lutron had customers who specifically asked whether it made a shade that “looked like J Geiger.” See, e.g., PX-65 (“I've had an increasing number of very important people asking if we carry [Geiger Shades].”); PX-73 (“Can Lutron develop a bracket system that looks similar/better [to Geiger's]?”). It is true that a “look is not the same thing as a patent, and that a look cannot be patented. But the thing that creates a particular “look” can be, and in this case was, patented. The thing that created the look consumers wanted was the magic bracket that hid the wires. While those consumers may not have pointed specifically to the bracket when asking for a shade that “looked like J Geiger,” the evidence demonstrates that shades that looked like J Geiger did so because they exposed the brackets while hiding the wires. The court has spent literally dozens of hours looking at Geiger, Lutron and other manufacturers products. The only feature of the J Geiger shading system that lends itself to a “looks like J Geiger is the exposed bracket that hides the “ugly parts” when coupled to the shade itself - thereby creating a particular look that some of Lutron's customers found desirable. The fact that these customers wanted a shade that “looked like” GeigTech's shade suggests that the feature driving their request, and so consumer demand, was not the improved motor or the decorative hembar, but rather the thing that made J Geiger shades “look like” J Geiger shades - which is the use of the patented bracket to hide the wires. See PX 149 (Palladiom Brackets are a “HIGHLY engineered solution where very single component that is potentially visible has been considered from the perspective of design; it looks good at every angle- no exposed wires, no exposed aluminum tube, and even machined SHIMS that match the brackets”) (emphasis added).
Finally, and most tellingly, the patented bracket is the feature that Lutron went to great lengths to copy. Copying is yet another type of evidence that, while not automatically determinative, has been held to be indicative of consumer demand. An infringer s actions that are “indicative of copying” help “establish[] that these [inventive] features do influence consumers' perceptions of and desire for these products.” See Apple Inc. v. .Samsung Elecs. Co., 809 F.3d 633, 642 (Fed. Cir. 2015) (“Apple IV"). The one and only feature of the Geiger shades that Lutron copied through Project Snowy Owl was the patented feature the brackets that concealed the wiring. See PX 97 (“Do we think we have learned enough by the reverse engineering and modeling we did from the Geiger patents and literature?”). Lutron admitted to studying GeigTech's website, brochures, and the '821 patent extensively as part of the development of the Palladiom Bracket -all of which are sources that touted the bracket's “concealed wiring” as an important feature of the bracket. See Tr. 719:13-18; 527:2-16; 720:10-16; 1352:17-1353:8; PX 63, PX 91; PX 193. Lutron also admitted to lying in order to investigate GeigTech's shade brackets in GeigTech's own showroom and in consumers' homes. Tr. 690:3- 692:19; 729:6-749:15; 1351:8-1352:7; PX 81; PX 90; PX 97; PX 117. Lutron even went so far as to put GeigTech's ‘821 Patent into CAD software in order to replicate and study the patent's features. Tr. 572:12-575:8; 1352:17-1353:8; 1896:111; PX 91; PX 93. Taken together, this evidence clearly shows that Lutron was facing demand from consumers to have a shade that used a bracket like the Geiger shade's bracket, i.e., one that could hide the wires.
All of this, taken together, adds up to evidence of a causal nexus between the infringed features of the shading system and consumer demand. See Apple IV at 643(“Where the precise question is about consumer preferences and buying choices, the strength and weight to be given to [copying and marketing] evidence is to be determined on a case-by-case basis based on what the evidence indicates.”). The Federal Circuit has stressed that a court evaluating the evidence in support of a request for an injunction should engage in “a flexible analysis, as befits the discretionary nature of the four-factor test for injunctive relief.” Id. at 641. Accordingly, there are “a variety of ways to make this required showing,” and evidence as to an infringer's subjective beliefs (e.g., its marketing materials) is probative when that evidence sufficiently corroborates evidence as to “consumers' perceptions,” which it clearly does here. See id. at 643. Perhaps the evidence is more circumstantial than a customer survey would have been, but there is no requirement that GeigTech rely on a survey or present any particular type of evidence in order to demonstrate causal nexus.
III. The Remedies Available at Law Are Inadequate to Compensate GeigTech for the Injury It Would Suffer from Future Infringement
GeigTech argues that money damages are inadequate because Lutron is a competitor in a market created by GeigTech and gained market share - to GeigTech's detriment - through the infringing Palladiom Shades.
GeigTech is correct. “[T]he rise in [Lutron's] market share ... in t[he] years while infringing [Geigtech's] patent[]” supports a finding that the remedies available at law are inadequate to compensate GeigTech's injury. Douglas Dynamics, 717 F.3d at 1345. Here, GeigTech and Lutron are direct competitors in a marketplace that GeigTech created. See Tr. 120:24-121:6, 126:2-6, 263:2-5, 818:23-820:10, PX 103 at 22. Lutron created Palladiom because consumers were pushing Lutron to offer a GeigTech alternative, i.e., a high-end exposed shade product. See PX 122 (Lutron's “core residential Windows Systems business has been under pressure from a competitor (J. Geiger) offering decorative brackets for exposed shades.). Lutron then became GeigTech's only competitor. See PX 179 (September 22, 2020 Lutron email stating, “The only known competitor is J Geiger” for Palladiom).
GeigTech's market share has steadily eroded, and Lutron's has substantially increased since Lutron's infringing Palladiom Shades have come into the market. GeigTech achieved a peak annual revenue of $10 million in 2021, which decreased to $7.8 million by 2023. PX 227, DX 1027. Meanwhile, Lutron entered the market in 2017 and its revenues from Palladiom Wired shades grew to $9.7 million annually in 2023. DX 1022.
“This record evidence underscores the profitability of infringement and suggests that mere damages will not compensate for a competitor's increasing share of the market, a market which [GeigTech] competes in, and a market that [GeigTech] has in part created with its investment in patented technology.” Douglas Dynamics, 717 F.3d at 1345. “Competitors change the marketplace. Years after infringement has begun it may be impossible to restore a patentee's . . . exclusive position by an award of damages and a permanent injunction.” Polymer Techs., Inc. v. Bridwell, 103 F.3d 970, 975-76 (Fed. Cir. 1996).
Moreover, the denial of an injunction would amount to a compulsory license of the '717 patent to Lutron, which this court will not grant. “If plaintiffs were forced to accept only monetary damages for continued infringement, the Court would, in effect, grant to [Lutron] a compulsory license, for which the Court has no basis.” Cognex Corp, 2014 WL 2989975, at *2. GeigTech claims it does not license its patents to competitors. Tr. 1058:12-22,1109:1-8. It will not be forced to do so here.
Finally, “[i]rreparable injury encompasses different types of losses that are often difficult to quantify, including . . . erosion in reputation and brand distinction.” Douglas Dynamics, TCI F.3d at 1344. A product which “made its place in the market by infringing on the intellectual property of the [patentee] and capitalized on its similarity to the better product causes a greater and different harm than just lost sales. Id. “The [patentee] would lose some of its distinctiveness and market lure because competitors could contend that they had ‘similar features without noting that those features infringe [the patentee]'s proprietary technologies.” Id. That is precisely what has happened here. Lutron was pressed by consumers to create a GeigTech shade alternative and marketed Palladiom in the same fashion. See, e.g., PX 145 at 1 (“J Geiger has a HUGE presence in Aspen and the architectural community was RELIEVED and excited that Lutron finally had a solution they can provide.) (emphasis in original).
Accordingly, GeigTech has satisfied this second factor for entry of an injunction.
IV. The Balance of Hardships Tips in GeigTech's Favor
GeigTech argues that, if an injunction is denied, Lutron could continue capitalizing on the market that GeigTech built by infringing the ‘717 Patent. Additionally, GeigTech asserts that other infringers will be encouraged to ignore GeigTech's efforts to enforce its patent rights and enter the market with new infringing products forcing further litigation and further eroding GeigTech s market share.
Lutron concedes that it cannot show hardship “given Lutron's change-over to the new design.” Dkt. 514 at 16. The only “harm” identified by Lutron regards the scope of the injunction, but as discussed infra, GeigTech concedes to limiting the injunction s scope to address that harm.. Accordingly, the court finds that GeigTech has satisfied this third factor.
V. The Public Interest Weighs in Favor of Granting an Injunction
“[T]he public interest nearly always weights in favor of protecting property rights in the absence of countervailing factors, especially when the patentee practices his inventions.” See Apple IVat 647; see also Smith Int'l, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1577-78 (Fed. Cir. 1983) (“Without this injunctive power of the courts, the right to exclude granted by the patent would be diminished, and the express purpose of the Constitution and Congress, to promote the progress of the useful arts, would be seriously undermined”).
The public interest is particularly strong here where an injunction will not prevent Lutron from selling exposed shades or even Palladiom shades-Lutron will continue to be free to sell non-infringing versions of Palladiom (as Lutron alleges it has already been doing). The injunction will simply stop Lutron from selling versions of the Palladiom Shading System that infringe the asserted claims of the '717 patent. In contrast, there is no countervailing “critical public interest that would be injured by the grant” of injunctive relief. Hybritech, Inc. v. Abbott Labs, 849 F.2d 1446, 1458 (Fed. Cir. 1998). Further, although competition serves the public interest, “copies of patented inventions have the effect of inhibiting innovation and incentive.” Douglas Dynamics, 717 F.3d at 1346. The public interest therefore favors enforcement of J Geiger's patent rights.
Lutron argues that the public interest would not be served by an injunction because the public has an interest in “competition” and diversity in products. That may be true, but the public does not have an interest in copied and infringing products. Moreover, according to Lutron itself, this injunction will have no effect on its ability to compete. Lutron claims it has already stopped selling the infringing shade product and is now offering a redesigned, non-infringing shade. Accordingly, Lutron will still be fully able to compete in the market and offer its shade products. In fact, there is now even more diversity in the products available to the public since Lutron has redesigned its shades.
Accordingly, the court finds that this fourth factor favors an injunction. As all four eBay factors favor an injunction, GeigTech's request for a permanent injunction is granted.
VI. The Scope of the Injunction
GeigTech urges that the court enter the following injunction:
Lutron and its officers, agents, servants, employees, and attorneys, and all those persons in active concert or participation with Lutron (or in active concert or participation with its officers, agents, servants, employees, attorneys) be permanently restrained and enjoined from making, using, offering for sale, selling, importing (into), or installing in the United States: (a) the adjudged Palladiom
Shading System products found to infringe claims 1, 2, 8,10,11, or 12 of the '717 patent, and (b) any Lutron shading system product that is substantially similar to and/or not colorably different from the adjudged infringing Palladiom Shading System products with respect to those elements proven to satisfy the limitations of claims 1, 2, 8, 10, 11, or 12 of the '717 patent. J Geiger further requests this injunction remain in effect until the expiration of the '717 patent.
Lutron objects to three aspects of this proposed injunction.
First, Lutron objects to an injunction on “importing” the infringing Palladiom Shades. Lutron argues that it should not be enjoined from importing existing stock of the infringing product, as it is currently doing so in order to modify those shades to incorporate the newly designed Palladiom feature. GeigTech concedes that it “is willing to include an explicit carve out that is intended to minimize disruption to Lutron's modification process.” (Dkt. No. 524 at 13). The court agrees, especially as the only basis for an importation injunction is to prevent the sale of products manufactured abroad, where U.S. patents do not reach. Accordingly, Lutron may continue to import the infringing shade system, but only for the purpose of modifying those products to incorporate the new Palladiom design.
Second, Lutron argues that the “use” of the “adjudged Palladiom Shading System products” should not be enjoined as such a requirement is overly broad, burdensome, and unnecessary. GeigTech does not object and the court agrees with this objection.
Finally, Lutron points that the proposed injunction includes products that are both “not colorably different” from brackets of the old design and that are “substantially similar to” those brackets. Lutron objects to the latter phrase and argues it is not clear how “substantially similar to” differs from “not colorably different.” GeigTech does not object and the court sees no issue with using just one phrase in order to eliminate any possibility of confusion.
Accordingly, with those three adjustments the court will enter the form of injunction proposed by GeigTech.
Conclusion
For the foregoing reasons:
1. GeigTech's motion for attorney's fees is DENIED.
2. GeigTech's motion for a permanent injunction is GRANTED.
3. Lutron's motions for attorney's fees and JMOL are DENIED.
4. Lutron's new trial motion is DENIED as to patent infringement, willful infringement, defamation, and invalidity, but GRANTED as to damages. The court sets aside the jury's damages award of $34.6 Million, and grants an order of remittitur in the sum of $3,843,986. If GeigTech does not agree to accept the remittitur within fourteen business days from the date this decision issues, we will schedule a damages trial for this fall.
5. GeigTech's motion for enhanced damages is dismissed without prejudice to renewal after damages are set either by acceptance of the remittitur or at a new trial.
The Clerk of Court is respectfully directed to close the open motions at Dkt. Nos. 429, 443, 450, 500, 503, 506, 508, 510, 530, and 532.