Articles Posted in Damages

Indianapolis, Indiana – Judge Richard L. Young of the Southern District of Indiana issued a decision on cross-motions for attorneys’ fees and costs in the case of Richard N. Bell (“Bell”) versus Michael Maloney (“Maloney”). The Court first entered judgment in favor of Bell on June 11, 2019 granting him $200 in statutory damages, and costs. Bell sought $33,536,25 in attorney’s fees and $4,719.80 in costs. Maloney made a cross-motion “for leave to file a Bill of Costs totaling $2,183.77 and to enforce the Rule 68 offer. The Court found that the Rule 68 offer should be enforced and Maloney is entitled to the costs he incurred after the offer was rejected.

Bell sent a demand letter to Maloney for $5,000.00 prior to filing this suit. After Bell filed suit, Maloney filed his Answer and then sent Bell an Offer of Judgment pursuant to FRCP 68. This offer was for $2,500.00 for Bell to take judgment against Maloney and would include all attorney’s fees and costs. Bell denied the Rule 68 offer and after the denial of cross-motions for summary judgment, the case went to a bench trial. After the one-day bench trial, the Court found Bell was the prevailing party and was entitled to $200 in statutory damages. Bell filed his motion for fees and costs eleven months after the bench trial occurred.

FRCP 68 provides in part, “[i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” The court in Payne v. Milwaukee Cty., 288 F.3d 1021, 1024 (7th Cir. 2002), found that “Rule 68 is designed to provide a disincentive for plaintiffs from continuing to litigate a case after being presented with a reasonable offer.” In determining if a final judgment obtained is less favorable than a Rule 68 offer, “the attorney’s fees and costs that accrued before the offer must be added to the judgment.” Lawrence v. City of Philadelphia, 700 F.Supp. 832, 836 (E.D. PA. 1988).

Continue reading

Indianapolis, Indiana – Judge Richard L. Young in the Southern District of Indiana granted default judgment in favor of Engineered by Schildmeier, LLC (“Engineered”) and against WUHU Xuelang Auto Parts Co., LTD and Amazing Parts Warehouse (collectively the “Defendants”). Engineered filed suit seeking a declaratory judgment of both patent and trade dress infringement in late 2018. The patentEngineered-BlogPhoto-300x254 allegedly infringed in the complaint is United States Patent No. D 816,584 (the “‘584 Patent”) for a “Pair of Bed Rail Stake Pocket Covers”.

When a defendant fails to plead or defend a case against them within the allotted time frame, they are in default. A plaintiff may motion the court for a default judgment, which is a binding judgment of the court for failure of the defendant to answer the allegations. The court can then grant a default judgment. If a proof of damages hearing is necessary, the judge can order such a hearing, but the defendant may not appear at that point to defend the amount of damages asserted by the plaintiff. A default judgment may be set aside upon request of the defendant, but they must show a good defense and legitimate excuse as to why they were in default to the court.

In this case, neither of the Defendants plead or otherwise defended themselves against the allegations set forth in Engineered’s complaint. As such, the court granted Engineered’s motion for default judgment and awarded damages accordingly. First, the Court found that the Defendants infringed the ‘584 Patent. Second, the Court found the Defendants violated Section 43(a) of the Lanham Act by infringing Engineered’s trade dress. Third, the Defendants were enjoined from importing, selling, or offering for sale any imitations of the ‘584 Patent. Finally, Engineered was awarded a total of $1,424,070.00. The damages award was calculated by adding $470,020.00 in lost profits; $940,040.00 in treble damages for willful infringement; $13,610.00 in attorneys’ fees; and $400.00 in court costs. By failing to appear and defend themselves, not only will defendants have default judgments granted against them, but as shown in this case, extremely large damages may also be imposed.

Continue reading

HerffJones-BlogPhoto-300x114Indianapolis, IndianaHerff Jones, based in Indianapolis, Indiana won a multimillion-dollar case against its largest competitor, Jostens Inc., headquartered in Minneapolis, Minnesota. Herff Jones also won significant judgments against John Wiggins and Chris Urnis, former employees of Herff Jones distributor, Brent Gilbert of GradPro Recognition Products in the same case.

Jostens began negotiating employment agreements with Wiggins and Urnis prior to their leaving GradPro, despite their having strict noncompete agreements with GradPro, according to the lawsuit. The lawsuit further claimed one of Jostens authorized representatives took at least five employees from GradPro in an effort to take away business from Herff Jones.

Jostens lost the suit as the jury found it conspired and stole confidential and trade secret information and interfered with Herff Jones’ employment contracts. The jury awarded nearly $1.9 million in compensatory damages against Jostens, Wiggins, and Urnis to Herff Jones, and another $580,000 to Brent Gilbert of GradPro. Punitive damages in the amounts of $650,000, $25,000, and $10,000 were also assessed against Jostens, Wiggins, and Urnis, respectively.

JoeHand-BlogPhoto-1-300x100Indianapolis, Indiana – In April of 2018, Attorneys for Plaintiff, Joe Hand Promotions, Inc., of Feasterville, Pennsylvania, filed suit in the Southern District of Indiana alleging that Defendants, The Anchor Lounge, LLC, d/b/a The Anchor Lounge, of Muncie, Indiana, and Randy Phillips, an individual residing in Delaware County, Indiana, infringed its rights in the “Ultimate Fighting Championship® 207: Nunes v. Rousey” (the “Program”). Plaintiff sought statutory damages, attorney’s fees, interest, and cost of suit. On October 25, 2018, the court entered default judgment in the Plaintiff’s favor.

Joe Hand is in the business of licensing and distributing pay-per-view sporting events to commercial locations. In their Memorandum of Points and Authorities in Support of their default motion, they claim that Defendants realized a profit of $1,155.00 by not paying the approximate licensing fee they would have paid if they had contracted with Joe Hand. Plaintiffs have filed multiple lawsuits in Indiana and across the nation against commercial establishments that have not contracted with them to exhibit pay-per-view programs, such as the Program in this case, seeking damages under 47 U.S.C. §§ 553 and 605.

While Plaintiff has received default judgments in two separate cases in Indiana this week, the Southern and Northern District Courts awarded the damages in two different manners. For instance, the Southern District in this case awarded Joe Hand the full requested amount of $41,570.00. The Judge in the Northern District, however, parsed out the specific amounts due under the statutes and reduced the award amount requested by more than half. This shows that judges are able to use their discretion in awarding damages and do not have to award the full amount requested just because the defendant did not appear, but they may if they believe the amount requested is sufficient.

Continue reading

South Bend, Indiana – In April 2018, Attorneys for Plaintiff, Joe Hand Promotions, Inc. (“Joe Hand”), ofJoeHand-BlogPhoto-300x100 Feasterville, Pennsylvania, filed suit in the Northern District of Indiana alleging that Defendants, MBK Holdings, Inc. d/b/a Matey’s Restaurant & Bar, of Michigan City, Indiana, Bryan Konieczny, and Mark Kehoskie, both individuals residing in Indiana, infringed its rights in the “UFC 202: Diaz v. McGregor 2”, “UFC 203: Miocic v. Overeem”, “UFC 205: Alvarez v. McGregor”, “UFC 207: Nunes v. Rousey”, “UFC 208: Holm v. de Randamie”, and UFC 210: Cormier v. Johnson 2” (the “Programs”). Plaintiff sought statutory damages, attorney’s fees, interest, and costs. Default Judgment in favor of Joe Hand Promotions, Inc. was entered as of October 19, 2018.

Joe Hand specializes in exclusively distributing and licensing premier, pay-per-view sporting events, including the Programs, to commercial locations. Plaintiff worked with multiple locations in Indiana to license and distribute the Programs so the commercial establishments could show them to their patrons. Defendants did not contract with the Plaintiff to show the Programs, even though they could have and could have paid the accompanying licensing fee of approximately $1,680.00 for such. Joe Hand asserts that Defendants willfully intercepted the interstate communication of the Programs and unlawfully exhibited them to their patrons within their commercial establishment.

Plaintiff sought judgment against Defendants for wrongful actions violating 47 U.S.C. § 605, or alternatively, 47 U.S.C. § 553. They asked for the maximum statutory damages of $110,000.00 under 47 U.S.C. § 605, or alternatively, the maximum statutory damages of $60,000.00 under 47 U.S.C. § 553, plus attorney’s fees, interest, and costs. While the Judge did enter a default judgment against the Defendants, he did not enter the entire amount of statutory damages requested. Instead, he broke down the total damages of $42,002.00 as follows:

  • $10,080.00 in statutory damages under 47 U.S.C. § 605(e)(3)(C)(i)(II);
  • $30,240.00 in additional damages under 47 U.S.C. § 605(e)(3)(C)(ii);
  • $562.00 in attorney’s fees;
  • $400.00 in costs; and
  • 66% post-judgment interest.

Many times in litigation, judges award the entire amount sought in the event of a default judgment, but the Judge in this case took the time to parse out damages under the statutes.

Continue reading

New Jersey – In February of 2005, Attorneys for Plaintiff, Howmedica Osteonics Corp., of Mahwah, New Jersey filed suit in the District Court of New Jersey alleging that Defendants, Zimmer, Inc. of Warsaw, Indiana, Centerpulse Orthopedics, Inc. of Austin, Texas, and Smith & Nephew, Inc. of Memphis, Tennessee infringed itsZimmer-BlogPhoto-300x179 rights in United States Patent No. 6,174,934 (“the ‘934 Patent”) for “Non-oxidizing Polymeric Medical Implant”, United States Patent No. 6,372,814 (“the ‘814 Patent”) for “Non-oxidizing Polymeric Medical Implant”, United States Patent No. 6,664,308 (“the 308 Patent”) for “Non-oxidizing Polymeric Medical Implant”, and United States Patent No. 6,818,020 (“the ‘020 Patent”) for “Non-oxidizing Polymeric Medical Implant”.  Plaintiff sought judgment for damages including interest and costs, treble damages, expenses, and attorneys’ fees.

Plaintiff is a corporation that develops, manufactures, and distributes orthopedic products, generally used in hip and knee procedures and other bone replacement procedures. Defendant is a corporation based in Warsaw, Indiana, that also focuses on products for joint and extremity replacements.

Continue reading

Chicago, Illinois – The Seventh Circuit ruled in the ongoing intellectual property litigation between Plaintiff Lightspeed Media Corp. and Defendants Anthony Smith et al.

Attorneys for Lightspeed Media Corp. have filed numerous lawsuits nationwide in an apparent attempt to extract quick settlements from individual users who would rather avoid litigating their pornography consumption in open court. After pushback from Defendants and their internet service providers, as well as the imposition of sanctions by the Central District of California in a similar case, the attorneys began to voluntarily dismiss some of the cases.

The litigation against Defendant Smith was one such dismissed lawsuit. After the dismissal, Smith filed a motion for attorney’s fees. The Southern District of Illinois found that the Lightspeed lawsuit had been frivolous, baseless, and “smacked of bullying pretense,” and imposed sanctions of $261,025.11, jointly and severally, against three lawyers for Lightspeed: Paul Hansmeier, John Steele, and Paul Duffy.

Much legal wrangling ensued. While pleading to the court an inability to pay the sanctions, Steele withdrew over $300,000 from an account that he shared with his wife. Hansmeier withdrew a similar amount from one of his accounts. Each of these transfers was apparently an attempt to conceal the funds from the court and Smith. Other actions, also apparent attempts to conceal the funds, were also taken by the attorneys. Following these actions, Hansmeier filed for bankruptcy and Duffy passed away.

The Seventh Circuit was asked to consider the appropriateness of the sanction against the three attorneys. It declined to hear the matter as to Duffy, stating that because he was deceased he was “beyond [their] jurisdiction.” The appeals court dismissed the appeal as to Hansmeier, noting that, in a liquidation proceeding under Chapter 7 of the bankruptcy code, “only the trustee [of the bankruptcy estate] has standing to prosecute or defend a claim belonging to the estate.”

After a review of multiple instances of discovery misconduct, the appellate court held that the district court had acted within its discretion in imposing a discovery sanction against Steele for what it called a “pattern of vexatious and obstructive conduct” and “obviously egregious behavior.”

The appellate court then turned to the matter of the contempt sanction against Steele. Steele argued that the sanction was in fact criminal in nature, not civil. Thus, he contended, the district court had failed to abide by the enhanced procedural safeguards required for such a sanction.

The Seventh Circuit agreed. It held that, while “civil contempt may be imposed if proven by clear and convincing evidence, and without the full criminal procedural process,” imposing criminal contempt required more. Specifically, it required that the contemnor be “afforded the protections that the Constitution requires of such criminal proceedings.”

The appellate court also held that the fine, as ordered by the district court, was not “designed either to compel the contemnor into compliance with an existing court order or to compensate the complainant for losses sustained as a result of the contumacy,” as was appropriate for a finding of civil contempt. Instead, the sanctions that had been levied against Steele were punitive in nature, and “meant to vindicate the authority of the court.” Thus, they were properly deemed criminal sanctions.

Concluding that the procedures required under the Constitution for criminal contempt had not been applied, the Seventh Circuit vacated the contempt sanction.

Continue reading

2016-06-17-blogphoto.png

Washington, D.C. – A unanimous decision by the U.S. Supreme Court this week gave district courts more flexibility to award enhanced damage in cases of willful patent infringement.

This decision consolidated two patent infringement lawsuits, Halo Electronics, Inc. v. Pulse Electronics, Inc., et al. and Stryker Corp. et al. v. Zimmer, Inc., et al, in which Indiana-based Zimmer, Inc. was sued. In each lawsuit, the proper interpretation of the statutory language of 35 U.S.C. §284, which permits district courts the discretion to award enhanced damages in cases of patent infringement, was at issue.

The exercise of that discretion is guided by the principle that enhanced damages are to be limited to cases of egregious misconduct. Prior to this week’s decision, it was also guided by a test elucidated by the Federal Circuit, as set forth in In re Seagate Technology, LLC. This test requires a patent owner to show two things by clear and convincing evidence: first, “that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent” and, second, that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.”

In a unanimous opinion written by Chief Justice John Roberts, the Court held that while the Seagate standard reflected an appropriate recognition that enhanced damages were to be awarded only in egregious cases, the test set forth by the Federal Circuit “is unduly rigid” and “impermissibly encumbers the statutory grant of discretion to district courts.”

The Court primarily took issue with the requirement that objective recklessness be found, holding that such a threshold “excludes from discretionary punishment many of the most culpable offenders, such as the ‘wanton and malicious pirate’ who intentionally infringes another’s patent–with no doubts about its validity or any notion of a defense–for no purpose other than to steal the patentee’s business.”

The Court also noted that the Seagate test improperly allowed ex post facto defenses in considering culpability. Specifically, under the Seagate test, an infringer could rely on a defense at trial, even if he had been unaware of that defense at the time he had acted. This, the Court held, ignored the general rule that culpability is to be determined by an actor’s knowledge at the time of the conduct in question.

Finally, the Court rejected the requirement that recklessness be proved by clear and convincing evidence, finding it to be inconsistent with §284. Instead, it stated that enhanced damages are no different from patent infringement litigation in general, which “has always been governed by a preponderance of the evidence standard.”

The Court vacated the judgments of the Federal Circuit in both cases and remanded them for further proceedings consistent with the Court’s opinion.

Although this was a unanimous opinion, Justice Breyer authored a concurring opinion, in which Justices Alito and Kennedy joined.

Continue reading

2015-12-14-BlogPicture.png

Indianapolis, Indiana – An Indiana copyright lawyer for Defendant Wrightspeed, Inc. of San Jose California filed a notice of removal in the Southern District of Indiana on the basis of both federal-question jurisdiction and diversity-of-citizenship jurisdiction.

Plaintiff Precision Rings, Inc. of Indianapolis, Indiana had filed its lawsuit in Marion County Superior Court seeking declaratory relief, injunctive relief, unspecified damages and attorney’s fees. Among Plaintiff’s contentions was the breach of a nondisclosure agreement. Included in this alleged breach was the misappropriation of Plaintiff’s trade secrets, which involved the use or disclosure by Defendant of certain copyrighted drawings that Plaintiff had registered with the U.S. Copyright Office.

Defendant Wrightspeed contended that federal-question jurisdiction was proper and asked that the federal court in the Southern District of Indiana hear and decide all further matters in the litigation. Defendant asserted that the complaint arose under copyright law because Plaintiff’s complaint included a claim that would require construction of the Copyright Act. Consequently, subject matter jurisdiction rested exclusively in federal court.

Defendant Wrightspeed also asserted that diversity-of-citizenship jurisdiction was a proper basis for the Indiana federal court to hear the litigation. The parties were completely diverse, it stated, with Plaintiff being a citizen of Indiana and Defendant being a citizen of both Delaware and California. Defendant contended further that, considering the potential damages, fees and costs, the amount at stake was well in excess of the $75,000 threshold necessary for diversity-of-citizenship jurisdiction.

Continue reading

supremecourt.jpg

Washington, D.C. -The United States Supreme Court has agreed to hear appeals in two separate lawsuits, Halo Electronics, Inc. v. Pulse Electronics, Inc., et al., Case No. 14-1513, and Stryker Corp, et al. v. Zimmer, Inc., et al., Case No. 14-1520, on the issue of willfulness as a prerequisite for awarding enhanced damages in patent infringement litigation. The two cases were consolidated.

Under 35 U.S.C. § 284 of the Patent Act, a district court “may increase … damages up to three times the amount found or assessed.” Despite this language, which on its surface is permissive and discretionary, the Federal Circuit imposes a stricter test. For a district court to award enhanced damages under § 284, this test requires that a patentee prove by clear and convincing evidence that infringement was “willful.” A determination of willfulness requires a finding of both (1) an objectively high likelihood that the infringer’s actions constituted infringement, and (2) that this likelihood was either known or so obvious that it should have been known to the accused infringer.

The questions presented to the Supreme Court are:

1. Has the Federal Circuit improperly abrogated the plain meaning of 35 U.S.C. § 284 by forbidding any award of enhanced damages unless there is a finding of willfulness under a rigid, two-part test, when this Court recently rejected an analogous framework imposed on 35 U.S.C. § 285, the statute providing for attorneys’ fee awards in exceptional cases?

2. Does a district court have discretion under 35 U.S.C. § 284 to award enhanced damages where an infringer intentionally copied a direct competitor’s patented invention, knew the invention was covered by multiple patents, and made no attempt to avoid infringing the patents on that invention?

The Court granted motions by Independent Inventor Groups and Nokia Technologies OY, et al. to file briefs as amici curiae.

Practice Tip: In December 2014, the Federal Circuit overturned the decision of the Western District of Michigan to triple the damages awarded to Stryker, reducing the amount from $228 million to $70 million.

Continue reading

Contact Information