Court Declines to Stay Enforcement of Patent Infringement Judgment Pending Patent Office Reexamination

In an April 11, 2014 ruling, Judge Samuel Conti denied the defendants' motion to stay execution of damages pending reexamination in the Patent Office of the patent-in-suit in this infringement action. Following a jury verdict, including for willful infringement, the Court entered judgment against the defendants for $953,424.66. Shortly before the trial, the defendants filed an request for reexamination, and after the trial and the jury’s verdict, the Patent Examiner issued a non-final office action invalidating the single claim at issue. The defendants then moved for the stay.

Noting that courts have discretion stay proceedings during Patent Office proceedings, Judge Conti found that all three factors that usually inform the stay decision weigh in favor of denying the stay, particularly given the lateness of the request and the advanced state of the lawsuit. Although Judge Conti recognized that there is some risk the judgment could become final and the patent-in-suit would later be invalidated (which does not permit reopening the judgment), he found the concerns premature, and wrote that “the Court would be willing to reconsider its decision to stay” if the Patent Office renders a final decision on validity while the appeal is still pending.

The Court also treated the defendants’ motion in the alternative as a request for a stay pending appeal without the posting of a supersedeas bond. Judge Conti again ruled that the pertinent factors weigh against entry of such a stay, and denied the motion.

Court Enhances Damages But Declines to Award Fees in Patent Infringement Action

In a December 18, 2013 ruling, Judge Samuel Conti denied the defendants’ motion for a new trial or for judgment as a matter of law following a jury verdict of patent infringement against them, and granted in part the plaintiff’s motion for enhanced damages and attorneys’ fees (in light of the jury’s finding of willful infringement) and for a permanent injunction.

With respect to the new trial motion, Judge Conti rejected the two individual defendants’ challenge to a jury instruction that they contended improperly allowed the jury to impute infringement to them in their individual capacities.  Since the jury found that the individuals are general partners in a partnership that was also found liable for infringement, the individuals could be held liable under general partnership law, mooting the issue about the jury instruction.  The Court also rejected the defendants’ contention that the plaintiff’s expert’s use of demonstrative exhibits that were not disclosed as part of the expert report warranted a new trial, noting that the exhibits merely illustrated points that were included in the report, and the exhibits were not admitted into evidence. 

Judge Conti analyzed the request for enhanced damages under the nine factors set out in Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992).  The Court found that the first three factors – whether the infringer deliberately copied the ideas or design of another, whether the infringer acted with knowledge of the patent and formed a good faith belief of non-infringement or invalidity, and whether the infringer engaged in litigation misconduct – all strongly favored the enhancement of damages.  Judge Conti found that the remaining factors did not mitigate against enhancing damages, and accordingly trebled the jury’s $300,000 damages award.  The Court declined to award attorneys’ fees, though, finding that the defendants’ conduct was not egregious, and that “some of the positions advanced at trial by Defendants had merit.”  In a later January 8, 2014 ruling, Judge Conti awarded prejudgment interest at the prime rate (3.25%), rejecting the plaintiff's request to use the 9% rate specified in the New York CPLR.  The Court awarded prejudgment interest only on the $300,000 damages award, not on the enhanced. amount.