Thursday, March 28, 2013

Disgorgement of Profits Not Improper for Contempt of Permanent Injunction

The court denied defendant's motion to strike the report of plaintiff's damages expert and rejected the argument that disgorgement of profits was not an available remedy for contempt of a permanent injunction. "The cost of the license or [defendant's] estimated reasonable royalty is so minimal in comparison to the profits gained by violating the Court's Injunction Order (the profits are approximately 80 times as much as the proposed reasonably royalty figure) that [defendant] would have an economic incentive not to comply with the Court's order. . . . That is why courts continue to award disgorgement of profits as a remedy for civil contempt, even where such profit amounts to far greater than a reasonable royalty. . . . The plaintiff is simply returned to profits to which he or she was entitled all along."

ePlus, Inc. v. Lawson Software, Inc., 3-09-cv-00620 (VAED March 26, 2013, Order) (Payne, J.).

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