Electro-Mechanical Corporation v. Power Distribution Products, Inc., et. al., 1-11-cv-00071 (VAWD September 10, 2013, Order) (Jones, J.).
Friday, September 13, 2013
Occasional Preference for Patented Feature Not Sufficient to Invoke Entire Market Value Rule
The court granted defendants' motion for remittitur and gave plaintiff the option of reducing the damages award from $491,046 to $21,625 or proceeding with a new damages trial. Plaintiff's lost profits evidence was based solely on the entire market value rule which was unsupported by the evidence, and the reasonable royalty evidence supported only the lower amount. "[Plaintiff] did not present adequate evidence at trial showing that any customer decided to purchase a longwall power distribution system in the first place for the purpose of obtaining the patented draw-out tray technology. At most, [plaintiff's] evidence showed that some customers already in the market for longwall power distribution systems chose to purchase systems containing draw-out trays over systems not containing draw-out trays. [Plaintiff's damages expert], testified that he was unaware of any customer that already owned a working longwall power system without a draw-out tray and chose to replace it with a new system containing a draw-out tray in order to obtain the patented technology. Instead, [the expert] confirmed that customers first chose to buy a longwall power distribution system, and then chose whether the system would include the patented device. This kind of evidence is insufficient to invoke the entire market value rule. . . . [The expert's] only calculation regarding lost profits was based on the entire market value rule. . . . Because [plaintiff's damages expert] failed to provide any calculation of lost profits based on sales of the infringing . . . devices alone, the maximum award supported by the evidence was a reasonable royalty based on [his] proposed royalty rate of 4.325%. Applying that royalty rate to the defendants’ sales of 25 . . . devices at $20,000 per device, the highest reasonable royalty award supported by the evidence is $21,625."