“Gross Misrepresentation” of Non-Infringing Alternative and Continued Willful Infringement Warrant Enhanced Ongoing Royalty Rate

The court granted in part plaintiff's motion for an ongoing royalty on defendant's accused secure video products and awarded an ongoing royalty at approximately double the verdict's implied royalty rate. "While [defendant] has taken steps to mitigate its infringement, [it] grossly misrepresented its ability to implement a non-infringing alternative to the jury. The huge disparity between [defendant's] position at trial and [its] position post-judgment also warrants increasing the implied royalty rate. In light of the changed circumstances, the reasonable royalty rate should be increased by 25%. . . . [Defendant's] ongoing willful infringement must also be considered. . . . While [defendant] contends it is not a willful infringer because it has a good faith belief that the patents-in-suit are invalid and that it does not infringe, the jury’s verdict and this Court’s judgment do not support [defendant's] belief. . . .While [it] has taken steps to implement non-infringing alternatives, [defendant] has not ceased all infringement. Considering four factors favor enhancing the implied royalty rate, the ongoing royalty rate is increased 50% to 0.98%."

VirnetX Inc. v. Apple Inc., 6-13-cv-00211 (TXED March 6, 2014, Order) (Davis, J.)