Wednesday, April 2, 2014

Infringer’s Market Capitalization “Strongly Counsels Against” Doubling or Tripling $1.1 Billion Award

Following a jury verdict of $1.1 billion, the court granted plaintiff's motion for enhanced damages, but ordered only a 23% penalty. "[T]he Court believes that four of the Read factors support an award of enhanced damages (factors 1, 2, 7 and 9), four of the factors are neutral (3, 5, 6, 8), and one of the factors weighs against an award of enhanced damages (4). . . . [W]ith reference to [the infringer’s size and financial condition] . . . the Court does not believe that [defendant] is sufficiently capitalized to sustain an award of double or treble the current damages award. . . . Such a significant penalty would effectively value the infringement at a rate of nearly fifty percent or one-third of the current market capitalization of the entire company. Based on the historical data of the stock price and the decline of same when the jury’s verdict of $1.169 billion was announced, the Court can logically infer that the stock price and market capitalization would again decrease if such a significant penalty was imposed. . . [Defendant's] financial condition does not support an enhancement and strongly counsels against enhancing damages to the degree requested by [plaintiff]."

Carnegie Mellon University v. Marvell Technology Group, Ltd., et al, 2-09-cv-00290 (PAWD March 31, 2014, Order) (Fischer, J.)

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