Accentra Inc. v. Staples, Inc.

• Decision Date: 19 December 2011
• Docket Number: Case No. CV 07–5862 ABC (RZx).
• Citation: 851 F.Supp.2d 1205
• Parties: ACCENTRA INC., et al., Plaintiffs, v. STAPLES, INC., et al., Defendants.
• Court: U.S. District Court — Central District of California

851 F.Supp.2d 1205

ACCENTRA INC., et al., Plaintiffs,

v.STAPLES, INC., et al., Defendants.

Case No. CV 07–5862 ABC (RZx).

United States District Court,

C.D. California,

Western Division.

Dec. 19, 2011.

Alan C. Chen, Jeffrey Stephen Kravitz, Fox Rothschild LLP, Los Angeles, CA, Frank T. Carroll, Joseph F. Posillico, Fox Rothschild LLP, Philadelphia, PA, Plaintiffs.

Andrew T. O'Connor, Barbara L. Moore, Cooley Manion Jones LLP, David Cotta, Peter J. Cuomo, Edwards Wildman Palmer LLP, Boston, MA, Bruce G. Chapman, Connolly Bove Lodge & Hutz LLP, Los Angeles, CA, for Defendants.

ORDER RE: POST–TRIAL MOTIONS

AUDREY B. COLLINS, Chief Judge.

After the jury trial and verdict in this case, the parties have filed several post-trial motions. The following motions are resolved by this Order: (1) Defendants and Counter-claimants Staples, Inc., and Staples The Office Superstore, LLC's (“Staples” ') Motion for Judgment as a Matter of Law (Docket No. 487); (2) Plaintiffs and Counter–Defendants Accentra, Inc. and Worktools, Inc.'s (“Accentra's”) Motion for Enhanced Damages and Attorney's Fees (Docket No. 492); (3) Accentra's Motion for Permanent Injunction (Docket No. 491); (4) Accentra's Motion for Accounting, Pre- and Post–Judgment Interest, and Costs (Docket No. 490); and (5) Accentra's a Motion for Order re Findings of Fact and Conclusions of Law for Inequitable Conduct (Docket No. 489).¹ The parties each filed oppositions and replies to the motions pursuant to the Court-ordered briefing schedule and the Court heard oral argument on several of the motions May 16, 2011.² The parties also filed supplemental briefs on the issues of indefiniteness and a new trial for damages. The Court rules as follows.

BACKGROUND³

Accentra alleged in this case that Staples willfully infringed three patents owned by Worktools and licensed by Accentra by selling several models of spring-powered staplers, namely, Staples' “Executive One–Touch” stapler (model “EX–5”), its “One–Touch” staplers (models “DX–1” and “CX–1”), and its “One–Touch” 60–sheet “High Capacity” stapler. The patents at issue are U.S. Patent No. 7,178,709 (filed Feb. 24, 2005) (the “'709 patent”); Patent No. 7,080,768 (filed Aug. 23, 2004) (the “'768 patent”); and Patent No. 7,290,692 (filed Jan. 4, 2007) (the “'692 Patent”). For its part, Staples claimed that it did not infringe any of the patents and, if it did infringe, the patents are invalid; Staples further claimed that the '709 patent is unenforceable due to Accentra's inequitable conduct before the Patent and Trademark Office (“PTO”).

Following trial, the jury returned a verdict in Accentra's favor, finding that the accused staplers willfully infringed the asserted claims of Accentra's patents ⁴, that Accentra had suffered damages as a result of the infringement, and that none of the asserted claims was invalid as obvious or anticipated. (Docket No. 472.) The jury awarded Accentra a total of $2,205,192 in reasonable royalties (rejecting Accentra's claimed lost profits) in the following proportions: $432,658 for infringement by the CX–1; $676,112 for infringement by the DX–1; $774,684 for infringement by the EX–5; and $321,738 for infringement by the High Capacity. ( Id. at 12.) The jury further provided advisory findings that Staples failed to prove the factual predicates for inequitable conduct by clear and convincing evidence, namely that named inventor Joel Marks and prosecution attorney Paul Feng withheld material information from the PTO during the prosecution of the ' 709 patent with the intent to deceive the PTO. ( Id. at 4.)

The parties now request various types of post-trial relief, and the Court addresses each of those requests below.

DISCUSSION

I. STAPLES' MOTION FOR JUDGMENT AS A MATTER OF LAW (Docket No. 487)

Staples moves for judgment as a matter of law on several grounds. First, Staples argues that the asserted claims of the '709 are indefinite, rendering the patent invalid and requiring that the jury's verdict of willful infringement of that patent be set aside. Second, Staples claims that there was insufficient evidence offered at trial for a reasonable jury to conclude that any of the staplers at issue infringed any of the patents-in-suit. Third, Staples argues that insufficient evidence was offered to support the jury's reasonable royalty award. Finally, Staples argues that insufficient evidence was offered for a reasonable jury to find that Staples willfully infringed any of the patents.

As outlined below, the motion is GRANTED IN PART and DENIED IN PART. The Court concludes that the '709 patent is invalid as indefinite, so the jury's verdict of willful infringement of that patent and award of damages must be set aside, which renders moot Staples' alternative argument that insufficient evidence supported the jury's finding of willful infringement of the '709 patent. The Court finds, however, that substantial evidence supports the jury's finding of infringement of the '768 and '692 patents. The Court rejects Staples' contention that Accentra's expert's testimony on damages must be excluded, but concludes that the damage award must be reduced as a matter of law because the '709 patent is invalid as indefinite. Finally, the Court concludes that insufficient evidence was offered to support the jury's findings that Staples' infringement of the '768 and '692 patents was willful, so the jury's verdict on those issues must be set aside.

A. Legal Standard

Once a party has moved pre-verdict for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(a), Rule 50(b) permits the party to renew that motion following the jury verdict. If properly raised, a Rule 50(b) motion in a patent infringement case is governed by Ninth Circuit law. Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1328 (Fed.Cir.2008). In the Ninth Circuit, “[a] jury's verdict must be upheld if it is supported by substantial evidence.” Wallace v. City of San Diego, 479 F.3d 616, 624 (9th Cir.2007). “ ‘Substantial evidence is evidence adequate to support the jury's conclusion, even if it is also possible to draw a contrary conclusion from the same evidence.’ ” Id. The Court is not permitted to weigh the evidence offered at trial; it must simply “ask whether the plaintiff has presented sufficient evidence to support the jury's conclusion.” Id. In doing so, the Court must “disregard all evidence favorable to the moving party that the jury is not required to believe” and “[t]he evidence must be viewed in the light most favorable to the nonmoving party, and all reasonable inferences must be drawn in favor of that party.” Id. In the end, “[j]udgment as a matter of law may be granted only where, so viewed, the evidence permits only one reasonable conclusion, and that conclusion is contrary to the jury's verdict.” Id.

B. Indefiniteness of the '709 Patent

Staples' claim that the '709 patent is indefinite arises in the unusual circumstance here of a post-trial motion for judgment as a matter of law, although Staples raised the same indefiniteness argument at the claim construction stage (Docket No. 58 at 14–23) and at summary judgment (Docket No. 155 at 31). Given this procedural posture, there is some concern that Accentra may be prejudiced by the Court addressing indefiniteness now, so the Court ordered the parties to file supplemental briefs on the issues of indefiniteness and prejudice. The Court concludes that no prejudice would arise from adjudicating indefiniteness following trial and that the '709 patent is, indeed, invalid as indefinite.

1. Prejudice

Indefiniteness is a “ ‘legal conclusion that is drawn from the court's performance of its duty as the construer of patent claims,’ ” not a question for the jury. Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed.Cir.2005). As a result, “ ‘district courts may engage in a rolling claim construction, in which the court revisits and alters its interpretation of the claim terms as its understanding of the technology evolves.’ ” Pressure Prods. Med. Supplies, Inc. v. Greatbatch Ltd., 599 F.3d 1308, 1316 (Fed.Cir.2010). In Pressure Products, for example, the court approved the district court's further construction of claims during trial because the court, and not the jury, had the obligation to resolve disputes over claim construction, even though they arose during trial. Id. Moreover, trial testimony educated the court on the proper construction of the claims, and the patentee was not prejudiced because it had the opportunity to adjust to the claim construction during trial. Id. at 1315–16.

There is even less of a risk of prejudice to Accentra here than there was in Pressure Products. Unlike Pressure Products, where the court was concerned about prejudice from adopting a different claim construction, finding claims indefinite is not a matter of adopting a different construction in the midst (or after) trial to which the patentee needs to adjust, but a matter of concluding that no construction of the disputed claims is possible. If the risk of prejudice was not enough to prevent the court in Pressure Products from adopting a different construction during trial, then the risk of prejudice to Accentra in finding the claims indefinite is largely nonexistent.

Even if prejudice could arise in this circumstance, Accentra has not shown that it has. First, Staples has repeatedly raised the indefiniteness of the ' 709 patent, most recently in the parties' Pre–Trial Conference Order (Docket No. 411 at 9) and at the pre-trial conference (Cuomo Supp. Decl., Ex. 6 (Pre–Trial Conf. Tr.) at 10–13), so Accentra can claim no unfair surprise from Staples raising the issue again after trial. Second, Accentra was permitted to present its infringement case to a jury, so ruling now that the ' 709 patent is indefinite would simply reverse the parties' positions on appeal, and if the Federal Circuit reverses the Court's indefiniteness ruling, it can reinstate the jury's verdict...