AIA Eng'g Ltd. v. Magotteaux Int'l

• Decision Date: 21 September 2012
• Docket Number: No. 3:09-cv-00255,3:09-cv-00255
• Court: U.S. District Court — Middle District of Tennessee
• Parties: AIA ENGINEERING LIMITED, Plaintiff/Counterclaim Defendant, v. MAGOTTEAUX INTERNATIONAL S/A & MAGOTTEAUX, INC., Defendant/Counterclaim Plaintiffs. MAGOTTEAUX INTERNATIONAL S/A & MAGOTTEAUX, PNC. Third Party Plaintiffs, v. VEGA INDUSTRIES, LTD. INC., Third Party Defendant.

AIA ENGINEERING LIMITED, Plaintiff/Counterclaim Defendant, v. MAGOTTEAUX INTERNATIONAL S/A & MAGOTTEAUX, INC., Defendant/Counterclaim Plaintiffs.

MAGOTTEAUX INTERNATIONAL S/A & MAGOTTEAUX, PNC. Third Party Plaintiffs, v. VEGA INDUSTRIES, LTD. INC., Third Party Defendant.

No. 3:09-cv-00255

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

ENTERED: September 21, 2012

Chief Judge Haynes

MEMORANDUM

Plaintiff, AIA Engineering Limited ("AIA"), an Indian corporation, filed this action under 28 U.S.C. § 2201, et seq., the declaratory judgment statute against the Defendants: Magotteaux International S/A, a Belgian corporation, and Magotteaux, Inc., an affiliated Tennessee corporation (collectively, "Magotteaux"). AIA sought declaratory judgment that its products did not infringe Magotteaux's U.S. Patent No. RE 39,998 (the "998 patent"), a reissue patent based upon Magotteaux's earlier U.S. Patent No. 6.399,176 Bl (the "176 patent") as well as a declaration of theinvalidity and unenforceability of the '998 patent. In response to Plaintiff's action, Magotteaux filed a third party complaint for patent infringement against AIA and Vega Industries, Ltd., (collectively, " AIA") an AIA subsidiary with its principal place of business in Brentwood, Tennessee that sells and distributes AIA's products in the United States. This Court has subject matter jurisdiction over the action under 28 U.S.C. §§ 1331 and 1338(a).

AIA moved for summary judgment and the Court awarded AIA declaratory judgment that Magotteaux's '998 patent was invalid under 35 U.S.C. § 251 for impermissibly recapturing subject matter surrendered during reissue examination. (Docket Entry No. 170). Magotteaux appealed the Court's ruling. (Docket Entry Nos. 173 & 182). The Federal Circuit reversed and remanded the Court's grant of summary judgment on the basis that the Court "erred in construing the claim term 'solid solution,' and thus erred in determining that the reissued claims impermissibly recaptured surrendered subject matter,"AIA Eng'r Ltd. v. Magotteaux Intern. S/A, 657 F.3d 1264, 1268 (Fed. Cir. 2011).

This action proceeded to trial and at the end of the proof, AIA moved for judgment as a matter of law under Federal Rule of Civil Procedure 50(a). (Docket Entry No. 438, Trial Transcript at 68). AIA's motion asserted two grounds: (1) lack of proof of wilfulness; and (2) Section 271(f) infringement claim. Id. The Court reserved ruling on AIA's motion. Id. at 86. The jury returned a verdict in favor of Magotteaux. The jury found:

1. Magotteaux established by a preponderance of the evidence that AIA infringed all of the claim of Magotteaux's '998 patent.

2. AIA did not establish by clear and convincing evidence that any of the claims of Magotteaux's '998 patent is invalid as obvious.

3. AIA did not establish by clear and convincing evidence that any of the claims ofMagotteaux's '998 patent is invalid as a result of a prior public use.

4. AIA should pay Magotteaux $1,668,028.00 in damages upon finding that AIA infringed any of the claims of the '998 patent and upon finding that AIA failed to prose that each of such infringed claims is invalid.

5. Magoteaux established by clear and convincing evidence that AIA's infringement was willful because "given the emails between Chris Carr (Treibacher) and Dr. Bhide regarding the purchase of grains and their classifications. Additionally, Dr. Bhide's email suggested that he wanted to 'completely suppress [his] identity' and [the jury] believ[ed] AIA was fully aware of both the Xwinn techonology and the patents, in place, but continued to pursue and engage in producing/selling the SinterCast products."

(Docket Entry No. 388, Jury Verdict at 1-3).

On July 3, 2012, in accordance with the jury's verdict, the Court entered judgement against AIA in favor of Magotteaux. (Docket Entry No. 390). Subsequently, the Court found that AIA "wilfully violated [Magotteaux's] patent rights" and awarded Magotteaux enhanced damages of $3,336,056.00 pursuant to 35 U.S.C. § 284. (Docket Entry No. 390). Additionally, the Court found the case "exceptional" and awarded Magotteaux "reasonable attorneys fees" pursuant to 35 U.S.C. § 285. (Docket Entry No. 390).

Magotteaux then moved for an award of prejudgment interest, post-judgment interest and attorneys' fees and costs in an amount totaling $3,851,906.91 (not including post-judgment interest). (Docket Entry Nos. 396 & 398). AIA opposed Magotteaux's motions for prejudgment interest and attorneys' fees and costs. (Docket Entry Nos. 436 & 437). AIA is also taxed with costs in this action. (Docket Entry No. 446). AIA moved to stay execution of the judgment in this action and any proceedings to enforce the judgment. (Docket Entry No. 409). AIA filed for judgment as a matter of law pursuant to Rule 50 and for a new trial pursuant to Rule 59. (Docket Entry Nos. 407, 408, 410,411 & 412). The Court ordered a stay of proceedings to enforce judgment pending dispositionof post trial motions pursuant to Rule 62(b). (Docket Entry No. 452).

Of the motions before the Court, the Court first addresses AIA's motion for judgment as a matter of law and an amended judgment or, in the alternative, for a new trial on the issue of willfulness and exceptional case. (Docket Entry No. 407). Magotteaux opposes this motion. (Docket Entry No. 457).

A. AIA's Rule 50(b) Motion on Willfulness

1. Standard of Review under Rule 50(b)

For a Rule 50 motion, the Court reviews the evidence in the light most favorable to the nonmoving party. Wilcox v. Tricam Indus., No. 1-08-0030, 2010 U.S. Dist. Lexis 51104, at *3 (M.D. Term. May 21, 2010) (citing Reeves v. Sanders Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)). Yet, the Court cannot "reweigh the evidence or assess the credibility of witnesses" because the "review is restricted to the evidence that was admitted at trial." Sykes v. Anderson, 625 F.3d 294, 305 (6th Cir. 2010) (citing Radvansky v. City of Olmsted Falls. 496 F.3d 609, 614 (6th Cir. 2007) and Fed. Prac. & Proc. 2540 (3d ed. 2008)). Under Rule 50(b),

If the court does not grant a motion for judgment as a matter of law made under Rule 50(a), the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion. No later than 28 days after the entry of judgment - or if the motion first addresses a jury issue not decided by a verdict, no later than 28 days after the jury was discharged - the movant may file a renewed motion for judgment as a matter of law and may include an alternative or joint request for a new trial under Rule 59. In ruling on the renewed motion, the court may: (1) allow judgment on the verdict, if the jury returned a verdict; (2) order a new trial; or (3) direct the entry of judgment as a matter of law.

Fed. R. Civ. P. 50(b)(l)-(3). Accordingly, the Court considers AIA's Rule 50(b) motion by reviewing the evidence in the record in the light most favorable to Magotteaux.

2. Waiver of Claims under Rule 50(b)

A Rule 50(b) motion may only be renewed on the grounds raised in an earlier Rule 50(a) motion at the close of the evidence and '"is not available ... on an issue not brought before the court prior to the submission of the case to the jury.'" Wilcox, 2010 U.S. Dist. Lexis 51104 at *5 (quoting Ford v. Cnty. of Grand Traverse. 535 F.3d 483, 491 (6th Cir. 2008)). "[A]lthough '[a] post trial motion for judgment may not advance additional grounds that were not raised in the pre-verdict motion,' a party is not required to state the grounds for judgment with 'technical precision.'" Ford, 535 F.3d at 492 (quoting Kusens v. Pascal. Co., 448 F.3d 349, 361 (6th Cir. 2006)). As such, "where Rule 50(a)'s purpose - i.e., providing notice to the court and opposing counsel of any deficiencies in the opposing party's case prior to sending it to the jury - has been met, courts usually take a liberal view of what constitutes a pre-verdict motion sufficient to support a post-verdict motion." Ford. 535 F.3d at 492-93 (quoting Kusens. 448 F.3d at 361).

Here, Magotteaux asserts that AIA "failed to raise noninfringment, prior public use, and its alleged Indian University testing as substantive contentions for its preverdict motion, and accordingly, none are subject to a renewed [judgment as a matter of law]" motion. (Docket Entry No. 457 at 4). AIA asserts that in its Rule 50(a) motion at the end of the trial,

AIA's counsel specifically referenced . . . AIA's 'earlier briefing' on the issue of willful infringement. . . . [that] included AIA's motion in limine to exclude evidence and argument solely directed to the issue of willful infringement, which identified the 'other indicia' of AIA's lack of recklessness including the reasonable invalidity claims based on obviousness and public use, and AIA's noninfringement defenses. . . . AIA's counsel further referenced, . . . this Court's earlier order granting AIA's motion in limine to exclude evidence and argument directed solely to the issue of willful infringement. All of this satisfied the requirement of Rule 50 that the moving party articulate in its preverdict motion the basis on which a judgment as a matter of law might be rendered in its post trial motion.

(Docket Entry No. 461-1 at 3) (citing Fed. R. Civ. P. 50, advisory committee note to 1991 amendment to Rule 50) ("[t]he information required with the motion may be supplied by explicit reference to materials and arguments previously supplied to the court")).

The Court concludes that AIA properly preserved its claims on willfulness and the section 217(f) infringement claim when AIA moved for judgment as a matter of law under Rule 50(a) at the end of trial. In its earlier motion, AIA put Magotteaux on notice of the basis for its Rule 50(b) motion for judgment as a matter of law. See (Docket Entry No. 438, Trial Transcript at 68-86). AIA's arguments in support of its Rule 50(a) motion are sufficient to preserve the claim that...