EagleView Technologies, Inc. v. Xactware Solutions, Inc.

• Citation: 522 F.Supp.3d 40
• Decision Date: 16 February 2021
• Docket Number: Civil No. 1:15-cv-07025
• Parties: EAGLEVIEW TECHNOLOGIES, INC., et al., Plaintiffs, v. XACTWARE SOLUTIONS, INC., et al., Defendants.
• Court: U.S. District Court — District of New Jersey

522 F.Supp.3d 40

EAGLEVIEW TECHNOLOGIES, INC., et al., Plaintiffs,

v.XACTWARE SOLUTIONS, INC., et al., Defendants.

Civil No. 1:15-cv-07025

United States District Court, D. New Jersey, Camden Vicinage.

Signed February 16, 2021

WALSH PIZZI O'REILLY FALANGA LLP, By: Liza M. Walsh, Esq., Hector D. Ruiz, Esq., Three Gateway Center, 100 Mulberry Street, 15^th Floor, Newark, New Jersey 07102 and KIRKLAND & ELLIS LLP, By: Adam R. Alper, Esq., Brandon H. Brown, Esq., Reza Dokhanchy, Esq., 555 California Street, San Francisco, California 94104, Michael W. DeVries, Esq., 333 South Hope Street, Los Angeles, California 90071, Patricia Carson, Esq., Leslie M. Schmidt, Esq., 601 Lexington Avenue, New York, New York 10022, Gianni Cutri, Esq., Kristina Hendricks, Esq., Joel R. Merkin, Esq., 300 North LaSalle, Chicago, Illinois 60654, Counsel for Plaintiff.

McCARTER & ENGLISH, LLP, By: Scott S. Christie, Esq., Matthew A. Sklar, Esq., Four Gateway Center, 100 Mulberry Street, Newark, New Jersey 07102, Lee Carl Bromberg, Esq., Thomas F. Foley, Esq., Thomas R. Fulford, Esq., Wyley S. Proctor, Esq., 265 Franklin Street, Boston, Massachusetts 02110 and GIBSON DUNN & CRUTCHER LLP, By: Mark A. Perry, Esq., 1050 Connecticut Avenue N.W., Washington, District of Columbia 20036, Counsel for Defendants.

[Docket No. 865]

BUMB, UNITED STATES DISTRICT JUDGE

Before the Court is Plaintiff's ("EagleView" or "Plaintiff") Motion for Enhanced Damages under 35 U.S.C. § 284, Attorneys’ Fees and Costs under 35 U.S.C. § 285, Pre- and Post-Judgment Interest, Accounting, and Taxable Costs. [Docket No. 865]. For the reasons stated herein, the Court will grant, in part, and deny, in part, the Motion. Specifically, the Court will award Enhanced Damages to the maximum allowable extent, award reasonable Attorneys’ Fees for a specified period, award Pre- and Post-Judgment Interest as described herein, and refer the Taxable Costs to the Clerk of Court. The Court will deny Plaintiff's request for an accounting of infringing sales.

I. BACKGROUND

On September 25, 2019, after a two-week trial, a jury found that Defendants Verisk Analytics, Inc. ("Verisk") and Xactware Solutions, Inc. ("Xactware") (collectively "Defendants") infringed on five of Plaintiff EagleView's patents— U.S. Patent Nos. 8,078,436 (the "’436 patent"), 8,170,840 (the "’840 patent"), 9,129,376 (the "’376 patent"), 8,825,454 (the "’454 patent"), and 8,818,770 (the "’770 patent"). [Docket. No. 796]. The jury awarded EagleView $125 million in compensatory damages and found that Defendants’ infringement was willful. The Court then enjoined Defendants from selling its infringing products. [See Docket Nos. 800 and 842].

Thereafter, Defendants filed a Motion for Judgment as a Matter of Law and For a New Trial. [Docket No. 863]. In an Opinion and Order dated September 9, 2019, the Court denied Defendants’ Motion for a New Trial, upheld the jury's finding of willfulness, and allowed judgment on the verdict pursuant to Fed. R. Civ. P. 50(b)(1). [See Docket Nos. 901 & 902]. The Court now turns to the within Motion.

II. ANALYSIS

A. 35 U.S.C. § 284 – Enhanced Damages

EagleView first moves the Court to treble the jury's damages under 35 U.S.C. § 284 because of Defendants’ egregious misconduct and deliberate strategy to harm its business. For the reasons that follow, the Court will treble the jury's award. Section 284 provides that the Court "may increase the damages up to three times the amount found or assessed." 35 U.S.C. § 284. Enhanced damages are "designed as a ‘punitive’ or ‘vindictive’ sanction for egregious infringement behavior." Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 136 S. Ct. 1923, 1932, 195 L.Ed.2d 278 (2016). The Court should assess enhanced damages only if the infringer's actions were "willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate." Id. This assessment is to be made on a preponderance of the evidence standard. Id. at 1934.

A finding of willfulness is a significant factor in this analysis. The Federal Circuit has held both that willfulness "is, without doubt, sufficient ... to increase a compensatory damages award," Jurgens v. CBK, Ltd., 80 F.3d 1566, 1570 (Fed. Cir. 1996) and that "[a] finding of willful infringement is a prerequisite to the award of enhanced damages." i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831, 858 (Fed. Cir. 2010), aff'd, 564 U.S. 91, 131, 131 S.Ct. 2238, 180 L.Ed.2d 131 (2011). Here, the Court has already affirmed the jury's willfulness finding, [see Docket Nos. 901 & 902], and the Court will rely on that finding as one of several factors in its analysis.

1. The Read Factors

In Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992), the Federal Circuit established a list of factors for district courts to evaluate when considering whether an infringer's behavior warranted enhanced damages. Although Read was overruled in Halo, the Read factors still serve as "useful guideposts" in the § 284 analysis. See, e.g., Apple Inc. v. Samsung Elecs. Co., 258 F. Supp. 3d 1013, 1030 (N.D. Cal. 2017). As such, the Court uses Read as a tool in reviewing Defendants’ conduct. Those Read factors are: (1) whether the infringer deliberately copied the ideas or design of another; (2) whether the infringer, when it knew of the other's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed; (3) the infringer's behavior as a party to the litigation; (4) defendant's size and financial condition; (5) closeness of the case; (6) duration of defendant's misconduct; (7) remedial action by the defendant; (8) defendant's motivation to harm, and (9) whether defendant attempted to conceal its misconduct. 970 F.2d at 827.

The first Read factor concerns whether Defendants deliberately copied Plaintiff's design. Here, the evidence supports a conclusion that they did. As the Court noted at trial, "the very unique relationship between the parties offered fertile opportunity and grounds for Xactware to steal the patent[ed] technology." [Trial Tr. 1001:17-21¹ ]. Defendants now contend that this "opportunity" cannot form the basis of enhanced damages, because opportunity alone is insufficient to establish "deliberate copying." On this narrow point, the Court agrees. But Defendants mistakenly contend that this fact ends the analysis.

As noted above, "a party seeking enhanced damages under § 284 bears the burden of proof by a preponderance of the evidence." WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1339 (Fed. Cir. 2016). Plaintiff meets this burden when combining evidence of Defendants’ "opportunity" with other facts. For instance, Xactware's Vice President Jeff Taylor—who did not testify at trial—toured Plaintiff's facilities as early as 2009, acknowledged that he knew how Plaintiff's technology worked, and noted that Defendants ultimately created products nearly identical to Plaintiff's. [See PTX-615² ]. The trial evidence plainly showed that early in 2008, when Defendants started to hear of EagleView's products, they saw EagleView as a real threat to their business. Indeed, Defendants admitted at that time that they had two choices: either "adopt" EagleView's technology for themselves or work with EagleView. [PTX-269.003] ("He [a long time customer] tells me that the EagleView system is working very well and they are finding it to be a desirable service, particularly on complex roofs ... He felt the accuracy was impressive ... He said at $50 per roof, he will use them without question if the roof has any degree of complexity ... this service has the potential to displace a high number of Xactware estimates ... I guess this is a confirmation that we should be working to either adopt it ourselves or work with EagleView.") EagleView presented evidence of what "adopting" EagleView's technology meant³ : when Taylor toured EagleView's business, he "took a few pictures of one of the technicians and over the [ ]shoulder of them ... working with the software to build a house model." [Trial Tr. 606:20-607:5⁴ ].

EagleView also demonstrated at trial that Taylor, along with Jeff Lewis and Brad Childs, were responsible for overseeing the development of Defendants’ products. And, as the evidence showed, Defendants’ Aerial Sketch v.2, Roof In Sight, and Property In Sight were "very similar and pretty much identical in most cases." [Trial Tr. 795:18-796:2]. Whether this conclusively proves "deliberate copying," as Defendants urge, is not the standard; the Court is satisfied that these facts meet Plaintiff's preponderance of the evidence burden as to this factor. Therefore, this factor favors enhancement.

The second Read factor asks whether Defendants, when they knew of Plaintiff's patent, investigated the scope of that patent, and formed a good-faith belief that Plaintiff's patent was invalid or that Defendants had not infringed. The Court finds that they did not. Defendants’ argument on this point is largely just that they sought the advice of an attorney who informed them that their products likely did not infringe on Plaintiff's patents. [Docket No. 870, at 19-20].

The Court, however, is unable to evaluate the scope of that defense, or more precisely, Defendants’ bald statement. Defendants contend only that after Plaintiff's patent issued, they "formulated an immediate strategy [which] included seeking legal advice." [Docket No. 870, at 20]. But Defendants have not disclosed those communications, nor have they otherwise substantiated their purported good-faith belief that they somehow did not infringe.

Defendants’ argument relies on certain e-mail communications. But these e-mails are unhelpful. One such e-mail chain is a March 8, 2012 discussion between Edmund Webecke (an Xactware Vice President) and Loveland (the Xactware President and CEO). In this e-mail, Webecke tells Loveland about a discussion he had with a Travelers representative. The...