Milwaukee Elec. Tool Corp. v. Snap-On Inc.

• Decision Date: 29 December 2017
• Docket Number: Case No. 14–CV–1296–JPS, Case No. 17–MC–49–JPS
• Citation: 288 F.Supp.3d 872
• Court: U.S. District Court — Eastern District of Wisconsin
• Parties: MILWAUKEE ELECTRIC TOOL CORPORATION, Metco Battery Technologies LLC, AC (Macao Commercial Offshore) Limited, and Techtronic Industries Co. Ltd., Plaintiffs, v. SNAP–ON INCORPORATED, Defendant. Milwaukee Electric Tool Corporation, Metco Battery Technologies LLC, AC (Macao Commercial Offshore) Limited, and Techtronic Industries Co. Ltd., Plaintiffs, v. Shook Hardy & Bacon and McDermott, Will & Emery, LLP, Defendants.

288 F.Supp.3d 872

MILWAUKEE ELECTRIC TOOL CORPORATION, Metco Battery Technologies LLC, AC (Macao Commercial Offshore) Limited, and Techtronic Industries Co. Ltd., Plaintiffs,

v.SNAP–ON INCORPORATED, Defendant.

Milwaukee Electric Tool Corporation, Metco Battery Technologies LLC, AC (Macao Commercial Offshore) Limited, and Techtronic Industries Co. Ltd., Plaintiffs,

v.Shook Hardy & Bacon and McDermott, Will & Emery, LLP, Defendants.

Case No. 14–CV–1296–JPS

Case No. 17–MC–49–JPS

United States District Court, E.D. Wisconsin.

Signed December 29, 2017

Jason C. White, Maria Doukas, Sanjay K. Murthy, Scott D. Sherwin, Morgan Lewis & Bockius LLP, Chicago, IL, Jeffrey G. Killian, Morgan Lewis & Bockius LLP, Washington, DC, Jessica Stow, Morgan Lewis & Bockius LLP, Philadelphia, PA, Jessica Hutson Polakowski, Paul J. Stockhausen, Alexander B. Handelsman, David G. Hanson, James N. Law, Monica A. Mark, Scott W. Hansen, Milwaukee, WI, fot Plaintiffs.

Amol A. Parikh, Joseph H. Paquin, McDermott Will & Emery LLP, Andrew M. Meerkins, George R. Dougherty, Hugh A. Abrams, Jonathon M. Studer, Peter F. O'Neill, Shook Hardy & Bacon LLP, Lynn H. Murray, Grippo & Elden, Chicago, IL, Michael T. Piery, David R. Cross, Johanna M. Wilbert, Quarles & Brady LLP, Milwaukee, WI, Paul Devinsky, McDermott Will & Emery LLP, Washington, DC, for Defendants.

ORDER

J. P. Stadtmueller, U.S. District Court

This is a patent case about lithium-ion batteries used in power tools. The case was tried to a jury in October 2017. The jury rendered a verdict in favor of Plaintiffs and awarded nearly $28 million in damages. Before the Court are the parties' post-trial motions. For the reasons stated below, the Court will deny post-trial relief to Defendant Snap–On Incorporated ("Snap–On"), deny Plaintiffs' motion for enhanced damages, and grant in part Plaintiffs' motion for pre-judgment interest.

1. BACKGROUND

In the early 2000s, Plaintiff Milwaukee Electric Tool Corporation ("Milwaukee") teamed up with Canadian battery manufacturer E–One Moli Energy (Canada) Ltd. ("Moli") to develop a lithium-ion ("Li-ion") battery usable in a power tool. Cordless power tools were traditionally powered by nickel-cadmium ("Ni–Cd") or nickel-metal hydride batteries, as Li-ion battery cells could not safely or reliably produce sufficient power output for such high-power applications. In what was dubbed the "884 Project," a joint team of Milwaukee and Moli scientists labored for many months to produce a working Li-ion battery pack, which was finally reduced to practice in late 2002. Milwaukee's first line of Li-ion powered tools, the V28, was debuted in 2005 to great acclaim.

In June 2009, Plaintiffs obtained patents on the Li-ion battery pack technology they developed with Moli. The critical independent claim found in all three patents-in-suit recites:

a battery pack for powering a hand held power tool, the battery pack comprising:

a housing connectable to and supportable by the hand held power tool; and

a plurality of battery cells supported by the housing, the battery cells being capable of producing an average discharge current greater than or equal to approximately 20 amps, the battery cells having a lithium-based chemistry.

The penultimate clause is known as the "20 Amp Limitation," and it has featured prominently in the parties' legal and factual disputes in this case. Snap–On developed its own line of Li-ion tools that was launched in September 2009.

This infringement action was filed on October 16, 2014, and is well past its third birthday. The case lived much of its life under a stay granted at Snap–On's request so that it and other accused infringers could seek inter partes review ("IPR") of the patents-in-suit before the United States Patent and Trademark Office ("USPTO"). None of the IPRs was successful in invalidating any part of the patents, although appeals of the IPR decisions are still pending in the Court of Appeals for the Federal Circuit.

In December 2016, after the Patent Trial and Appeal Board ("PTAB") issued its decisions on the latest round of IPRs, the Court lifted the stay and discovery proceeded apace. The Court addressed matters of claim construction and the parties' arguments on summary judgment in an order dated September 22, 2017. Milwaukee Elec. Tool Corp. v. Snap–On Incorporated , Case No. 14-CV-1296-JPS, 271 F.Supp.3d 990, 2017 WL 4220457 (E.D. Wis. Sept. 22, 2017).

The case was tried to a jury beginning on October 16, 2017. See (Docket # 313). During the course of the eight-day trial, the jury was shown hundreds of documents, numerous physical exhibits, and heard testimony from twenty-four witnesses, including seven experts. The jury returned a verdict for Plaintiffs on October 26, 2017. See (Docket # 316). The jury found that Snap–On's accused products infringed each asserted claim of the patents-in-suit. Id. at 1–4. The jury further found that none of the subject claims were invalid as obvious under 35 U.S.C. § 103 and that Snap–On's infringement of the patents was willful. Id. at 4–5. Finally, the jury awarded compensatory damages in the form of a lump-sum reasonable royalty in the amount of $27.8 million. Id. at 5.

2. ANALYSIS

The parties' post-trial motions cover myriad issues pertaining to liability and damages. Snap–On's two motions seek judgment as a matter of law and a new trial, respectively. Plaintiffs also filed two post-trial motions, the first requesting treble damages and the second seeking pre- and post-judgment interest. The Court will address each motion in turn.

2.1 Snap–On's Motion for Judgment as a Matter of Law

Federal Rule of Civil Procedure 50 provides that "[a] motion for judgment as a matter of law may be made at any time before the case is submitted to the jury." Fed. R. Civ. P. 50(a). The Rule allows a party to move for judgment on a particular claim when (1) "a party has been fully heard on an issue during a jury trial," and (2) "the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the [non-moving] party on that issue." Fed. R. Civ. P. 50(a)(1). Rule 50(b) is used to renew after trial a motion under Rule 50(a). Id. 50(b). In ruling on the renewed motion, the court may uphold the jury's verdict, order a new trial, or direct entry of judgment as a matter of law. Id.

In patent cases, the law of the regional circuit sets the standard applied to motions under Rule 50. Summit Tech. Inc. v. Nidek Co. , 363 F.3d 1219, 1223 (Fed. Cir. 2004). The Seventh Circuit instructs that

[i]n deciding a Rule 50 motion, the court construes the evidence strictly in favor of the party who prevailed before the jury and examines the evidence only to determine whether the jury's verdict could reasonably be based on that evidence. The court does not make credibility determinations or weigh the evidence. Although the court reviews the entire record, the court must disregard all evidence favorable to the moving party that the jury [was] not required to believe.

Passananti v. Cook Cnty. , 689 F.3d 655, 659 (7th Cir. 2012) (internal citations and quotations omitted).

In its renewed motion for judgment as a matter of law pursuant to Rule 50(b), (Docket # 347), Snap–On addresses three issues. First, it contends that the evidence at trial proved its obviousness defense, contrary to the jury's verdict. Second, it challenges the finding of infringement as to two of its packs that Plaintiffs' battery expert, Dr. Mark Ehsani ("Ehsani"), could not and did not test. Finally, Snap–On seeks reversal of the jury's finding that its infringement was done willfully.¹

The bulk of Snap–On's arguments ignore the standard of review, which permits reversal of the verdict only if no reasonable jury could have decided as this jury did. Snap–On seems to think it can succeed if it shows merely that it could have convinced the jury to go its way, but this is no reason to disturb the jury's determinations. A brief examination of each issue shows that the jury's conclusions were supported by sufficient evidence.

2.1.1 Obviousness

Snap–On first contends that the asserted claims were obvious in light of the prior art. An obviousness challenge requires a showing that "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." 35 U.S.C. § 103(a) (2006).² To prove obviousness, one must show that a skilled artisan "would have found it obvious to bridge the differences between the subject matter of the claims and the prior art[.]" Ohio Willow Wood Co. v. Alps S., LLC , 735 F.3d 1333, 1343 (Fed. Cir. 2013). This entails consideration of several factors, including "(1) the scope and content of the prior art, (2) the differences between the prior art and the claims at issue, (3) the level of ordinary skill in the art, and (4) any relevant secondary considerations, such as commercial success, long felt but unsolved needs, and the failure of others." Wyers v. Master Lock Co. , 616 F.3d 1231, 1237 (Fed. Cir. 2010) ; Graham v. John Deere Co. , 383 U.S. 1, 17–18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). Patents are presumed valid, Microsoft Corp. v. i4i Ltd. P'ship , 564 U.S. 91, 131 S.Ct. 2238, 2243, 180 L.Ed.2d 131 (2011), so an invalidity defense like obviousness can only succeed if proven by clear and convincing evidence, Procter & Gamble Co. v. Teva Pharm. USA, Inc. , 566 F.3d 989, 993 (Fed. Cir. 2009).

The thrust of Snap–On's obviousness argument to the jury was that Plaintiffs' patents simply substituted Li-ion battery cells, created by Moli, for the Ni–Cd cells used in existing battery packs. See (Docket # 348 at 8); (Docket # 369 at 5). Everything else about the packs, including using the 20 Amp Limitation as an industry-standard performance benchmark, remained the same. (Docket # 348 at 8). Because of the simplicity of the change introduced in...