Raffel Sys. v. Man Wah Holdings Ltd.
| Decision Date | 11 May 2023 |
| Docket Number | 18-CV-1765 |
| Parties | RAFFEL SYSTEMS, LLC, Plaintiff, v. MAN WAH HOLDINGS LTD, INC., MAN WAH USA INC., and XYZ COMPANIES 1-10, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
DECISION AND ORDER ON THE PARTIES' POST-TRIAL MOTIONS
Introduction 3
Legal Standards 3
Analysis 5
Man Wah's Post-Trial Motions 5
1. Trade Dress Infringement ......................................................................................... 5
1.1 Applicable Law ............................................................................................... 5
1.2 Analysis .......................................................................................................... 6
1.2.1 Acquired Distinctiveness ................................................................ 6
1.2.2 Likelihood of Confusion ................................................................. 9
1.2.3 Non-Functionality ......................................................................... 10
1.2.3.1 Waiver ................................................................................ 11
1.2.3.2 Merits ................................................................................. 13
1.3 Damages ........................................................................................................ 14
1.3.1 Compensatory Damages ................................................................ 14
1.3.2 Man Wah's Profits ........................................................................ 16
1.3.3 Admission of Conroy's Expert Opinion .......................................... 18
1.3.4 The Jury's Finding of Willfulness ................................................... 18
2. Common Law Misappropriation .............................................................................. 21
2.1 The Jury's Verdict on Common Law Misappropriation ................................... 21
2.2 Preemption .................................................................................................... 23
2.3 Compensatory Damages ................................................................................. 24
2.4 Punitive Damages .......................................................................................... 24
3. False Marking ......................................................................................................... 27
4. Patent Infringement ................................................................................................. 29
4.1 Instruction on Obviousness ............................................................................. 29
4.2 Instruction on Willfulness ............................................................................... 32
5. Duplicate Damages ................................................................................................. 35
Raffel's Post-Trial Motions ............................................................................................ 39
1. Enhanced Damages for Patent and Trade Dress Infringement ................................... 39
1.1 Treble Damages for Willful Patent Infringement ............................................. 39
1.2 Treble Damages for Trade Dress Infringement ............................................... 43
1.3 Enhanced Award of Man Wah's Profits .......................................................... 44
2. Attorneys' Fees, Prejudgment Interest, and Non-Taxable Costs ................................ 45
2.1 Attorneys' Fees .............................................................................................. 45
2.2 Prejudgment Interest ...................................................................................... 48
2.3 Non-Taxable Costs ......................................................................................... 49
3. Permanent Injunction .............................................................................................. 50
3.1 Irreparable Harm and Inadequate Remedy at Law .......................................... 51
3.2 Balance of Hardship and Public Interest .......................................................... 53
3.3 Scope of Permanent Injunction ....................................................................... 54
Conclusion ..................................................................................................................... 54 Following a ten-day jury trial, on June 17, 2022, the jury returned a special verdict awarding damages in favor of the plaintiff, Raffel Systems, LLC, and against the defendants, Man Wah Holdings LTD, Inc. and Man Wah (USA) Inc. (collectively “Man Wah”). (Docket # 439.) Presently before me are post-trial motions from both parties. Man Wah moves for judgment as a matter of law under Fed.R.Civ.P. 50(b) and/or for a new trial under Fed.R.Civ.P. 59(a) as to Raffel's trade dress infringement, common law misappropriation, false marking, and patent infringement claims. (Docket # 466.) Man Wah further moves to reduce or eliminate damages as to these claims. (Id.) Raffel requests treble damages on its patent infringement claim, enhanced damages on its trade dress infringement claim, attorneys' fees, prejudgment interest, certain non-taxable costs, and a permanent injunction prohibiting Man Wah from using Raffel's patents and/or trade dress. (Docket # 473.) I will address each issue in turn.
Federal Rule of Civil Procedure 50 provides that judgment may be entered against a party who has been fully heard on an issue during a jury trial if a “‘reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.'” Passananti v. Cook Cnty., 689 F.3d 655, 659 (7th Cir. 2012) (). In 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. Id. The court does not make credibility determinations or weigh the evidence. Id. 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.'” Id. (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 151 (2000)).
Federal Rule of Civil Procedure 59 provides for a motion for a new trial and a motion to alter or amend a judgment. After a jury trial, the court may grant a new trial “for any reason for which a new trial has heretofore been granted in an action at law in federal court[.]” Fed.R.Civ.P. 59(a)(1)(A). “A new trial is appropriate if the jury's verdict is against the manifest weight of the evidence or if the trial was in some way unfair to the moving party.” Venson v. Altamirano, 749 F.3d 641, 656 (7th Cir. 2014). A jury verdict is against the manifest weight of the evidence if no rational jury could have rendered a verdict against the moving party. King v. Harrington, 447 F.3d 531, 534 (7th Cir. 2006).
Further, a motion to alter or amend the judgment under Rule 59(e) is proper “only where the movant clearly establishes: (1) that the court committed a manifest error of law or fact, or (2) that newly discovered evidence precluded entry of judgment.” Barrington Music Prod., Inc. v. Music & Arts Ctr., 924 F.3d 966, 968 (7th Cir. 2019) (internal quotation marks and citation omitted). A manifest error is the “wholesale disregard, misapplication, or failure to recognize controlling precedent.” Oto v. Metropolitan Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000) (internal quotation marks and citation omitted). Rule 59(e) does not allow a party to “undo its own procedural failures,” to “introduce new evidence or advance arguments that could and should have been presented to the district court prior to judgment,” Moro v. Shell Oil Co., 91 F.3d 872, 876 (7th Cir. 1996), or to rehash previously rejected arguments, Vesely v. Armslist LLC, 762 F.3d 661, 666 (7th Cir. 2014).
Man Wah's Post-Trial Motions (Docket # 466)
Man Wah moves for judgment as a matter of law under Rule 50(b) and/or moves for a new trial under Rule 59(a) as to Raffel's trade dress infringement, common law misappropriation, false marking, and patent infringement claims. (Docket # 466.) Man Wah further challenges the jury's damages awards as to each claim. I will address each issue in turn.
1. Trade Dress Infringement
Man Wah renews its motion for judgment as a matter of law under Rule 50(b) and moves for a new trial under Rule 59 as to Raffel's trade dress infringement claim on the grounds that Raffel failed to meet its burden to prove acquired distinctiveness, a likelihood of confusion, and non-functionality. (Docket # 467 at 10-19.)
1.1 Applicable Law
“The ‘trade dress' of a product is essentially its total image and overall appearance.” Two Pesos, Inc. v Taco Cabana, Inc., 505 U.S. 763, 765 n.1 (1992) (internal citation and quotation omitted). “It may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.” Id. In trade dress...
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