Saint-gobain Autover USA. Inc v. Xinyi Glass North Am. Inc

• Citation: 707 F.Supp.2d 737
• Decision Date: 13 April 2010
• Docket Number: Case No. 1:06CV2781.
• Parties: SAINT-GOBAIN AUTOVER USA, INC., et al., Plaintiffs,v.XINYI GLASS NORTH AMERICA, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

707 F.Supp.2d 737

SAINT-GOBAIN AUTOVER USA, INC., et al., Plaintiffs,v.XINYI GLASS NORTH AMERICA, INC., et al., Defendants.

Case No. 1:06CV2781.

United States District Court,

N.D. Ohio,

Eastern Division.

March 31, 2010.

As Corrected April 13, 2010.

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Kip T. Bollin, Matthew D. Ridings, Thompson Hine, Cleveland, OH, William T. Enos, Andrew K. Beverina, Arthur L. Neustadt, Barry J. Herman, Jean-Paul Lavalleye, Jeffrey B. McIntyre, Oblon, Spivak, McClelland, Maier & Neustadt, Alexandria, VA, for Plaintiff.

J. Michael Jakes, James R. Barney, Finnegan Henderson Farabow Garrett & Dunner, Washington, DC, James F. McCarthy, III, Laura A. Hinegardner, Katz, Teller, Brant & Hild, Cincinatti, OH, Joseph A. Sebolt, Ryan K. Liebengood, Sand & Sebolt, Canton, OH, for Defendant.

MEMORANDUM OPINION

SARA LIOI, District Judge.

This matter is before the Court on the motion of Plaintiffs Saint Gobain Autover USA, Inc., Saint Gobain Sekurit Mexico, S.A., DE C.V., and Saint Gobain Sekurit USA (“Plaintiffs” or “Saint Gobain”) for enhanced damages, attorney's fees, and prejudgment interest. (Doc. No. 224.) In addition to opposing Saint Gobain's motion, Defendants Xinyi Glass North America, Inc. and Xinya Automobile Glass Co., Ltd. (“Defendants” or “Xinyi”) have moved for oral argument on Saint Gobain's motion. (Doc. No. 230.) Saint Gobain has moved to strike Xinyi's motion. (Doc. No. 236.)

BACKGROUND

The factual and procedural history surrounding this case has been set forth in previous decisions, most recently in the Court's October 12, 2009 Memorandum Opinion, familiarity with which is presumed. For purposes of framing the issues raised by Saint Gobain's motion for enhanced damages, it is sufficient to note that Plaintiffs are the patent holders of the '395 and '669 patents, which both relate generally to glazings, i.e., windshields, for installation in motor vehicles.¹ The '395 patent is entitled “Method of Centering Windshields Glazings,” and discloses and claims a method of centering a glazing upon a mounting bracket. The ' 669 patent, entitled “Spacer for Windshield Bracket,” discloses and claims a glazing with at least one profiled spacer with a lip portion projecting beyond the periphery of the glazing.

On November 16, 2006, Saint Gobain brought suit against Xinyi, alleging patent infringement, and seeking an injunction against continued infringement, damages for past infringement, treble damages for willful infringement, and attorney's fees and costs. (Doc. No. 9, Am. Compl. at 3.) Following a hearing on claim construction, and consideration of both pre- and post-hearing briefs from the parties, the Court announced its construction of the claims. Specifically, the Court found that the term “centering” and its related terms did not require construction, while the term “aligning” merited construction and related to the process of ensuring “a uniform distance between the bracket and the glazing along a contact surface of the spacer.” (Doc. No. 118, Memo. Op. at 10-13, 22-23.)

Xinyi subsequently sought summary judgment, and offered as defenses non-infringement, obviousness, and non-enablement. Both sides filed motions in limine to block from the Court's consideration various defenses, arguments, and evidence. In a decision dated October 12, 2009, 666 F.Supp.2d 820 (N.D.Ohio 2009) the Court denied Xinyi's summary judgment motion in toto. In so ruling, the Court granted Saint Gobain's motion to strike Xinyi's obviousness defense on the ground that Xinyi had failed to seasonably supplement its discovery responses to provide information regarding this defense in violation of Fed.R.Civ.P. 26(e). (Doc. No. 163, Mem. Op, 666 F.Supp.2d at 826-27.) While the Court also found that Xinyi had failed to provide discovery as to the defense of non-enablement, and failed to properly plead the defense in its answer, the Court permitted Xinyi to maintain the defense upon a finding that Saint Gobain had not been prejudiced by the omissions.² Further, in denying summary judgment, the Court found that the parties' dueling experts on the subjects of non-infringement and non-enablement precluded a grant of summary judgment in favor of Xinyi. ( Id. at 832-34, 834-35, 837-38.)

Beginning November 2, 2009, the Court presided over a seven-day jury trial. On November 10, 2009, the Court granted Saint Gobain's motion for judgment as a matter of law on Xinyi's non-enablement defense, finding that Xinyi's expert, Samuel Phillips, was not qualified to render a decision on non-enablement, and Xinyi failed to otherwise provide any support for this defense. (TR at 1885.) At the trial's conclusion, the jury returned a verdict in favor of Plaintiff on the issue of infringement, and awarded $10,896,558.00 in compensatory damages. (TR at 2000.) The jury also found that Saint Gobain had proven its right to a reasonable royalty, and awarded $47,457.00 in royalty damages, for a total damage award of $10,944,015.00. (TR at 2002.) Finally, the jury found that Xinyi willfully infringed both the '395 and the '669 patents. (TR at 2003.)

Plaintiffs have now moved for enhanced damages and prejudgment interest, under 35 U.S.C. § 294, and attorney's fees, under 35 U.S.C. § 285. According to Plaintiffs, treble damages are appropriate because “Xinyi's overall conduct warrants the maximum allowable increase in damages.” (Doc. No. 224, Mot. at 5.) Plaintiffs also argue that this is such an “exceptional” case, under 35 U.S.C. § 285, that the award of attorney's fees is appropriate. Xinyi opposes any enhancement to the jury's award, and, in fact, urges the Court to set aside the jury's finding of willfulness.

APPLICABLE LAW

Upon a finding of infringement, 35 U.S.C. § 284 requires a court to award “damages adequate to compensate for the infringement.” The same section gives a court discretion to increase the damages up to three times the amount awarded by the fact finder. Id.

The Federal Circuit announced a new standard for willfulness in In re Seagate Tech., LLC: “proof of willful infringement permitting enhanced damages requires at least a show of objective recklessness.” In re Seagate Tech., 497 F.3d 1360, 1371 (Fed.Cir.2007). Under this standard, “to establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Id. If this threshold showing is made, “the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.” Id. This “objective recklessness” standard represented a marked departure from the traditional standard, which imposed an affirmative duty of care on potential infringers to determine whether their conduct was infringing if they had notice of another party's patent rights. Contra Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1389-1390 (Fed.Cir.1983).

In Read Corp. v. Portec, Inc., 970 F.2d 816, 827 (Fed.Cir.1992), the Federal Circuit identified nine factors that were to guide a trial court's enhancement analysis: (1) whether the defendant deliberately copied the ideas or design of another; (2) whether the defendant, when he 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 defendant's behavior as a party to the litigation; (4) the defendant's size and financial condition; (5) the closeness of the case; (6) the duration of the defendant's misconduct; (7) remedial action by the defendant; (8) the defendant's motivation for harm; and (9) whether defendant attempted to conceal its infringement.

Saint Gobain's request for attorney's fees is governed by 35 U.S.C. § 285, which provides for attorney's fees for “exceptional” patent cases. The statute does not define the term “exceptional,” but “the Committee on the Judiciary stated that the remedy of attorneys' fees ‘should be available in exceptional cases, i.e., in infringement cases where the acts of infringement can be characterized as ‘malicious' ‘fraudulent,’ ‘deliberate,’ or ‘willful’.' ” Playboy Enter., Inc. v. Baccarat Clothing Co., Inc., 692 F.2d 1272, 1276 (9th Cir.1982).

Finally, prejudgment interest is available, upon a proper showing, under 35 U.S.C. § 284. The purpose of such an award is to fully compensate patent holders for infringement. General Motors Corp. v. Devex Corp., 461 U.S. 648, 654, 103 S.Ct. 2058, 76 L.Ed.2d 211 (1983).

I. Xinyi's Motion for Oral Argument

Before the Court can reach the merits of Saint Gobain's damages motion, it must address Xinyi's request for oral argument. Xinyi believes that oral argument “will aid this court in understanding the complex issues raised in both parties' briefs, including the Federal Circuit's recent en banc decision in In re Seagate, which substantially changed the law of willfulness and enhanced damages.” (Doc. No. 230, Mot. at 2.)

As will be illustrated more fully below, Saint Gobain looks to the trial testimony of Xinyi's officials and the litigation conduct of Xinyi's attorneys to support its request for enhanced damages. Xinyi relies primarily upon what it believes was the closeness of claim construction and the question of infringement to oppose enhancement. The undersigned presided over both claim construction and the trial in this matter, and is, therefore, extremely familiar with the well developed record as to these events. Moreover, the decisions interpreting and applying Seagate and other applicable decisions are readily available to the Court, and the Court also has the benefit of the thorough briefing by the parties on all pertinent issues. The Court finds that oral argument is not necessary, and DENIES Xiny's...