Wechsler v. Macke Intern. Trade, Inc.
| Decision Date | 06 January 2005 |
| Docket Number | No. CV-00-00296CAS.,CV-00-00296CAS. |
| Court | U.S. District Court — Central District of California |
| Parties | Lawrence I. WECHSLER v. MACKE INTERNATIONAL TRADE, INC., and Anthony O'Rourke |
Edward G. Poplawski, Sidley Austin Brown & Wood, Guy R. Bayley, Guy R. Bayley Law Offices, Los Angeles, CA, Irfan A. Lateef, Knobbe Martens Olson & Bear, Paul N. Conover, Knobbe Martens Olson and Bear, Irvine, CA, Robert E. Wechsler, Wechsler & Wechler, Great Neck, NY, Thomas F. Smegal, Jr., Knobbe Martens Olson & Bear, Irvine, CA, for Plaintiff.
David Heskel Ben-Meir, Hogan & Hartson, Los Angeles, CA, Richard S. Luskin Law Offices, Malibu, CA, Richard E. Lyon, Jr., Holland & Knight, Los Angeles, CA, for Defendants.
PROCEEDINGS: DEFENDANTS' MTION FOR JMOL PRECLUDING LOST PROFITS DAMAGES (filed November 12, 2004)
Plaintiff Lawrence I. Wechsler is the inventor of a portable device for feeding animals, for which he owns U.S. Patent No. 5,636,592 ("the '592 patent"), issued on June 10, 1997. In this action, plaintiff alleges that defendants Macke International Trade, Inc. ("Macke") and Anthony O'Rourke, Macke's President and Secretary, have infringed the '592 patent by "importing, using, offering for sale, and selling in the United States, two different products, the `Handl-Drink' and the `Handi—Drink 4' products as well as inducing infringement of the '592 patent." Plaintiff's Statement of Genuine Issues of Material Fact, filed on January 23, 2004, at ¶ 1; see also defendants' Statement of Uncontroverted Facts, filed on January 8, 2004, at ¶ 2. Plaintiff filed the original complaint in this action on July 19, 1999, and a first amended complaint on May 8, 2000, asserting claims against defendants for patent infringement in violation of 35 U.S.C. § 271(a), and against O'Rourke and Macke for inducing patent infringement pursuant to 35 U.S.C. § 271(b).1
The Court granted defendants' motion for summary judgment of non-infringement of the '592 patent on February 13, 2002. The Federal Circuit reversed the Court's grant of summary judgment of non-infringement with respect to Handi-Drink 1, and affirmed the Court's grant of summary judgment of non-infringement with respect to Handi-Drink 2 on January 29, 2003. On November 25, 2003, the Court denied defendants' motion for summary judgment of invalidity of the '592 patent.
On January 8, 2004, defendants moved for summary judgment seeking the dismissal of defendant Anthony O'Rourke. On February 26, 2004, the Court granted in part and denied in part defendants' motion. The issues of Macke's willful infringement of the '592 patent, damages, and O'Rourke's personal liability for inducing infringement of the '592 patent were tried to the jury on October 5, 6, 7, 8, 12, and 13, 2004. On October 13, 2004, the jury returned its special verdicts. On the Special Verdict Form, the jury answered the questions below as follows:
1. Do you find that Mr. Wechsler has shown by a preponderance of evidence that Mr. O'Rourke is personally liable for infringement of the Wechsler patent?
"YES" is a finding for Mr. Wechsler. "NO" is a finding for Mr. O'Rourke.
YES____ NO X
2. Do you find by clear and convincing evidence that Defendants have willfully infringed based upon Defendants becoming aware of the content of the Wechsler patent in 1997 through the meetings between Mr. Woods and Mr. O'Rourke and his representatives, and thereafter commencing sales of the original Handi-Drink?
"YES" is a finding for Mr. Wechsler. "NO" is a finding for Mr. O'Rourke.
YES____ NO X
3. Do you find by clear and convincing evidence that Defendants have willfully infringed based upon Defendants becoming aware of the content of the Wechsler patent in April 1999 and then continuing to sell the original Handi-Drink?
"YES" is a finding for Mr. Wechsler. "NO" is a finding for Mr. O'Rourke.
YES X NO____
4. What are the total damages owed to Mr. Wechsler for the infringement of the Wechsler patent?
LOST PROFITS: $ 630,600
REASONABLE ROYALTY: $ 25,535
TOTAL: $ 656,135
On October 27, 2004, the Court entered an order of final judgment.2 On November 12, 2004, defendants filed a renewed motion for judgment as a matter of law precluding lost profits damages. The Court heard oral argument on December 13, 2004, and took the matter under submission.
Judgment as a matter of law is proper "if the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion and that conclusion is contrary to the jury's." Vollrath Co. v. Sammi Corp., 9 F.3d 1455, 1460 (9th Cir.1993). Judgment as a matter of law is improper if there is substantial evidence to support the jury's verdict. See Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1014 (9th Cir.1985). "`Substantial evidence' is admissible evidence that reasonable minds might accept as adequate to support a conclusion." Davis v. Mason County, 927 F.2d 1473, 1486 (9th Cir.1991).
In considering a motion under Rule 50, the court does not assess the credibility of witnesses, and does not "weigh the evidence, but [instead] draws all factual inferences in favor of the nonmoving party." Landes Constr. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1371 (9th Cir.1987); Lytle v. Household Mfg., Inc., 494 U.S. 545, 554, 110 S.Ct. 1331, 108 L.Ed.2d 504 (1990). Finally, the court may not substitute its judgment of the facts for the judgment of the jury. Tennant v. Peoria & Pekin Union Ry. Co., 321 U.S. 29, 64 S.Ct. 409, 88 L.Ed. 520 (1944).
Defendants argue that the jury's award of lost profits of $630,600 is unexplained and unsupported by any of the evidence presented at trial, including the calculations offered by plaintiff's own expert. Mot. at 7. They assert that plaintiff failed to establish three of the four parts of the governing test, as laid out in Panduit Corp. v. Stahlin Bros., Fibre Works, Inc., 575 F.2d 1152, 1156 (6th Cir.1978), for determining whether lost profits should be awarded as damages: (1) demand for the patented product; (2) absence of acceptable non-infringing substitutes; (3) manufacturing and marketing capability to exploit the demand; and (4) the amount of profit the patentee would have made. See id. at 8-10. Specifically, defendants contend that plaintiff fails to meet parts (2), (3), and (4) of this test.
As to the second prong, defendants contend that Macke's Handi-Drink 2 was an acceptable, non-infringing substitute for plaintiffs product ("the Gulpy"), notwithstanding the fact that it was not introduced into the market until April 2000. Id. at 11-12. With regard to its availability, defendants assert that the design of the Handi-Drink 2 "was available to Defendants at any time that they desired to more clearly avoid infringement" of the '592 patent, and that "a non-infringing process for producing a non-infringing product" is an acceptable non-infringing substitute under Panduit. Id. at 12 ).
As to the third prong, defendants assert that the mere fact that plaintiff "conceived" of the Gulpy in early 1995 but did not introduce it on to the market until April 2001, establishes plaintiffs lack of manufacturing capability to meet product demand. Id. at 13. Further, they argue that inasmuch as plaintiff had no knowledge of the pet product distributors or customers Macke sold to at the time he introduced the Gulpy, he has not established his manufacturing and marketing capability to exploit the demand for pet watering devices. Id. at 14-15.
As to the fourth prong, defendants assert that plaintiff has not produced sufficient evidence that his company ("New Angle") would have made any of Macke's sales of the infringing Handi-Drink. Id. at 16. Defendants contend that plaintiff relies only on his own unsupported and conclusory statements and those of his expert, Dr. Goedde, that plaintiff would have made 90 or 100 percent of the infringing sales. Id. at 16. Specifically, they contend that plaintiff's sole evidence of the lost profit per unit of sales was his own testimony regarding the price at which he anticipated selling his product, which price was "blindly adopted" by Dr. Goedde in his lost profits calculations. Id. Defendants further contend that the actual sales prices for the Gulpy that Dr. Goedde also used in his calculations were not from the "relevant time period" of November 1998 to April 2000—that is, the time of the infringing sales—and that since plaintiff did not have a product on the market during that period, he could not have made the infringing sales. Id. at 16-17.
Finally, defendants assert that plaintiff is not entitled to any of New Angle's lost profits because there is no evidence in the record that plaintiff granted the company an exclusive license, or indeed any license at all, to make the Gulpy under the '592 patent. Id. at 17-18 (citing Poly-America, L.P. v. GSE Lining Technology, Inc., 383 F.3d 1303, 1311-12 (Fed.Cir.2004)) ( that patentee could not recover lost profits of its non-exclusive licensee). Defendants argue that to "synthetically create lost profits" for plaintiff based on New Angle's profits would be improper, especially in light of the fact that New Angle was never a party to this litigation. Id. at 18 (quoting Poly-America, 383 F.3d at 1311-12). Defendants assert that they were never able to undertake any discovery from New Angle, and hence the record does not establish that New Angle had an exclusive license under the '592 patent. Id. at 18-19.
Plaintiff responds first that defendants are erroneously characterizing lost profits as a pure question of law. Opp. at 2. Plaintiff asserts that the Court's role is to determine the threshold question of whether lost profits are legally available to a patentee, while the...
To continue reading
Request your trial
-
Wechsler v. Macke Intern. Trade, Inc.
...to Wechsler for Macke's infringement of the '592 patent was not supported by substantial evidence. Wechsler v. Macke Int'l Trade, Inc., 399 F.Supp.2d 1088 (C.D.Cal.2005) ("Wechsler III"). Wechsler cross-appeals the district court's grant of summary judgment that Macke is not the alter ego o......
-
Schwendimann v. Arkwright Advanced Coating, Inc.
...awarded lost profits for non-patentholding companies, but without much discussion of the issue. See Wechsler v. Macke Int'l Trade, Inc. , 399 F.Supp.2d 1088, 1094–95 (C.D. Cal. 2005) (finding patentholder could recover lost profits for his company), aff'd in part , rev'd in part , 486 F.3d ......