NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not citable as precedent. It is a public record. 

## United States Court of Appeals for the Federal Circuit

04-1486, -1488

VENTURE INDUSTRIES CORPORATION, VEMCO, INC., PATENT HOLDING COMPANY, and LARRY J. WINGET, Plaintiffs-Cross Appellants,

v. AUTOLIV ASP, INC. (successor to Morton International, Inc.), Defendant-Appellant,

v. AUTOLIV, INCORPORATED, Defendant.

__________________________ DECIDED: August 7, 2006

__________________________ Before LINN, DYK, and PROST, Circuit Judges

. PROST, Circuit Judge

. Venture Industries Corp. (“Venture”) s ued Autoliv ASP (“Autoliv”) for breach of contract. The contract was a Supply Agreem ent that had been entered into as part of the settlement of previous litigation between Ventur e and Morton International (“Morton”), the predecessor in interest to Auto liv. The trial was complicated by the fact that aside from the breach of Supply Agreement claim, many other claims relating toother agreements resulting from the settlem ent had been stayed pending arbitration. In particular, claims arising from a Cross Licensing agreement were stayed including claims disputing who between Autoliv and V enture owned various technologies. This complication led to numerous evidentiary ru lings relating to testimony addressing any technology ownership issue. As the district court did not err in these evidentiary rulings,

we affirm the district court’s rulings. Ultimatel y, the jury found that Autoliv had breached the Supply Agreement and Venture was awarded $27,576,001 in damages and $5,878,972 in resulting prejudgment interest. The district court did err in calculating the accrual date of prejudgment interest. In this case, the proper date to calculate prejudgment interest is the date of filing the complaint. We therefore vacate the district court’s calculation of prejudgment interest and remand the case to re-calculate the prejudgment interest consist ent with this opinion. Even though other claims remain pending in this suit, we have jurisdiction ov er this appeal because the district court entered judgment pursuant to Ru le 54(b) of the Federal Ru les of Civil Procedure as to the breach of contract claim.
I. After the entry of final judgment, Autoliv filed a motion for a new trial pursuant to Rule 60(b) of the Federal Rule s of Civil Procedure. The dist rict court’s denial of that motion is the subject of a separate appeal, which we also resolve today. Venture Indus. Corp. v. Autoliv ASP, Inc. , No. 05-1537 (Fed. Cir. Aug. 7, 2006). In the companion case, we vacate and remand as to Autoliv’s request for a new trial pursuant to Rule 60(b)(3). Id. , slip op at 21-22. Our affirmance of the judgment below and our remand

04-1486, -1488 2for the re-computation of interest in this case are, of course, subj ect to the outcome of the proceedings on remand in the companion case. Autoliv is the successor in interest to the Automotive Safety Products Unit of Morton International, Inc. Mo rton was a ‘tier one’ supplier of safety restraint systems to the automotive industry meaning t hat it directly supplied safety restraint systems to car and truck manufacturers. Venture was, on t he other hand, a ‘tier two’ supplier because it supplied components to ‘tier one’ supplie rs. Venture custom molded plastics, including air bag covers. From 1990 to 1995, Venture supplied Morton with air bag

covers. In 1995, Venture sued Morton in the Easter n District of Michigan asserting that Morton had misappropriated inte llectual property relating to air bag cover technology owned by Venture. Morton count er-claimed asserting ownership of the technology. On December 31, 1995, Morton and V enture settled the case by entering into a Settlement Agreement containing two s eparate agreements: a Cross License Agreement and a Supply Agreement. The Cross License Ag reement permitted each party to use the other’s claimed technology. One relevant provision of the Cross License Agreement addressed the procedures for resolving any di sputes arising from the Cross License Agreement: If a dispute arises betw een the parties relating to [the Cross License Agreement] they shall use the followi ng procedure prior to either party’s pursuing any other available remedy:

. . . (b) If the dispute relates to the inv entorship and/or owner ship of Subject Technology or whether any particula r Invention constitutes Subject Technology, or whether Subject Technol ogy constitutes Solely or Jointly Owned Subject Technology, the dispute shall be submitted to binding arbitration . . . .

04-1486, -1488 3The other agreement that form ed part of the settlement wa s the Supply Agreement. It allowed Venture to place bids on all of Morton’s future air bag cover programs and provided that Venture would be awarded those contracts where Venture’s bids were “reasonably competitive.” The Supply Agreement stated that: (a) Morton shall give [Vent ure] the opportunity to quote on all of Morton’s world wide future Cover programs awarded to it by its customers

. . . excluding , however , such future cover program s (i) for which Morton has been directed by its customer to use a source other than [Venture] or has been directed by its customer not to us e [Venture], (ii) for which [Venture], in Morton’s reasonable judgment, does not have the capability at the time of quotation to meet their requirem ents for the particular program(s) under consideration; and (iii) which Morton has elected, in its sole discretion, to retain internally for manufacture by Morton itself. (b) All timely quotes received from [Venture] for programs described in subsection (a) above, shall be com pared by Morton to quotes received from other established module cover s uppliers for the same program(s). Provided [Venture’s] quote is reas onably competitive (as determined in good faith by Morton taking in to account price, terms, quality, ability to meet qualification requirements and de livery dates and other objective factors related to competitiveness), it shall be awarded such program(s). On November 3, 1999, Venture once agai n sued Morton and Autoliv as the successor in interest to Morton, alleging that they had breached the Supply Agreement and the Cross License Agreement and al so alleging patent infringement and misappropriation of trade secrets. Of all the claims in the amended complaint, only the claim for the breach of the Supply Agreement was fully adjudicated. All remaining claims were either stayed or dismissed. In particular, as the Cr oss License Agreement contains a mandatory binding ar bitration requirement, the cl aims that arose out of disputes over the Cross License Agreem ent have been stayed pending the outcome of arbitration. As the claim for breach of the Supply Agreement did not arise from the Cross License Agreement, this claim was neit her stayed nor taken up in the arbitration.

04-1486, -1488 4On October 23, 2003, prior to trial, Autoliv filed a motion in limine to exclude, inter alia, evidence referencing the earlier lawsui t, the resulting Settlement Agreement and the Cross License Agreement. It argued su ch evidence was irrelevant, unfairly prejudicial, and impermissible character ev idence as the 1995 case and the Cross License Agreement has “no rele vance and no relationship” to this case. On October 29, 2003, the district court held a pre-trial conference addressing, among other things, Autoliv’s motion in limine. The district court ruled that Venture and Autoliv would prepare a stipulation of facts describing the facts leading to the formation of the Supply Agreement and stated that the stipulation “can be done in lieu of testimony, but I’m not going to shade the testimony and I’m not going to confine [Venture] to the four corners.” The resulting stipulation of facts was read to t he jury at the start of trial on November 4, 2003 and stated that between 1990 and 1995, Venture had a relationship with Morton under which Venture manufactured air bag covers which it sold to Morton. Next, in 1995, Venture and Morton had a falli ng out which resulted in Venture suing Morton. Next, on December 31, 1995, the lawsuit was settled. A component of the settlement was a supply agreement pursuant to which Morton agreed to permit Venture to bi d on [some] of Morton’s air bag cover programs . . . . On the third day of trial, the district court re-visited the evidentiary issue and ruled on the scope of evidence that could be admitted regarding the settlement of the prior litigation. Along similar lines, on the fourth day of the trial, the district court again explained the type of evidence that could be adm itted stating that “I think Ve nture is entitled to explain what the essence of the pr ior dispute was about so the jury can understand fully how that prior dispute was settled. All they k now now is it was a dispute between Morton and Venture.” Based on these evidentiary rulings, Venture introduced testimony

04-1486, -1488 5relating to the origins of the Supply Ag reement and relating to Venture’s licensing practices with third party air bag suppliers. Autoliv moved to have the court issue a limiting instruction as to this testimony but the district court denied the motion. Autoliv also requested a specific jury instruction that placed the burden on Venture to establish that its quotes were reasonably competitive with the quotes from other suppliers but the district court declined to use Autoliv’s jury instruction. Ultimately, the case went to the jury and, on December 4, 2003, the jury found that Autoliv had breached the S upply Agreement with respect to thirty three of thirty eight air bag programs and it awarded V enture $33,459,135 in dam ages. That damage award included $5,878,972 in prejudgment interest where the interest was calculated from the date the damages were incurred. Autoliv appeals the district court’s evidentiary rulings, the district court’s refusal to give a limiting instruction, and t he district court’s refusal to use Autoliv’s jury instruction. Venture cross-appeals the district court’s failu re to award prejudgment interest from the date of filing the complaint rather t han from the date the damages accrued.
II. As to the question of whether evidenc e was properly admitted at trial is a procedural question, the regional circ uit law controls the issue. Micro Chem., Inc. v. Lextron, Inc. , 317 F.3d 1387, 1390-91 (Fed. Cir. 2003). In the Sixth Circuit, a district court’s decision to admit or exclude evidenc e is reviewed for abuse of discretion. Beck v. Haik , 377 F.3d 624, 636 (6th Cir. 2004) . Jury instructions are reviewed “as a whole to determine whether they adequately inform the ju ry of relevant considerations and provide a basis in law for the jury to reach its decision.” Beard v. Norwegian Caribbean

04-1486, -1488 6Cruise Lines , 900 F.2d 71, 72 (6th Cir. 1990). A distri ct court’s decision whether to use a party’s jury instruction is re viewed for abuse of discretion. Hisrich v. Volvo Cars of N. Am., Inc. , 226 F.3d 445, 449 (6th Cir. 2000). On appeal, Autoliv argues that the district court erred in three ways. First, it contends that Venture’s references to tec hnology ownership were prejudicial and should have been excluded. Second, once this evidenc e was admitted, Autoliv contends that the district court erred by refusing to give a limiting instruction covering the admitted evidence. Lastly, Autoliv argues that the tr ial court erred by refusing to use Autoliv’s jury instruction.
A. As to the initial evidentiary rulings, Autoliv argues that the dist rict court improperly expanded its initial decision to lim it technology evidence when it allowed two particular pieces of evidence. First, Autoliv objects to the testimony of Mr. Torakis who regarded the Supply Agreement as the quid pro quo for the Cross Licensing Agreement stating that “[Venture] wanted busine ss, [Morton] wanted our ideas that was the deal.” Autoliv also objects to the testimony of Mr. Winget who testified that third party suppliers like Toyota Gosei and TRW had paid Venture a licens e fee of fifty cents per air bag cover for Venture’s technology. Autoliv contends that this testimony unfai rly prejudiced Autoliv because evidence of a quid pro quo arrangement or of licensing payments suggests that Venture owned the air bag technology. The district court was well within its discr etion to allow testimony especially where it felt it was needed to illuminate central iss ues to the case provided that “the judge inform[s] the parties and give[s] them an opport unity to present evidence relating to the

04-1486, -1488 7newly revived issue.” Huss v. King Co. , 338 F.3d 647, 651 (6th Cir. 2003). It is clear from the record that where the district court revisited the sc ope of the testimony because it was necessary for the jury’s understanding, it also allowed the parties recourse to adjust their litigation strategies regarding this testim ony. For example, on November 6, 2003, the dist rict court stated that at an earlier time in this case I m ade a ruling, and I don’t know whether any part of it was reserved, that the supply agreement was a stand-alone agreement and excluded any evidence of the cross-licens e agreement or the settlement agreement of the litigation. Based on the testimony I’ve heard ov er the last two days, I think that ruling was too restrictive. I don’t think this jury is capable of understanding the supply agr eement . . . . I can’t understand why anybody would enter into such an agr eement without kno wing that there was a lawsuit, there was a settlement of the lawsuit, and the settlement of that lawsuit included both the cross- license agreement, because it was a dispute over technology, and included t he supply agreement . . . . [T]hat doesn’t mean a wide-ranging inquiry c an be made into it, but . . . on a limited basis, I will allow testimony on the settlement agreement and on the litigation . . . . In response to this change, Mr. Horton, couns el for Autoliv asked, “Obviously the scope of this is now changing dramatically. I ma y want to call a witne ss regarding the crosslicensing agreement.” The j udge responded, “You can. You can do anything you want. In light of this ruling, if anyone wants to amend the witness list or the exhibit list, they can do so.” Second, Autoliv argues that, once ev idence of technology ownership was admitted, the district cour t erred by not granting Autoliv’s request for a limiting instruction as to the technology ownership evidence. We do not agree with Autoliv. Autoliv requested a limiting in struction that two exhibits , Plaintiff’s Exhibits 129a and 130, were being introduced to demonstrate Autoliv ’s ownership over the technology. As stated by the district cour t the exhibits were admitt ed to demonstrate Autoliv’s

04-1486, -1488 8manufacturing capabilities and included no “claim to proprietorship [and] no claim to ownership.” We discern no clear error in the district court’s refusal to give the limiting instruction. Third, and lastly, as to the jury instruct ion, Autoliv argues that the district court erred by refusing to grant its more specific instruction which stated that Venture bore the burden of establishing that the exclusions in the Supply Agr eement did not apply. “[A] district court’s refusal to give a jury instruction constitutes reversible error if: ‘(1) the omitted instructions are a correct standard of the law; (2) the instruction is not substantially covered by other delivered charges; (3) the failu re to give the instruction impairs the requesting party’s theory of the case.’” Webster v. Edward D. Jones & Co. , 197 F.3d 815, 820 (6th Cir. 1999). The instruct ion that was read to the jury stated: Venture has the burden of proving eac h of the following propositions. First, that Venture performed all ob ligations required of it under the contract. Second, that Autoliv ASP failed to perform its obligations under the contract and breached the contract. Th ird, as a result of the breach of the contract, Venture was damaged. Autoliv ASP has the burden of proving it qualified for any exclusi on set forth in the Supply Agreement which it maintains absolved it of an obligation under the Supply Agreement. The district court also read the entirety of Section 2.2 of the Supply Agreement to the jury. That section detailed the requirem ents of each party and the circumstances and conditions under which Autoliv could have refused to award a cover program to Venture. Those sections of the Suppl y Agreement outline t hat programs could be excluded from the Supply Agr eement under specific circum stances such as where a customer directs that a specific cover s upplier be used rather than Venture. Under these circumstances, we conclude that the distri ct court properly instru cted the jury that Autoliv bore the burden of provi ng that the exclusions excus ed it from allowing Venture

04-1486, -1488 9to bid on a contract. The district court did not abuse its discretion in rejecting Autoliv’s proposed jury instruction. Autoliv’s arguments regardi ng the evidentiary and jury related rulings have been considered and are found to be without merit. We see no reason to disturb those rulings of the district court.
III. In its cross-appeal, Venture argues that the district court erred by failing to award Venture prejudgment interest fr om the date of the filing of the complaint, regardless of the time the damages actually accrued. In particular, Venture argues that Michigan Compiled Laws section 600.6013 explicitly grants prejudgment interest from the time of filing of the complaint and that statute controls the grant of prejudgment interest in this

case. Prejudgment interest is neither unique to patent law nor any other subject matter specific to the Federal Circuit’s jurisdiction. Therefore, in this case , the law of the Sixth Circuit applies. See Biodex Corp. v. Loredon Biomedical, Inc. , 946 F.2d 850, 855-56 (Fed. Cir. 1991). Statutory interpretation is reviewed de novo. United States v. Thomas , 211 F.3d 316, 319 (6th Cir. 2000). In the Sixth Circuit, the issue of prejudgment interest is governed by the law of the forum state, which, in this case is Michigan. The interpretation of a statute by a district court is reviewed de novo. United States v. Thomas , 211 F.3d 316, 319 (6th Cir. 2000). Autoliv argues that prejudgm ent interest in this case should not be calculated from the time the complaint was filed. It cites to a portion of Michigan Compiled Laws section 600.6013(1) which states that

04-1486, -1488 10[i]nterest is allowed on a money judgm ent recovered in a civil action, as provided in this section. However, fo r complaints filed on or after October 1, 1986, interest is not allowed on fu ture damages from the date of filing the complaint to the date of entry of the judgment. As used in this subsection, “future damages” means t hat term as defined in section 6301. But Autoliv relegates to a footnote the re levant information that under section 600.6301 the “future damages” discussed in secti on 600.6013 are “damages arising from personal injury.” As this case is not one for damages for personal injury, the limits on prejudgment interest cited by Autoliv are irre levant. Instead, as has been held by the Sixth Circuit in a breach of contact case, [i]n Michigan, prejudgment interest is not discretionary as the statute provides in relevant part that “int erest on a money judgment recovered in a civil action shall be calculated from the date of filing the complaint” and “shall be calculated on the entire amount of the money judgment, including attorney fees and other co sts.” The statute except s from this proscription prejudgment interest on future damages for personal injuries. Perceptron, Inc. v. Sensor Adaptive Mach. , 221 F.3d 913, 922 (6th Cir. 2000) (citing Mich. Comp. Laws Ann. § 600.6013(6) (West Supp. 2000)). The Sixth Circuit in Perceptron further articulates that [w]e are convinced Michigan law requi res that prejudgment interest be calculated in this case on the entir e judgment from t he date that the complaint was filed. The prejudgment interest statut e is remedial in nature and is to be construed liberally in fa vor of the prevailing party. The purpose of awarding statutory prej udgment interest is not only to compensate the prevailing party for the delay in the use of the money, but also to offset the costs of bringi ng the action and to provide an incentive for prompt settlement. The statute must be applied in accordance with its plain terms. Id. at 923 (citations omitted). In view of the arguments made, we agree with Venture that damages in this case should have been ca lculated from the dat e the complaint was filed rather than when the damages accrued. See also Ayar v. Foodland Distribs. , 698 N.W.2d 875, 877 (Mich. 2005) (f inding the language of section 600.6013(8) “to be clear

04-1486, -1488 11and unambiguous”); Morales v. Auto-Owners Ins. Co. , 672 N.W.2d 849 (Mich. 2003) (holding that “the language of MCL 600.6013 unambiguously st ates that prejudgment interest is to be calculated from the date the complaint is filed”).
IV. In sum, we affirm the district court’s rulings on the evidentiary and procedural issues, however, we conclude that the distri ct court did err in calculating prejudgment interest. In this case, the proper date to calculate prejudgment inte rest is the date of filing the complaint. We, therefore, vacate t he district court’s calculation of prejudgment interest and remand the case to the distri ct court to re-calculate the prejudgment interest consistent with this opinion, and subject to the outcome of the remand proceedings in the companion case.

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