NOTE: This disposition is nonprecedential. 

United States Court of Appeals 

for the Federal Circuit ______________________ 

IN RE: CALIFORNIA EXPANDED METAL 

PRODUCTS CO.,

Defendant-Appellant

______________________ 

2023-1140

______________________ 

Appeal from the United States District Court for the 

Central District of California in No. 2:20-cv-10409-MCSJEM, Judge Mark C. Scarsi.

______________________ 

Decided: March 20, 2024

______________________ 

RAYMOND JOSEPH TROJAN, Trojan Law Offices, Beverly 

Hills, CA, argued for appellant. Also represented by DYLAN 

C. DANG. 

______________________ 

Before DYK, MAYER, and TARANTO, Circuit Judges.

TARANTO, Circuit Judge. 

California Expanded Metal Products Co. (CEMCO) 

owns several patents that describe and claim fire-retardant 

head-of-wall assemblies. In 2020, Seal4Safti, Inc. filed an 

action in district court seeking a declaratory judgment of 

noninfringement, unenforceability, and invalidity of several of those patents, and CEMCO filed affirmative 

Case: 23-1140 Document: 30 Page: 1 Filed: 03/20/2024
2 IN RE: CALIFORNIA EXPANDED METAL PRODUCTS CO. 

defenses and counterclaims for patent infringement. In a 

2022 trial, a jury determined that Seal4Safti had willfully

induced infringement of all asserted patent claims and 

awarded CEMCO damages in the form of a reasonable royalty. J.A. 1267–69. Subsequently, the district court denied 

CEMCO’s request for a permanent injunction, J.A. 50–52, 

and set aside the jury’s damages award on the ground that 

CEMCO did not meet its burden to prove the amount of a 

reasonable royalty, Seal4Safti, Inc. v. California Expanded 

Metal Products Co., No. 20-cv-10409, 2022 WL 16710721, 

at *3–4 (C.D. Cal. Oct. 3, 2022) (Post-Trial Order); see also 

id. at *5–6 (finding case exceptional and declaring CEMCO 

entitled to attorney’s fees). The court entered judgment for 

CEMCO on all its claims and against Seal4Safti on all its 

claims, but awarded “no monetary or injunctive relief.” 

J.A. 1200. 

On appeal, CEMCO challenges the denial of monetary 

and injunctive relief. We affirm the district court’s setting

aside of the jury’s royalty award but vacate the denial of 

the permanent injunction and remand the case for further 

proceedings.

I 

CEMCO is the current owner of the five patents at issue in this case: U.S. Patent Nos. 7,681,365; 7,814,718; 

8,136,314; 8,151,526; and 10,406,389. The patents generally describe and claim fire-retardant assemblies for the 

top of a wall, the assemblies including an intumescent strip

that seals construction joints or gaps when exposed to heat. 

E.g., ’365 patent, Abstract. At the time of trial, there were

two dominant participants in the market for fire-retardant 

head-of-wall products that can be installed before construction of a wall is complete: CEMCO’s exclusive licensee, 

Clarkwestern Dietrich Building Systems LLC (ClarkDietrich), and Seal4Safti. J.A. 43. 

On November 13, 2020, Seal4Safti filed a complaint in 

the United States District Court for the Central District of 

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IN RE: CALIFORNIA EXPANDED METAL PRODUCTS CO. 3

California seeking declaratory judgments of noninfringement, unenforceability, and invalidity of the five abovelisted patents, and in response, CEMCO filed several affirmative defenses and counterclaims for patent infringement. The present litigation, originated by Seal4Safti, 

followed previously initiated litigation in which CEMCO 

and ClarkDietrich sought and obtained relief, based on several of the patents at issue in the present case, against 

Seal4Safti, individuals affiliated with Seal4Safti, and companies having a relation to Seal4Safti. See Seal4Safti, Inc. 

v. California Expanded Metal Products Co., No. 20-cv10409, 2022 WL 2199031, at *2 (C.D. Cal. Jan. 19, 2022) 

(summarizing history of this case); California Expanded 

Metal Products Co. v. Klein, No. 18-cv-00659, 2023 WL 

8086968, at *1 (W.D. Wash. Nov. 21, 2023) (summarizing 

parallel contempt proceedings).

In a May 2022 trial, a jury determined that CEMCO’s 

asserted patents were not invalid, concluded that 

Seal4Safti had willfully induced infringement of all asserted claims, and awarded damages of $156,000. J.A. 

1264–72. The damages award was based on a hypothetical 

royalty negotiation, which the jury determined would result in an ongoing royalty payment of 12% of $1,300,000 in 

sales made by Seal4Safti. J.A. 1269. After the jury trial, 

the district court held a bench trial on several remaining 

equitable issues, and it ruled against Seal4Safti on those 

issues, J.A. 45–50, except for denying CEMCO’s request for 

a permanent injunction to bar Seal4Safti from selling and 

advertising its firestopping products, J.A. 50–52. A few 

weeks later, the district court resolved the parties’ posttrial motions. As relevant here, the court granted 

Seal4Safti’s request to amend the anticipated judgment to 

set aside the jury’s damages award pursuant to Federal 

Rule of Civil Procedure 59(e). Post-Trial Order, 2022 WL 

16710721, at *3, *6.

The district court entered final judgment on October 3, 

2022. J.A. 1199–200. Seal4Safti timely filed a notice of 

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4 IN RE: CALIFORNIA EXPANDED METAL PRODUCTS CO. 

appeal and CEMCO timely filed a notice of cross-appeal. 

Seal4Safti soon moved to dismiss its appeal, explaining 

that it had decided to formally discontinue its operations, 

and we granted the motion, leaving only CEMCO’s crossappeal. We have jurisdiction under 28 U.S.C. § 1295(a)(1). 

II

A 

We first consider the district court’s decision to set 

aside the jury’s reasonable-royalty award. In reviewing the 

court’s decision on a motion under Rule 59(e), we use the 

standard of review applicable in the regional circuit. See 

CODA Development S.R.O. v. Goodyear Tire & Rubber Co., 

916 F.3d 1350, 1357 (Fed. Cir. 2019). The Ninth Circuit 

reviews a district court’s decision to alter or amend a judgment pursuant to Rule 59(e) for abuse of discretion. Kaufmann v. Kijakazi, 32 F.4th 843, 847 (9th Cir. 2022).

A Rule 59(e) motion may be granted when “necessary 

to correct manifest errors of law or fact upon which the 

judgment rests.” Allstate Insurance Co. v. Herron, 634 F.3d 

1101, 1111 (9th Cir. 2011). Here, the district court set 

aside the jury’s damages award as a matter of law because

it determined that the jury “had no basis to arrive at a reasonable royalty of 12%,” so the award was “based on impermissible speculation.” Post-Trial Order, 2022 WL 

16710721, at *3 (citing Amgen Inc. v. Hospira, Inc., 944 

F.3d 1327, 1341 (Fed. Cir. 2019) (“A jury’s damages award 

‘must be upheld unless the amount is grossly excessive or 

monstrous, clearly not supported by the evidence, or based 

only on speculation or guesswork.’” (quoting Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1310 (Fed. 

Cir. 2009)))). That ruling, we conclude, was not an abuse 

of discretion. 

At trial, CEMCO sought damages in the form of a reasonable royalty and adopted a hypothetical-negotiation approach incorporating a familiar recitation of facts courts 

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IN RE: CALIFORNIA EXPANDED METAL PRODUCTS CO. 5

have considered within that framework, set forth in Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 

1120 (S.D.N.Y. 1970), modified on appeal sub nom. Georgia-Pacific Corp. v. U.S. Plywood-Champion Papers Inc., 

446 F.2d 295 (2d Cir. 1971). CEMCO presented several 

pieces of evidence corresponding to several Georgia-Pacific

considerations. See, e.g., J.A. 363 (testimony about ClarkDietrich’s sales under its license); J.A. 1131–32 (total sales 

of Seal4Safti’s fire-retardant gasket products); J.A. 1147–

50 (inventor’s declaration discussing the benefits, commercial success, and popularity of patent-covered products); 

J.A. 1172–90 (profitability of similar products). But the 

district court concluded that CEMCO did not provide adequate testimony tying this evidence to any particular royalty rate, and CEMCO has not identified such evidence on 

appeal.1 CEMCO first presented its proposed royalty rate 

of 20% in its closing arguments, and its analysis of GeorgiaPacific considerations was limited to attorney argument. 

See, e.g., J.A. 293 (arguing ClarkDietrich’s dominance in 

the market would “drive[] up” the reasonably royalty); J.A. 

294–95 (arguing the commercial success of patent-covered 

products “is significant”). 

1 CEMCO notes in this court that it also sought to 

introduce several prior licensing and settlement agreements that, it says, would have provided evidence of comparable licensing rates. The district court excluded that 

evidence due to deficiency of the disclosure required by 

Federal Rule of Civil Procedure 26. J.A. 755–56. In this 

court, CEMCO does no more than assert that the exclusion 

of the evidence was improper; it does not develop an argument challenging the exclusion of the evidence. We therefore consider the argument forfeited. See Rodriguez v. 

Department of Veterans Affairs, 8 F.4th 1290, 1305 (Fed. 

Cir. 2021).

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6 IN RE: CALIFORNIA EXPANDED METAL PRODUCTS CO. 

“The burden of proving damages falls on the patentee.” 

Lucent, 580 F.3d at 1324. And when a party chooses to use 

a hypothetical-negotiation framework, “while mathematical precision is not required, some explanation of both why 

and generally to what extent the particular factor impacts 

the royalty calculation is needed.” Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 31 (Fed. Cir. 2012). We 

find no error in the district court’s conclusion that, as a 

matter of law, CEMCO failed to carry its burden to prove 

damages for lack of such explanation of the proper royalty 

rate in its evidence. See Exmark Manufacturing Co. v. 

Briggs & Stratton Power Products Group, LLC, 879 F.3d 

1332, 1350 (Fed. Cir. 2018) (requiring claimant to “carefully tie” Georgia-Pacific considerations “to the proposed 

royalty rate”); see also Whitserve, 694 F.3d at 31–32. 

B 

We next turn to the district court’s denial of CEMCO’s 

request for a permanent injunction. A plaintiff seeking a 

permanent injunction “must demonstrate: (1) that it has 

suffered an irreparable injury; (2) that remedies available 

at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of 

hardships between the plaintiff and defendant, a remedy 

in equity is warranted; and (4) that the public interest 

would not be disserved by a permanent injunction.” eBay 

Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). We 

review a district court’s denial of a permanent injunction 

for abuse of discretion. Robert Bosch LLC v. Pylon Manufacturing Corp., 659 F.3d 1142, 1147 (Fed. Cir. 2011). A 

district court abuses its discretion if it bases its ruling on 

“‘an error of law or clearly erroneous factual findings’” or 

commits “‘a clear error of judgment in weighing relevant 

factors.’” Ecolab, Inc. v. FMC Corp., 569 F.3d 1335, 1352 

(Fed. Cir. 2009) (quoting Innogenetics N.V. v. Abbott Laboratories, 512 F.3d 1363, 1379 (Fed. Cir. 2008)). 

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IN RE: CALIFORNIA EXPANDED METAL PRODUCTS CO. 7

The district court based its denial of a permanent injunction solely on a finding that CEMCO had failed to 

demonstrate an irreparable injury. J.A. 51. And it based 

that finding solely on its reading of our decision in ActiveVideo Networks, Inc. v. Verizon Communications, Inc., 694 

F.3d 1312 (Fed. Cir. 2012). The district court read that decision as standing for the proposition that “[w]henever a 

patentee only stands to lose licensing fees for the sale of a 

product when the licensee is not joined in the case,” an injunction should be denied because “‘[s]traightforward monetary harm of this type is not irreparable harm.’” J.A. 51 

(quoting ActiveVideo, 694 F.3d at 1338). 

The district court gave too broad a reading to ActiveVideo, which is materially different from the present case. In 

ActiveVideo, the plaintiff patent owner was ActiveVideo, 

and the injunction it obtained against defendant Verizon 

(for infringement) was based on Verizon’s competition with 

Cablevision, a licensee of ActiveVideo. See 694 F.3d at 

1337–38. This court, holding the issuance of the injunction 

to have been improper, id. at 1337–41, explained that “Cablevision does not have an exclusive license to the patents 

at issue,” id. at 1338, and that it was “conclud[ing] only 

that in light of the record in this case, which shows extensive licensing, licensing efforts, solicitation of the defendant over a long period of time preceding and during 

litigation, and no direct competition between [defendant 

and plaintiff], it was clearly erroneous for the district court 

to conclude that money damages would not adequately 

compensate” the plaintiff, id. at 1340. The court did not 

conclude that, on different facts, particularly where a patentee has granted an exclusive license to a third party to 

sell patent-covered products, the patentee may not suffer 

irreparable harm from infringement. Such an exclusivelicensing patentee might well face harm beyond the simple 

loss of reliably measurable licensing fees, including price 

erosion, damage to intangible reputation, harm to brand 

loyalty, and permanent loss of customers. See Robert 

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8 IN RE: CALIFORNIA EXPANDED METAL PRODUCTS CO. 

Bosch, 659 F.3d at 1152–55 (finding irreparable harm even 

though neither the plaintiff nor defendant directly sold patent-covered products to customers). ActiveVideo does not 

foreclose consideration of such issues in this case.

Because the district court based its denial of injunctive 

relief solely on its erroneous conclusion that CEMCO stood 

only to lose licensing fees and thus failed to demonstrate 

an irreparable injury, the court did not make additional

findings necessary for the injunctive-relief inquiry. We 

therefore vacate the court’s denial of injunctive relief and 

remand for the court to reconsider the appropriateness of 

CEMCO’s requested permanent injunction.

III

We have considered CEMCO’s additional arguments 

and find them unpersuasive. For the foregoing reasons, we 

affirm the district court’s decision to set aside the jury’s 

damages award, vacate the court’s denial of injunctive relief, and remand for further proceedings consistent with 

this opinion.

CEMCO shall bear its own costs. 

AFFIRMED IN PART, VACATED IN PART, AND 

REMANDED

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