Source: https://es.scribd.com/document/379003222/Microsoft-Corporation-v-Corel-Order-Regarding-Post-Trial-Motions
Timestamp: 2019-04-19 23:24:46+00:00

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24 GRANTED IN PART and DENIED IN PART.
on November 8. 2016. 2015. Dkt. the Court denied Corel’s motion. and contesting the validity of each of 10 the Asserted Patents. all three 2 entities are owned the same private-equity firm. No. Corel answered on 9 February 17.”) ¶¶ 29-129. Dkt. 15 Meanwhile. No. On January 12. and D’532 patents.501 5 (“the ’501 patent”). Corel notified the Court that “[w]hile [it] believes 16 strongly in its defenses of non-infringement and invalidity.532 (“the D’532 patent”). 2017. No. Dkt. Corel moved to amend its answer 11 to add a defense of express license to Microsoft’s claim that Corel infringed the ’980 patent. 170. 18 115 at 2. D550. 47.255. Dkt. 244. denying all allegations of infringement. Patent Nos. 2016. Dkt. D564. in which Corel 19 admitted each of Microsoft’s infringement allegations and withdrew various affirmative defenses. Northern District of California United States District Court 13 On May 23. 1. 20 including its invalidity defenses.1 (2) the proper amount of 26 1 27 In its pretrial statement. 24 The parties proceeded to trial on the remaining disputed issues: (1) whether Microsoft gave 25 pre-suit notice to Corel of any of the D’237. 2017. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 2 Page of 192 of 19 1 Software.510. No. the Court granted 23 Microsoft’s motion. No. The Court granted Corel leave to file a Second Amended Answer. 153 at 2. 2016. Microsoft dropped this issue during trial.036 (“the ’036 patent”). 7. No. Complaint (“Compl. 3 Microsoft initiated this case on December 19. Dkt.415 (“the ’415 patent”).047. as the 28 Case No. and D570. Dkt.237 (“the D’237 patent”). 214. No. Dkt. On December 11. 120. 7. Dkt. 8. Microsoft moved for partial summary judgment with respect to 22 Corel’s remaining liability defenses. LLC is a separate legal entity from the two defendants in this case. No.” Dkt. however.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 2 . alleging that Corel infringed nine 4 patents relating to graphical user interfaces in software applications: U.865 (“the D’865 patent”) (collectively. to properly develop and prove out 17 those defenses will simply cost more than the damages could rationally be in this case. On May 23. 12 No. However. disposing of all liability issues in the case. 28. 2016. Microsoft also identified pre-suit notice of the D’140 patent as a disputed issue. 8 “the Asserted Patents”).140 (“the 7 D’140 patent”). Nos. No.S. 21 On January 12.703. 121. Answer. D’532.980 (“the ’980 patent”).715. Corel moved for early partial summary judgment on its express license 14 defense. Dkt. 154. D554. 5. 5.828 (“the 6 ’828 patent”). 2017. 49.
and D’532 patents was willful. 641:6-642:22. 3 No. If final judgment is entered that Corel did not willfully infringe: a.2 See Dkt. the 26 ’415 patent. The damages for the ’980 patent are $16. 4 stipulating to damages for the ’501. ’036. See Trial Tr. ’036. 2018. The damages for the ’415 patent are $50. the parties stipulated that: 21 1. 304. No. ’415. construed in the light most favorable to the nonmoving party. No. 310. the parties filed a joint stipulation further narrowing these issues. 3 Specifically. and (3) whether Corel’s 2 infringement of the ’828. and 9. Dkt. D’140.3d 592.000. D’237.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 3 . 20 See Dkt. 305. or the stipulation at trial. Nos. § 285. and reasonable attorneys’ fees pursuant to 35 U. Corel CAD. No. 244. D’140.S. 6 The Court held a jury trial on February 6. Dkt. 24 5. Dkt. On the eve of trial. 310. No. LEGAL STANDARDS 12 A. 4. 840 F. 2016) (quotation marks omitted). the jury returned a verdict that (1) Microsoft had not given Corel pre- 8 suit notice of the D’237.4 Dkt. 2018. D’237. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 3 Page of 193 of 19 1 damages for Corel’s infringement of each of the Asserted Patents. b. 7 318. 302. D’532. City of Anaheim.000 in 9 damages. The instant post-trial motions followed. D’532. the ’501 patent. 6. whether Microsoft was entitled to enhanced damages and/or its costs. The damages for the ’501 patent are $50. and D’532 10 patents. (2) Microsoft was entitled to $287. If final judgment is entered that Corel willfully infringed any patent: 23 a. No. expenses. 534:9- 538:21. 604 (9th Cir. permits 15 only one reasonable conclusion.000. The parties agree that they will not refer to the ’980 patent. and that conclusion is contrary to that of the jury. 11 II. and ’980 patents and eliminating certain products from 5 the case. Judgment as a Matter of Law Northern District of California United States District Court 13 Federal Rule of Civil Procedure 50 permits a district court to grant judgment as a matter of 14 law when “the evidence. 324. Dkt.000. 302. 4 27 The Court also held proceedings on February 8. 244. 316.C. On February 13. 2 19 The parties also disputed. The damages for Corel’s sales of Corel CAD 2014-2016 are $24.3 Dkt.667.000. 319. 22 3. 7. The court must 17 18 infringing products were not using the design of the D’140 patent in 2009. The damages for Corel’s sales of Corel CAD 2014-2016 are $5.000. No. 2. as a non-jury issue. 2018 to hear argument on the parties’ motions for judgment as a matter of law. and D’532 patents. Corel CAD 2017 is not accused of infringement by Microsoft in this litigation. 28 Case No.” Estate of Diaz 16 v. The damages for the ’415 patent are $150. D’532. and (3) Corel had willfully infringed the ’828. 25 b.
” Id.” Id. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 4 Page of 194 of 19 1 draw all reasonable inferences in favor of the nonmoving party.” Id. 15 bad-faith. In Halo Elecs. Portec. 1933. Ed. 1995)). deliberate. Ct.” such as those “typified by willful misconduct. “[T]he court should give credence to the evidence 3 favoring the nonmovant as well as that ‘evidence supporting the moving party that is 4 uncontradicted and unimpeached. the court “may not make credibility determinations or 7 weigh the evidence. 150 (2000). Enhanced Damages Pursuant to 35 U. malicious.. at 1933-34. However. Inc. § 284. at 151 (quoting 9A C.S..S. Nevertheless. 1935. at least to the extent that evidence comes from disinterested 5 witnesses.C. “courts should continue to take into account the 18 particular circumstances of each case in deciding whether to award damages.S. 970 F.’ “ Id. Sanderson Plumbing 2 Prods. 8 B. 1992). In addition. 1931. and in what 19 amount.” 136 Northern District of California United States District Court 13 S.. the Supreme Court 11 held that § 284 “contains no explicit limit or condition” on when a district court may award 12 enhanced damages. This “sort of conduct warranting enhanced 14 damages has been variously described in [Supreme Court] cases as willful.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 4 . Federal Practice and Procedure 6 § 2529 at 300 (2d ed.. courts “may increase the damages up to three times the amount 10 found or assessed. Inc. or—indeed—characteristic of a pirate. consciously wrongful. Inc. at 1933. “culpability is generally measured 23 against the knowledge of the actor at the time of the challenged conduct. in Read Corp. v..” Id. None of these behaviors (including willfulness) are prerequisites for or automatic 17 entitlements to enhanced damages. § 284 9 In a case of infringement. wanton. but instead allows courts to “punish the full range of culpable behavior. 195 L. 1923. Reeves v.” 21 Id.3d 816. at 1933 (citation 24 omitted). the 25 Federal Circuit enumerated eight factors that may guide an analysis of “the egregiousness of the 26 defendant’s conduct based on all the facts and circumstances. 16 at 1932.” The Read factors include: 27 (1) whether the infringer deliberately copied the ideas or design of 28 Case No. Pulse Elecs. at 150. Miller. 530 U. instead.” 35 U.C. enhanced damages are generally reserved for “egregious 20 cases of misconduct beyond typical infringement.. 22 In assessing the egregiousness of an actor’s behavior. Inc. 826-27 (Fed. 2d 278 (2016). Cir. flagrant. 133. v. Wright & A.
2d 455 (1994)). Ct. DISCUSSION 25 A.3d 1209. 510 U. (4) defendant’s size and financial condition. 24 III.C. 2011) (“[W]e are 15 mindful that the district court has lived with the case and the lawyers for an extended period. at 14 1756. 1225 (Fed. Ed. (2) whether the infringer.S. 329) 26 Corel moves the Court to remit the jury’s damages award to $99.” Octane Fitness. 1324 (Fed. Id. investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed. A 22 movant must establish its entitlement to attorneys’ fees under § 285 by a preponderance of the 23 evidence.” Octane Fitness. 449 F. when he knew of the other’s 1 patent protection. 12 Northern District of California “District courts may determine whether a case is ‘exceptional’ in the case-by-case exercise United States District Court 13 of their discretion. Inc. Corel’s Motion for Remittitur (Dkt. considering the totality of the circumstances.S. In 16 considering the totality of the circumstances. (6) duration 3 of defendant’s misconduct. (3) 2 the infringer’s behavior as a party to the litigation. Cir. including “frivolousness.S. 2d 816 (2014). see also Eon-Net LP v.”). objective unreasonableness (both in the 19 factual and legal components of the case) and the need in particular circumstances to advance 20 considerations of compensation and deterrence.. the Supreme Court suggested that district courts 17 could consider ‘nonexclusive’ factors it previously set forth concerning a similar provision in the 18 Copyright Act. 134 S. Inc. No.S. 188 L. ICON Health & Fitness.. 1023. the Supreme 8 Court explained that an exceptional case “is simply one that stands out from others with respect to 9 the substantive strength of a party’s litigating position (considering both the governing law and the 10 facts of the case) or the unreasonable manner in which the case was litigated. 134 11 S.6 (citing 21 Fogerty v. Ct. 1749.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 5 . 127 L. LLC v. In Octane Fitness. Vaughan Co.. Ed. 653 F. Cir. 5 C. ––––. (5) closeness of the case. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 5 Page of 195 of 19 another. 2006). Fantasy. Flagstar Bancorp. Ct. at 1758. (7) remedial action by the defendant. 517. 114 S. v. Attorneys’ Fees Pursuant to 35 U.3d 1314. 534. 1756. less any amount the 27 28 Case No. § 285.Ct. 134 S.000. at 1756 n.C. 4 Liquid Dynamics Corp. (8) defendant’s motivation for harm.” 35 U. motivation. § 285 6 “The court in exceptional cases may award reasonable attorney fees to the prevailing 7 party.” ––– U.
Dkt. § 289 provides that: 21 Whoever during the term of a patent for a design. 336. 2015 (the day Microsoft filed suit) through February 13. the jury’s damages award was excessive. This number was the sum of (1) 7 $74. Accordingly.”).” it cannot recover 19 disgorgement damages.000 in damages. because Microsoft only presented evidence of profits from a 18 software product (Corel Home Office) and not a physical “display screen. Id.” refers collectively to the trial transcripts located at Dkt. Exs. 26 322 (for pages 226-426). 2018. Trial Tr. 2009 (6 years before the date Microsoft filed suit) to February 13.6 Northern District of California United States District Court 13 B. 321 (for pages 1-225). Microsoft does not oppose this motion. 329-2 and 329-3. 2018. if the jury concluded that Microsoft did 4 not provide Corel with pre-suit notice of the D’237. (1) applies the patented design.5 373:11-18.C. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 6 Page of 196 of 19 1 Court holds that Microsoft is not entitled to recover in view of Corel’s renewed motions for 2 judgment as a matter of law. Dkt. 28 Case No. A and B. § 289. § 289 (Dkt. Microsoft’s damages expert testified that. and D’532 patents. Dkt.C. 6 27 As discussed below. 323 (for pages 427-530). D’532. infra. 330) 14 Corel renews its motion for judgment as a matter of law that Microsoft is not entitled to 15 disgorgement damages under 35 U. No. See Sections III. Microsoft was 5 entitled to $99.S.S. 335.C. or (2) 23 sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the 24 25 5 “Trial Tr. Nos.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 6 . 329. 324 (for pages 531-696) and 325 (for pages 697-713). to any article of manufacture for the purpose of sale. Dkt. 16 D’532. Corel argues that the D’237. or any colorable imitation thereof. Corel’s Renewed Motion for Judgment as a Matter of Law that Microsoft is Not Entitled to Disgorgement Damages Under 35 U. this amount need not be further reduced in view of the Court’s rulings on Corel’s renewed JMOLs. 3 At trial.S. No.B and III. Microsoft disagrees. and D’532 patents (collectively. D’140. In view of 11 this testimony. the Court agrees with Corel 12 and Microsoft and will remit the jury’s damages award to $99. 20 35 U. Nos.000 for disgorgement of Corel’s profits for sales of Corel Home Office received from 8 December 18. without license of 22 the owner. No.000.C. “the Design Ribbon Patents”) claim a “display screen” as 17 their article of manufacture and. and (2) $25. No. see also Declaration of Megan Wood 6 (“Wood Decl. 330.000 as a 9 reasonable royalty for Corel’s infringement of the Utility Design Patents occurring from 10 December 18. No. Dkt.
Apple Inc. is simply a thing made by hand or machine. identify the ‘article of 3 manufacture’ to which the infringed design has been applied. 123. at 101 (“[a]n individual thing or element of a 9 class. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 7 Page of 197 of 19 owner to the extent of his total profit. Stormonth. Corel’s arguments are not persuasive. An article of 12 manufacture.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 7 . 196 L. 2d 363 (2016). Thus. . claim. The 25 Design Ribbon Patents all claim “[t]he ornamental design for a user interface for a portion of a 26 display screen. 24 Corel’s focus on the claim language of the Design Ribbon Patents is misplaced. As the Supreme Court recently explained. or process of manufacturing products.” Samsung. craft. claim. Corel has already admitted that its products—including Corel Home Office— 16 infringe the Design Ribbon Patents. see also American Heritage Dictionary. 2 Determining a damages award under § 289 “involves two steps.” Stormonth 589. And “manufacture” means “the conversion of raw materials by the hand. Microsoft is not precluded.. Dkt. 1 recoverable in any United States district court having jurisdiction of the parties. 116. into 10 articles suitable for the use of man” and “the articles so made. a particular object or item”). but not less than $250. . then. Second. Corel has already admitted that there exists an “article of manufacture” to 18 which the patented designs of the Design Ribbon Patents have been applied. .” Samsung Elecs.” D’237 patent. claim.” and thus can be an 21 “article of manufacture. the Design Ribbon Patents claim a design for a “user 28 Case No. as a 22 matter of law. A Dictionary 8 of the English Language 53 (1885) (Stormonth). 17 109. Second Amended Answer (“SAA”). even if the Court were to consider Corel’s arguments on the merits. they do not 20 compel a contrary result. First. 137 S. Co. As an initial matter. Ct. 15 they are waived. claim. Ed. 121. at 434. Thus. at 1070 11 (“[t]he act. D’532 27 patent. Thus. at ¶¶ 102. especially on a large scale” or “[a] product that is manufactured”). calculate the infringer’s 4 total profit made on that article of manufacture. Ct. see also American Heritage Dictionary. Software is “a thing made by hand or machine. v. Northern District of California United States District Court 13 Id. 14 In view of these principles. 19 Moreover. 5 429. No. “article of 6 manufacture” has a “broad meaning:” 7 An “article” is just “a particular thing. or by machinery. as shown and described . D’140 patent. 137 S.” J. 434. D’532 patent. from disgorgement damages because the infringing article of manufacture is a 23 software product.
7 See SAA ¶¶ 102. Corel’s motion 5 is DENIED.” It is certainly possible to “appl[y] [this] patented design” to the user interface of a 2 software product (and therefore infringe). Inc. Corel’s Renewed Motion for Judgment a Matter of Law Barring Microsoft from Recovering Both Section 284 and Section 289 Damages (Dkt. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 8 Page of 198 of 19 1 interface. 6 C.C. Microsoft disagrees. according to Corel. 116. though—the “patented design” of the Design Ribbon Patents is broad enough that it could be “applie[d]” to software. v. 295 F. Inc.” Such is not the case here. but in no event less than a 20 reasonable royalty for the use made of the invention by the infringer. The Court also finds this reasoning persuasive. 23 24 7 25 At the hearing. Microsoft is not precluded from 4 disgorgement damages because its “article of manufacture” is a software product. Id.C. (quoting 35 U. by its plain language. 123. which is precisely what Corel admitted it did in Corel 3 Home Office. 28 Case No. which.C. 331) 7 Corel renews its motion for judgment as a matter of law that Microsoft is not entitled to 8 recover from Corel both reasonable royalty damages under 35 U. Microsoft also pointed out that § 289. No. 331.3d 1277. Dkt. No.S. [the patentee] is not 18 entitled to a further recovery from the same sale because the award of infringer profits under § 289 19 also constitutes ‘damages adequate to compensate for the infringement. § 284 and disgorgement 9 damages under 35 U.S. the Federal Circuit addressed the question of 15 “whether a patentee may recover infringer profits and a reasonable royalty when both a design 16 patent and a utility patent have been infringed by the sale of a single product. No. 109. United States District Court 13 In Catalina Lighting. this principle does not warrant a reduction of Microsoft’s damages. 22 Applied here. 337. contemplates damages where a “patented design” is applied to “any article of manufacture. Lamps Plus. holds 11 that patentee asserting both design and utility patents against the same product can only recover 12 Northern District of California one type of damages. Corel 10 argues that to hold otherwise would violate Federal Circuit law. 1291 (Fed. Cir.” separate from the 26 language of the claim. 21 § 284).: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 8 . Dkt. Accordingly. 2002) (the 14 primary case which Corel relies on in its motion).S. § 289 for Corel’s sales of Corel Home Office.” The court 17 concluded that “once [a patentee] receives profits under § 289 for each sale. with the caveat that it may sometimes be the case that a “patented design” is claimed so narrowly that it cannot be “applie[d]” 27 to certain “article[s] of manufacture..’” Id.
Inc. Cal. 09-CV-05235-MMC. Inc. Microsoft’s Motion for Attorneys’ Fees. 2017).D. v. 2015). for the 6 period running from December 18. Jan. 30. could have occurred during the period 10 running from December 18. 18 D. Microsoft did precisely this: it sought and the jury awarded $74. plus the $25. 27 13-CV-05038 NC. No. v. because Microsoft did not recover both types 16 of profits for any of its infringing sales. Thus. Nov.000 reasonable royalty that it recovered from 15 infringing sales prior to December 18. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 9 Page of 199 of 19 1 Although it is true that. Cal. See. 333) 19 Microsoft moves for attorneys’ fees. F5 Networks. However. Inc. as many other courts in this District have done. 10. Microsoft sought and the jury awarded precisely this in the amount 8 of $25. 2016). a patentee cannot recover both § 284 and § 289 2 damages for the same sale of an infringing product. Microsoft was entitled to recover reasonable royalty damages beginning in 2009. and pre-judgment interest. e. it had 12 to choose one. 2017 WL 130236 (N. and. Microsoft could only recover disgorgement damages beginning in 2015. No.000.D. beginning with enhanced damages. Aug. 2015 to February 13. 2015.000 in profits. v. 2016 WL 4208236 (N. and Pre- Judgment Interest (Dkt. The Court addresses each of these issues.g. Aug. AAT Bioquest. 14-CV-03909-DMR.. Fairchild Semiconductor Int’l.. Microsoft could only recover 7 reasonable royalty damages. Enplas Display Device Corp. v. No. was just the 14 sum of these $74. Inc. Ltd. No. Cal. Radware. 2015. 20 Dkt.. the jury’s award does not fun afoul of Catalina Lighting.. 22. 2016 WL 4427490 (N. under Catalina Lighting.D. Costs. 2015 WL 7708332 (N. 2009 to December 17. Microsoft was entitled to recover 11 either reasonable royalty damages or disgorgement damages. Power Integrations. Microsoft’s final ask. Ltd. which were Northern District of California United States District Court 13 the total profits for Corel Home Office during that period. then. 5:13-CV-02024-RMW. 333. costs. Seoul Semiconductor Co.. Texas Fluorescence Labs.000. enhanced damages.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 9 . 2016). Inc. the Court finds it more appropriate to first address the question of enhancing 25 damages. which is the amount it would have cost Corel to design around Microsoft’s patents. No. the jury’s damages award does not run afoul 3 of this principle. 9 The only potential period of double recovery. then. There. 4 but. under Catalina Lighting.D. 17 Corel’s motion is DENIED. because the jury found that Microsoft did not give pre-suit notice of the Design Ribbon 5 Patents.8 21 22 23 8 24 The Court notes that the parties addressed attorneys’ fees before enhanced damages in their briefing... Thus. Cal. No. 2018. 28 Case No. 26 13. Enhanced Damages.
in a case of infringement. (6) Corel’s infringement began as early as 2009 and continued through trial in 2018. No.7. (3) Corel 16 engaged in litigation misconduct by refusing to make a non-zero settlement offer.” Mot. the extent to which (if any) 8 damages should be enhanced under § 284. § 284. At trial. and then 26 argues that enhancement is warranted “[f]or many of the same reasons enumerated above with respect to awarding attorneys’ fees. malicious. 4 or—indeed—characteristic of a pirate. at 1932. the jury found that 5 Corel willfully infringed Microsoft’s patents. (4) Corel is not 17 a small company and its revenue for the accused products . 19 (7) Corel presented no evidence that it took remedial action. intended to punish conduct 3 of the sort that is “willful.9 Motion for Attorneys’ Fees. and (8) Corel was motivated by 20 economic pressures. namely: (1) Corel set out to copy the entirety of the Ribbon interface. consciously wrongful. 21 Corel responds that it had a good faith belief that it could use the Ribbon. Enhanced Damages. the Court considers Microsoft’s arguments and Corel’s responses in its assessment of both issues. 27 12 n. courts “may increase the damages up to 2 three times the amount found or assessed.C. No. the Court’s sole task at this stage is to assess. deliberate. Opposition to Motion for Attorneys’ Fees. 136 S. Enhanced Damages. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 10 Page of 19 10 of 19 i. (5) this was not a 18 close case. bad-faith. 19. 339. 28 Case No. Corel reuses its arguments in a similar way. at 5-8.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 10 . 9 Microsoft argues that the Court should award enhanced damages in light of the jury’s 10 willfulness finding and the particular circumstances which underlie it. In particular. 6 See Dkt. wanton. Thus. in light of Corel’s willful 7 infringement and all of the other relevant circumstances of this case. Enhanced Damages 1 Under 35 U. as Microsoft had 22 been actively encouraging adoption of Ribbon-like user interfaces through its 2007 licensing 23 program. Microsoft 11 emphasizes that Corel set out to copy Microsoft Office. 19-21. No. Corel does not challenge this finding. Opp. Thus. Dkt. 12 Northern District of California a Corel customer. despite warnings from Microsoft and HP. Costs.”).S. 319. Dkt. and Prejudgment United States District Court 13 Interest (“Mot. 15 (2) Corel presented no good faith belief of non-infringement or invalidity at trial. Costs. Mot. flagrant. 333.” This is a punitive measure. Ct. Microsoft also argues that the Read factors support 14 enhancing damages.” Halo. and Prejudgment 24 25 9 Microsoft first makes these arguments in support of its request for attorneys’ fees.
” and “with [its] great 4 relationship with Microsoft. if we were to introduce a produce with a user experience 14 familiar to users of Office 2007.004.002. Dkt.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 11 . Ability responded that “they looked briefly at the legality of the ribbon UI a long time 25 back but decided they were too small for MS [Microsoft] to be concerned with.g. . 17 Corel touted at trial that it had a close. Trial Tr. the evidence in the 9 record suggests that Corel’s efforts to copy Microsoft’s Ribbon interface were deliberate. For example.” EX-23. an internal Corel document discussing the “strategy behind Corel Home 12 Office” noted that “[t]he gradual. and that 10 Corel at least had some awareness that it could be infringing Microsoft’s intellectual property in 11 the process. uptake of Microsoft Office 2007. the easiest course of action would be to sit down and figure out what 5 a fair price would be to resolve the issue. showed us that Northern District of California United States District Court 13 there might be an opportunity . Corel seemed nonchalant. For example. In addition. when pressed about its state of mind at the time. if 22 not careless. 19 See. No. 574:25-575:7. 553:5-554:11 (Corel CEO describing how Corel has been in a relationship with 20 Microsoft “for multiple decades” and the two companies “have a great working relationship”).]” 24 EX-38.” EX-48. but steady.005. 8-12.”). There 8 is no dispute that Corel willfully infringed Microsoft’s patents. longstanding relationship with Microsoft—in light of this. Corel also responds that it was reasonable for it to 2 continue to sell its infringing products after Microsoft filed suit and even after Corel stipulated to 3 infringement and validity because it believed this was “a very small matter. as one Corel email in 2009 notes that “concerns were raised 27 again [by HP] about potential lawsuits and patent infringements of the MSFT-like ribbon in 28 Case No. 339. Once implemented.” EX-73.006-007. 7 The Court agrees with Microsoft that some enhancement of damages is warranted. Corel also disputes that its 6 litigation conduct was unreasonable. Opp. at 8-9.” Trial Tr. and a product that is 16 “just about exactly like MS Office” but available “at a fraction of the price.001.. e.” EX-32. 18 it is difficult to believe that Corel had no awareness that the features it was copying were patented. Corel at one point asked Ability 23 if “someone [was] doing due diligence on the general risk to patent and trademark lawsuit[. Corel characterized Corel 15 Home Office as a “copy [of] MSO [Microsoft Office] 2007. . Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 11 Page of 19 11 of 19 1 Interest (“Opp. 21 Nevertheless. 26 Concerns were also raised externally. about the possibility of infringement.
5 infringed some of Microsoft’s patents and IP. 63 L.” Halo. Corel proceeded to sell Corel Home Office. United States v. but 14 it proceeded at its own peril. In December 2015. Corel ran the risk that it 19 may be on the hook for the continued. and made no effort to redesign them. Its 20 business decision does not absolve its conduct for the purposes of § 284. 28 Case No. 6 Microsoft filed the instant lawsuit. 307.001. 16 Colgate & Co. . the Court is not convinced that the damages should be 25 enhanced up to the full treble multiplier. there eventually 3 did come a time when Corel was aware that its products were infringing Microsoft’s patents. even if Corel did not initially appreciate the gravity of its actions. a Microsoft employee testified that she informed Corel in 2009 that “Corel Home Office . wanton. At 4 trial. Corel was entitled to make this business decision. Corel admitted that these patents were valid and infringed. enhanced damages is a 26 punitive measure. No 1. or—indeed—characteristic of a pirate. 121. willful infringement which it engaged in the meantime. Cf. throughout this entire time. malicious. or even refuse to license them entirely. 992 (1919) (discussing “the long 17 recognized right . . As the Supreme Court noted. Despite this. Dkt. 319:15-320:24. No. In sum. identifying the infringed patents by number.S. 8 Nevertheless. considering the 21 entire period from the development of Corel Home Office to the present.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 12 .” Trial Tr. Corel’s nonchalance 22 and—eventually—knowing indifference towards Microsoft’s patent rights is egregious enough 23 that the Court finds that the jury’s award should be enhanced. 7 Roughly one year later. deliberate. 300. 468. at the same time. 39 S. . Dkt. bad- 27 faith.. Ed. Corel’s CEO testified that Corel made no attempt to redesign or stop selling Corel 11 Home Office because this “seemed to be a very small matter” and he figured that “the easiest 12 course of action would be to sit down and figure out what a fair price would be for a license to Northern District of California United States District Court 13 resolve the issue. consciously wrongful. flagrant. was entitled to demand whatever 15 price it felt it deserved for its patents. . to exercise [one’s] own independent discretion as to parties with whom he 18 will deal”). Corel continued with its relatively nonchalant attitude: it 9 continued to sell its infringing products. as the property owner.” Trial Tr. 465. 10 At trial.” EX-12. In choosing to wait for a “fair price” which may never come. 574:25-575:7. 2 Further. 24 That said. Microsoft. Ct. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 12 Page of 19 12 of 19 1 CHO. 250 U. intended to punish conduct of the sort that is “willful.
000 (see Section III. the Court will double the $25.S. Trial Tr. “[t]he court in exceptional cases may award reasonable attorney 24 fees to the prevailing party. Corel’s actions do not seem to have 9 the overtly malicious character that has incurred enhanced damages in other cases. Bombardier Recreational Prod. Co. 198 F. at 1932. 16 the Court will decline to award full. attempted to conceal the infringement. aff’d. Cir.. Exceptional Case 23 Under 35 U. but proceeded anyways. the Court finds that some but not a complete enhancement of 18 damages is warranted under § 285. 3d 1343.. Goodwall Const. Adding this to the adjusted award of 20 $99. Corel’s attitude seems to have more of an air of carelessness or indifference—it knew that 4 patent infringement was a “concern. as described 3 above.” Instead.A. 7-18. 21 ii..000 in damages 19 which the jury awarded for Microsoft’s utility patents. Accordingly. Microsoft is the prevailing 25 party..000 in damages.” or “characteristic of a pirate.3d 1350 (Fed.D. 3-19.” “flagrant.” The parties do not dispute that. the issue before the Court is whether this is an 26 “exceptional case” justifying an award attorneys’ fees. 991 F. the Court is not convinced that 2 it rises to the level of “malicious. See. . Accordingly. e. or the unreasonable 28 Case No. 17 In light of the foregoing. assuming or hoping that 5 this would be a “small” matter in Microsoft’s eyes. 574:25-575:7 (Corel CEO testifying 6 that “seemed to be a very small matter”). see also EX-73. 758 (Fed. While Corel’s willful infringement was blatant. Co. .2d 751. Microsoft is entitled to $124. See Mot. v. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 13 Page of 19 13 of 19 1 136 S. 2017) (trebling damages where the accused infringer failed 12 to obtain an opinion of counsel.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 13 . v.” EX-12.C. and copied the patentee’s Northern District of California United States District Court 13 product). Ct.004 (Ability responding to Corel that 7 “they looked briefly at the legality of the ribbon UI a long time back but decided they were too 8 small for MS [Microsoft] to be concerned with”). treble damages. Fla. 11 2016). Cir. Supp. Attorneys’ Fees and Costs 22 a. here. Thus. Beers Const. 1993) (trebling 14 damages where the accused infringer willfully copied the patented process and attempted to 15 conceal information from its patent attorney when seeking an infringement opinion). A case can be “exceptional” either “with 27 respect to the substantive strength of [Microsoft’s] litigating position .001. § 285. Inc. As such. Opp.g. 876 F. 1353 (S. 10 Arctic Cat Inc. supra).
12 Corel disagrees that neither its infringement (including willfulness) nor the manner in Northern District of California United States District Court 13 which it litigated this case are exceptional. “[T]here is no 2 precise rule or formula for making these determinations. ultimately. Cir. 24 Advanced Micro Devices. 134 S.. Id. Corel argues that it had a 14 good faith belief that it could adopt a Ribbon-like interface in its products and that its decision to 15 continue selling its infringing products was reasonable. at 4-9.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 14 . Opp. and being unhelpful in pursuing foreign discovery. the results of the trial were mixed: Microsoft 19 prevailed in willfulness. Microsoft also argues that Corel behaved 9 unreasonably during this case by refusing to engage in settlement. Ct. 1582 (Fed. v.2d 198. Johnson & Son. 977 F. Inc. Id. Among other things. ignored warnings that it was infringing. v. but Corel prevailed in showing there was no pre-suit notice. Corel also points out that it 16 reasonably cooperated in settlement and that the way it pursued its claims and defenses was 17 reasonable. Opp. As one district court has 25 recently explained: 26 A finding of willful infringement for purposes of enhanced damages does not require a finding that a case is exceptional under § 285.C. but instead equitable discretion should be 3 exercised. Although willfulness can be a “compelling” 22 indicator that a case is “exceptional” under § 285. Corel also emphasizes that it voluntarily stipulated to infringement and 18 validity to streamline the case and that. Microsoft offers several theories as to why this was an exceptional case: (1) Corel 5 willfully infringed its patents. 781 F. 3-13. In particular. Mot. 977 F. 7-11. Cir. 28 Case No. Carter-Wallace. unreasonably pursuing 10 affirmative defenses and counterclaims. (2) Corel acted unreasonably with respect to settlement. S. Inc.. at 1756. Advanced Micro Devices. Id.2d 1555. Brooktree Corp. 20 After reviewing each of Microsoft’s theories and considering this case in its totality. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 14 Page of 19 14 of 19 1 manner in which the case was litigated. 7-9. 4 Here. Microsoft 7 highlights that Corel set out to copy Microsoft Office. it does automatically make it so. Inc. 1986).” Octane Fitness.2d 1555. and 6 (3) Corel acted unreasonably in litigating this case. 27 Brooktree Corp. Id. 201 (Fed. the 21 Court finds that this is not an exceptional case..” Id. 23 Inc. v. and 8 had no good faith defenses for infringement. at 11 9-13. at 9-12. 1992).
459 F. 4:14-CV-371. inappropriate conduct related to the matter in litigation.3d 1327. Wal-Mart Stores. do not make this case exceptional. No. 2. at *3 (E. 1321 (Fed. 1992). v.. However. supra. .. .. The parties 20 had a similar exchange four months later. Chang Decl.” Golight.D. 11 in and of itself. 332-10. Exs. Microsoft declined. Dkt.. Tex. Ltd. Dkt. 338-24. Ex. Chang Decl. . 2017 WL 7 4038883. Corel sent 17 Microsoft detailed estimates illustrating that the revenues at stake in this litigation were not worth 18 the fight and suggesting the parties drop the case. such as willful infringement. fraud or inequitable conduct 5 . Co. D. Corp. 2004). v..”). Samsung Elecs. Inc. No.. Corel’s willful infringement. 338-10. Nos. Dkt. No.”). Corel rejected this offer. 25 which was far from reasonable in its mind. Lamberson Decl. See Section III. Ex. and it did so with a certain degree of carelessness or 9 indifference. Dkt.i. No. 2017). 332-9. 338-12. Inc. Corel’s willful infringement does not 10 completely rise to the level of overt maliciousness. “the willfulness of the 1 infringement by the accused infringer may be a sufficient basis in a particular case for finding the case ‘exceptional’ for purposes of 2 awarding attorney fees to the prevailing patent owner. v.D. Declaration of Sabrina Chang (“Chang Decl. Dkt. No. 12 None of the other aspects of this case which Microsoft highlights pushes this case over the Northern District of California United States District Court 13 line. See 23 Chang Decl. 2006) (“Exceptional cases usually feature 4 some material. Sept. Dkt. Corel’s actions with respect to settlement. C. considered alone or in combination with the 14 other circumstances of this case. Nevertheless. 13. and Microsoft responded with its first monetary settlement offer of . 6 and 7. roughly one year after the suit began. No. 12. Plastic Recovery Techs. Cir. 1340 (Fed.. 24 Ex. it is clear that Corel 8 willfully infringed Microsoft’s patents. 19 Ex. is not sufficient to render this an exceptional case. Something more is needed. As such. Inc. Cir. See id. 3. Over the 26 course of the next year. 21 Then.3d 1311. Here. First. reasoning that it reflected a royalty rate. Ex. 355 F. 338-14 ad 338-16. the parties continued to exchange settlement offers up until the eve of 27 28 Case No.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 15 . Cir. see 3 Serio-US Indus. as discussed above. Declaration of Jonathan Lamberson (“Lamberson Decl.. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 15 Page of 19 15 of 19 1582 (Fed. A review of the parties’ 15 settlement history confirms that both parties actively engaged in settlement discussions. 6 Imperium IP Holdings (Cayman).”). Corel shared detailed financial information with 22 Microsoft. and acted 16 reasonably in their negotiations: Within three months of Microsoft filing suit.
In addition. Corel’s actions during litigation. See. given that a stipulation of willfulness not only could have had powerful 9 consequences for the issue of enhanced damages in this case but also for issues and bargaining 10 positions in the Utah litigation. Intel Corp. at *4 (E.. 2014 WL 6756304. Corel agree to 3 stipulate to willfulness. Microsoft continued to insist that.’”) (quoting Stragent. 6:11-cv-421. 14 and 15. they were neither frivolous nor brought in 17 bad faith. Dkt. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 16 Page of 19 16 of 19 1 trial. Exs.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 16 . Aug. However. The only issue that comes close is Corel’s continued pursuit of its express 22 10 23 24 25 26 27 28 Case No. the focus must be on 19 arguments that were frivolous or made in bad faith. 3:15-MD-02600-JD. 2017 WL 747329... do not make this case exceptional. Mot. it was not unreasonable for Corel to refuse to agree to this term. 5 Nothing about the parties’ behavior during these negotiations was unreasonable.D. Case 20 No. 2014) (Dyk. 214. 14 and 15. Circuit Judge.10 Lamberson Decl. 338-28 and 338- 2 30. 11 Accordingly. which Corel was not willing to do.D. Chang Decl. The 15 Court disagrees.. e. No. 4 The parties eventually reached impasse. 27. Given the 6 small amount of money that Corel estimated (and then trial confirmed) was at issue in this case.. 11-12. sitting 21 by designation)). considered alone or in combination with the Northern District of California United States District Court 13 other circumstances of this case.. See In re Protegrity Corp. Chang Decl. Dkt. 12 Second. nothing about its behavior during settlement makes this case exceptional. Exs. Exs. 18 Feb. Nos. Cal. at *3 (N. Although the Court ultimately disagreed Corel’s affirmative defenses and 16 counterarguments on summary judgment. 6. 2017) (“A ‘losing argument is not a relevant consideration. C and D. No. it 7 was not unreasonable for Corel to insist on a walk-away settlement. even up until a late stage in 8 this case. rather.g. Microsoft complains that 14 Corel was unreasonably stubborn in pursuing its counterclaims and defenses. LLC v. as a part of any settlement. Tex.
187. are sufficient to make this case exceptional. 24 In sum. No. 187. As such. refusing to help an opponent get third-party discovery is far from 14 litigation misconduct. Although Corel provides no response or Northern District of California United States District Court 13 explanation for its refusal. In addition. No. 28 Case No. is not enough to make this case exceptional. these recycled arguments “amount[ed] to an improper motion for 6 reconsideration. No.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 17 . 154. The Court denied Corel’s early motion for 2 partial summary judgment that Corel had an express license. Dkt. Accordingly. such tactics are often attempted by vigorous litigants and this isolated incident is not 8 enough. Corel’s efforts to 22 reduce issues and costs weigh against finding that it acted unreasonably such that this case could 23 be considered exceptional. by itself or in combination with other circumstances of this case. 18 Such an open effort to reduce costs and streamline litigation is rare in patent cases. this too. Accordingly. especially 19 when there are other issues that still remain to be tried. when considered in combination with 26 willfulness. However. because Corel’s willfulness in and of itself is not enough to render this an 25 exceptional case and because no other circumstances. even though Corel did not 20 prevail in its early motion for partial summary judgment on the express license issue. although Corel should not have made these 7 arguments. in opposing 3 Microsoft’s later motion for summary judgment on this defense. to make this case 9 exceptional. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 17 Page of 19 17 of 19 1 license defense for the ’980 patent. this too 21 reflects an attempt to streamline costs and issues early in the case. including 11 that Corel refused to accept service of the complaint for its Canadian parent and refused to help 12 get voluntary discovery from Ability and Graebert. No. Dkt. 10 Microsoft also complains that Corel did not assist it in getting foreign discovery. by itself or in combination with other circumstances 15 of this case. 214 at 3. Corel recycled some of the same 4 arguments that it used in its earlier motion. Id.” Dkt. As the Court noted in its summary 5 judgment order. 27 Microsoft is not entitled to fees or costs. this is not an exceptional case. but. See Dkt. 16 Instead. cutting against Microsoft’s complaints of unreasonable litigation conduct is the 17 fact that Corel stipulated to infringement and dropped its invalidity defenses early in the case.
This award “is intended to cover the lost investment 7 potential of funds to which the plaintiff was entitled. 6 Devex Corp. The Court has considerable 11 discretion in awarding prejudgment interest. Enhanced Damages. Corel’s motion for remittitur (Dkt. Cir. the Court GRANTS Microsoft’s request. ’828 patent. 295 F. See Catalina Lighting. v. ’828 patent. 28 Case No. Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 18 Page of 19 18 of 19 b. as well as for the CorelCAD product. Nicolet Instrument Corp. and Ribbon 14 Design Patents. The jury’s original 24 award will be reduced to $99. Reasonableness of Fees and Costs 1 Because Microsoft is not entitled to fees or costs. 969 (Fed. Although Devex addressed a royalty award under 9 § 284. Inc. Reply in Support of Motion for Attorneys’ Fees. Id. Id. 25 26 11 Microsoft has withdrawn its request for prejudgment interest for the ’501. 1994). and Ribbon Design Patents.. compounded annually. It proposes that the Court calculate interest from the issue date 16 of the ’036 and ’828 patents. Microsoft suggests that the Court use the U. ’415.11 Mot. 461 U. 329) is GRANTED. See Opp.. 648. 344. Treasury Bill rate. 3 iii.000. and Prejudgment Interest (“Reply”). Costs. the Court need not reach this issue. EG & G Energy Measurements 8 Grp. See Bio-Rad Labs. 1986). Inc. ORDER 22 For the foregoing reasons: 23 1. Pre-Judgment Interest 4 The purpose of awarding prejudgment interest is to compensate the patentee for “the 5 foregone use” of the royalty payments that the patentee never received. Motors Corp. Corel does not oppose any of these requests. 21 IV. 20 calculated according to the treasury bill rate.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 18 . 12 Northern District of California 807 F. 18 Based on this non-opposition.S. v. No. Dkt. the Federal Circuit has also upheld awards of prejudgment interest on awards of infringer's 10 profits under § 289. at 10. Microsoft is 19 entitled to prejudment interest for the ’036 patent.3d at 1292..3d 1384.S.” Nelson v.2d 964. 22-23. United States District Court 13 Here. 37 F. and ’980 27 patents. Gen. 2 Microsoft’s motion for fees and costs is DENIED. Microsoft requests prejudgment interest for the ’036 patent.. at 23.. 655-56 (1983). 15 compounded annually. No. 18. 1391 (9th Cir. and from the filing date of the Complaint for the Design Ribbon 17 Patents.
C. and pre-judgment 6 interest (Dkt. calculated according to the 9 treasury bill rate. 2018 Northern District of California United States District Court 13 __ ________________________________ EDWARD J.C.S. DAVILA 14 United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. compounded annually. Corel’s renewed motion for judgment as a matter of law that Microsoft is not 2 entitled to disgorgement damages under 35 U. 5 4. § 285.S. 7 § 284. 331) is DENIED. Microsoft is not entitled to recover attorneys’ fees or 10 costs under 35 U. Microsoft’s motion attorneys’ fees. § 289 (Dkt.: 5:15-cv-05836-EJD ORDER REGARDING POST-TRIAL MOTIONS 19 . Case 5:15-cv-05836-EJD Case 5:15-cv-05836-EJD Document Document 353 *SEALED* 357 Filed 05/11/18 Filed 05/08/18 Page 19 Page of 19 19 of 19 1 2.C. costs. Corel’s renewed motion for judgment as a matter of law that Microsoft is barred 4 from recovering damages under 35 U.000 and the Court awards prejudgment 8 interest for the ’036 patent. No.S. § 289 (Dkt. No. 333) is GRANTED IN PART and DENIED IN PART. and Ribbon Design Patents. No.C.S. § 284 and 35 U. enhanced damages. Pursuant to 35 U. 330) is DENIED. ’828 patent. the jury’s damages award is enhanced to $124.C.S. 12 Dated: May 8. 3 3. 11 IT IS SO ORDERED.

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