Opinion ID: 4219733
Heading Depth: 2
Heading Rank: 1

Heading: Promega’s Burden to Prove the Amount of Damages

Text: In patent cases, “[t]he burden of proving damages falls on the patentee,” Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009), and “[t]he [patentee] must show his damages by evidence,” Philp v. Nock, 84 U.S. 460, 462 (1873). Damages “must not be left to conjecture by the jury. They must be proved, and not guessed at.” Id. When a patentee seeks lost profits as the measure of damages, “the patent holder bears the burden of proving the amount of the award.” Minco, Inc. v. Combustion Eng’g, Inc., 95 F.3d 1109, 1118 (Fed. Cir. 1996) (emphasis added). “[T]he amount of a prevailing party’s damages is a finding of fact on which the plaintiff bears the burden of proof by a preponderance of the evidence.” SmithKline Diagnostics, Inc. v. Helena Labs. Corp., 926 F.2d 1161, 1164 (Fed. Cir. 1991). “[T]he amount is normally provable by the facts in evidence or as a factual inference from the evidence.” Lindemann, 895 F.2d at 1406. II. Promega’s Waiver of Alternative Damages Arguments The linchpin of the district court’s rulings on Life’s JMOL motion and Promega’s motion for a new trial is its finding that Promega waived any argument that the trial record supports a damages calculation based on a subset of Life’s total worldwide sales. In Promega I, we held that all of the accused products infringed under § 271(f)(1) and that the jury’s damages verdict—based on total sales— was supported by substantial evidence. 773 F.3d at 1358. 16 PROMEGA CORP. v. LIFE TECHNOLOGIES CORP. It was therefore unnecessary for us to address the district court’s waiver finding. However, now that it is undisputed that certain of the accused kits did not infringe under the Supreme Court’s interpretation of § 271(f)(1)— specifically, kits containing only one component supplied from the United States that were assembled and sold overseas to foreign buyers without ever passing through the United States—we must address the district court’s waiver finding. 9 We review the district court’s waiver finding using the same standard applied by the regional circuit. Riverwood Int’l Corp. v. R.A. Jones & Co., 324 F.3d 1346, 1352 (Fed. Cir. 2003). The Seventh Circuit reviews the ultimate legal conclusion of waiver de novo and predicate factual findings for clear error. Baker v. Lindgren, 856 F.3d 498, 506 (7th Cir. 2017). Under Seventh Circuit precedent, a party may waive an argument by not raising it in opposition to a Rule 50(b) motion. See Wallace v. McGlothan, 606 F.3d 410, 418–19 (7th Cir. 2010) (holding that party waived an argument by failing to raise it in opposition to Rule 50(b) motion). In its opening JMOL brief, Life argued that, “with only an aggregate sales number for all kits combined, the jury had no evidence upon which it could partition that sales number up among any smaller collection of kits to award damages for any infringement proven for any such lesser 9 Promega argues that the accused Identifiler kits contained multiple components supplied from the United States. See Promega’s Statement at 2. However, in its post-remand submission Promega does not argue that any of the other fourteen accused products contained two or more components supplied from the United States. Nor does Promega maintain in its post-remand submission that all of Life’s accused kits infringe under § 271(a) or § 271(f)(1). PROMEGA CORP. v. LIFE TECHNOLOGIES CORP. 17 group of kits.” Life Open. JMOL Br., No. 10-CV-281 (W.D. Wis. Mar. 22, 2012), ECF No. 581 at 11. The district court rephrased Life’s argument as claiming that Promega “adduced evidence only as to defendants’ total worldwide sales” and, therefore, that “defendants are entitled to judgment as a matter of law unless all of those sales fall under § 271(a) or § 271(f)(1).” J.A. 2340–41. The district court then found that Promega did not dispute this argument in its responsive JMOL brief and, therefore, that Promega had “conceded” the point. 10 See id. Having reviewed Promega’s responsive JMOL brief, we agree with the district court that Promega waived any argument that the trial record could support a damages award based on a subset of total sales by wholly failing to address Life’s argument on this point. Promega’s position at JMOL was completely con- sistent with Promega’s all-or-nothing damages strategy that Promega pursued throughout the litigation. At trial, the district court corrected Promega’s misconceptions about the import of the parties’ stipulation regarding the amount of Life’s total worldwide sales and informed Promega that it needed to put forward evidence separately proving the amount of infringing acts under § 271(a) 10 In its JMOL opposition brief, Promega argued that: (1) Life’s JMOL motion raised untimely arguments that were not raised in Life’s Rule 50(a) motion; (2) Life’s reading of § 271(f)(1) was improperly narrow; (3) even under Life’s reading of § 271(f)(1), the evidence supported a jury’s finding that all of the accused products infringed under § 271(f)(1); and (4) the evidence supported a jury’s finding that all of the accused products infringed under § 271(a). Promega does not press the first, third, and fourth arguments in its post-remand statement. The Supreme Court rejected Promega’s second argument. 18 PROMEGA CORP. v. LIFE TECHNOLOGIES CORP. and § 271(f)(1). Promega did not object to the district court’s characterization of its burden of proof on infringement, nor did it move the district court for a continuance of the trial in order to reopen discovery and develop the evidence necessary to quantify domestic and foreign sales. Rather, Promega elected to make what appears to be a cursory attempt at further proving the fact of damages during its rebuttal case (by showing that some sales were made to United States customers)—as opposed to any particular amount of damages. Lindemann, 895 F.2d at 1406 (“In patent law, the fact of infringement establishes the fact of damage because the patentee’s right to exclude has been violated. . . . The patentee must then prove the amount of damage.”). Promega presented no expert testimony on damages at trial. Instead, in its rebuttal case, Promega relied on exhibits and lay testimony, including testimony from Mr. Sandulli regarding financial spreadsheets showing sales of the accused products, without using any of this evidence to arrive at any numerical value that could have been used by a reasonable jury to calculate an award of lost profits damages. We agree with Life that Promega did not “produce a witness who could make sense of the documents” it presented in such a way that could have enabled a reasonable jury to calculate a damages award. Life Reply Br. at 50. Promega later confirmed its adherence to its all-ornothing approach by submitting a proposed special verdict form that asked the jury to determine a single “United States sales” figure for sales falling under both § 271(a) and § 271(f)(1). Promega knew that it needed to prove the ultimate issue of liability under § 271, as evidenced by its attempts to put in evidence and elicit testimony regarding sales in the United States and components supplied from the United States. These efforts clearly indicate Promega’s recognition of its burden to separately prove infringement under § 271(a) and § 271(f)(1), respectively. PROMEGA CORP. v. LIFE TECHNOLOGIES CORP. 19 Yet it exclusively argued liability for all, rather than any subset(s), of the accused kits. 11 Promega’s deliberate strategy to adhere to a single damages theory had the effect of winnowing out from the case any argument about damages based on a figure other than worldwide sales. Cf. Tronzo v. Biomet, Inc., 236 F.3d 1342, 1347 (Fed. Cir. 2001) (affirming the district court’s refusal to consider a new damages theory presented for the first time post-remand, because the plaintiff “made strategic decisions in the initial trial concerning what evidence and arguments to advance in support of his theory of damages”). The Supreme Court has explained that “waiver and forfeiture rules” exist to “ensure that parties can determine when an issue is out of the case, and that litigation remains, to the extent possible, an orderly progression.” Exxon Shipping Co. v. Baker, 554 U.S. 471, 487 n.6 (2008). 11 Promega cites statements by the district court that, according to Promega, indicate that the district court determined at summary judgment that Life was liable for infringement by all of its accused kits. Promega Open. Br. at 4 (citing J.A. 2287, 6310). This assertion is belied by the district court’s indication at trial that the ultimate issue of Life’s liability was unresolved, because Promega needed to prove the amount of damages at- tributable to infringement under § 271(a) and the amount of damages attributable to infringement under § 271(f)(1). J.A. 6190. Moreover, after the Supreme Court’s decision, it is now indisputable that Life is not liable for infringement by all of the accused products, given that kits containing only one component supplied from the United States that were assembled and sold overseas to foreign buyers without ever passing through the United States cannot infringe under § 271(a) or § 271(f)(1). 20 PROMEGA CORP. v. LIFE TECHNOLOGIES CORP. The reason for the rules is not that litigation is a game, like golf, with arbitrary rules to test the skill of the players. Rather, litigation is a “winnowing process,” and the procedures for preserv- ing or waiving issues are part of the machinery by which courts narrow what remains to be decided. Id. (quoting Poliquin v. Garden Way, Inc., 989 F.2d 527, 531 (1st Cir. 1993)). In the instant case, the district court could properly conclude that Promega abandoned any alternative damages base when it failed to rebut Life’s argument in its Rule 50(b) motion that Promega did not present evidence that a reasonable jury could have relied on to award damages based on any subset of total worldwide sales. The district court’s decision was all the more reasonable given that it warned Promega during trial that it bore the burden to separately prove infringement under § 271(a) and § 271(f)(1). As in Exxon, the district court’s waiver finding was part of its “sensible efforts to impose order upon the issues in play and the progress of the trial.” 554 U.S. at 487 n.6. Such a finding “deserve[s] our respect.” Id.