Opinion ID: 783497
Heading Depth: 3
Heading Rank: 1

Heading: The Determination for Unjust Enrichment Correctly Measured Damages

Text: 51 We must next determine the appropriate measure of Cyanamid's unjust enrichment. Cyanamid argues that the proper measure of damages is the value that Cyanamid would have paid in 1981 to acquire the research results and for any cooperation needed to apply for the '634 patent, not disgorgement of Cyanamid's profits as the district court found. Neither Cyanamid IV nor Colorado case law supports Cyanamid's assertions. 52 In Cyanamid IV, our review was limited to the matters appealed. We did not disturb any of the district court's factual findings regarding unjust enrichment, noting that Cyanamid does not argue that the district court erred in any findings under its unjust enrichment analysis. Therefore, this court does not review those findings. We did not expunge the facts elicited at trial or remand the case for a new trial. Such a mandate — premised on federal patent standards to resolve the threshold question of inventorship — simply required the district court on remand to apply the correct law to the facts already determined to be sufficient to meet the correct legal standard. Indeed, Cyanamid agreed on remand that no further evidence regarding liability should be introduced. Accordingly, based on the evidence presented at trial, the district court found on remand that, under Colorado law, the Doctors were entitled to equitable relief on their unjust enrichment claim separate and independent from their remedy at law for fraudulent nondisclosure. 53 We conclude that under Colorado law, the district court did not abuse its discretion by ordering Cyanamid to disgorge the incremental profits directly attributable to its misconduct. Colorado law supports the benefits-based approach used by the district court to effect equitable relief in appropriate cases. See EarthInfo, Inc. v. Hydrosphere Res. Consultants, Inc., 900 P.2d 113, 118 (Colo.1995) ( en banc ) (adopting a case by case approach to determining whether profits may be awarded as restitution in a claim for unjust enrichment). This is true even if it results in plaintiff receiving a greater reward than if simply awarded damages for the defendant's misconduct: 54 Restitution, which seeks to prevent unjust enrichment of the defendant, differs in principle from damages, which measure the remedy by the plaintiff's loss and seek to provide compensation for that loss. As a consequence,  in some cases the defendant gains more than the plaintiff loses, so that the two remedies may differ in practice as well as in principle. 55 Id. (quoting 1 Dan B. Dobbs, Law of Remedies § 4.1(1), at 555, 557 (2d ed.1993)) (emphasis added). 56 No wooden formulas exist for determining when restitution of profits realized by a party is permissible. Id. at 119. Because it is an equitable remedy, whether profits are awarded to a nonbreaching party shall be determined within the discretion of the trial court on a case by case basis. Id. at 118. As the Colorado Supreme Court envisioned it, in determining whether restitution of profits or disgorgement in a given case is appropriate: 57 [C]ourts must resort to general considerations of fairness, taking into account the nature of the defendant's wrong, the relative extent of his or her contribution, and the feasibility of separating this from the contribution traceable to the plaintiff's interest. 1 George E. Palmer, The Law of Restitution § 2.12 at 161 (1978) [hereinafter Palmer]. Thus, the more culpable the defendant's behavior, and the more direct the connection between the profits and the wrongdoing, the more likely that plaintiff can recover all defendant's profits. See, e.g., Douglas Laycock, The Scope and Significance of Restitution, 67 Tex. L. Rev. 1277, 1289 (1989). The trial court must ultimately decide whether the whole circumstances of a case point to the conclusion that the defendant's retention of any profit is unjust. 58 Id. at 119. 59 Applying these principles of Colorado law to this case, we conclude that the district court properly limited the equitable remedy by calculating the incremental profits from the sale of Materna attributable to the right to exclude generic competition that Cyanamid gained from the '634 patent — not the total profits Cyanamid made by selling a product incorporating the Doctors' invention. The district court found Cyanamid liable in the amount of $53,106,066, which included $22,243,228 for unjust enrichment, 8% statutory prejudgment interest through January 1, 2002, and the additional prejudgment interest that had accrued from January 1, 2002, to the date of judgment. This measure of damages comports with our opinion in Cyanamid IV, which allowed the district court to base its damages calculation on evidence of the incremental profit or benefit that Cyanamid realized from the Doctors' invention. Assuming that the determination of damages finds support in the evidence and was not the product of procedural error, we conclude that the district court relied on an appropriate measure of damages and would support a valid final judgment. Accordingly, we must next consider whether the measure of damages was supported by sufficient evidence or was flawed by any legal error occurring at trial.