Opinion ID: 208638
Heading Depth: 2
Heading Rank: 3

Heading: Royalty Damages

Text: On cross-appeal, DePuy challenges the district court's denial of a motion for new trial on the issue of reasonable-royalty damages. At trial, DePuy argued for a 15% royalty rate on $237.2 million worth of infringing sales that were not subject to DePuy's claim for lost profits, for a total of $31.8 million in royalties. Medtronic disputed this royalty rate and argued instead that a 6% rate would give DePuy full and fair compensation if its products were found to infringe. J.A. 5473. DePuy therefore believes that the jury should have simply picked a number between 6% and 15%. The jury awarded 0%. Shortly after the jury was dismissed, DePuy indicated to the court that the jury may have possibly misunderstood that the reasonable royalty applied to a different set of infringing sales, but ultimately told the court that DePuy will be investigating the issue and [m]aybe we will conclude that there is nothing. J.A. 5501-02. Several weeks later, DePuy filed a motion for new trial on royalty damages. We review decisions on ... motions for a new trial under the law of the regional circuit. Lucent Tech., Inc. v. Gateway, Inc., 543 F.3d 710, 717 (Fed.Cir. 2008). The First Circuit reviews the denial of a motion for new trial for an abuse of discretion. Davignon v. Hodgson, 524 F.3d 91, 100 (1st Cir.2008). Here, the district court cited the First Circuit's Wennik decision, which sets forth the circuit's iron-clad rule that a party `waives [the issue of] inconsistency if it fails to object after the verdict is read and before the jury is dismissed.' Wennik v. Polygram Group Distrib., Inc., 304 F.3d 123, 130 (1st Cir.2002) (alteration in original) (quoting Toucet v. Mar. Overseas Corp., 991 F.2d 5, 8 (1st Cir.1993)). Under this precedent, the district court stated that it was unclear why the jury awarded a 0% royalty rate in light of other aspects of the jury's verdict, but that any inconsistency in the verdict should have been resolved before the jury was discharged. Feb. 14 Order at 1. For that reason, the district court denied DePuy's motion. DePuy resists characterizing the jury's award of a 0% royalty rate as an inconsistency, arguing instead that the award lacks evidentiary support. We disagree and fail to see this as a question of evidence. The jury verdict, on its face, was inconsistent. A 0% royalty rate cannot be squared with: (1) the jury's finding that the subject sales constituted acts of infringement, and (2) the instruction that the jury choose a royalty rate between 6% and 15%the sole form of compensation that DePuy requested on those sales. As the district court correctly observed, these other aspects of the jury's verdict should have resulted in a royalty rate between 6% and 15%. We therefore agree with the district court that the award of 0% rendered the verdict inconsistent. The jury may well have been confused by the wording used in the special verdict form, which expressly instructs the jury to answer Question Nos. 11 and 12 (calculation of royalty rate) if they found that DePuy is not entitled to lost profits, but to answer Question No. 10 (calculation of lost profits) if they found that DePuy is entitled to lost profits. J.A. 9. In the latter event, if lost profits are available (as the jury found here), the form says nothing about answering Question Nos. 11 and 12 regarding the royalty rate. Those questions themselves ask for a royalty on an infringement for which plaintiffs are not entitled to recover lost profits, without specifying which infringement or sale was at issue. Id. (emphasis added). [4] Whatever the cause, the verdict was inconsistent, placing an obligation on DePuy to object. In view of the First Circuit's iron-clad rule barring untimely inconsistency objections, and given DePuy's awareness of the issue and its ability to have properly objected, we cannot say that the denial of DePuy's motion for new trial was an abuse of discretion. Moreover, we need not decide in this case whether an otherwise untimely inconsistency objection can ever be saved by the statutory damages floor of 35 U.S.C. § 284 (setting a damages floor not less than a reasonable royalty for the use made of the invention by the infringer). DePuy's $149.1 million lost-profits award, which we have affirmed, exceeds DePuy's alternative request for $59.2 million in total damages based solely on royalties on all of Medtronic's accused salesi.e., the entire use made of the invention by the infringer under § 284. J.A. 5520-21, 12263 (requesting, in the alternative if lost profits were found unavailable, $59.2 million in royalties on all $462 million in accused sales). Accordingly, the denial of DePuy's motion for new trial is affirmed.