Opinion ID: 697651
Heading Depth: 3
Heading Rank: 2

Heading: The Package Sales of Dock Levelers and Truck Restraints

Text: 247 The district court found that Kelley developed its Truk Stop restraint both to capture part of the newly-developed restraint market and to avoid losing leveler sales. Rite-Hite Corp. v. Kelley Co., 774 F.Supp. 1514, 1522, 21 USPQ2d 1801, 1806 (E.D.Wis.1991). The district court discussed customers' requests for package bids for the simultaneous installation of vehicle restraints and dock levelers, especially for new dock installations. Id. at 1530, 21 USPQ2d at 1812. The court found that customers almost invariably purchased both items from the same manufacturer. Id. The court also referred to testimony that Kelley representatives told some customers that Kelley would void its warranties on its dock levelers if they were used with a Rite-Hite restraint, id., Kelley itself linking sale of the dock levelers to the infringing restraints. 248 The district court assessed the damages caused by Kelley's infringement after meticulous review of an extensive body of evidence. The elements of causation and foreseeability, although fully satisfied on the evidence, are scarcely at issue. It is not disputed that these 1,692 dock levelers were sold, warranted, installed, and used together with the truck restraints. Kelley's actual package sales of dock levelers and infringing restraints were the only convoyed sales for which compensation was awarded. 249 These dock leveler sales were as direct a target of the infringement as were the ADL-100 sales, and the quality of the proofs was equally high. The evidence shows the same transaction-by-transaction losses of sales to Kelley for the dock levelers as for the ADL-100 truck restraints, indeed in the same bid and sale packages. Precedent previously recognized that compensation may be appropriate when the items are sold together, whether or not they also have separate markets. See TWM Mfg. Co. v. Dura Corp., 789 F.2d 895, 229 USPQ 525 (Fed.Cir.1986) (damages awarded for lost sales of unpatented wheels and axles that were sold with patented suspension systems); Deere & Co. v. International Harvester Co., 710 F.2d 1551, 218 USPQ 481 (Fed.Cir.1983) (royalty damages assessed based on sales of unpatented combines and patented corn heads). 250 Recovery of damages for lost convoyed sales has always required a high standard of proof, lest remote and speculative claims be opportunistically pressed. However, it is not correct to hold that recovery is never possible unless the relationship of the patented and convoyed products is such that the only and necessary use is as a single functioning unit. Indeed, even the majority's new requirement is met in this case. These specific dock levelers were not sold separately because the customer or Kelley required that they be sold together; and it is undisputed that they are used together. 251 The correct question is not whether the infringing truck restraint was part of a larger combination whereby the truck restraint could not function without the dock leveler, or whether the truck restraint or the dock leveler also had an independent market and use. The correct rule was stated in Leesona Corp. v. United States, 599 F.2d 958, 974, 220 Ct.Cl. 234, 202 USPQ 424, 439, cert. denied, 444 U.S. 991, 100 S.Ct. 522, 62 L.Ed.2d 420 (1979), that 252 it is not the physical joinder or separation of the contested items that determines their inclusion in or exclusion from the compensation base, so much as their financial and marketing dependence on the patented item under standard marketing procedures for the goods in question. 253 The sales of dock levelers and truck restraints met this criterion. 254 As the Court reiterated in Aro Manufacturing and in General Motors v. Devex, general damages in patent cases are whatever damages the plaintiff can prove. The history of the 1946 enactment reports this legislative purpose: 255 The object of the bill is to make the basis of recovery in patent infringement suits general damages, that is, any damages the complainant can prove, not less than a reasonable royalty, together with interest from the time the infringement occurred, rather than profits and damages. 256 Report of the Senate Subcommittee on Patents, S.Rep. No. 1503, 79th Cong., 2d Sess. 1, reprinted in 1946 U.S.Code Cong. Serv. 1386, 1387. The record shows that Kelley foresaw the potential loss of dock leveler sales, and that this contributed to Kelley's infringement of Rite-Hite's truck restraint patent. The record shows Kelley and Rite-Hite both bidding on the same restraint/leveler packages. The evidence established that Rite-Hite's loss of 1,692 dock leveler sales was the direct, foreseeable, and indeed intended result of Kelley's infringement. 257 Kelley bore the risk that if it was found to infringe Rite-Hite's restraint patent, it would be liable for compensatory damages on the restraint/leveler packages. By eliminating recovery for this proven loss, this court makes a policy decision contrary to the principles of compensatory damages. Heretofore Federal Circuit precedent treated lost convoyed sales as a matter of fact and proof. I discern no clear error or discretionary abuse in the district court's award of actual damages for these specific lost sales of restraint/leveler packages.