Court Opinion

ID: 855069
Source: CourtListenerOpinion
Date Created: 2013-03-13 15:27:36.972322+00
Date Added: 2024-06-11T15:12:30.960420
License: Public Domain

United States Court of Appeals
     for the Federal Circuit
           ______________________

             SYNQOR, INC.,
             Plaintiff-Appellee,
                      v.

      ARTESYN TECHNOLOGIES, INC.
        AND ASTEC AMERICA, INC.,
           Defendants-Appellants,

                    AND

             BEL FUSE, INC.,
            Defendant-Appellant,

                    AND

DELTA ELECTRONICS, INC., DELTA PRODUCTS
       CORP., AND POWER-ONE, INC.,
           Defendants-Appellants,

                    AND

MURATA ELECTRONICS NORTH AMERICA, INC.,
  MURATA MANUFACTURING CO., LTD., AND
    MURATA POWER SOLUTIONS, INC.,
           Defendants-Appellants,

                    AND

   CHEROKEE INTERNATIONAL CORP. AND
        LINEAGE POWER CORP.,
2                                 SYNQOR   v. ARTESYN TECH

                       Defendants.
                 ______________________

    2011-1191, -1192, -1194, 2012-1070, -1071, -1072
                ______________________

     Appeals from the United States District Court for
the Eastern District of Texas in No. 07-CV-0497, Judge
T. John Ward.
                 ______________________

                Decided: March 13, 2013
                ______________________

   CARTER G. PHILLIPS, Sidley Austin, of Washington,
DC, argued for plaintiff-appellee. On the brief were
CONSTANTINE L. TRELA, JR., THOMAS D. REIN, ROBERT N.
HOCHMAN, RUSSELL E. CASS and STEPHANIE P. KOH; and
MICHAEL D. HATCHER, of Dallas, Texas. Of counsel was
THOMAS D. REIN.

    DONALD R. DUNNER, Finnegan, Henderson, Farabow,
Garrett & Dunner, LLP, of Washington, DC, argued for
defendants-appellants Artesyn Technologies, Inc., et al.
With him on the brief was JASON W. MELVIN. Of counsel
on the brief were ROBERT J. MCAUGHAN, JR., ALBERT B.
DEAVER, JR. and JEFFREY A. ANDREWS, Sutton McAughan
Deaver PLLC, of Houston, Texas. Of counsel was ERIK R.
PUKNEYS, Finnegan, Henderson, Farabow, Garrett &
Dunner, LLP, of Palo Alto, California.

    ANDREW J. PINCUS, Mayer Brown LLP, of Washington,
DC, argued for defendants-appellants, Bel Fuse, Inc. and
Delta Electronics, Inc., et al. With him on the brief were
GARY M. HNATH, PAUL W. HUGHES and ROBERT E.
MCBRIDE. Of counsel were JEFFREY T. LINDGREN and
RICHARD C. VASQUEZ.
 SYNQOR   v. ARTESYN TECH                               3

    ALAN D. SMITH, Fish & Richardson P.C., of Boston,
Massachusetts, argued for defendants-appellants Murata
Electronics North America, Inc., et al. With him on the
brief were WHITNEY A. REICHEL and KEVIN SU. Of counsel
was STEVEN R. KATZ.
                ______________________

   Before RADER, Chief Judge, LOURIE, Circuit Judge,
and DANIEL, Chief District Judge. 1
RADER, Chief Judge.
     The United States District Court for the Eastern Dis-
trict of Texas granted SynQor, Inc. (SynQor) partial
summary judgment of infringement against nine power
converter manufacturers (Defendants) on U.S. Patents
Nos. 7,072,190 (’190 Patent); 7,272,021 (’021 Patent);
7,564,702 (’702 Patent); 7,558,083 (’083 Patent); and
7,269,034 (’034 Patent). Specifically the District Court
determined the “isolation” limitations of the asserted
claims of the ’190 Patent, ’021 Patent, ’702 Patent, and
’083 Patent appear in Defendants’ products. SynQor, Inc.
v. Artesyn Techs., Inc. (Claim Construction Order), No. 07-
CV-0497, 2010 U.S. Dist. LEXIS 74808, at *27 (E.D. Tex.
July 26, 2010); SynQor, Inc. v. Artesyn Techs., Inc. (Sum-
mary Judgment Order), No. 07-CV-0497 (E.D. Tex. Dec.
12, 2010). The trial court denied Defendants’ motions for
judgment as a matter of law (JMOL) or new trial after a
jury found all asserted claims infringed, not invalid, and
awarded lost-profits damages of over $95 million.
SynQor, Inc. v. Artesyn Techs., Inc., No. 07-CV-0497 (E.D.
Tex. Aug. 17, 2011). The court awarded supplemental
and enhanced damages for post-trial infringement.

   1  The Honorable Wiley Y. Daniel, Chief District
Judge, United States District Court for the District of
Colorado, sitting by designation.
4                                   SYNQOR   v. ARTESYN TECH

SynQor, Inc. v. Artesyn Techs., Inc. (Supplemental Dam-
ages Order), No. 07-CV-0497 (E.D. Tex. July 11, 2011).
Based on a review of the record evidence, this court af-
firms.
                             I.
    This case deals with high-efficiency DC-DC power
converter systems used to power circuitry in large com-
puter systems and telecommunication and data communi-
cation equipment. Such systems convert direct current
(DC) from one voltage level to another. The patents at
issue involve converters with separate “isolation” and
“regulation” stages.
    A converter provides “isolation” if its input and output
are not directly connected by wires. The parties dispute
whether, in the context of the patents, the term “isolation”
requires the absence of a wired connection between any
“two points,” or only the absence of a wired connection
“between an input and an output of a particular stage,
component, or circuit.” See Part IV below.
    In an isolated circuit, a transformer conveys current
to the load. The mere presence of a transformer does not
“isolate” the circuit, however, because a wired connection
between the input and output might also defeat the
isolation. Isolation serves both as a safety feature and
also as a stability guarantor by preventing unwanted
“ground current” from flowing through the circuit. Isolat-
ed converters are typically larger, more complicated, and
less efficient than non-isolated converters.
    A converter provides “regulation” by restricting its
output to a desired voltage even when the input voltage
varies. A “fully regulated” converter monitors the output
voltage and modifies the operation of the circuit to main-
tain a desired output voltage. A “semi-regulated” con-
verter monitors the input voltage to maintain a desired
output voltage.
 SYNQOR   v. ARTESYN TECH                               5
    SynQor’s asserted patents relate to a multiple-stage
distributed power architecture known as an “intermediate
bus architecture” (IBA). In an IBA, external power (e.g.,
120 volts alternating current (AC)) is first converted to
relatively high-voltage DC power (e.g., 48 volts) by a
“front end converter.” Next, an “intermediate bus con-
verter” steps down the 48 volt DC power to a lower volt-
age (e.g., 12 volts). The intermediate bus converter
provides isolation either with no regulation or with semi-
regulation. The final stage uses multiple non-isolating
regulators to convert 12 volt DC to proper levels for power
logic circuitry (e.g., 5 volts).
    IBA improved prior art power converter systems that
used integrated converters, each performing both isola-
tion and regulation, to step the 48 volt input down to the
voltage levels required to power logic circuitry. Large
computer and communication systems use multiple
voltage levels for different logic circuitry housed on a
single load board, and the prior art systems required a
separate isolating/regulating converter for each voltage
level. This array took up valuable space on the load
board, which could otherwise accommodate more memory
and other logic circuitry. IBA saves space by using a
single isolation stage with multiple non-isolating regula-
tors. The non-isolating regulators can be smaller, less
expensive, and more efficient than integrated isolat-
ing/regulating converters.
    The ’190 Patent, ’021 Patent, and the ’702 Patent cov-
er power converter systems comprising a “non-regulating
isolation stage” and a “plurality of non-isolating regula-
tion stages, each receiving the output of the isolation
stage.” See, e.g., ’190 Patent col. 17 ll. 22–42. The ’083
Patent claims a “non-regulating isolating step-down DC-
DC power converter,” which is the intermediate bus
converter component of the power systems claimed in the
other patents. ’083 Patent col. 16 l. 59–col. 17 l. 29. The
6                                   SYNQOR   v. ARTESYN TECH

’034 Patent claims a “DC-DC converter system” compris-
ing “isolation/semi-regulation circuitry” and a plurality of
non-isolating switching regulators receiving the output of
the isolation/semi-regulation circuitry. ’034 Patent col. 17
ll. 22–43.
    Defendants manufactured and sold intermediate bus
converters overseas. SynQor asserted claims for induced
and contributory infringement under 35 U.S.C. §§ 271(b)
and (c), alleging Defendants sold the power supply com-
ponents with knowledge that they would be used in, or
were especially made to be used in, infringing systems
imported into the United States. SynQor also asserted
direct infringement under § 271(a) with respect to certain
U.S. sales.
                            II.
    This court reviews the grant or denial of a motion for
JMOL under the law of the regional circuit, in this case,
the United States Court of Appeals for the Fifth Circuit.
Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 563 F.3d
1358, 1370 (Fed. Cir. 2009). The Fifth Circuit reviews
without deference the denial of a motion for JMOL.
Cambridge Toxicology Grp., Inc. v. Exnicios, 495 F.3d 169,
179 (5th Cir. 2007). “Judgment as a matter of law is
appropriate only when a ‘reasonable jury would not have
a legally sufficient evidentiary basis to find for the party
on that issue.’” Id. (quoting Fed. R. Civ. P. 50(a)(1)).
    Anticipation is a question of fact, and this court re-
views the jury’s findings for substantial evidence. Minn.
Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1301
(Fed. Cir. 2002). On the issue of obviousness, this court
reviews the jury’s determination of underlying facts for
substantial evidence, but reviews the ultimate conclusion
of obviousness without deference.       W. Union Co. v.
MoneyGram Payment Sys., Inc., 626 F.3d 1361, 1369 (Fed.
Cir. 2010). Compliance with the written description
 SYNQOR   v. ARTESYN TECH                                  7
requirement is a question of fact, and this court reviews
the jury’s findings for substantial evidence. Centocor
Ortho Biotech, Inc. v. Abbott Labs., 636 F.3d 1341, 1347
(Fed. Cir. 2011).
   A.   “A plurality of non-isolating regulation stages”
    Defendants assert that the doctoral thesis of Dr.
Loveday H. Mweene (Mweene Thesis) anticipates claims 2
and 8 of the ’190 Patent, claim 21 of the ’021 Patent, claim
56 of the ’702 Patent, and claim 1 of the ’083 Patent.
Similarly, Defendants argue that the Mweene Thesis
combined with a paper on distributed power systems
written by Bob Mammano would have made obvious
claims 10 and 19 of the ’190 Patent, claim 30 of the ’021
Patent, and claim 71 of the ’702 Patent.
    Each of the forgoing claims, except claim 1 of the ’083
Patent, requires “a plurality of non-isolating regulation
stages” that receive the output of a non-regulating isola-
tion stage. This court concludes that the record contains
sufficient evidence to support the jury’s finding that
claims 2, 8, 10, and 19 of the ’190 Patent, claims 21 and
30 of the ’021 Patent, and claims 56 and 71 of the ’702
Patent would not have been anticipated at the time of
invention in view of the Mweene Thesis, which lacks a
plurality of non-isolating regulation stages.
    The Mweene Thesis focuses primarily on the design of
a front-end AC-DC converter for converting AC current
from the utility to a 50V DC output bus. In its discussion
of the stability of the overall distributed power supply
system, the thesis also addresses downstream elements,
such as the point-of-load converters. The Mweene Thesis
discloses a distributed power architecture, including the
point-of-load converters, in Figure 1.1:
8                                   SYNQOR   v. ARTESYN TECH

    The front-end converter is a non-regulating isolation
stage. Defendants assert that the “point of load convert-
ers” are “a plurality of non-isolated regulation stages.” As
support, Defendants point to Mweene’s disclosure of a
“buck converter” in Figure 8.3. SynQor admits that the
buck converter of Figure 8.3 is a non-isolated regulator.
Its experts explained at trial, however, that the Mweene
Thesis discloses the buck converter only as a simplified
model for purposes of a mathematical stability analysis,
not as “something you would really use” as a point-of-load
converter in a working system. J.A. at 1547.
     SynQor’s technical expert, Dr. James Dickens, testi-
fied that a person of skill in the art would have under-
stood the point of load convertors in Mweene’s system to
be isolated. According to Dr. Dickens, the ordinarily-
skilled artisan would have considered isolation necessary
to account for safety issues and to “help prevent a cata-
strophic board failure,” which could be caused by a fault
in the front end converter propagating through to the
logic circuitry. Id. Inventor Dr. Martin Schlecht similarly
testified that if the point of load regulators shown in
Figure 1.1 of the Mweene Thesis were not isolated, a
voltage drop could result that would cause the logic
circuitry to malfunction. Several of Defendants’ witnesses
and documents confirmed that an isolation stage is re-
 SYNQOR   v. ARTESYN TECH                                9
quired between a 48 volt input and the logic circuitry.
Further, Dr. Mweene acknowledged his thesis “did not in
detail describe the design of point-of-load converters,” and
therefore did not disclose use of a non-isolating switching
regulator as a point-of-load regulator. J.A. at 1366.
     “Anticipation requires the presence in a single prior
art disclosure of all elements of a claimed invention
arranged as in the claim.” Connell v. Sears, Roebuck &
Co., 722 F.2d 1542, 1548 (Fed. Cir. 1983); see also The-
rasense, Inc. v. Becton, Dickinson & Co., 593 F.3d 1325,
1332 (Fed. Cir. 2010). The Mweene Thesis discloses a
distributed power architecture with a non-regulating
isolation stage supplying power to a plurality of regula-
tors, and separately discloses a non-isolating regulator in
a simplified mathematical analysis. Thus, the record
contains sufficient evidence to support the jury’s finding
that the buck converter discussed by the Mweene Thesis
was not disclosed as a point of load converter to be used in
an actual system. In other words, even if the Mweene
Thesis discloses each discrete element of each claim
Defendants assert is anticipated, the thesis does not
disclose those elements arranged as required by the
claim.
    For similar reasons, this court concludes Defendants
did not prove any of the asserted claims of the ’190 Pa-
tent, the ’021 Patent, or the ’702 Patent would have been
obvious at the time of invention in view of the Mweene
Thesis in combination with other references. The jury
found that the Mweene Thesis does not teach a plurality
of non-isolating regulators that receive the output of a
non-regulating isolation stage. Defendants did not assert
that any other prior art reference provides such a teach-
ing, nor that Mweene alone would have rendered such a
system architecture obvious.
    Defendants argue only that Mammano supplies a mo-
tivation to use the specific voltage ranges recited in
10                                   SYNQOR   v. ARTESYN TECH

dependent claims. This court need not consider Defend-
ants’ arguments that certain dependent claim limitations
would have been obvious where the base claim has not
been proven invalid. See Callaway Golf Co. v. Acushnet
Co., 576 F.3d 1331, 1344 (Fed. Cir. 2009) (holding verdict
irreconcilably inconsistent where jury found dependent
claim obvious and found independent claim nonobvious).
    Because neither the Mweene Thesis alone nor any
combination of the asserted prior art teaches or suggests
a distributed power architecture having a plurality of
non-isolated regulation stages, this court affirms the
denial of Defendants’ motion for JMOL that claims 2, 8,
10, and 19 of the ’190 Patent, claims 21 and 30 of the ’021
Patent, and claims 56 and 71 of the ’702 Patent would
have been invalid as anticipated or obvious.
     B. “Uncontrolled rectifiers are both conducting”
     Claim 1 of the ’083 Patent requires “plural controlled
rectifiers,” each in parallel with an uncontrolled rectifier.
’083 Patent, col. 17 l. 9. When each controlled rectifier is
turned off, current flows through its paired uncontrolled
rectifier. The claim requires a first and a second con-
trolled rectifier which switch on alternately. Id. col. 17 ll.
21–24. Claim 1 further requires “a short time . . . when
the first controlled rectifier and the second controlled
rectifier are both off and their corresponding uncontrolled
rectifiers are both conducting.” Id. col. 17 ll. 25–29 (em-
phasis added).
    The Mweene Thesis describes a circuit with plural
controlled rectifiers, each in parallel with an uncontrolled
rectifier, and states that “the rectifiers can be turned on
late, the current being initially carried by their anti-
parallel diodes.” J.A. at 5723. Defendants assert this
shows that, when the controlled rectifiers are off, their
parallel uncontrolled rectifiers are conducting as required
by claim 1 of the ’083 Patent. SynQor’s expert, Dr. Dick-
 SYNQOR   v. ARTESYN TECH                                 11
ens, testified that it is “impossible” for the uncontrolled
rectifiers in the Mweene circuit corresponding to those
required by claim 1 to be conducting at the same time,
because current cannot flow through the necessary paths
simultaneously. J.A. at 1549. Dr. Dickens’ testimony
therefore supplies substantial evidence to support the
jury’s verdict.    In sum, the record contains sufficient
evidence to support the jury’s finding that Mweene does
not anticipate claim 1 of the ’083 Patent. This court
therefore affirms the denial of Defendants’ motion for
JMOL.
               C. Claim 9 of the ’034 Patent
    Claim 9 of the ’034 Patent covers a DC-DC converter
system comprising isolation/semi-regulation circuitry with
an output of “about 12 volts,” which is connected to “a
plurality of non-isolating switching regulators” whose
outputs “are of voltage levels to drive logic circuitry.” ’034
Patent, col. 17 l. 22–col. 18 l. 3. Defendants argue that
claim 9 of the ’034 would have been anticipated or obvious
at the time of invention in view of a 1995 article by Doug-
las Arduini (Arduini). Alternatively, Defendants assert
the ’034 Patent is not entitled to a priority date earlier
than its filing date, and is therefore anticipated by a 2005
article by Seiya Abe.
    Defendants’ expert, Dr. Mercer, opined at trial that
Arduini anticipated the ’034 Patent, but did not offer an
opinion as to obviousness. Arduini discloses a “universal
DC-DC converter” with a series of interchangeable com-
ponents that can be put together to build a desired DC-
DC converter. J.A. at 6552. Arduini Figure 2 provides a
specific exemplary system that teaches a plurality of non-
isolating linear regulators, rather than the switching
regulators required by claim 9 of the ’034 Patent.
   Defendants argue Arduini’s own teachings would
have rendered obvious the differences between the
12                                  SYNQOR   v. ARTESYN TECH

claimed system and that shown in Figure 2. Specifically,
Defendants argue it would have been obvious to substi-
tute switching regulators for Arduini’s linear regulators.
Arduini Figure 1 teaches that various different “post
regulators” can be used to build a DC-DC converter. The
text mentions use of a “simple buck regulator,” a type of
non-isolated switching regulator. Further, Dr. Schlecht
admitted it was known in the art that switching regula-
tors provided the most efficient choice of load regulators.
    Nonetheless, SynQor’s expert Dr. Dickens explained
that Arduini does not teach substitution of switching
regulators for linear regulators in the context of a circuit
like that shown in Figure 2, and never teaches the use of
multiple non-isolated switching regulators. Rather, Dr.
Dickens and Defendants’ expert Dr. Mercer both testified
that Figure 1 of Arduini discloses a vast number of possi-
ble combinations with a wide variety of possible options
for each component listed. Specifically, Dr. Mercer testi-
fied that in the eyes of a person skilled in the art, the box
labeled “LDO post regulator” in Figure 1 “explodes dra-
matically to whatever you want to put for the design.”
J.A. at 1483. Defendants presented no evidence of a
reason to combine the elements of Arduini in the manner
required by claim 9, other than Dr. Mercer’s statement
that Arduini teaches “putting those building blocks to-
gether” in any manner the circuit designer desires. J.A.
at 1479.
    Moreover, SynQor introduced extensive objective evi-
dence of nonobviousness at trial, including commercial
success, industry recognition, initial (pre-invention)
skepticism of experts, unexpected results, and copying by
competitors. The record links this convincing evidence to
the claimed invention thus supplying a nexus to the
claimed intermediate bus architecture. For example, the
record shows that even Defendants’ engineers were highly
skeptical of the claimed invention, at one point describing
 SYNQOR   v. ARTESYN TECH                                  13
it as a “whopper in terms of technical challenge.” Another
engineer stated “that separating isolation from regulation
. . . almost surely would cost more in dollars, efficiency,
and board space.” Further, Defendants’ expert McAlex-
ander admitted that “there is certainly an element of
commercial success [to SynQor’s] architecture,” and
SynQor’s expert, Dr. Leeb, testified that “there were
significant efforts [by Defendants] to copy . . . SynQor’s
products.”
    The jury found claim 9 of the ’034 Patent not invalid
as anticipated or obvious. In doing so, the jury implicitly
resolved underlying factual issues—including the pres-
ence of objective indicia of nonobviousness and whether
there was a reason to combine the various elements
taught by Arduini in the manner claimed—in favor of
SynQor. See Agrizap, Inc. v. Woodstream Corp., 520 F.3d
1337, 1343 (Fed. Cir. 2008) (holding the court will “pre-
sume all factual disputes were resolved in favor of the
verdict”). The record contains substantial evidence to
support the jury’s findings. Accordingly, this court af-
firms the denial of Defendants’ motion for JMOL that
claim 9 of the ’034 Patent is invalid for obviousness.
     Defendants also did not prove claim 9 of the ’034 Pa-
tent lacks entitlement to priority based on SynQor’s
original 1998 patent applications. A claim is entitled to
the filing date of an earlier application if “the disclosure of
the application relied upon reasonably conveys to those
skilled in the art that the inventor had possession of the
claimed subject matter as of the filing date.” Ariad
Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed.
Cir. 2010) (en banc).
    The specification of the ’190 Patent, to which the ’034
Patent claims priority, states:
      When the regulation stage precedes the isola-
      tion stage, it is not necessary to sense the iso-
14                                  SYNQOR   v. ARTESYN TECH

      lated output voltage to control the regula-
      tion. An alternative approach is to sense the
      voltage on the primary side of the isolation
      stage, which may eliminate the need for sec-
      ondary side circuitry and the need to bridge
      the feedback control signal across the isola-
      tion barrier.
’190 Patent, col. 14 l. 64–col. 15 l. 3 (emphasis added).
The second quoted sentence undisputedly describes semi-
regulation. Defendants argue that the specification is
limited to semi-regulation preceding the isolation stage,
whereas claim 9 of the ’034 Patent requires regulation
following an isolation/semi-regulation stage.
     Dr. Dickens and Dr. Schlecht testified that a person of
ordinary skill in the art would understand that the ’190
specification taught use of semi-regulation in the isolation
stage, and that such a semi-regulated isolation stage
could precede several DC-DC switching or linear regula-
tors. Additionally, the specification states that “DC-DC
switching regulators can be used on the secondary side to
achieve the additional regulation desired.” ’190 Patent,
col. 14 ll. 36–39 (emphasis added).
    The jury made a factual finding that the parent speci-
fication adequately supports claim 9 of the ’034 Patent.
The record supplies sufficient evidence to support that
factual finding. This court therefore affirms the denial of
JMOL that the ’034 Patent is not entitled to the 1998
priority date.
                            III.
    This court reviews the district court’s claim construc-
tion and grant of partial summary judgment without
deference. Metropolitan Life Ins. Co. v. Bancorp Servs.,
527 F.3d 1330, 1335 (Fed. Cir. 2008). Summary judgment
is appropriate when “the pleadings, depositions, answers
to interrogatories, and admissions on file, together with
 SYNQOR   v. ARTESYN TECH                                   15
the affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” Fed. R. Civ. P.
56.
    The district court construed the terms “isolation,” “iso-
lating,” and “isolated,” to mean “the absence of an electric
path permitting the flow of DC current (other than a de
minimus amount) between an input and an output of
a particular stage, component, or circuit.” Claim
Construction Order, 2010 U.S. Dist. LEXIS 74808, at *27
(bold emphasis added). Defendants argue the construc-
tion should require isolation “between two points” rather
than “between an input and an output of a particular
stage, component, or circuit.” Defendants assert that
consumers connect the input and output of the claimed
system to a common ground such that the system is not
isolated.
     “[T]he words of a claim ‘are generally given their or-
dinary and customary meaning’ . . . that [they] would
have to a person of ordinary skill in the art in question at
the time of the invention.” Phillips v. AWH Corp., 415
F.3d 1303, 1312–13 (Fed. Cir. 2005) (en banc) (quoting
Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582
(Fed. Cir. 1996)). In this case, the customary meaning of
the contested terms, construed within their proper context
in the claim, verifies the trial court’s construction. The
term “isolation” is used as an adjective describing a stage
or converter within the power converter system. For
example, claim 1 of the ’190 Patent claims “a power
converter system comprising: a DC power source; a non-
regulating isolation stage . . .; and a plurality of non-
isolating regulation stages . . . .” ’190 Patent col. 17 ll. 22–
42 (emphasis added); see also ’702 Patent col. 22 l. 22
(claiming a system comprising an “isolating step-down
converter” and “plural non-isolating . . . regulators”). The
claim language thus only requires isolation within a
16                                  SYNQOR   v. ARTESYN TECH

particular stage. Requiring “isolation” between every two
points in the system would read the terms “stage” or
“converter” out of the claims.
    The figures in the specification further support the
district court’s construction. See, e.g., ’190 Patent Figs. 2
& 3. The figures show an isolation stage that has no
electrical connection between its input and output. The
figures do not depict the entire power converter system,
and are therefore silent as to whether the input and
output grounds of the entire system could be connected to
one another.
    Moreover, Defendants’ expert admitted that constru-
ing the claims such that “employ[ing] the common tech-
nique of grounding the system” would cause the converter
to be considered non-isolated would prevent the claims
from encompassing the preferred embodiment. J.A. at
45070–71. A claim construction that “excludes the pre-
ferred embodiment is rarely, if ever, correct and would
require highly persuasive evidentiary support.” Adams
Respiratory Therapeutics, Inc. v. Perrigo Co., 616 F.3d
1283, 1290 (Fed. Cir. 2010). In this case, the specifica-
tion, including the claims, supports a reading that encom-
passes the preferred embodiment.
    Thus, this court holds that the district court correctly
construed “isolation” to require the absence of an electri-
cal path “between the input and output of a particular
stage, component, or circuit.” The record indicates that
the Defendants put forth no reason that the accused
systems avoid infringement under the district court’s
construction. Thus, this court affirms the grant of partial
summary judgment of infringement on this limitation.
                            IV.
    Liability for induced or contributory infringement un-
der § 271(b) or (c) requires “knowledge that the induced
acts constitute patent infringement.” Global-Tech Appli-
 SYNQOR   v. ARTESYN TECH                               17
ances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068 (2011). This
includes, in part, actual “knowledge of the existence of the
patent that is infringed.” Id.
    Defendants argue the jury was incorrectly instructed
as to the knowledge requirement for induced infringe-
ment. Defendants also assert the record contains insuffi-
cient evidence to support the jury’s finding that they had
actual knowledge of the ’190 Patent—a finding necessary
to support the award of pre-suit damages for induced
infringement. Finally, Defendants argue the district
court erred in excluding evidence of pending reexamina-
tions of the patents in suit.
      A. Jury Instruction on Requisite Knowledge
    “This court reviews the legal sufficiency of jury in-
structions on an issue of patent law without deference to
the district court. This court reviews jury instructions in
their entirety and only orders a new trial when errors in
the instructions as a whole clearly mislead the jury.”
DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1304 (Fed.
Cir. 2006) (en banc in relevant part) (internal citations
and quotations omitted). “In reviewing jury instructions,
the full trial record and the jury instructions in their
entirety must be examined because instructions take on
meaning from the context of what happened at trial,
including how the parties tried the case and their argu-
ments to the jury.” Therasense, 593 F.3d at 1331.
    The district court instructed the jury:
      The Plaintiff must show that the Defendants
      actually intended to cause the acts that con-
      stitute direct infringement and that the De-
      fendants knew or should have known that its
      actions would induce actual infringement. A
      Defendant also cannot be liable for inducing
      infringement if it had no reason to be aware
      of the existence of the patent.
18                                   SYNQOR   v. ARTESYN TECH

J.A. at 390 (emphases added).
    Defendants argue this instruction allowed the jury to
find inducement if Defendants lacked actual knowledge of
the patents and only “had reason to be aware of” their
existence.
    While this instruction might be erroneous if consid-
ered in isolation, this court finds that the instructions as a
whole in the context of the trial informed the jury that
actual knowledge was required. SynQor premised its
theory at trial on actual knowledge of the patents, and
told the jury during closing that “to determine when the
clock starts for damages, you need to know when Defend-
ants knew of SynQor’s ’190 Patent.” J.A. at 1584.
    Additionally, the record shows that the jury instruc-
tions on contributory infringement required actual
knowledge of the patent. J.A. at 390. The jury found
each Defendant liable for contributory infringement, and
awarded pre-suit damages from the date the ’190 Patent
issued. J.A. at 408–25. Thus, the jury, by following this
instruction, in fact found each Defendant had actual
knowledge of the ’190 Patent when it issued.
    In this context, the jury instructions as a whole did
not clearly mislead the jury. Rather, the jury’s finding of
liability for contributory infringement demonstrates the
jury found each Defendant had actual knowledge of the
’190 Patent prior to suit.
              B. Actual Knowledge Evidence
    The record contained sufficient evidence to support
the jury’s conclusion that each Defendant had actual
knowledge of the ’190 Patent when it issued. SynQor did
not present direct evidence that any Defendant possessed
the ’190 Patent on the date it issued, nor did any Defend-
ant admit it had actual knowledge of the ’190 Patent.
Such direct evidence of knowledge is not required to
 SYNQOR   v. ARTESYN TECH                               19
support a finding of inducement. Broadcom Corp. v.
Qualcomm, Inc., 543 F.3d 683, 700 (Fed. Cir. 2008).
    SynQor presented specific evidence for each Defend-
ant that allowed the jury to infer actual pre-suit
knowledge of the ’190 Patent. The district court recount-
ed this evidence in detail and found it sufficient to sup-
port the jury’s verdict. SynQor, Inc. v. Artesyn Techs.,
Inc., No. 07-CV-0497, 2011 U.S. Dist. LEXIS 91668, at
*11–35 (E.D. Tex. Aug. 17, 2011). Among other evidence,
SynQor showed that each of the Defendants possessed
SynQor datasheets or products marked with SynQor’s
earlier patents, including U.S. Patent No. 5,999,417, to
which the patents in suit claim priority. SynQor’s expert,
Dr. Leeb, gave his opinion that “there was a significant
effort by the Defendants in this case to cross/imitate
SynQor's products,” and that those efforts would have
exposed Defendants to SynQor’s patents. Id. at *12–13.
Further, some Defendants admitted to monitoring
SynQor’s patents and one was shown to have possessed
the ’190 Patent prior to the time this suit was filed.
    After examining the record, this court concludes that
it contains sufficient evidence from which a reasonable
jury could infer that each Defendant had actual
knowledge of the patents in suit during the relevant time
period. Accordingly, this court affirms the denial of
JMOL of noninfringement under § 271(b).
               C. Reexamination Evidence
    This court applies regional circuit law to evidentiary
issues. The Fifth Circuit reviews a district court’s eviden-
tiary rulings for abuse of discretion. Seatrax, Inc. v.
Sonbeck Int’l, Inc., 200 F.3d 358, 371 (5th Cir. 2000).
    The district court excluded evidence that, prior to tri-
al, the United States Patent & Trademark Office had
granted reexamination requests for the patents-in-suit
and had issued first rejections of the asserted claims of
20                                  SYNQOR   v. ARTESYN TECH

the ’190 and ’021 Patents. The reexaminations were not
final at the time of the trial, and the district court deter-
mined they would have been confusing and more prejudi-
cial than probative. SynQor, Inc. v. Artesyn Techs., Inc.
(Denial of New Trial), No. 07-CV-0497, 2011 U.S. Dist.
LEXIS 91693, at *38 (E.D. Tex. Aug. 17, 2011). This court
detects no abuse of discretion in the trial court’s ruling.
                             V.
    The jury adopted the damages model put forth by
SynQor’s expert, Mr. Brett Reed. This model included
both lost-profits damages and a reasonable royalty com-
ponent. For both components, the jury awarded damages
based on the price SynQor asserts it would have been able
to charge but for the price erosion caused by Defendants’
infringement. Those “but for” prices are roughly two to
three times the prices actually charged by Defendants.
    Defendants seek JMOL or a new trial based on nu-
merous alleged errors in the damages portion of the trial.
Defendants argue the record evidence does not support
SynQor’s price erosion theory and reasonably royalty
rates. Defendants also argue the district court erred in its
jury instructions and exclusion of evidence relating to
noninfringing alternatives. Finally, Defendants argue
SynQor improperly introduced evidence of the entire
market value of customer end products containing the
patented components.
     A. Price Erosion & Reasonable Royalty Evidence
    “An award of damages by a jury is upheld on appel-
late review unless it is clearly not supported by evidence,
grossly excessive, or based only on speculation and
guesswork.” Interactive Pictures Corp. v. Infinite Pictures,
Inc., 274 F.3d 1371, 1376 (Fed. Cir. 2001).
   To establish entitlement to price erosion damages,
SynQor had the “burden . . . to show that ‘but for’ in-
 SYNQOR   v. ARTESYN TECH                                21
fringement, it would have sold its product at higher
prices.” Crystal Semiconductor Corp. v. Tritech Microelec-
tronics Int’l, Inc., 246 F.3d 1336, 1357 (Fed. 2001). A
credible but-for analysis must account for the “effect of [a]
higher price on demand for the product.” Id. Further,
because “a rational would-be infringer is likely to offer an
acceptable noninfringing alternative, if available, to
compete with the patent owner rather than leave the
market altogether,” the analysis must consider the impact
of such alternate technologies on the market as a whole.
Grain Processing Corp. v. Am. Maize-Prods. Co., 185 F.3d
1341, 1350–51 (Fed. Cir. 1999).
    Defendants argue the jury’s damages award is exces-
sive because SynQor’s price erosion theory is unsupported
by the evidence. To the contrary, the jury heard evidence
that SynQor sold its bus converters for prices “in the 60s
to as high as $110” per unit when it first entered the
market, J.A. at 1068, and made sales to Hewlett-Packard
and Sun for $84 per unit in 2002, J.A. at 1289. Addition-
ally, SynQor sold about 18,500 converters to Cisco in 2010
at $70 and $81 per unit during a market shortage.
     While Defendants’ expert opined that SynQor could
not have charged the 2010 prices over the long term, and
a Cisco representative testified that his company would
not have paid that price over the four-year period of
infringement, SynQor offered contrary testimony. Specif-
ically, SynQor countered Defendants’ suggestion that the
industry would have moved to noninfringing fully-
regulated converters rather than pay SynQor’s higher
prices for the patented converters. Dr. Leeb, SynQor’s
expert, testified that the power handling capability,
efficiency, and stability of fully-regulated converters was
inferior to that of the patented technology. Dr. Schlecht
and Dr. Leeb testified that, in late 2010, new fully-
regulated converters were just beginning to compete in
performance with the earliest unregulated bus converters.
22                                  SYNQOR   v. ARTESYN TECH

    In sum, the jury reasonably could have concluded that
testimony from some of Defendants’ witnesses indicated
customers would not have switched to noninfringing
alternatives in response to SynQor’s higher prices. Cisco’s
representative admitted his company would have had to
incur significant costs to redesign its end products to use
any noninfringing power converter that was not a “drop-in
replacement,” and that drop-in replacements did not exist
as of August 2010. Similarly, a defense witness testified
he was not aware of any customers that had actually
switched from unregulated intermediate bus converters to
any noninfringing alternative for the same application.
    Upon review of the entire record, this court detects
sufficient evidence for the jury to have accepted Mr.
Reed’s “but for” pricing. As such, both the lost-profits and
reasonable royalty damages are supported by substantial
evidence and not excessive or based only on speculation
and guesswork. Accordingly, this court affirms the denial
of Defendants’ motion for JMOL or a new trial.
               B. “Cisco Awards” Evidence
    Defendants argue that the district court abused its
discretion in not admitting evidence that Cisco had
awarded certain Defendants the right to develop fully-
regulated converters as “drop in replacements” for the
accused products (Cisco Awards). On the eve of trial, in
December 2010, Defendants produced preliminary tech-
nical specifications and data sheets on products in devel-
opment. Defendants assert that these fully-regulated
drop-in converters developed under the “Cisco Awards”
qualify as available noninfringing alternatives because
Defendants would have made such products but for their
infringement. This court finds no abuse of discretion in
the exclusion of the Cisco Awards evidence.
   First, the district court reasonably excluded the evi-
dence under Federal Rule of Civil Procedure 37 as having
 SYNQOR   v. ARTESYN TECH                               23
been produced too late. Denial of New Trial, 2011 U.S.
Dist. LEXIS 91693, at *35–36. The court found SynQor
would have been prejudiced by allowing evidence of the
Cisco Awards at trial because there was insufficient time
for SynQor’s experts to test the availability or perfor-
mance characteristics of the alleged substitutes. Id.
    Second, the district court properly found the Cisco
Awards not probative of the availability of noninfringing
alternatives during the damages period. Id. at *36.
Where, as here, an alleged substitute was not on the
market during the damages period, the accused infringer
has the burden to overcome the inference that the substi-
tute was not “available.” Grain Processing, 185 F.3d at
1353. Factors to consider include the ease with which a
substitute was eventually made available, the state of the
technology, and the availability of input products and
equipment. See id. at 1354; see also Micro Chemical, Inc.
v. Lextron, 318 F.3d 1119, 1123 (Fed. Cir. 2003) (finding
an alternative product not available where new product
required 984 hours to design and another 330 hours to
test).
     As the district court noted, “uncontroverted” evidence
demonstrated that significant improvements in fully-
regulated converter performance characteristics had just
been made in 2010. Denial of New Trial, 2011 U.S. Dist.
LEXIS 91693, at *36. As such, the input components
necessary to develop the replacement converters were not
readily available during the infringement period, and
there is “no basis to conclude that the high performing
fully regulated converters that Defendants were working
on in late 2010 could have been developed any earlier.”
Id. Moreover, the record shows that, even with the bene-
fit of recent component improvements, it took Defendants
nearly a year, if not longer, to make the replacement
converters available for commercial use. J.A. at 60781.
   Accordingly, the district court did not abuse its discre-
24                                  SYNQOR   v. ARTESYN TECH

tion by excluding evidence of the Cisco Awards.
     C. Jury Instruction on Noninfringing Alternatives
    Defendants argue the jury received an erroneous
instruction on noninfringing alternatives suggesting that
they must be actually sold on the market during the
period of infringement. The district court instructed the
jury:
       If the realities of the marketplace are such
       that acceptable non-infringing substitutes
       were available from suppliers who would
       have made some but not all of the sales that
       were made by the Defendants, then the
       Plaintiff may be entitled to lost profits on a
       portion of the infringing sale.
J.A. at 394 (emphasis added). The jury instruction does
not require the product to be “on the market.” Further,
the charge explained SynQor had the burden to show that
it “would have made additional profits if the Defendants
had not infringed.” J.A. at 1613. Both sides’ presenta-
tions made it clear that the jury could consider the impact
of products not on the market if they would have been
available but for infringement.
    The district court’s jury instruction was not erroneous
or misleading in the context of the trial. See Therasense,
593 F.3d at 1331. Accordingly, this court affirms the
denial of Defendants’ motion for a new trial.
            D. Entire Market Value Evidence
    This court’s standard of review a district court’s deci-
sion on a motion for new trial is governed by regional
circuit law. Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d
1292, 1309 (Fed. Cir. 2011). In the Fifth Circuit, a court
may grant a new trial if it finds the trial was unfair or
prejudicial error was committed. Smith v. Transworld
Drilling Co., 773 F.2d 610, 612–13 (5th Cir. 1985). “The
 SYNQOR   v. ARTESYN TECH                               25
decision to grant or deny a motion for a new trial is within
the discretion of the trial court and will not be disturbed
absent an abuse of discretion or a misapprehension of the
law.” Prytania Park Hotel, Ltd. v. Gen. Star Indem. Co.,
179 F.3d 169, 173 (5th Cir. 1999).
    Defendants argue a new trial on damages is warrant-
ed because SynQor’s revelation of $20 billion customer
end-product sales “skew[ed] the damages horizon for the
jury.” Uniloc, 632 F.3d at 1320. A patentee may “assess
damages based on the entire market value of the accused
product only where the patented feature creates the ‘basis
for customer demand’ or ‘substantially create[s] the value
of the component parts.’” Id. at 1318 (quoting Lucent
Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1336 (Fed.
Cir. 2009)).
    Here, SynQor never sought to justify its damages fig-
ure based on the price of the customer end products.
Denial of New Trial, 2011 U.S. Dist. LEXIS 91693, at *85.
SynQor’s damages calculations were based on the “but
for” sales price of the intermediate bus converters.
SynQor used the end-product value only to argue that the
price elasticity of demand for the intermediate bus con-
verters would be high because they enable space saving
and efficiency while representing a small fraction of the
end price. Id. at *86.
   The district court found SynQor’s discussion of end-
product sales in this case was not unfair or prejudicial.
This court finds no abuse of discretion and affirms the
denial of Defendants’ motion for a new trial.
                            VI.
    After trial, the district court issued a permanent in-
junction beginning January 24, 2011, which was partially
stayed by this court until September 30, 2011. Supple-
mental Damages Order, slip op. at 4; see SynQor, Inc. v.
Artesyn Techs., Inc., 417 F. App’x 976 (Fed. Cir. 2011). On
26                                  SYNQOR   v. ARTESYN TECH

June 15, 2011, the district court held a full evidentiary
hearing on the issue of supplemental damages for the
post-trial period. Supplemental Damages Order, slip op.
at 5. The court found each Defendant actively induced or
contributed to infringement after the verdict by continu-
ing to sell the accused products overseas with knowledge
that they would be imported into the United States. Id.
at 17–27. The court awarded supplemental damages
using the methodology adopted by the jury. Id. at 17.
Further, the court enhanced post-verdict damages by 1.75
times based on the “egregiousness” of Defendants’ conduct
in continuing to sell the accused products after the jury
found infringement. Id. at 28.
               A. Supplemental Damages
     Defendants argue they have a right to a jury trial
with respect to new factual issues raised by SynQor’s
claim for supplemental damages. This court has held,
however, that the amount of supplemental damages
following a jury verdict “is a matter committed to the
sound discretion of the district court.” Amado v. Microsoft
Corp., 517 F.3d 1353, 1362 n.2 (Fed. Cir. 2008).
     In Amado, this court required the district court to
take into account new factual circumstances, including
the change in the parties’ bargaining positions and the
infringer’s ability to immediately comply with the injunc-
tion, “as well as the evidence and arguments found mate-
rial to the granting of the injunction and the stay.” Id. at
1362. Thus, a jury right is not implicated every time the
district court is required to determine factual matters
before awarding supplemental damages to compensate
the patentee for post-verdict infringement. See Finjan,
Inc. v. Secure Computing Corp., 626 F.3d 1197, 1212–13
(Fed. Cir. 2010) (noting a patentee is not “fully compen-
sated” unless the damages award includes sales following
the verdict, and that 35 U.S.C. § 284 requires the court to
assess damages when they are not found by a jury).
 SYNQOR   v. ARTESYN TECH                               27
    Defendants also argue the district court erred in find-
ing Defendants Artesyn Technologies, Inc. and Astec
America, Inc. (collectively, Astec) and Bel Fuse, Inc. (Bel
Fuse) induced infringement following the verdict. The
record shows that the underlying direct infringement took
place, because Defendants’ largest customer admitted it
continued shipping products that incorporate Defendants’
bus converters into the U.S. following the infringement
verdict. Supplemental Damages Order, slip op. at 18.
Astec and Bel Fuse argue they lacked the requisite intent
to induce infringement, however, based on agreements
they entered with their U.S. customers following the
verdict.
     Astec issued a stop order on all shipments, regardless
of destination, effective two days after the verdict. Some
customers then informed Astec that they required further
supply to meet sales obligations in the United States. In
response, Astec entered into indemnification agreements
with those customers. The district court found, and this
court agrees, that the indemnification agreements show
Astec knew its customers would import end-products into
the United States and merely shifted financial responsi-
bility for any damages onto the customers. Id. at 22.
     Similarly, following the verdict Bel Fuse entered into
an indemnification agreement with its sole customer as to
which the district court awarded supplemental damages.
Bel Fuse characterizes the agreement as a “non-
importation agreement” that prevented Bel Fuse convert-
ers from being incorporated into products shipped to the
United States. The terms of the agreement reveal, how-
ever, that the parties understood U.S. imports would
continue until a permanent injunction became effective.
J.A. at 69573–74. This court therefore agrees with the
district court’s finding that “Bel Fuse knew that direct
infringement would occur and planned for the liability
that it would incur by inducing the direct infringement.”
28                                  SYNQOR   v. ARTESYN TECH

Supplemental Damages Order, slip op. at 24–25.
    Thus, while a true non-importation agreement with
which a Defendant complies may prevent a post-verdict
finding of intent to induce infringement, the district court
correctly determined the Astec and Bel Fuse agreements
at issue here did not demonstrate a lack of intent to
induce infringement. Instead, the agreements contem-
plated continued U.S. sales and merely provided for a
shift of liability.
                 B. Enhanced Damages
    The court enhanced the damages award for Defend-
ants’ post-verdict sales by 1.75 times, citing its authority
to do so under 35 U.S.C. § 284. Id. at 27. Defendants
argue the award of enhanced damages was improper
because the court did not expressly find willful infringe-
ment and because SynQor did not pursue a willfulness
claim at trial. See Spectralytics, Inc. v. Cordis Corp., 649
F.3d 1336, 1348 (Fed. Cir. 2011) (holding “a finding of
willfulness is a prerequisite for enhancing damages under
§ 284”).
    The district court found Defendants’ conduct “egre-
gious[]” in continuing, and even increasing, sales in the
face of an infringement verdict. Supplemental Damages
Order, slip op. at 28. The district court made the appro-
priate determination for an award of enhanced damages.
Spectralytics, 649 F.3d at 1349 (holding that, while a
finding of willfulness is a “prerequisite” to the award of
enhanced damages, the “‘paramount determination in
deciding to grant enhancement and the amount thereof is
the egregiousness of the defendant’s conduct based on all
the facts and circumstances.’” (quoting Read Corp. v.
Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992))).
   The court’s enhancement of damages was squarely
based on a recognition of Defendants’ willful infringement
and the enhancement therefore was proper under § 284.
 SYNQOR   v. ARTESYN TECH                                29
This court also sees no reason why SynQor’s decision not
to argue pre-verdict willful infringement at trial should
preclude the district court from finding willful infringe-
ment for post-verdict sales. Defendants’ cursory claim of
entitlement to a jury trial on the issue of enhancement,
noted in a single sentence of the opening brief, is unper-
suasive and insufficient to raise the issue on appeal. See
Murata Opening Br. 79. In sum, the district court did not
abuse its discretion by awarding enhanced damages for
Defendants’ post-verdict infringement.
 C. Supplemental Damages & Sanctions Against Delta
    This court applies regional circuit law to sanctions
rulings. Transclean Corp. v. Bridgewood Servs., Inc., 290
F.3d 1364, 1370 (Fed. Cir. 2002). The Fifth Circuit re-
views the imposition of sanctions for abuse of discretion.
United States v. Garrett, 238 F.3d 293, 297 (5th Cir.
2000). A district court considering “sanctions for discov-
ery violations should consider the following factors: 1) the
reasons why disclosure was not made; 2) the amount of
prejudice to the opposing party; 3) the feasibility of curing
such prejudice with a continuance of the trial; and 4) any
other relevant circumstances.” Id. at 298.
     The district court awarded $507,779 in supplemental
damages for pre-verdict sales of 17,000 converters that
Delta did not disclose to SynQor or to the court until April
2011. SynQor, Inc. v. Artesyn Techs., Inc. (Sanctions
Order), 07-CV-0497, 2011 U.S. Dist. LEXIS 74337 (E.D.
Tex. July 11, 2011). Delta disputes the award because it
had a non-importation agreement in place with Cisco, its
sole customer for those sales. Specifically, Cisco agreed
that for orders “shipped by Delta after June 21, 2010
(‘Affected Products’), Cisco will not ship or have shipped
on its behalf Affected Products or systems containing
Affected Products into the United States.” J.A. at 70024.
There is no evidence that either Cisco or Delta failed to
comply with their non-importation agreement.
30                                  SYNQOR   v. ARTESYN TECH

    Thus, Delta argues the undisclosed sales were non-
infringing and not subject to damages. The district court
awarded damages based on the sales, however, because
Delta withheld them from discovery in violation of the
district court’s orders. Sanctions Order, 2011 U.S. Dist.
LEXIS 74337, slip op. at *9–11.
    The district court found Delta unilaterally made a
“conscious and willful decision to withhold this relevant
sales data from production.” Id. at *17. SynQor was
“severely prejudiced” by the non-disclosure because its
damages model was based on each Defendant’s worldwide
sales, multiplied by an importation rate. Id. at *23. The
district court recognized that if SynQor had been in-
formed of the 17,000 sales by Delta, those sales would
have been included in Mr. Reed’s damages model—either
as additional sales by Delta or by adjusting the importa-
tion rate for other Defendants whose products made up
for the lost U.S. sales volume. Id. at *21–22. Federal
Rule of Civil Procedure 37(b)(2) permits courts to direct
that “facts be taken as established” where a party fails to
comply with a discovery order. The court properly award-
ed damages to SynQor for the undisclosed sales made by
Delta because they would otherwise have been accounted
for at trial. Id. at *23.
    The district court also ordered Delta to pay $500,000
in civil contempt sanctions plus attorneys’ fees and costs.
Id. at *25 (citing Fed. R. Civ. Proc. 37(b)(2)). The sanction
was “to compensate SynQor for losses sustained due to
Delta’s discovery violations, including prejudgment inter-
est,” and to deter other litigants from engaging in similar
discovery abuses. Id. at *24–25. As the district court
noted, “[n]o court can function if its discovery rules are
disregarded.” Id. at *18. The sanctions awarded bear a
“reasonable relationship” to the harm that occurred, and
serve as a deterrent against similar discovery violations
by future litigants. See BMW of N. Am. v. Gore, 517 U.S.
 SYNQOR   v. ARTESYN TECH                             31
599, 580–81 (1996). This court finds the sanctions im-
posed against Delta do not constitute an abuse of discre-
tion.
                            VII.
    For the foregoing reasons, this court affirms the
judgment of the district court.
                       AFFIRMED