EDTX Awards Supplemental Damages (Pre- and Post-Verdict)

On July 11, 2011, Judge Ward of the Eastern District of Texas issued an opinion finding that SynQor was entitled to supplemental damages. At issue in this case are the damages related to Defendants' infringement of SynQor's patents both before and after the Court's verdict of infringement. Judge Ward, in his opinion and for this summaries' purpose, broke the damage periods in two ("Period 1" and "Period 2"). SynQor, Inc. v. Artesyn Tech. Inc., Case. No. 2:07-CV-497-TJW-CE (E.D. Tx., July 11, 2011).

Period 1 - Pre-Verdict Infringement

Period 1 represents the damages related to pre-verdict infringement. The Court, and the Parties, adopted the damages methodology used by the Plaintiff's damages expert at trial. Defendant ("Murata") disputed Plaintiff's proposed application of the damages methodology for supplemental damages. Plaintiff ("SynQor") argued that the "90% importation rate" used by the damages expert should have been used to determine the supplemental damages award, even though the jury did not use that 90% importation rate itself. In support, SynQor stated that during a settlement agreement with a separate Defendant, Fujitsu, SynQor learned that the 90% importation rate was the actual rate rather than a negotiated term. In contrast, Murata argued that "the supplemental calculation [could not] take into account information that did not exist on the verdict date[.]" Id. at 10. Considering both positions, the Court agreed with Murata that the "importation rate used at trial and adopted by the jury [was] the one that should be used for the pre-verdict time period" and not the importation rate learned subsequent to the jury's verdict. Id.

Additionally, another Defendant ("Delta") disputed damages. Specifically, Delta argued that it should not be liable for sales of the infringing product after June 21, 2010 because it had notified its distributor that none of the infringing product should be sold within the United States. However, the Court disagreed with Delta because Delta waited until "well after the close of discovery, and the jury's verdict, to disclose certain pre-verdict sale [sic] made to [its distributor.]" Id.

Period 2 - Post-Verdict Infringement

The Court, in Period 2 (post-verdict infringement), addressed the supplemental damages related to each of six defendants and their post-verdict infringement. The Court found that four of the six defendants infringed the product post-verdict. The discussion of the Defendant, Astec, below encompasses the main arguments provided by the four infringing defendants.

Astec argued that SynQor could not prove Astec's infringement of its product after the verdict. Specifically, Astec argued that it informed its customers of the litigation, and conditioned sales of the infringing product on "(a) obtaining authorization from SynQor for the sales or (b) entering into an indemnification Agreement, in which the customer agreed to be financially responsible for any damage that may be caused to SynQor by Astec shipping the converters into the United States or the customer importing or selling its products in the United States." Id. at 22. The Court did not buy Astec's argument. It noted that Astec "knew its customers were in dire straits" to meet its U.S. demand. Further, the indemnification agreements, according to the court, "were not drafted in a vacuum, and in fact, the circumstantial evidence establishes that Astec's customers had more incentive to violate the terms of indemnification agreement than to work with SynQor." Id. at 23.