Federal Judiciary

Motion for Remittitur Denied in Anascape v. Nintendo

By Michael Smith

Anascape v. Nintendo, 9:06cv158 (E.D. Tex. June 26, 2008)
Judge: Ron Clark
Holding: Defendant's Motion for Remittitur or in the Alternative, A New Trial on Damages DENIED
Plaintiff Anascape, Ltd. sought $50.3 million for infringement of a patent relating to video game controllers. After a jury trial in Judge Clark's court in Lufkin, three of the four products sold by Defendant Nintendo of America, Inc. were found to infringe all of the asserted claims of the patent - but the big seller, the Wii Nunchuk, was not.  Nintendo did not call an expert witness on damages at trial, or rebut Anascape?s evidence on overall sales of the accused products, instead focusing on its claims that the plaintiff simply wrote claims specifically to cover its Gamecube controller, Judge Clark noted. Such activity is perfectly proper, he noted, as is the defendant's legitimate trial tactic of pointing it out to try to turn the jury against the copier.  The jury awarded Anascape $21 million in damages for patent infringement. Nintendo asserted that remittitur is appropriate because the jury?s damages award was unsupported by any record evidence. Judge Clark disagreed, finding that the damages award was neither excessive nor against the greater weight of the evidence.
The crux of this motion was the defendant's argument that the plaintiff's damages expert. Mr. Walter Bratic had broken the damages down by product, and since the defendant prevailed on its argument that the big seller did not infringe, the expert's calculations (reproduced in the order and below) should set a ceiling on damages of $2 milion and some change, not the $21 million the jury awarded.
Judge Clark noted that the defendant had avoided putting forward its own damages calculation based on product by product sales, thus "cleverly avoid[ing] setting a floor for damages ... but waiv[ing] the opportunity to present contravening evidence on damages."  "It appears to the court" he continued, "that Nintendo made some skillfully calculated decisions regarding trial tactics to protect the Wii Nunchuk with Remote. Sales revenue to date from the Wii Nunchuk totals more than the revenue from the other three products combined. In terms of an on-going royalty or compulsory license, that is where substantial future damages would have been. Having virtually admitted that three 'old school' products infringe, and having made no serious attempt to rebut Anascape?s damage calculations, Nintendo is not in a good position to argue that the jury?s verdict is the result of passion or prejudice, or even that it is disproportionate to the injury sustained."
Damages for patent infringement, the Court observed, must be ?adequate to compensate for the infringement, but in no event less than a reasonable royalty[.]? 35 U.S.C. § 284. "This is the amount that Congress has set as a floor?not a ceiling or a mid-point," Judge Clark wrote (emphasis mine). 
"Deciding how much to award as damages in a patent infringement case ?is not an exact science" the Court continued, quoting the Federal Circuit in Kalman v. Berlyn Corp., 914 F.2d 1473, 1482 (Fed. Cir. 1990). "The Federal Circuit has stated that it does ?not hold that a jury may only arrive at a royalty specifically articulated by the parties during trial.? Unisplay S.A., 69 F.3d at 1167. Instead, ?a jury?s choice simply must be within the range encompassed by the record as a whole.? Id. Here, the jury was instructed on the reasonable royalty inquiry and on all of the Georgia-Pacific factors, so that too supported the Court's conclusion that the plaintiff's expert's calculations did not limit the jury's discretion to award a sum in excess of a straight "base times royalty rate" calculation.

Full post as published by Eastern District of Texas Federal Court Practice on July 07, 2008 (boomark / email).