Federal Judiciary

Judgment entered (again) in Paice v. Toyota - ongoing royalty set at 1/4-1/2%

By Michael C. Smith

In December 2005 a Marshall jury found for plaintiff Paice in its case against Toyota and awarded approximately $4 million (I was there for closing arguments and recall the plaintiff asking for around $32 million, for what that's worth).  In 2006 Judge Folsom issued orders on requests for injunctions in two trials where plaintiffs had prevailed, granting the injunction in one case (TiVo v. Echostar) but denying it in the other, this case.  In 2007 the Federal Circuit ruled on the appeal in this case.  The court affimed the jury's finding of infringement under equivalents and its decision not to find literal infringement.  It was also okay with the decision not to grant an injunction and with the idea of  an ongoing royalty (which it wouldn't call a compulsory license). 
What it was not okay with and remanded for a redetermination was the district court's setting the royalty at the $25 per engine found by the jury, noting in passing that the plaintiff does not get a jury to determine the ongoing rate.  The reason for the remand was because the court "was unable to determine whether the district court abused its discretion" with respect to calculating the royalty because the district court didn't provide any basis for that number beyond the jury's verdict.  It wasn't saying $25 an engine was wrong - but there must be some (unidentified) analysis backing it up and an explicit opportunity for the parties to negotiate out a royalty rate before the court sets one.  
On Friday, two years and eight months after initially entering judgment, Judge Folsom again entered a final judgment, this time for $4,269,950.00 plus pre and postjudgment interest, plus an ongoing royalty for the remaining life of the ?970 Patent, as a percentage of wholesale vehicle price, of 0.48% for each Toyota Prius II, 0.32% for each Toyota Highlander, and 0.26% for each Lexus RX400H sold after the entry of the Court?s original Final Judgment?August 16, 2006.  For the period of time between the jury?s verdict and final judgment, the Court found the applicable royalty was still $25 per infringing vehicle sale - which looks to me to be a a fraction of the new royalty.

Full post as published by Eastern District of Texas Federal Court Practice on April 21, 2009 (boomark / email).