United States: Jury's Award Of Lump Sum Royalty Precludes Plaintiffs Request For Ongoing Royalties After Trial

Last Updated: July 22 2013
Article by Stanley M. Gibson

After a jury trial in which plaintiff Summit 6 was awarded $15 million against Samsung, Summit 6 moved for an award of future, ongoing royalties to compensate it for Samsung's continued infringement after the verdict. Summit 6's motion was based on the argument that the jury's verdict only compensated it for Samsung's past infringement up to the point of trial.

On the verdict form, the jury added the words "lump sum" under the $15 million amount. In its motion, Summit 6 argued that the jury instruction did not define "lump sum," nor did the jury instructions explain that a lump sum award would be through the life of the patent, instead of up to the date of trial. Samsung argued in response that the jury understood that "lump sum" covered both past and future infringement, citing to specific testimony during trial defining the term "lump sum."

The district court began its analysis of the motion by focusing the damages that a patentee is entitled to receive. "A patentee is entitled to 'damages adequate to compensate for infringement, but in no event less than a reasonable royalty.'" Wordtech Sys. Inc. v. Integrated Networks Solutions, Inc., 609 F.3d 1308, 1319 (Fed. Cir. 2010) (quoting 35 U.S.C. § 284). In assessing a damages award, "a court must ask, '[H]ad the Infringer not infringed, what would [the] Patent Holder[ ] have made?'" Lucent, 580 F.3d at 1324 (alterations in original) (quoting Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 507 (1964)). "A reasonable royalty can be calculated from an established royalty, the infringer's profit projections for infringing sales, or a hypothetical negotiation between the patentee and infringer based on the factors in Georgia-Pacific." Wordtech, 609 F.3d at 1319 (citing Lucent, 580 F.3d at 1324). "The hypothetical negotiation 'attempts to ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agreement just before infringement began,' and 'necessarily involves an element of approximation and uncertainty.'" Id. at 1319 (quoting Lucent, 580 F.3d at 1324-25).

The hypothetical negotiation can result in either a running royalty rate or a lump-sum royalty payment. See Lucent, 580 F.3d at 1325. "District courts have broad discretion to interpret an ambiguous verdict form, because district courts witness and participate directly in the jury trial process." Telcordia Techs., Inc. v. Cisco Sys., Inc., 612 F.3d 1365, 1378 (Fed. Cir. 2010).

As explained by the district court, "[i]n this case, the verdict form under Damages asked: 'What sum of money, if any, do you find from a preponderance of the evidence is adequate to compensate Plaintiff for Defendant's conduct that you found to infringe? Provide the amount, if any, in dollars and cents.' See Jury Charge 46-47, ECF No. 562. On the line below this question, the foreman wrote '15,000,000.00 -> $15 MILLION' and underneath the blank line added 'LUMP SUM.' Id. The Court finds that this is an express statement in the verdict that this is award is for a lump sum license. See Telecordia Techs., 612 F.3d at 1378 ('In the absence of an express statement in the verdict, this court cannot determine whether the jury compensated [plaintiff] for all of [defendant's] infringing activities.')."


The district court then noted that "[t]hroughout trial, 'lump sum' was consistently explained by both parties as providing a one-time, single payment for a license for the life of the patent. Summit 6's expert, Benoit, and Samsung's expert, Martinez, both testified multiple times as to this definition. Summit 6 argues that the jury charge never gave the jury a specific definition of 'lump sum' and thus it is unclear what the jury intended by its inclusion of that term on the verdict form. Pl.'s Mot. Compulsory Royalty 2, ECF No. 569. The Court, however, finds that the trial testimony was consistent and abundant such that the jury would understand that 'lump sum' would compensate Summit 6 for the life of the patent. Also, the fact that the jury specifically wrote that language underneath the $15 million amount emphasizes that the jury wanted to ensure their damages amount was clear."

As a result, the district court concluded that the jury verdict encompassed damages for both and future infringement. "Accordingly, the Court finds that the jury verdict represents the amount of a lump sum license for the life of the patent and compensates Summit 6 for both past and future infringement of the '482 patent."

Summit 6 LLC v. Samsung, Case No. 3:11-cv-367-O (N D. Tex. June 26, 2013)

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