The U.S. Court of Appeals for the Federal Circuit affirmed a jury’s finding of willful infringement under the Knorr-Bremse totality-of-the-circumstances rule. Imonex Services, Inc. v. W. H. Munzprufer Dietmar Trenner GmbH, Case Nos. 04-1262,-1290 (Fed. Cir. May 23, 2005) (Rader, C.J.).
At a first trial, the jury decided that Imonex’s patents (directed to coin selectors like those found on coin-operated laundry machines) were valid, enforceable and willfully infringed and awarded damages of over $10 million. The district court denied the defendant’s judgment as a matter of law (JMOL) motions of non-infringement and non-willfulness but ordered a second trial on damages. The second jury awarded damages of just over $1 million to Imonex. Both sides appealed.
On the issue of willfulness, the Federal Circuit affirmed the district court finding that it properly applied the test set out in the en banc Knorr-Bremse v. Dana Corp. opinion. The defendants had argued that they discharged their duty of due care by obtaining opinions of counsel regarding infringement shortly after being served with the complaint. Imonex argued that the defendants should have obtained these opinions earlier, as soon as they learned of their possible infringement of the patents. The Federal Circuit reiterated its holding in Knorr-Bremse that it is no longer appropriate to draw an adverse inference with respect to willful infringement from failure to obtain legal advice. While early receipt of legal advice would have strengthened the defendants’ argument that they had not willfully infringed, failure to have solicited such advice should not be viewed as evidence of willfulness. Nevertheless, the Court held that the jury had sufficient evidence (even without such an inference) to find actual notice and willful infringement under the facts of the case.
On the issue of damages, the Court upheld the district court’s exclusion of the Imonex expert’s testimony on the entire market value. The entire-market-value rule allows calculation of damages based on the value of an entire apparatus containing several features when the patented feature is the "basis for customer demand." Because Imonex proffered no evidence that the patented features were the basis for customer demand for the laundry machines as a whole, the Court found that the trial court properly excluded the expert testimony on the unsupported entire-market-value theory.
The Federal Circuit also upheld the district court’s decision to remit the first jury’s damages award. Applying the law of the Fifth Circuit for this issue, the Court found the district court was justified in remitting the original damage award based on the misleading and improper argument of Imonex’s lawyer during closing argument.
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