Case 2:14-cv-00111-AJS Document 333 Filed 04/22/15 Page 1 of 5
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
`
`
`
`
`
`14cv0111
`ELECTRONICALLY FILED
`
`DRONE TECHNOLOGIES, INC.,
`
`
`
`Plaintiff,
`
`
`
`
`
`v.
`
`
`
`
`PARROT S.A., PARROT, INC.,
`
`
`Defendants.
`
`ORDER OF COURT RE: DEFENDANTS’ OBJECTIONS TO JURY VERDICT FORM
`RE: DAMAGES (DOC. NO. 317)
`
`On April 6, 2015, the Parties filed separate Proposed Verdict Forms, per the Court’s
`
`
`
`
`
`
`
`Pretrial Order. Doc. Nos. 261-262. On April 9, 2015, based upon the Parties’ submissions and
`
`the Court’s review of the record, the Court filed a Draft Jury Verdict Form as to Damages. Doc.
`
`No. 289. This draft document included separate questions as to each of Plaintiff’s infringed
`
`patents and a blank line for the jury to complete as to the “reasonable royalty rate” and “total
`
`damages” for each patent. Id. The Court invited the Parties to file any objections to this draft;
`
`both Plaintiff and Defendants subsequently objected to the Draft Verdict Form. Doc. No. 294-
`
`295. Based upon the Parties’ agreement, the Court updated the Draft Verdict Form by removing
`
`the line for a determination of a “reasonable royalty rate.” Doc. Nos. 294-295, 298. In the
`
`updated Final Verdict Form, the Court also condensed the jury’s determination of damages to a
`
`single question. Doc. No. 298 (“What is the total amount of damages due to Plaintiff with
`
`respect to its infringed US Patents 7,584,071 (“the ‘071 patent”) and 8,106,748 (“the ‘748
`
`patent”)?”).
`
`

`
`Case 2:14-cv-00111-AJS Document 333 Filed 04/22/15 Page 2 of 5
`
`
`
`On April 16, 2015, during the Preliminary Pretrial Conference, the Court discussed the
`
`Final Verdict Form in depth with Counsel. Following the Conference, the Court filed a revised
`
`Jury Verdict Form, which reads as follows:
`
`1. What is the total amount of damages due to Plaintiff with respect to its
`infringed US Patents 7,584,071 (“the ‘071 patent”) and 8,106,748 (“the ‘748
`patent”) from January 31, 2012 through June 30, 2015?
`
`
`Total Damages: $________________________________
`
`
`
`
`
`
`
`
`
`
`
`2. What is the total amount of damages due to Plaintiff with respect to its
`infringed US Patents (the ‘071 patent and the ‘748 patent) from July 1, 2015
`through the expiration of the patents (‘071 patent-March 2028; ‘748 patent-
`November 2030)?
`
`
`Total Damages: $________________________________
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Doc. No. 309. The Court invited the Parties to file any objections “to issues not previously ruled
`
`upon by the Court during the conference or in previous Orders” on or before April 20, 2015, at
`
`NOON. Id. Defendants object to the Jury Verdict Form in three respects and move this Court
`
`to: (1) remove the question (#2) addressing future damages; (2) separate the question as to past
`
`damages (#1) so that the jury awards separate damages for each patent; and (3) remove the date
`
`“January 31, 2012” for the Verdict Form. Doc. No. 317. Plaintiff did not file any objections to
`
`the Jury Verdict Form re: Damages, but has filed a “Pretrial Memorandum,” in which Plaintiff
`
`addresses the company’s position that the Jury Verdict Form as filed reflects an appropriate
`
`determination of damages. Doc. No. 319. Defendants have filed a brief in response to Plaintiff’s
`
`Memorandum. Doc. No. 321.
`
`
`
`First, the Parties agree that a reasonable royalty, not lost profits, is the appropriate
`
`measure of damages in this case. Doc. No. 199, pg. 19. A reasonable royalty can be calculated
`
`2
`
`
`
`

`
`Case 2:14-cv-00111-AJS Document 333 Filed 04/22/15 Page 3 of 5
`
`in various manners, based upon the factors enumerated in Georgia-Pacific Corp. v. U.S. Plywood
`
`Corp., 446 F.2d 295 (2d Cir. 1971). Plaintiff’s expert sets forth that in his opinion, $7.5 million
`
`is an appropriate damages award for sales from date of first infringement through June 2015
`
`(based upon reasonable royalty rates of $16/unit for the AR. Drone and Bebop and $6/unit for
`
`MiniDrone products) and $17.3 million is an appropriate lump sum payment for the unlimited
`
`use of Plaintiff’s patents from June 2015 through the patents’ expiration. Defendants’ expert
`
`calculates reasonable damages from date of first infringement through June 2015 as a lump sum
`
`payment of at most $400,000 based upon his calculation of the cost of a license (based upon
`
`$0.50 per unit, for a total of $647,670) less qualitative factors that he contends suggest a
`
`downward pressure on the royalty.1 Doc. No. 199. As noted, Plaintiff’s expert witness sets forth
`
`a damages theory based upon separate calculations as to both past and future infringement;
`
`arguably a segmented lump sum payment. In essence, although the expert witnesses arrive at
`
`their damages estimates in different manners, both experts calculate an award that could be
`
`construed as a lump sum payment to Plaintiff for Defendants’ infringement. After the close of
`
`evidence, the jury will be instructed how to weigh expert testimony and the various methods they
`
`may employ to calculate damages, based upon a reasonable royalty.
`
`
`
`The Court must first address whether future damages can or should be submitted to the
`
`jury. Defendants contend that a jury determination of future damages is inappropriate because
`
`future damages are an equitable determination for the Court and any award would be speculative.
`
`
`
`A review of the record reveals that Plaintiff’s expert has set forth sufficient support such
`
`that the Court will permit testimony as to a determination of damages for future infringement
`
`1 The Court granted Defendants permission to supplement their damages expert report, to address future
`damages, during the Preliminary Pretrial Conference, which was filed on April 21, 2015. Doc. Nos. 313
`and 322.
`
`
`
`3
`
`

`
`Case 2:14-cv-00111-AJS Document 333 Filed 04/22/15 Page 4 of 5
`
`during trial. As such, the jury will hear presentation of the Parties’ experts and their
`
`contradictory damages calculations as to both past and future damages. To eliminate confusion
`
`amongst the jury wherein they would receive evidence that was segmented between past and
`
`future damages, but then only complete a single question as to damages, the Court has included
`
`separate lines on the Verdict Form for both past and future infringement. As Defendants have
`
`conceded, the Court may utilize the jury for an advisory opinion on the determination of
`
`damages for future infringement. Separate questions for both past and future damages protect
`
`Defendants and alleviate their concern that future damages are an issue for the Court because the
`
`Verdict Form will clearly reflect the jury’s determination of damages up to June 2015 and then
`
`clearly reflect the award for future damages through the date of the expiration of the patents. As
`
`the Court noted during the Preliminary Pretrial Conference, the Court could not take the jury’s
`
`determination of future infringement as advisory if the sole jury interrogatory was the total
`
`amount of damages, without differentiation between past and future damages. Doc. No. 313, pg.
`
`34 (“Well, I can’t take it as advisory if I have only one number.”).
`
`
`
`Defendants will not be prejudiced if a determination of future damages is submitted to the
`
`jury because the calculation of past and future damages are distinct. As noted by the expert
`
`witnesses, the award for past and/or future damages is driven, in large part, by the number of
`
`sales during distinct time periods (future damages: July 1, 2015 through the expiration of the
`
`patents). As such, any sales the jury credits for a calculation of future damages will not affect
`
`the determination of a damages award for infringement through June 30, 2015 (the end date for
`
`the period of past infringement). Therefore, because there is sufficient evidence to support the
`
`Parties’ positions as to a calculation of future infringement and Defendants will not be prejudiced
`
`by presentation of this evidence, the Court will submit the issues of future damages to the jury.
`
`
`
`4
`
`

`
`Case 2:14-cv-00111-AJS Document 333 Filed 04/22/15 Page 5 of 5
`
`
`
`The Court has previously ruled, as a matter of law, that January 31, 2012 is the date of
`
`first infringement, which has been included in the Final Jury Instructions as the date of the
`
`hypothetical negotiation. Doc. No. 293, pg. 2. The Court has also previously ruled that the
`
`jury’s damages calculations should not be parsed as to the two infringed patents in order to
`
`prevent jury confusion and to streamline the presentation of evidence. Doc. No. 298. To the
`
`extent that Defendants’ objections to the inclusion of January 30, 2012 on the Jury Verdict Form
`
`and the inclusion of a single question as to both patents is a motion for this Court to reconsider
`
`these prior rulings, this requested relief is denied.
`
`
`
`AND NOW, this 22nd day of April, 2015, IT IS HEREBY ORDERED THAT
`
`Defendants’ Objections to Jury Verdict Form re: Damages (Doc. No. 317) are OVERRULED.
`
`The Verdict Form, as filed at Doc. No. 309, will be utilized by the jury to determine the damages
`
`due to Plaintiff for Defendants’ infringement.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`s/ Arthur J. Schwab
`Arthur J. Schwab
`United States District Judge
`
`
`
`
`
`cc:
`
`All Registered ECF Counsel and Parties
`
`5