Case 2:14-cv-00111-AJS Document 403 Filed 06/12/15 Page 1 of 24
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
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`14cv0111
`ELECTRONICALLY FILED
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`DRONE TECHNOLOGIES, INC.,
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`Plaintiff,
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`v.
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`PARROT S.A., PARROT, INC.,
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`Defendants.
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`MEMORANDUM ORDER OF COURT RE: POST-TRIAL DAMAGES MOTIONS
`(DOC. NOS. 378, 380, 382, 383, 386)
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`I. Introduction
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`A.
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`Jury Determination of Damages Due to Plaintiff for Defendants’ Infringement
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`After unprecedented disruptive and dilatory discovery actions by Defendants, the Court
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`was constrained to enter default judgment against Defendants as to infringement of two United
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`States Patents. The only issue presented during the recent three-day jury trial was the amount of
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`damages, if any, due to Plaintiff for Defendants’ infringement.
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`After deliberating for approximately seven (7) hours over two (2) days, the jury
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`determined that Plaintiff was due $3,783,950 for damages from January 31, 2012 through June
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`30, 2015 (“past damages”) and $4,016,050 for damages from July 1, 2015 through expiration of
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`the patents (7,584,071 patent (“the ‘071 patent”)-March 2028; 8,106,748 (“the ‘748 patent”)-
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`November 2030) (“future damages”–advisory jury verdict). Doc. No. 371.
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`B.
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`The Jury’s Damages Verdict was Based Upon the Georgia-Pacific Factors
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`Before the trial commenced, based upon the Court’s Pretrial Orders, the Parties worked
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`to draft proposed preliminary jury instructions, motions in limine, evidentiary objections,
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`proposed final jury instructions, and a proposed verdict form such that the trial would be solely
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`Case 2:14-cv-00111-AJS Document 403 Filed 06/12/15 Page 2 of 24
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`focused on a determination of damages derived from the application of relevant legal principles
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`to relevant evidence. Doc. No. 127. As agreed-to by the Parties, the jury was instructed from
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`the Court’s first remarks and throughout the trial that their deliberations and eventual verdict
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`must be based upon fifteen (15) enumerated factors (“Georgia-Pacific factors”). The importance
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`of these factors was impressed upon the jurors by:
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`providing the factors in a written document prior to preliminary jury instructions;
`reference by attorneys and witnesses to the factors throughout the trial;
`the Court’s instruction at several points to re-read the provided factors; and
`the Court’s preliminary and final jury instructions
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`Once seated, the jury was provided background on patents and patent litigation through a
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`video from the Federal Judicial Center and then instructed by the Court that:
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`[i]t has already been established that Parrot is liable for infringing Drone
`Technologies’ ‘071 and ‘748 patents as to four specific models of Parrot Drone
`Products. Those four Parrot drone models are called: 1. AR.Drone; 2. AR.Drone
`2.0 (pronounced “A R Drone Two Point Oh”); 3. Minidrones; and 4. Bebop
`Drones. The only issue for you to decide is: What is the proper amount of
`damages to be paid by Parrot to Drone Technologies, if any?
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`Doc. No. 320, pg. 2.
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`Following these preliminary instructions, the Court provided each juror with a two-page
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`document entitled “Reasonable Royalty-Relevant Factors” that set forth factors to guide the
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`jury’s determination of a reasonable royalty. Doc. No. 308. These fifteen factors were agreed-to
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`by the Parties and were derived from applicable case law. Georgia-Pacific Corp. v. United
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`States Plywood Corp., 318 F.Supp. 1116 (S.D. NY. May 28, 1970). The Court emphasized the
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`importance of these factors to the jury and explained that:
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`. . . I give this to you because I want you to read it now, we will read it one more
`time before we start the trial. But as the evidence comes in, I want you to see why
`you are hearing that evidence, because the evidence will relate to one or more of
`these factors as you see documents, as you hear testimony . . . I realize that it is
`not generally the vocabulary you use in your day-to-day life, but I just thought it
`was important that you see those criteria, those factors, prior to hearing all the
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`Case 2:14-cv-00111-AJS Document 403 Filed 06/12/15 Page 3 of 24
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`evidence. You will see them again, but I just know that you are going to get three
`days of evidence and I want you to see what the evidence relates to, and you will
`obviously hear the opening and closing statements of counsel as to what they
`think the facts show as to those particular items.
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`Doc. No. 347, pgs. 85-86.
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`The jury was instructed that the enumerated factors were not the only potentially
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`applicable factors but, rather, were “some of the kinds of factors” that may be considered along
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`with “any other factors which in your mind would have increased or decreased the royalty Parrot
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`would have been willing to pay and Drone Technologies would have been willing to accept,
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`acting as normally prudent business people.” Doc. No. 308, pg. 2.
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`Once the trial began, the proceedings were consistently focused on the Georgia-Pacific
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`factors, which is demonstrated by the following:
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`the attorneys explicitly referenced the Georgia-Pacific factors during opening
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`arguments (Mr. Hopenfeld: “First, what is the invention and how does it differ
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`from the technology that came before it? You have those Georgia-Pacific factors
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`in front of you in your notebooks. You might want to get them out. If you have
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`got your pen, you might want to think about circling factor No. 9. Take a look at
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`factor No. 9. That’s the advantages of the invention over the prior art.” Doc. No.
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`347, pg. 112, lines 8-14);
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`the expert witnesses relied on the factors during their testimony (“I believe the
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`Court handed out as part of the jury’s binder the actual 15 factors, we call them
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`the Georgia-Pacific factors. But what the Georgia-Pacific factors really are is
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`they provide an economic framework for people like myself who are in this
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`business to – kind of a checklist for us to go through a determine what type of
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`information should be looking at, what type of analysis should we be doing, what
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`are the important considerations that go to determining what a reasonable royalty
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`would be or what the amount of damages that would be appropriate in a given
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`case.” Doc. No. 347, pg. 204, lines 1-11);
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`Case 2:14-cv-00111-AJS Document 403 Filed 06/12/15 Page 4 of 24
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`
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`the Court reminded the jury of the factors before transitioning to the Defendants’
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`case-in-chief (“I’d like you to take a few moments and re-read the two-page
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`document again in front of you so that that’s in front of your mind as we begin the
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`Defendants’ case. And I would ask that you give the Defendants’ part of the case,
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`called the Defendants’ case-in-chief, the same careful attention that you paid to
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`the Plaintiff’s case.” Doc. No. 357, pg. 2, lines 12-17); and
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`the attorneys centered their presentation of closing arguments on the Georgia-
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`Pacific factors (Mr. Tabachnick: “Georgia-Pacific factors No. 9 and 10. You
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`remember Mr. Barnes talked about the advantages of the old over the new. All
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`the comments about it being a breakthrough in the flying business, flying devices
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`business, this absolute control mode and accelerometer mode, that it being
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`revolutionary, that it be – the Popular Science article where it said it drastically
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`simplifies piloting. All of these things that demonstrate, that are evidence of the
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`fact that this is valuable technology.” Doc. No. 361, pg. 13, lines 9-17)
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`Once the jury was ready to begin deliberations, the Court again instructed the jury
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`members that the Georgia-Pacific factors were to be employed to determine damages. (“Now
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`we are going to review the reasonable – the relevant factors that apply to a reasonable royalty
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`determination. You will be familiar with these by now.”) Doc. No. 361, pg. 61, lines 9-11.
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`In sum, all aspects of the trial were focused on the Georgia-Pacific factors and the jury’s
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`verdict necessarily reflects the jurors’ appropriate consideration of these guiding principles.
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`C.
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`The Jury was Presented with Competing Testimonial and Documentary Evidence
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`The presentation of the Parties’ opinions as to an appropriate damages awards was
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`primarily presented through three expert witnesses; namely, Ned Barnes for Plaintiff and John
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`Jarosz and Francois Callou for Defendants. Doc. Nos. 187, 195, 198-199. The difference
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`between the expert witnesses’ damages calculations was approximately $24 million. Mr. Barnes
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`testified for Plaintiff that total damages due for Defendants’ infringement was $24.8 million,
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`Case 2:14-cv-00111-AJS Document 403 Filed 06/12/15 Page 5 of 24
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`while Mr. Jarosz opined that a lump sum payment of $680,000 was the highest appropriate sum.
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`Doc. Nos. 187 and 344. These estimates were presented to the jury and calculated as follows:
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`Mr. Barnes’ estimate: ($24.8 million)
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`Reasonable royalty rates of:
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` $16/unit for A.R. Drone and Bebop
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` $6/unit for the MiniDrone
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`Multiplied by the number of sales
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` Through June 2015=$7.5 million
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` Estimated through expiration of the patents=$17.3 million
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`Total =$24.8 million
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`Mr. Jarosz’s estimate: ($680,000)
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`Past Damages-Reasonable royalty rate of:
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` $.50/unit for patents at issue (based upon a collaboration
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`agreement between Defendants and Thomas Barse)
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`Multiplied by the number of sales
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` Through June 2015=$647,670
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` Reduced to no more than $400,000
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`Future Damages-Reasonable royalty rate of:
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` $.10/unit (based upon a collaboration agreement between
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`Defendants and Thomas Barse)
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`Multiplied by the estimated number of sales
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` Estimated from June 2015 through the expiration of the
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`patents=$467,343
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` Reduced to no more than $280,000
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`Implied total payment=$1.1 million
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`Reduced total=$680,000
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`The jury was informed how to incorporate these expert witness opinions into its separate
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`calculation of damages. Specifically, the Court instructed that the opinions of expert witnesses
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`may be given the weight each juror believed it deserved, and, if a determination was made that
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`the expert witness’s opinion was based on insufficient education or experience or not supported
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`by sound evidence, the juror “may disregard the opinion entirely.” Doc. No. 361, pg, 52, line 23-
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`pg. 53, line 5. An expert witness’s testimony could also be rejected, in whole or in part, based
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`upon a finding that the expert had lied in any material portion of his testimony. Id. at pg. 53,
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`lines 17-24.
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`Because the jury was faced with such varied damages calculations, the Court further
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`instructed the jury members that they were not bound to adopt the damages calculation of one
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`expert witness or the other. Rather, the Court stated that:
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`[n]ow that you’ve heard the opening statements, to get ourselves re-centered,
`there has already been a determination of infringement of the two patents. It’s
`your job then to determine the damages in the case. You’ve heard one number
`from the Plaintiff, you heard another number from the Defendant[s]. But you,
`applying those factors, determine what the number will be. So you’re not bound
`by the Plaintiff’s version or the Defendants’ version. You are the fact finder and
`you’re the ones that will be applying the law to facts that you find and will then
`determine the dollar amount.
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`Doc. No. 347, pg. 119, lines 1-11.
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`This point was reiterated again the next day as to the expert witnesses’ evaluation of the
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`value of the patented technology when the Court notified the jury members that:
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`[y]ou’ve heard some evidence and some argument that the two functionalities
`have great value. You have the other side – that’s the Plaintiff’s position.
`Defendants’ position is they have little or no value. You have to make that
`decision. You have to make that evaluation of whether it’s A or B or somewhere
`in between. That’s part of what you’re going to hear today into tomorrow.
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`Doc. No. 358, pg. 7, lines 2-8.
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`In sum, the jury was presented with two very different methods of calculating damages as
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`well as widely different resultant opinions as to an appropriate award. The competing expert
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`witness opinions reflect the inability or unwillingness of the Parties to settle this business dispute
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`and necessitated that a jury determine the final outstanding issues between the Parties.1
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`D.
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`The Jury’s Verdict was Driven by Credibility Determinations
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`Faced with such diametrically opposed evidence in terms of the Parties’ damages
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`estimates, the jury necessarily had to undertake numerous credibility determinations in arriving
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`at a unanimous verdict. Credibility determinations present a jury with one of its most difficult
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`tasks. Doc. No. 361, pg. 51, lines 12-14 (“This is your toughest job in many ways, to judge the
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`credibility and believability of witnesses.”).
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`The core nature of these credibility disputes precluded an entry of summary judgment
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`and necessitated that a jury resolve the matter, as reflected in the Court’s Memorandum Order
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`Re: Defendants’ Motion for Partial Summary Judgment. Doc. No. 228, pgs. 2-3 (The Plaintiff’s
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`expert witness’s report and anticipated testimony “is sufficient to allow a jury to assess a
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`reasonable royalty damages award. Further, genuine issues of material fact exist that could
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`influence a jury’s determination of damages, including the credibility of the Parties’ experts.”).
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`Credibility disputes existed on both sides of the case and, importantly, included whether
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`Defendants had the capability to “design-around” the infringing features and could have
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`implemented non-infringing products that were so substantially similar to the infringing
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`technologies “that the user [wouldn’t] even notice it” within four weeks and at a total cost of
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`approximately $20,000.00. Doc. No. 357, pgs. 142-146.
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`Other underlying necessary credibility determinations included the measure of
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`importance of Plaintiff’s patents in Defendants’ products (as demonstrated by Plaintiff through
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`testimony and documents created prior to litigation and obtained from Defendants and by
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`1 The Parties attempted to mediate their dispute on at least two occasions, neither of which were
`successful. 7/17/14 (Report of mediation by Robert Lindefjeld)(Doc. No. 60); 3/26/15 (Report of
`mediation by David Oberdick)(Doc. No. 235).
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`Defendants through a demonstration of their products and its packaging), the relevance of past
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`licensing agreements between Defendants and third-party companies, the impact of the removal
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`of the infringing features on sales, and the testimony of the expert witnesses.
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`The Court noted the dichotomy between the Parties’ positions and the difficulty of the
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`jury’s task because “[t]his is a hard case in many ways, a lot of issues, a lot of conflicting
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`testimony” and, further noted the importance of the jury’s role because “the parties have been
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`unable to resolve the matter among themselves and have decided that they want the [eight] of
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`you to decide for them.” Doc. No. 361, pg. 2, lines 7-10.
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`In conformance with the model civil jury instructions of the United States Court of
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`Appeals for the Third Circuit, the jury was instructed, at length, how to undertake credibility
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`determinations, including those of expert witnesses. Doc. No. 361, pgs. 51-54. The Court’s
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`instructions informed the jury that they were to be guided by the appearance and conduct of the
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`witness, the manner in which the witness testified, the character of the testimony given, and the
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`evidence or testimony to the contrary. Doc. No. 361, pg. 51, lines 19-22, pg. 52, line 14-pg. 53,
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`line 5.
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`As previously noted, the jury’s verdict did not wholly conform to either Plaintiff’s or
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`Defendants’ request for damages. Therefore, the jury’s balanced verdict necessarily represents
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`the resolution of numerous credibility determinations. Further, the verdict was based upon the
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`application of Georgia-Pacific factors and the presentation of testimony and documentary
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`evidence, which allowed the lay jury members to employ the necessary tools to finally resolve
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`the Parties’ business dispute.
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`II. Plaintiff’s Post-Trial Damages Motions
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`Presently before this Court are the following five (5) motions, all of which have been
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`filed by Plaintiff, disposition of which may affect the jury’s damages award and the Court’s entry
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`of a Final Judgment Order:
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`Motion for Royalty for Future Infringement (Doc. No. 378);
`Motion for Fees under Rule 37 (Doc. No. 380);
`Motion for an Order Awarding Pre-Judgment Interest (Doc. No. 382);
`Renewed Motion for an Exceptional Case Finding and an Award of Attorneys’
`Fees (Doc. No. 383); and
`Motion for Post-Judgment Interest (Doc. No. 386)
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`Each of these Motions is now fully briefed and ripe for disposition. Doc. Nos. 378-383,
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`385-386, 388-392, 394-398.
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`A. Motion for Royalty for Future Infringement (Doc. No. 378)
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`The Parties continue to drastically disagree as to both the proper amount of damages due
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`to Plaintiff for future infringement and whether the amount of any award should be determined
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`by the jury or the Court.
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`The distinct positions as to the amount of the award are reflected in the opinions of the
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`damages experts who testified extensively during trial. As previously noted, Plaintiff’s expert
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`witness testified that, in his opinion, reasonable royalty rates were $16 per unit for the A.R.
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`Drone and Bebop and $6 per unit for the MiniDrone, which results in future damages of
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`$17,326,867.00. Doc. No. 187. Defendants’ expert witness testified that a much lower rate of
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`10 cents per unit was appropriate, which results in a calculation for future infringement
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`$467,343.00 and a reduced total of $280,000 after application of various factors. Doc. No. 344.
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`Due to the Parties’ disagreement as to the availability of future damages, inclusion of a
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`question on future damages on the jury’s verdict form was extensively discussed during pretrial
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`proceedings. Plaintiff originally proposed that past and future damages be combined such that
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`the sole question presented to the jury would be “the proper amount of damages due to Drone
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`Technologies, Inc.” Doc. No. 262. Defendants, in their proposed verdict form, also did not
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`differentiate between past and future damages, but rather included separate questions as to each
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`patent for “the total amount of damages you award to Plaintiff[].” Doc. No. 261. Consistent
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`with these proposals, the first draft of the Court’s Jury Verdict Form Re: Damages did not
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`distinguish between past and future damages. Doc. No. 289. At this stage, Defendants’ expert
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`witness Jarosz had only submitted an expert report as to damages for past infringement. Doc.
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`No. Doc. No. 199.
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`The Court discussed the expert witnesses’ opinions on past and future damages and
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`whether a determination of future damages should be submitted to the jury during the April 16,
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`2015 Preliminary Pretrial Conference. Doc. No. 313. Defendants objected to submitting an
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`interrogatory on future damages to the jury because they argued that an assessment of future
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`damages is an issue for the Court to decide as a matter of law. Doc. No. 277, pg. 1; Doc. No.
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`317, pg. 3. However, Defendants contended that, if the jury was asked to determine future
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`damages, the question should be put to the jury apart from a determination of past damages.
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`Doc. No. 321, pg. 4. As a result of this protracted discussion, the Court determined that the jury
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`should separately determine damages for past and future infringement. The Court further
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`notified the Parties that the jury’s determination of future damages would be advisory. Doc. No.
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`313, pg. 41, lines 4 and lines 19-22 (“I’ll at least then have an advisory jury verdict. . . . . From
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`the jury’s standpoint, the concept of an advisory jury will not be discussed with them. They will
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`just assume they are doing both pieces, the past and the future, and we’ll go from there.”). Based
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`upon these determinations, Defendants were provided with an opportunity to supplement their
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`expert report to address the appropriate measure of future damages. Doc. No. 322.
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`As noted, the jury awarded Plaintiff $4,016,050 for damages from July 1, 2015 through
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`expiration of the patents, which is approximately $1.43 per unit. Doc. No. 371. Plaintiff, in this
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`Motion, moves this Court to disregard the jury’s verdict as to future damages and determine,
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`consistent with Plaintiff’s expert witness’s opinion, that a higher per unit royalty is appropriate.
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`Doc. No. 378.
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`Plaintiff, in essence, moves this Court to substitute its own judgment for that of the jury
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`based upon essentially the same facts and evidence and apply a future royalty between $5 and
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`$16 (the jury’s royalty rate for past damages and Barnes’s opinion of a reasonable royalty rate
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`per unit for A.R. Drone and Bebop). In doing so, Plaintiff admits the jury, through its verdict,
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`did not adopt Barnes’s proposed rates of $16 and $6 per unit for either past or future damages
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`(past damages verdict would equate to a $5 per unit royalty, future infringement damages of
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`$1.43/unit) and acknowledges in its Motion that the Parties’ damages conclusions were “widely
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`divergent.” Doc. No. 378, ¶ 2.
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`Plaintiff, in its Motion, does not assail the past damages verdict, presumably because the
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`difference between Plaintiff’s requested future damages and the jury’s award for this period is
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`much larger than that for past damages (approximately $13 million vs. $3.8 million). Doc. No.
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`379, pg. 7. Defendants, in response, argue that having to face a damages trial and a jury verdict
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`is “punishment enough” and no future damages should be included in the final judgment because
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`it is a form of equitable relief. If future damages are awarded, Defendants urge the Court to
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`adopt the jury’s verdict of $1.43/unit, for a total of $4,016,050. Doc. No. 392, pgs. 2-3.
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`A Court may employ equitable remedies for future infringement in the form of: (1) an
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`injunction; (2) an order directing the parties to attempt to negotiate terms for future use of an
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`invention; or (3) an ongoing royalty. Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10,
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`35 (Fed. Cir. 2012). A District Court may also conclude that no relief is appropriate. Id.
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`The Court finds that the jury’s determination of damages for future infringement is
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`appropriate. As noted, the jury was repeatedly focused on the Georgia-Pacific factors and the
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`Parties presented their case through these factors. The jury actively engaged with these factors,
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`including the expert witnesses’ opinions, and applied the facts to the guiding principles, as
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`demonstrated by the following questions, which were submitted to the Court during
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`deliberations:
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`May we please have the Barse and Jarosz expert reports?
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`With regard to future royalty – will Parrot be allowed to use the technology in the
`[‘]071 Patent and the [‘]748 Patent in its future products through 2028 and 2030,
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`for the appropriate patent, at the conclusion of this case, or will the parties have to
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`negotiate a licensing agreement to cover the time period from the jury’s verdict
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`through the life of each patent?
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`Will the Parties have to negotiate a licensing agreement for Parrot’s future use of
`the patented technology to cover the time period from the jury’s verdict through
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`the life of each patent, regardless of what amount the jury awards[?]
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`Doc. No. 370.
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`Plaintiff contends that the jury’s verdict for future damages should not be adopted
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`because it does not account for the apparent $5/unit royalty rate incorporated in the past damages
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`award. Doc. No. 379, pg. 8. As previously noted, the jury’s verdict represents the consideration
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`of a voluminous record based upon the applicable legal principles. The jury members
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`necessarily rejected the Parties’ positions, including Defendants’ request that they award no
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`future damages. Doc. No. 361, pg. 36, line 25-pg. 37, line 3 (“I suggest you start with the second
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`piece of it, the future damages. They have to prove that, but all we have heard is speculation
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`about the future, so that one should be easy, write in zero.”). The verdict is not flawed because it
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`does not comport with the Parties’ positions or with the damages for past infringement.
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`To that end, the jury was not instructed or obliged to award past and future damages
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`using the same reasonable royalty rate, and its varied rates for damages reflects the difficulty in
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`determining an appropriate amount of damages, especially where sales have not yet occurred.
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`The Court finds that in whatever manner it is described, be it an ongoing $1.43/unit reasonable
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`royalty or a segment of a lump sum payment, the jury’s future damages award reflects the
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`Georgia-Pacific factors, the continually disputed patents and products, the unpredictable drone
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`business, and the credibility determinations that underscore all of these considerations. This
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`award is not meant either to “further” “punish” Defendants nor to reward Plaintiff for
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`Defendants’ unprecedented conduct. Rather, the Court finds that this reasonable award
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`compensates Plaintiff for Defendants’ future uncondoned use of its patents.
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`Therefore, Plaintiff’s Motion for a Royalty for Future Infringement (Doc. No. 378) will
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`be DENIED. Plaintiff’s damages for infringement from July 1, 2015 through expiration of the
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`patents are $4,016,050. Doc. No. 371, ¶ 2.
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`B. Motion for Fees Under Rule 37 (Doc. No. 380)
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`In this Motion, Plaintiff timely moves for an award of reasonable expenses, including
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`attorneys’ fees, in connection with discovery disputes. Doc. No. 380 (requested amount:
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`$174,702.00). Defendants object both to the imposition of fees pursuant to Rule 37 as well as
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`the amount requested by Plaintiff. Doc. No. 390.
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`The expenses requested in this Motion were incurred over a four-month period and
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`culminated in Plaintiff’s Motion for an Order to Show Cause Why Defendants Should Not be
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`Held in Contempt and ultimately this Court’s Order of Court entering default judgment against
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`Defendants as to liability. Doc. Nos. 78, 106, 107. The following documents were filed by
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`Case 2:14-cv-00111-AJS Document 403 Filed 06/12/15 Page 14 of 24
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`Plaintiff, between June and November 2014, related to Defendants’ failure to comply with
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`discovery obligations:
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`
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`
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`Plaintiff’s Motion to Compel Initial Disclosure Documents (June 19, 2014, Doc.
`No. 41), which was granted by this Court on July 1, 2014: Defendants were
`ordered to comply on or before July 9, 2014 (Doc. No. 48);
`Plaintiff’s Response (Doc. No. 55) to Defendants’ Emergency Motion for
`Reconsideration of this Court’s July 1, 2014 Order (July 3, 2014, Doc. No. 51):
`Defendants’ Motion was denied by this Court on July 8, 2014 (07/08/2014 Text
`Order);
`Plaintiff’s Motion to Compel Defendants to Obey this Court’s July 1, 2014 Order
`(July 22, 2014, Doc. No. 61), which was granted by this Court on July 25, 2014:
`Defendants were given until August 13, 2014, to comply with the July 1, 2014
`Order (Doc. No. 63);
`Plaintiff’s Response to Defendants’ Emergency Motion to Modify the Protective
`Order (August 1, 2014, Doc. No. 64): Defendants’ Motion was denied by this
`Court (August 7, 2014, Doc. No. 70);
`Plaintiff’s Response (Doc. No. 76) to Defendants’ Motion for Relief from the
`Court’s Order Dated July 25, 2014, or in the Alternative, for a Stay Pending a
`Petition for Writ of Mandamus (August 13, 2014, Doc. No. 74): Defendants’
`Motion was denied by this Court (August 14, 2014, Doc. No. 77); and
`Plaintiff’s Motion for Order to Show Cause Why Defendants Should Not Be Held
`in Contempt (August 18, 2014, Doc. No. 78), which was granted by this Court
`(November 3, 2014, Doc. Nos. 107-108) after a hearing (October 23, 2014) and
`briefing from the Parties (Doc. No. 102-103)
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`Federal Rule of Civil Procedure 37(a)(5)(A) provides that the Court must require the
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`party whose conduct necessitated the motion at issue or the attorney advising the conduct to pay
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`the movant’s reasonable expenses in connection with the motion unless the motion was filed
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`before a good faith effort was made to resolve the dispute, the opposing party’s actions were
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`substantially justified, or other circumstances would make an award of expenses unjust. The
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`same rule further provides that the Court must order a disobedient party, the attorney advising
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`the party, or both to pay reasonable expenses caused by the failure to obey a discovery order,
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`unless the failure was substantially justified or other circumstances would make an award unjust.
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`Fed.R.Civ.P. 37(b)(2)(C).
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`Case 2:14-cv-00111-AJS Document 403 Filed 06/12/15 Page 15 of 24
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`As noted throughout this Opinion, Defendants’ conduct has stymied Plaintiff’s
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`prosecution of its claims and the administration of justice during the pendency of the Parties’
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`dispute. Rule 37 sanctions are available “not merely to penalize those whose conduct may be
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`deemed to warrant such a sanction, but to deter those who might be tempted to such conduct in
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`the absence of such a deterrent” and can be used to compensate the opposing party for the
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`expense caused by the abusive conduct. Nat’l Hockey League v. Metro. Hockey Club, 427 U.S.
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`639, 643 (1976). Defendants’ dilatory actions increased the financial, temporal, and mental costs
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`of prosecuting this case and may serve to give small companies pause to file a complaint
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`including claims for patent infringement, dissuade local law firms from representing these
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`potential plaintiffs, and/or encourage defendants with sufficient resources to attempt to delay
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`resolution of the case on the merits in order to “punish” opponents. Defendants’ behavior and
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`the risk of future similar behavior from other parties warrants an imposition of fees as both a
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`punitive and deterrent measure.
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`These sanctions are necessary apart from the Court’s entry of default judgment, which
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`was the Court’s only option when confronted with Defendants’ extraordinary discovery actions.
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`Otherwise, if such unprecedented behavior goes unsanctioned, the discovery process is reduced
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`to a virtually useless optional component of litigation. This erosion is untenable because
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`discovery is designed to prevent civil trials from being “carried on in the dark.” Hickman v.
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`Taylor, 329 U.S. 495, 501 (1947); see also United States v. Procter & Gamble Co., 356 U.S.
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`677, 682 (1958)(“Modern instruments of discovery . . . together with pretrial procedures make
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`trial less a game of blind man’s bluff and more a fair contest.”).
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`In accordance with the forthcoming accompanying Order, Plaintiff shall file a Petition
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`pursuant to Federal Rule of Civil Procedure 37, including reasonable attorneys’ fees and
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`expenses. David White, Esq. will be appointed as Special Master and shall issue a Report and
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`Recommendation to the Court on the appropriate total sum for these items.
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`C. Motion for an Order Awarding Pre-judgment Interest (Doc. No. 382)
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`35 U.S.C. § 284 provides for an award of pre-judgment interest as fixed by the Court.
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`Plaintiff moves the Court to award pre-judgment interest from January 31, 2012 through the date
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`of entry of judgment and moves that