Case 2:15-cv-01202-WCB Document 388 Filed 07/18/17 Page 1 of 29 PageID #: 24408
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Case No. 2:15-CV-1202-WCB
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`§§§§§§§§§§
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`ERFINDERGEMEINSCHAFT UROPEP
`GbR,
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`Plaintiff,
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`v.
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`ELI LILLY AND COMPANY,
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`Defendant.
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`MEMORANDUM OPINION AND ORDER
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`Before the Court is the motion of plaintiff Erfindergemeinschaft UroPep GbR (“UroPep”)
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`for ongoing royalties in this case. Dkt. No. 363. Defendant Eli Lilly & Co. (“Lilly”) opposes.
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`The Court GRANTS IN PART UroPep’s motion for royalties for the period between April 17,
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`2017, and July 9, 2017.
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`BACKGROUND
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`In its complaint, UroPep alleged that Lilly infringed UroPep’s patent, U.S. Patent No.
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`8,791,124 (“the ’124 patent”), by marketing the drug Cialis for the treatment of benign prostatic
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`hyperplasia (“BPH”). Lilly answered by denying infringement and contending that the ’124
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`patent was invalid. The evidence at trial showed that Lilly made approximately $704.3 million
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`in sales of Cialis attributable to the BPH indication between October 9, 2014 (the date on which
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`Lilly was notified of UroPep’s patent), and April 16, 2017 (the day before the beginning of the
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`trial). See Dkt. No. 342, Trial Tr. at 401, 403; Dkt. No. 344, Trial Tr. at 1120. The jury found
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`that Lilly had infringed the ’124 patent and that the patent was not invalid. It awarded UroPep
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`$20 million in damages. The implied royalty rate adopted by the jury was therefore 2.84 percent
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`of the total infringing sales for the pretrial infringement period.
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`For the reasons set out in detail below, the Court will apply twice the jury’s implied
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`royalty rate to the infringing sales of Cialis made between April 17, 2017, and July 9, 2017 (the
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`date the ’124 patent expired). That amount has been added to the total amount awarded to
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`UroPep, as reflected in an amended judgment entered today. The prejudgment interest rate (the
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`applicable prime rate, compounded quarterly) will apply to the entire monetary award granted in
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`the amended judgment. The statutory post-judgment interest rate will apply thereafter. The
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`parties are directed to determine the precise amount owed by Lilly to UroPep as an ongoing
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`royalty for the April 17 to July 9 period, based on the Court’s award and in light of the volume of
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`the relevant infringing sales during that period. The parties are also directed to determine the
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`dollar value of the prejudgment interest to be paid on the ongoing royalty for the period between
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`April 17 and July 18, the date of the amended judgment in this case.
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`DISCUSSION
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`UroPep requests an ongoing royalty rate of 15 percent—much greater than the 2.84
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`percent royalty rate implied by the jury’s verdict for Lilly’s pretrial infringing conduct.
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`According to UroPep, the proposed 15 percent rate is supported by (1) the increased profitability
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`of Lilly’s post-verdict infringing sales, (2) UroPep’s post-verdict bargaining power, and (3)
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`Lilly’s post-verdict willful infringement. Lilly, on the other hand, contends that the Court should
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`not award an ongoing royalty. If the Court does award an ongoing royalty, Lilly argues that it
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`should be limited to a royalty rate of 2.84 percent, or at most 3 percent.
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`I. UroPep’s Right to an Ongoing Royalty
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`At the outset, it is clear to the Court that UroPep is entitled to be compensated for
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`infringement occurring between the cut-off date for its calculation of damages, April 16, 2017,
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`and the expiration date of the ’124 patent, July 9, 2017. See Fresenius USA, Inc. v. Baxter Int’l,
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`Inc., 582 F.3d 1288, 1303 (Fed. Cir. 2009) (“A damages award for pre-verdict sales of the
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`infringing product does not fully compensate the patentee because it fails to account for post-
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`verdict sales.”). Lilly makes several arguments for why any recovery for that period is barred,
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`but none of those arguments is persuasive.
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`First, Lilly argues that the statement in the Court’s Final Judgment denying all relief
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`other than that set forth in the judgment bars any recovery for the post-verdict period. See Dkt.
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`No. 360, at 2, ¶ 6. In fact, however, the Court explained in a telephonic conference conducted on
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`May 15, 2017, shortly before the judgment was entered, that the Court would address the issue of
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`ongoing royalties in an amended judgment following the parties’ briefing of that issue. As part
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`of that discussion, the Court stated that it would allow the parties additional time to brief the
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`ongoing royalties issue based on Lilly’s request for an extension of time for filing its response to
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`UroPep’s motion. The Court made clear that it contemplated addressing the ongoing royalties
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`issue separately from the initial judgment. There is thus no force to Lilly’s suggestion that the
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`Court’s initial judgment contemplated the termination of UroPep’s rights in that regard.
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`Second, Lilly argues that UroPep waived its right to an ongoing royalty award pursuant
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`to 35 U.S.C. § 283 by not requesting an injunction. Section 283 provides that a court “may grant
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`[an] injunction[] in accordance with the principles of equity to prevent the violation of any right
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`secured by patent, on such terms as the court deems reasonable.” The Federal Circuit has
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`“interpreted that provision to permit a court to award ‘an ongoing royalty for patent infringement
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`in lieu of an injunction’ barring the infringing conduct.” Prism Techs. LLC v. Sprint Spectrum
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`L.P., 849 F.3d 1360, 1377 (Fed. Cir. 2017) (quoting Paice LLC v. Toyota Motor Corp., 504 F.3d
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`1293, 1314 (Fed. Cir. 2007)); SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods.,
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`LLC, 807 F.3d 1311, 1332-33 (Fed. Cir. 2015) (en banc) (“[A]bsent egregious circumstances,
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`when injunctive relief is inappropriate, the patentee remains entitled to an ongoing royalty.”),
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`vacated in part on other grounds, 137 S. Ct. 954 (2017).
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`In its complaint, UroPep sought an injunction, or an accounting of future royalties if an
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`injunction was denied. Lilly points out, however, that in the joint pretrial order UroPep did not
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`include an express request for ongoing royalties in lieu of an injunction. Instead, UroPep stated
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`in the joint pretrial order that it “is entitled to recover both pre-verdict and post-verdict damages
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`in the form of a reasonable royalty for the infringement of the ’124 patent by Lilly.” Dkt. No.
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`251, at 9, ¶ 2.
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`The Court interprets that statement as a request for ongoing royalties in lieu of an
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`injunction, to be assessed by the Court pursuant to 35 U.S.C. § 283. UroPep did not request an
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`injunction, no doubt appreciating that the equities would not favor issuance of an injunction in
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`favor of a non-competitor and for the short period of time remaining in the life of the ’124
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`patent. See Prism, 849 F.3d at 1377 (an ongoing royalty may be awarded if “a conduct-barring
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`injunction is not warranted”). In addition, UroPep likely recognized that it would be better
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`served by a post-verdict award of ongoing royalties than by an order enjoining Lilly from
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`promoting the Cialis’s BPH indication for a three-month period. Under those circumstances,
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`UroPep’s decision to seek a post-verdict royalty award—i.e., ongoing royalties in lieu of an
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`injunction—cannot reasonably be treated as a forfeiture of its right to relief of any sort for the
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`post-verdict infringement period. Lilly cites no authority that would support that odd
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`proposition. Thus, the Court concludes that UroPep has not waived its right to post-verdict
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`ongoing royalties under 35 U.S.C. § 283.
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`Third, Lilly argues that the Court has the option to refuse to award any ongoing royalties.
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`While that is technically true, it would be improper for the Court first to conclude that the
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`damages awarded by the jury do not cover the post-verdict period, but then to rule that UroPep is
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`not entitled to any relief for that period. Lilly quotes language from the Federal Circuit’s
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`decision in Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 35 (Fed. Cir. 2012), where
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`the court stated that “[t]here are several types of relief for ongoing infringement that a court can
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`consider: (1) it can grant an injunction; (2) it can order the parties to attempt to negotiate terms
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`for future use of the invention; (3) it can grant an ongoing royalty; or (4) it can exercise its
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`discretion to conclude that no forward-looking relief is appropriate in the circumstances.” Lilly
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`interprets that statement as offering the Court the unfettered option of granting no relief at all for
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`post-verdict infringement. In Whitserve, however, the Federal Circuit did not suggest that it
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`would be proper to deprive the prevailing plaintiff of any remedy whatsoever for post-verdict
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`infringement. Quite the opposite. The court concluded that the jury’s award covered only past
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`harm, rejecting the argument that the jury’s verdict indicated that the award was meant to “cover
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`future use of [the asserted] patents.” Id. at 35. The Federal Circuit then held that the district
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`court abused its discretion by denying the request for prospective relief (i.e., an injunction or an
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`ongoing royalty), and forcing the plaintiff to “resort to serial litigation” to obtain compensation
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`for the post-verdict period. Id. at 35-36.
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`This case is quite similar. The parties did not argue to the jury (or the Court) that the
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`damages award would constitute compensation for a paid-up license, nor did they otherwise
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`indicate that the jury should consider future conduct in making its damages assessment. Rather,
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`as Lilly acknowledges, both experts “applied their proposed royalty rates to the pretrial royalty
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`base—i.e., the incremental profits and revenues that existed at the time of trial.” Dkt. No. 370, at
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`4 (emphases omitted). As in Whitserve, the parties “limited their damages arguments to past
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`infringement rather than projected future infringement.” 694 F.3d at 35. In addition, “[t]he jury
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`was instructed to award ‘damages,’ which by definition covers only past harm,” and its “verdict
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`did not indicate that the award was meant to cover future use” of the patented invention. Id.
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`Lilly has offered no reason for the Court to decline to provide prospective relief under
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`section 283. See Whitserve, 694 F.3d at 36 (court is required “to explain any decision it makes”
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`denying such relief). Lilly only points out that the experts at trial neither addressed future
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`royalty payments nor explained why any royalty would change post-trial. Dkt. No. 370, at 4.
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`But that reinforces the fact that, as in Whitserve, the issue of future royalties was not before the
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`jury and not resolved by the verdict.
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`The Court has concluded that an injunction would not be appropriate in this case, given
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`the short period between the verdict and the expiration of the ’124 patent and the absence of any
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`evidence that UroPep would suffer irreparable harm during that period without an injunction.
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`The Court also has concluded that ordering the parties to attempt to negotiate terms for future use
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`of the invention is unlikely to be successful in light of the wide divergence between the parties’
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`positions on the ongoing royalty issue. Nor have the parties indicated that they “believe
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`additional negotiation attempts would be fruitful”; rather, they have indicated by their briefing
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`“that they wish[ ] the court to resolve the issue of the amount of any ongoing royalty.” Affinity
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`Labs of Tex., LLC v. BMW N. Am., LLC, 783 F. Supp. 2d 891, 896-97 (E.D. Tex. 2011).
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`Finally, the Court has no reason to deny UroPep relief for Lilly’s ongoing infringement and
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`consign UroPep to the inefficient process of initiating follow-on litigation to seek damages for
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`the three-month period of infringement at issue here. See Whitserve, 694 F.3d at 34-35.
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`Accordingly, the Court concludes that UroPep is entitled to an award of ongoing royalties for the
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`period between April 17, 2017, and July 9, 2017.
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`Although the Court has addressed the question of relief under section 283, the Court
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`appreciates that this indirect infringement case presents an additional wrinkle: Even if UroPep
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`had obtained an injunction under section 283, it would still be entitled to damages under 35
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`U.S.C. § 284 for post-verdict infringing sales that were attributable to Lilly’s pretrial
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`inducement. Those damages would be derived from infringing sales that were caused by Lilly’s
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`pretrial acts of inducement but were not covered by the jury’s verdict because the induced sales
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`occurred after the jury’s verdict. See Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197,
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`1213 (Fed. Cir. 2010) (reversing denial of request for damages because “the district court should
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`have awarded compensation for any infringement [activity] prior to the injunction.”). Under
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`section 284, the Court has “broad discretion in determining appropriate relief for patent
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`infringement.” Id. at 1212-13. But “injunctions [under section 283] and damages [under section
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`284] must be tailored to the circumstances and be correlatively determined.” Id. at 1212-13;
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`accord Carborundum Co. v. Molten Metal Equip. Innovations, Inc., 72 F.3d 872, 881 (Fed. Cir.
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`1995). Therefore, the Court’s determination of the ongoing royalty due to UroPep in lieu of an
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`injunction under section 283 (i.e., the ongoing royalty on infringing sales attributable to Lilly’s
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`post-verdict inducement) must be added to the damages due to UroPep for post-verdict
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`infringing sales attributable to Lilly’s pre-verdict inducement under section 284. For that reason,
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`the Court includes both forms of relief in its analysis of the post-verdict hypothetical negotiation
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`to determine a reasonable ongoing royalty.
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`Lilly raises two objections to UroPep’s claim to such damages under section 284, neither
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`of which has merit. First, Lilly argues that section 284 bars the Court from departing from the
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`jury’s implied royalty rate. However, section 284 and Federal Circuit case law contradict Lilly.
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`Section 284 instructs the court to assess damages “not found by a jury” (the jury in this case
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`awarded damages for the pretrial period but did not consider future conduct and sales), and
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`requires the court to determine a royalty that is “reasonable under the circumstances.” The
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`Federal Circuit’s decision in Finjan clarifies that courts have “broad discretion” to fashion an
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`appropriate remedy and requires the court to consider the differing circumstances that may apply
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`to an award of damages under section 284 for a period not covered by the jury’s verdict. 626
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`F.3d at 1212.
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`Second, Lilly argues that UroPep was required to disclose before trial and to present at
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`trial any argument for post-verdict damages under section 284. But there is no rule that plaintiffs
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`must ask the jury to decide all prospective damages under section 284. Such a rule would make
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`no sense in this context in light of the fact that the post-verdict sales giving rise to damages under
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`section 284 had not occurred at the time the case was submitted to the jury. See Finjan, 626 F.3d
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`at 1213 (remanding for the district court to award post-verdict damages based on Finjan’s
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`request, made after trial, “to amend the judgment to include damages for infringing sales that the
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`jury did not consider”).
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`II. Calculation of the Ongoing Royalty
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`While the Court agrees that UroPep is entitled to monetary relief for the post-verdict
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`period, the Court disagrees that UroPep is entitled to the royalty rate that it requests for that
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`period.
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`As noted, the jury’s verdict of $20 million in damages for the period between October 9,
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`2014, and April 16, 2017, represents an implied royalty rate of 2.84 percent of the infringing
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`Cialis sales. UroPep argues that it is entitled to a much larger recovery for the three-month
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`period between April 17, 2017, and July 9, 2017, than would result from a straight application of
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`the jury’s 2.84 percent implied royalty rate to the infringing sales made during that three-month
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`period. UroPep asks the Court to increase the royalty rate more than five-fold and award a 15
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`percent royalty rate for all infringing sales made during the post-verdict period. UroPep’s
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`argument is that the jury’s verdict should not control the royalty rate for the post-verdict period;
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`instead, the Court should calculate the post-verdict royalty rate by determining the rate that
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`would have been agreed upon in a hypothetical negotiation occurring just after the verdict.
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`According to UroPep, that hypothetical negotiation would produce a higher royalty rate
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`both because of the greater certainty provided by the verdict regarding infringement and validity,
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`and because the evidence shows that Lilly could expect to earn a higher profit margin on its sales
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`of Cialis during the three-month post-verdict infringement period than in the pre-verdict
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`infringement period. UroPep argues that a hypothetical negotiation at the time of the verdict
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`would produce a royalty rate of 10 percent. UroPep then argues that the Court should add a
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`premium of 5 percent to the royalty rate (i.e., multiply the 10 percent royalty rate by 1.5)
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`because, following the jury’s verdict, Lilly’s infringement must necessarily be regarded as
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`willful.
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`Underpinning UroPep’s argument is the theoretical framework discussed in Amado v.
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`Microsoft Corp., 517 F.3d 1353 (Fed. Cir. 2008). See Dkt. No. 363, at 4. In Amado, the Federal
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`Circuit explained that there is a “fundamental difference” between “a reasonable royalty for pre-
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`verdict infringement and damages for post-verdict infringement.” 517 F.3d at 1361. “Prior to
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`judgment, liability for infringement, as well as the validity of the patent, is uncertain, and
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`damages are determined in the context of that uncertainty. Once a judgment of validity and
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`infringement has been entered, however, the calculus is markedly different because different
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`economic factors are involved.” Id. In the Amado case itself, the Federal Circuit directed the
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`district court to consider a hypothetical negotiation following the trial, which the court concluded
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`would produce a higher royalty rate for the infringement period following the verdict, largely
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`because of the fact that any uncertainty as to whether the jury would find infringement or
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`invalidity had been removed. Id. at 1362 & n.2.
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`To be sure, it is not entirely clear that the Amado analysis applies to a case such as this
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`one. In Amado itself, the Federal Circuit applied that framework to a case in which the district
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`court granted an injunction and then stayed it in favor of an ongoing royalty award. Moreover,
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`the court used language suggesting that the rule in Amado might be limited to instances in which
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`an injunction was, or could be, granted. See Amado, 517 F.3d at 1362 (“When a district court
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`concludes that an injunction is warranted, but is persuaded to stay the injunction pending an
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`appeal, the assessment of damages for infringements taking place after the injunction should take
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`into account the change in the parties’ bargaining positions, and the resulting change in
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`economic circumstances, resulting from the determination of liability . . . as well as the evidence
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`and arguments found material to the granting of the injunction and the stay.”).
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`The Federal Circuit subsequently applied Amado in ActiveVideo Networks, Inc. v.
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`Verizon Commc’ns, Inc., 694 F.3d 1312 (Fed. Cir. 2012). In that case, the circuit court held that
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`the Amado framework is applicable to the determination of the ongoing royalty rate that Verizon
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`should pay the patent owner, ActiveVideo, for the “sunset” period during which the injunction
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`was stayed. ActiveVideo Networks, 694 F.3d at 1342-43. Citing Amado, the court rejected
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`Verizon’s argument that the sunset royalty rate should be limited to the rate that ActiveVideo
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`negotiated with a different party, Cablevision, prior to the litigation. The court explained that the
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`pre-litigation royalty rate with Cablevision was not applicable to the post-verdict calculation of
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`the royalty rate between ActiveVideo and Verizon, in light of the “substantial shift in the
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`bargaining position of the parties” following the jury’s finding that the patent in suit was
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`infringed and not invalid. Id. at 1342.
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`Neither of those situations is presented here. UroPep, which is not a competitor or a
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`party that would otherwise suffer irreparable harm in the absence of an injunction, has not asked
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`for a post-trial injunction, and in the Court’s judgment would not be entitled to one if it had
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`asked. For that reason, Lilly argues that the analysis employed by the Federal Circuit in Amado
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`does not apply to this case. Because this case does not involve a pre-litigation license to the
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`same patent with another party, as was the case in ActiveVideo, Lilly argues that the Federal
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`Circuit’s analysis in that case is also not directly applicable here.
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`UroPep contends that Amado is not limited to cases in which an injunction was sought,
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`obtained, and stayed or vacated. There are suggestions in Federal Circuit law that Amado is not
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`limited to that context. See SynQor, Inc. v. Artesyn Techs., Inc., 709 F.3d 1365, 1384 (Fed. Cir.
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`2013); Telcordia Techs., Inc. v. Cisco Sys., Inc., 612 F.3d 1365, 1378-79 (Fed. Cir. 2010); Paice
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`LLC v. Toyota Motor Corp., 504 F.3d 1293, 1317 (Fed. Cir. 2007) (Rader, J., concurring)
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`(“[P]re-suit and post-judgment acts of infringement are distinct, and may warrant different
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`royalty rates given the change in the parties’ legal relationship and other factors.”). Nonetheless,
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`the extent to which the imposition of an injunction is a realistic threat is an important factor that
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`largely accounts for
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`the difference between pre-verdict and post-verdict hypothetical
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`negotiations. As the court explained in Presidio Components Inc. v. American Technical
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`Ceramics Corp., No. 08-CV-335, 2010 WL 3070370 (S.D. Cal. Aug. 5, 2010), the difference
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`between reasonable royalties for pre-verdict and post-verdict infringement “is largely due to the
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`threat of an injunction, which serves as a big stick, essentially framing negotiation in terms of
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`how much an adjudged infringer would pay for a license to continue its infringing conduct.
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`Where . . . an injunction is no longer proper, the Court is hard pressed to find in what material
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`respect the situation is different now than it was during trial.” Id. at *4 (citations and quotation
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`marks omitted); see also Univ. of Pittsburgh v. Varian Med. Sys., Inc., No. 08-cv-1307, 2012
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`WL 1436569, at *12 (W.D. Pa. Apr. 25, 2012) (“The change in bargaining position found in
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`Amado was that the patentee was seeking a permanent injunction when such a remedy did not
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`exist for sales that occurred prior to the entry of final judgment.”). Because an injunction was
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`plainly not called for in this case, the “big stick” threat of an injunction was not available to
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`UroPep and thus should not be a factor suggesting a higher royalty rate for post-verdict
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`infringement.
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`A second consideration bearing on whether and to what extent the Amado model applies
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`to this case has to do with the assumptions underlying the jury’s calculation of the hypothetical
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`royalty rate of 2.84 percent. In Amado, the Federal Circuit noted “a fundamental difference”
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`between a reasonable royalty for pre-verdict infringement and damages for post-verdict
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`infringement, in that “[p]rior to judgment, liability for infringement, as well as the validity of the
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`patent, is uncertain, and damages are determined in the context of that uncertainty”; but “[o]nce a
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`judgment of validity and infringement has been entered, . . . different economic factors are
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`involved.” Amado, 517 F.3d at 1361-62.
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`While the economic factors bearing on the post-verdict royalty rate may differ from those
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`that informed the pre-verdict rate, the basic assumptions informing the hypothetical negotiation
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`in those two settings are often not dramatically different. In this case, for example, both parties
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`relied on a damages theory based on a hypothetical negotiation conducted at the outset of the
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`infringement period. The parties’ experts both based their analyses of the hypothetical
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`negotiation on the assumption that the ’124 patent was valid and infringed. See Dkt. No. 179-1,
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`at 25 (UroPep’s expert Dr. Vellturo); Dkt. No. 344, Trial Tr. at 1052, 1107 (Lilly’s expert Mr.
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`Jarosz). Importantly, the Court instructed the jury that in applying the hypothetical negotiation
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`method of calculating damages, the jury was required to assume that the ’124 patent was both
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`infringed and valid. Dkt. No. 346, Trial Tr. 1431. Therefore, it is clear that the jury’s
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`assessment of the hypothetical royalty at the start of infringement was predicated on an
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`assumption that both validity and infringement would be resolved in UroPep’s favor.
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`In that regard, the jury’s hypothetical negotiation analysis was quite similar to the Court’s
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`assessment of the ongoing hypothetical royalty rate to be conducted at the conclusion of the
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`trial.1 See TransPerfect Global, Inc. v. MotionPoint Corp., No. C10-2590, 2014 WL 6068384, at
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`*5 (N.D. Cal. Nov. 13, 2014); Mark A. Lemley, The Ongoing Confusion over Ongoing
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`Royalties, 76 Mo. L. Rev. 695, 704-705 (2011) (“Juries are already required to assume that the
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`patent is valid and infringed when setting past damages. There is no reason to think that asking
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`the same question twice should produce different answers in most cases.”). As Chief Judge
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`1 In fact, in this case there is greater uncertainty in the Amado post-verdict negotiation
`than in the jury’s assessment of damages. In determining a reasonable royalty and resulting
`damages, the jury was instructed to “assume that both parties to the negotiation believed the
`patent was valid and infringed.” Dkt. No. 346, at 46 (Trial Tr. at 1431). In contrast, Amado
`instructs the district court to “take into account the change in the parties’ bargaining positions,
`and the resulting change in economic circumstances, resulting from the determination of
`liability—for example, the infringer’s likelihood of success on appeal . . . .” 517 F.3d at 1362;
`see also ActiveVideo Networks, 694 F.3d at 1343 (“The district court may wish to consider on
`remand additional evidence of changes in the parties’ bargaining positions. . . . Indeed,
`ActiveVideo’s bargaining position is even stronger after this appeal.”). The jury in this case
`assumed certainty when awarding a royalty; the district court assessing ongoing royalties under
`Amado must take into account the uncertainty stemming from a possible reversal on appeal.
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`Case 2:15-cv-01202-WCB Document 388 Filed 07/18/17 Page 14 of 29 PageID #: 24421
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`Clark has aptly explained, “it is logically inconsistent to argue that a calculation based upon
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`assumptions of infringement and validity would change when those assumptions are replaced by
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`jury findings of the same facts.” Ariba, Inc. v. Emptoris, Inc., 567 F. Supp. 2d 914, 918 (E.D.
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`Tex. 2008); see also Cummins-Allison Corp. v. SBM Co., 584 F. Supp. 2d 916, 918 (E.D. Tex.
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`2008) (“[A] jury finding of infringement and no invalidity does not change any logically
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`consistent analysis; rather, it merely confirms the original assumption of those facts. It is
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`inconsistent and unnecessarily confusing to adopt the position that once the assumed facts upon
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`which the expert’s analysis of the hypothetical negotiation are confirmed by a verdict, the expert
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`can change his opinion of a reasonable royalty rate.”).
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`
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`In both Amado and cases following it, the courts have made clear that the Amado
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`analysis does not necessarily entail an increase in the post-verdict royalty rate over the pre-
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`verdict rate found by the jury. Courts that have applied Amado have held that the ongoing
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`royalty rate can ordinarily range from the rate found by the jury for pre-verdict infringement to a
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`rate somewhat higher. And in some instances, those courts have concluded on the facts of the
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`cases before them that the royalty rate for post-verdict infringement should be no greater than the
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`pre-verdict rate. See, e.g., XY, LLC v. Trans Ova Genetics, LC, No. 13-cv-876, 2016 WL
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`6664619, at *1-2 (D. Colo. Nov. 10, 2016) (adopting a post-verdict royalty rate lower than the
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`pre-verdict royalty rate selected by the jury); TransPerfect Global, Inc. v. MotionPoint Corp.,
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`No. C 10-2590, 2014 WL 6068384, at *5 (N.D. Cal. Nov. 13, 2014); Bianco v. Globus Med.,
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`Inc., 53 F. Supp. 3d 929 (E.D. Tex. 2014) (same analysis applied to a trade secret claim);
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`Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., No. 09-290, 2014 WL 1320154 (W.D. Pa.
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`Mar. 31, 2014), rev’d in part and vacated in part on other grounds, 807 F.3d 1283 (Fed. Cir.
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`2015); see also J. Gregory Sidak, Ongoing Royalties for Patent Infringement, 24 Tex. Intell.
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`Case 2:15-cv-01202-WCB Document 388 Filed 07/18/17 Page 15 of 29 PageID #: 24422
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`Prop. L.J. 161, 175-76 (2016) (noting that of 35 cases in which ongoing royalties were awarded
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`between 2007 and 2015, the same royalty was awarded for post-verdict and pre-verdict
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`infringement in 18 of them).
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`
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`While under Amado the royalty rate determined by the jury for pre-verdict infringement
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`does not restrict a court from adopting a higher post-verdict royalty rate, the jury’s decision is an
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`important consideration in the Court’s calculus. Recognizing the importance of the jury’s
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`verdict, courts have uniformly held that the starting point for the Amado analysis of the ongoing
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`royalty rate is the royalty rate found by the jury for the pre-verdict infringement period. See
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`Arctic Cat Inc. v. Bombardier Recreational Prods., Inc., No. 14-cv-62369, 2016 WL 4267375, at
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`*7 (S.D. Fla. Aug. 15, 2016); Apple, Inc. v. Samsung Elecs. Co., No. 12-CV-00630-LHK, 2014
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`WL 6687122, at *4 (N.D. Cal. Nov. 25, 2014); Bianco v. Globus Med., Inc., 53 F. Supp. 3d 929,
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`932 (E.D. Tex. 2014); VirnetX Inc. v. Apple Inc., No. 6:13-CV-211, 2014 WL 12672822, at *3
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`(Mar. 6, 2014); I/P Engine, Inc. v. AOL Inc., No. 2:11CV512, 2014 WL 309245, at *2 (E.D. Va.
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`Jan. 28, 2014); Fresenius USA, Inc. v. Baxter Int’l, Inc., No. C 03-1431, 2012 WL 761712, at
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`*11 (N.D. Cal. Mar. 8, 2012), vacated on other grounds, 721 F.3d 1330 (Fed. Cir. 2013); Mondis
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`Tech. Ltd. v. Chimei InnoLux Corp., 822 F. Supp. 2d 639, 647 (E.D. Tex. 2011). The burden is
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`on UroPep to show that it is entitled to a royalty rate in excess of the rate initially determined by
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`the jury. Creative Internet Advertising Corp. v. Yahoo! Inc., 674 F. Supp. 2d 847, 855 (E.D.
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`Tex. 2009).
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`
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`Moreover, as explained above, the similarity between the hypothetical negotiation
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`calculus performed by the jury under the Court’s instructions and the hypothetical negotiation
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`that the Court is called upon to perform following the verdict provides a strong reason for
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`following the jury’s lead. To the extent that the jury can be discerned to have made a decision
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