Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 1 of 14 PageID #: 19134
`
`United States District Court
`EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
`
`§
`IMPERIUM IP HOLDINGS (CAYMAN),
`LTD.
`§
`§
`
`§
`v.
`§
`
`§
`SAMSUNG ELECTRONICS CO., LTD.,
`§
`SAMSUNG ELECTRONICS AMERICA,
`§
`INC., SAMSUNG
`§
`TELECOMMUNICATIONS AMERICA,
`LLC, AND SAMSUNG SEMICONDUCTOR, §
`INC.
`§
`
`
`CIVIL ACTION No. 4:14-CV-371
` Judge Mazzant
`
`
`MEMORANDUM OPINION
`
`Before the Court are issues relating to enhanced damages, issues regarding the Sony
`
`
`
`License Agreement, and the Court’s rendering of final judgment.
`
`Plaintiff filed suit against Defendants on June 9, 2014, asserting patent infringement
`
`(Dkt. #1). In mandatory disclosure on February 12, 2015, Defendants informed Plaintiff that
`
`Sony, among other companies, was a supplier of image sensors for Samsung’s products (Dkt.
`
`#155, Ex. K). On March 9, 2015, Defendants further specified, in response to interrogatories,
`
`which products contained Sony image sensors (Dkt. #155, Ex. L). On April 2, 2015, Plaintiff
`
`produced to Defendants Imperium’s 2013 Settlement and License Agreement with Sony
`
`Corporation (“Sony License Agreement”) that concerns the patents-in-suit (Dkt. #155, Ex. B;
`
`Dkt. #169, Ex. 3).
`
`September 9, 2015, marked the discovery deadline and the deadline to file dispositive
`
`motions (Dkt. #70 at p. 3). That same day, Plaintiff’s damages expert, Michele Riley, called
`
`attention to Sony sensors in her expert report: “As Exhibit 6A – 6D shows, certain of these
`
`sensors were purchased by Samsung from Sony. I understand that Imperium is not accusing
`
`
`
`1
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 2 of 14 PageID #: 19135
`
`those sensors of infringement in this case.” (Dkt. #156, Ex. Q). Also that same day, September
`
`9, 2015, Plaintiff’s technical expert, Dr. Cameron H.G. Wright, presented his infringement report
`
`(Dkt. #156, Ex. R). This infringement report details, in part, the alleged infringement of Claim
`
`14 of asserted U.S. Patent No. 7,092,029 (“the ’029 Patent”), which includes, among other items,
`
`an image sensor (Dkt. #156, Ex. R at p. 191; Dkt. #1, Ex. C at col. 14). In demonstrating
`
`“exemplary support” for this limitation of an image sensor, the report points to Defendants’
`
`supplemented response to interrogatories identifying image sensors used in Samsung products
`
`(Dkt. #156, Ex. R at p. 184; Ex. M). Of particular note is that at least one of Dr. Wright’s
`
`citations points to a product disclosure that lists, as the image sensors, only Sony image sensors
`
`(Dkt. #156, Ex. M at p. 4).
`
`Defendants contended that they “did not know before September 9 that Imperium would
`
`rely on Sony sensors to prove infringement, but once they learned that this is what Imperium was
`
`doing, Samsung worked diligently to bring this issue promptly before the Court.” (Dkt. #155 at
`
`p. 12). Nearly eight weeks later, on November 3, 2015, Plaintiff filed a motion for leave to file
`
`summary judgment out-of-time, alleging that accused products containing Sony image sensors
`
`are licensed to the patents-in-suit under the Sony License Agreement (Dkt. #155 at p. 2).
`
`On January 21, 2016, the Court denied Defendants’ motion for leave to file summary
`
`judgment out-of-time (Dkt. #219). In its Memorandum Opinion and Order, the Court stated
`
`Much of the information relied upon by Defendants to support its motion for
`summary judgment was known, or should have been known, by Defendants
`before September 9. First, as Defendants explain, the accused Samsung-Sony
`products comprise almost half of the accused products in this lawsuit (Dkt. #155
`at p. 3). Second, Defendants were aware that the patents-in-suit include, at least
`as one limitation, “an image sensor coupled to a memory” (Dkt. #1, Ex. C at col.
`14, ln. 3). Third, Defendants had identified accused products that contain, as the
`only image sensor, a Sony image sensor (Dkt. #155 at p. 8). Fourth, Defendants
`had access to the Sony License Agreement as of April 2, 2015 (Dkt. #169, Ex. 3).
`Considering these factors, the Court finds that even if Plaintiff “obscured” the fact
`
`
`
`2
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 3 of 14 PageID #: 19136
`
`that it is relying upon Sony image sensors, Defendants could have been aware of
`the potential relevance of the Sony License regarding what it describes as almost
`half of the accused products long before September 9, 2015, such that the timing
`of the filing was in the reasonable control of Defendant. This tends to suggest
`that the current filing is not untimely due to “excusable neglect.”
`
`
`(Dkt #219 at p. 4). At the Pretrial conference, the Court discussed with parties the issue of the
`
`Sony License defense. The Court determined that issues related to the Sony License had not
`
`been briefed beyond the request to file summary judgment out-of-time, and the Court was,
`
`therefore, without a great delay in the proceedings, not in a position to determine whether
`
`Defendants had waived the Sony License as a defense or whether the Sony License even applied.
`
`The Court, therefore, determined that the issue would be taken up after trial (Trial Tr. 1/29/16 at
`
`35:22-36:13).
`
`
`
`Trial commenced on February 1, 2016, and continued until February 8, 2016, when the
`
`jury rendered a verdict finding Defendants infringed claims of the ‘029 Patent and the ‘884
`
`Patent (Dkt. #252). In addition, the jury found the Defendants willfully infringed claims of the
`
`‘029 Patent and the ‘884 Patent (Dkt. #252 at pp. 3, 8).
`
`
`
`On February 18, 2016, the Court set forth a briefing schedule regarding enhanced
`
`damages and any remaining issues regarding the Sony License Agreement (Dkt. #254). On
`
`March 8, 2016, Defendants filed Defendant Samsung’s Brief Regarding the Sony License and
`
`Enhanced Damages (Dkt. #277). On March 22, 2016, Plaintiff filed Imperium’s Motion and
`
`Brief on the Seagate Objective Prong, Enhanced Damages, and Samsung’s Sony Defense (Dkt.
`
`#280). On March 28, 2016, Defendants filed a reply brief (Dkt. #299). On April 4, 2016,
`
`Plaintiff filed a sur-reply (Dkt. #302). On April 6, 2016, Plaintiff filed a Corrected sur-reply on
`
`the Seagate Objective Prong, Enhanced Damages, and Samsung’s Sony Defense (Dkt. #312).
`
`
`
`3
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 4 of 14 PageID #: 19137
`
`On April 7, 2016, Defendants filed a Motion for Leave to File a Response to Plaintiff’s
`
`“Corrected” Sur-Reply (Dkt. #313) and the responsive briefing (Dkt. #314). On April 25, 2016,
`
`Plaintiff filed a response to Defendants’ Motion for Leave to File a Response to Plaintiff’s
`
`“Corrected” Sur-Reply (Dkt. #324). On May 5, 2016, Defendants filed a reply (Dkt. #325). On
`
`May 16, 2016, Plaintiff filed a sur-reply (Dkt. #326).
`
`On June 13, 2016, the Supreme Court returned a decision in Halo Electronics, Inc. v.
`
`Pulse Electronics, Inc., 136 S. Ct. 1923, 1925 (2016). The Supreme Court determined that the
`
`Federal Circuit’s two-part test for enhanced damages was inconsistent with 35 U.S.C. § 284,
`
`abrogating In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007). Id.
`
`The Sony License
`
`
`
`Plaintiff argues that Defendants’ Sony License Defense is barred under Rule 16 of the
`
`Federal Rules of Civil Procedure for lack of diligence in failing to timely disclose the theory.
`
`Defendants argue that Rule 8(c) rather than Rule 16, applies. Plaintiff contends that Defendants
`
`are incorrect that only Rule 8 applies and that the Rule 16 requirements for diligence and “good
`
`cause” still apply. Further, Plaintiff asserts that Defendants merely provided a boilerplate
`
`“license defense” and described a “MIPI-license” theory in their interrogatory responses and
`
`therefore did not comply with Rules 37(c) or 26(e) of the Federal Rules of Civil Procedure (Dkt.
`
`#302 at p. 8).
`
`
`
`Even if, for the sake of argument, only Rule 8 applies, the Court finds that Defendants
`
`waived asserting the Sony License as a defense. “Generally, under Rule 8(c) affirmative defenses
`
`must be raised in the first responsive pleading.” Pasco ex rel. Pasco v. Knoblauch, 566 F.3d
`
`572, 577 (5th Cir. 2009). However, “[a]n affirmative defense is not waived if the defendant
`
`‘raised the issue at a pragmatically sufficient time, and [the plaintiff] was not prejudiced in its
`
`
`
`4
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 5 of 14 PageID #: 19138
`
`ability to respond.’” Id. (citing Allied Chem. Corp. v. Mackay, 695 F.2d 854, 856 (5th Cir.
`
`1983)). The court is to “look at the overall context of the litigation,” and the Fifth Circuit has
`
`found “no waiver where no evidence of prejudice exists and sufficient time to respond to the
`
`defense remains before trial.” Id. at 577. Defendants cite Pasco, but in Pasco, the defendant
`
`failed to raise a defense in its first responsive pleading but raised the new affirmative defense in
`
`its motion for summary judgment, two months before discovery was due, and the court noted
`
`that it was a special circumstance where the relevant law on qualified immunity and the Fourth
`
`Amendment was not clearly settled prior to a Supreme Court decision that was passed down.
`
`Pasco, 566 F.3d at 578. In Allied Chemical, defendant failed to raise a defense in its first
`
`response but asserted the defense in its motion for summary judgment. 695 F.2d at 855-56.
`
`
`
`Unlike cited cases where defendants raised the new defense in the motion for summary
`
`judgment, Defendants did not raise the Sony License defense until well beyond the deadline for
`
`summary judgment. As the Court has previously noted, Defendants state that they only knew of
`
`the issue as of September 9, 2015 and then diligently worked to bring the issue promptly before
`
`the Court but did not do so until November 3, 2015 (Dkt. #219 at p. 2). Defendants have
`
`previously presented evidence that they sent e-mails regarding the Sony License to Plaintiff’s
`
`counsel on September 24, 2015 (Dkt. #155, Ex. C).
`
`
`
`The Court finds that evidence of prejudice existed in that Defendants chose not to raise
`
`the defense, even when they admit to becoming aware of the issue, and did not supplement
`
`interrogatory responses with the Sony License information. Sufficient time may have existed, in
`
`theory, between the date Defendants raised the issue and the day of trial, but practically, there
`
`was not sufficient time to respond to the defense, to take discovery on the specific issue, to file
`
`briefings with the Court on the issue, and to have a hearing on the issue, if necessary.
`
`
`
`5
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 6 of 14 PageID #: 19139
`
`Defendants may have given a boilerplate, general license defense in its answer, but even
`
`in supplementing its responses to interrogatories Defendants only gave an indication of asserting
`
`a license to one or more asserted claims of the patents-in-suit per the terms of its membership in
`
`the MIPI Alliance (Dkt. #277, Ex. I at pp. 38-42). If anything, Defendants’ decision to
`
`supplement their answer to interrogatory regarding license defenses on July 13, 2015, and
`
`September 7, 2015, after receiving the Sony License Agreement on April 2, 2015, indicated an
`
`active intention not to assert the Sony License.
`
` Claim 1 of the ‘029 Patent requires “capturing a preparatory image while generating the
`
`preparatory light wherein the preparatory image is represented by preparatory image data.”
`
`According to Defendants’ interpretation of the ‘029 Patent, not reliant on any of Plaintiff’s
`
`views, the ‘029 Patent “teaches that an image sensor is the specific component that captures this
`
`preparatory image.” (Dkt #277 at p. 2). Defendants have never presented evidence as to why,
`
`given this understanding of the patent and knowledge of their own products’ usage of Sony
`
`image sensors, Defendants did not assert that they may be entitled to assert the Sony License,
`
`particularly if Plaintiff agreed to Defendants’ understanding of the patents-in-suit. After all,
`
`Defendants generally pleaded a boilerplate license defense and presumptively stated that
`
`“Samsung may be entitled to a license” with respect to its membership in the MIPI Alliance.
`
`The Court is unconvinced by Defendants’ assertion that Plaintiff concealed its reliance on
`
`Sony image sensors throughout the litigation. Plaintiff maintains that it did not rely on Sony
`
`sensors and that its theory regarding the claims allows that “capturing a preparatory image”
`
`limitation can be performed by components other than an image sensor, such as an image
`
`processor (Dkt. #302 at p. 9). Plaintiff contends that it is under this understanding that it listed a
`
`generic CMOS image sensor rather than specific image signal processors in claim charts (Dkt.
`
`
`
`6
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 7 of 14 PageID #: 19140
`
`#302 at p. 8). Defendants are critical of Dr. Wright’s deposition testimony that Claim 1 requires
`
`a digital imaging sensor, but consistent with Plaintiff’s stated theory of infringement, an imaging
`
`sensor would likely be present in an accused product but need not be used to meet the claim
`
`limitation of “capturing a preparatory image.” The fact that Defendants disagree about the way
`
`in which the claim limitation should be read, as necessitating that an image sensor be the only
`
`component that can practice “capturing a preparatory image,” does not demonstrate concealment
`
`or misconduct on Plaintiff’s part. In short, Plaintiff’s theory of infringement due to image
`
`processors rather than image sensors gives an adequate basis for Plaintiff’s actions, Dr. Wright’s
`
`testimony, and continued insistence that it does not depend upon Sony image sensors to meet the
`
`claim limitations, while Defendants’ theory does not explain their decision not to assert the Sony
`
`License until November 3, 2015. The Court, therefore, determines that Defendants waived their
`
`defense based on the Sony License.
`
`Finally, Defendants’ assertion that the verdict triggered coverage under a second
`
`definition of “Covered Third Party Products” is unconvincing, as such logic would allow parties
`
`to wait until after a verdict, after the dust has cleared, to bring new disputes that were rightly the
`
`subject of the litigation.
`
`Enhanced Damages
`
`At the time of trial, proof of willful infringement required “clear and convincing evidence
`
`that the infringer acted despite an objectively high likelihood that its actions constituted
`
`infringement of a valid patent,” and this “objectively-defined risk … was either known or so
`
`obvious that it should have been known.” In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed.
`
`Cir. 2007). The Court instructed the jury based on the law at the then-applicable willfulness
`
`standard:
`
`
`
`7
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 8 of 14 PageID #: 19141
`
`
`
`
`
`In this case, Imperium contends both that Samsung infringed the
`asserted claims of the ’884, ’290, and ’029 patents, and, further, that
`Samsung infringed willfully. If you find that Samsung infringed the
`asserted claims of the patents-in-suit, then you must go on to address the
`additional issue of whether or not this infringement was willful.
`
`Willfulness requires you to determine by clear and convincing evidence
`that Samsung acted recklessly. To prove that Samsung acted recklessly,
`Imperium must persuade you that Samsung actually knew of the risk of
`infringement, or that the risk of infringement was so clear from the
`circumstances that Samsung should have known of the risk. To determine
`whether Samsung had this state of mind, consider all facts which may
`include, but are not limited, to:
`
`
`1. Whether or not Samsung acted in accordance with the standards of
`commerce for its industry;
`2. Whether or not Samsung intentionally copied a product that is
`covered by the patents-in-suit;
`3. Whether or not there is a reasonable basis to believe that Samsung
`did not infringe or had a reasonable defense to infringement;
`4. Whether or not Samsung made a good-faith effort to avoid
`infringing the patents-in-suit, for example, whether Samsung
`attempted to design around the patents; and
`5. Whether or not Samsung tried to cover up its infringement.
`
`
`(Dkt. #250 at pp. 15-16). The jury, in its verdict, found that Imperium had proven by clear and
`
`convincing evidence that Samsung willfully infringed a claim of the ‘884 Patent and a claim of
`
`the ‘029 Patent (Dkt. #252 at pp. 3, 8).
`
`After the jury returned a verdict, but before this final judgment, the Supreme Court
`
`decided, on June 13, 2016, Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923,
`
`1925 (2016). The Supreme Court determined that the Federal Circuit’s two-part test for
`
`enhanced damages was inconsistent with 35 U.S.C. § 284, abrogating In re Seagate Technology,
`
`LLC, 497 F.3d 1360 (Fed. Cir. 2007). Id. The Supreme Court explained that “Section 284 gives
`
`district courts discretion in meting out enhanced damages. It ‘commits the determination’
`
`whether enhanced damages are appropriate ‘to the discretion of the district court’ and ‘that
`
`
`
`8
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 9 of 14 PageID #: 19142
`
`decision is to be reviewed on appeal for abuse of discretion.’” Id. at 1934 (quoting Highmark
`
`Inc. v. Allcare Health Mgmt. Sys, Inc., 134 S. Ct. 1744, 1748 (2014)). “In applying this
`
`discretion, district courts are ‘to be guided by [the] sound legal principles’ developed over nearly
`
`two centuries of application and interpretation of the Patent Act.” Id. (alternation in original)
`
`(citing Martin v. Franklin Capital Corp., 546 U.S. 132, 139 (2005)). Enhanced damages are
`
`“not to be meted out in a typical infringement case, but are instead designed as a ‘punitive’ or
`
`‘vindictive’ sanction for egregious infringement behavior. The sort of conduct warranting
`
`enhanced damages has been variously described in … cases as willful, wanton, malicious, bad-
`
`faith, deliberate, consciously wrongful, flagrant or—indeed—characteristic of a pirate.” Id. at
`
`1932.
`
`In Halo, the Supreme Court rejected the Seagate approach, holding that the objective
`
`reasonableness of the infringer’s litigation defense does not preclude a finding of “willful
`
`misconduct.” Id. Rather, “[t]he subjective willfulness of a patent infringer, intentional or
`
`knowing, may warrant enhanced damages, without regard to whether his infringement was
`
`objectively reckless.” Id. at 1933. “As with any exercise of discretion, courts should continue to
`
`take into account the particular circumstances of each case in deciding whether to award
`
`damages, and in what amount. Section 284 permits district courts to exercise their discretion in a
`
`manner free from the inelastic constraints of the Seagate test.” Id. at 1933-34. Further, the
`
`Supreme Court determined that enhanced damages should be governed by a preponderance of
`
`the evidence standard rather than the clear and convincing standard under Seagate. Id. at 1934.
`
`
`
`In accordance with the Halo ruling, the Supreme Court vacated and remanded
`
`Innovention Toys, LLC v. MGA Entertainment, Inc., 136 S.Ct. 2483, 2484 (2016). In accordance
`
`with Halo, the Federal Circuit addressed the purposes of the remand to the district court, given
`
`
`
`9
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 10 of 14 PageID #: 19143
`
`circumstances in which the jury had found, under the Seagate standard, that the defendants
`
`willfully infringed by clear and convincing evidence:
`
`The task on remand is limited in an important respect. There is no basis for a new
`trial on “willful misconduct,” which is a sufficient predicate, under Halo, to allow
`the district court to exercise its discretion to decide whether punishment is
`warranted in the form of enhanced damages. Halo, 136 S. Ct. at 1934 (“such
`punishment should generally be reserved for egregious cases typified by willful
`misconduct”). On the record in this case, including the jury instructions . . ., the
`predicate of willful misconduct is established by the jury’s finding that MGA was
`subjectively willful under the second part of the Seagate standard. The jury made
`that finding under the clear-and-convincing-evidence standard, which is more
`demanding than needed. See Halo, 136 S. Ct. at 1934. The Supreme Court in
`Halo did not question our precedents on jury determination of that issue. See
`WBIP, LLC v. Kohler Co., Nos. 2015-1083, -1044, 2016 WL 3902668, at *15
`(Fed. Cir. July 19, 2016). Nor did it doubt that a finding favorable to the patentee
`on the second part of the Seagate standard suffices to establish the subjectively
`willful misconduct that, when present, moves the enhancement inquiry to the
`stage at which the district court exercises its discretion. The remand in this case,
`therefore, is for the district court to exercise its discretion in accordance with
`Halo, including the emphasis on egregiousness; willful misconduct has already
`been established by a verdict that Halo does not warrant disturbing. See Halo
`Elecs., Inc. v. Pulse Elecs., Inc., Nos. 2013-1472, -1656, slip op. at 20-21 (Fed.
`Cir. Aug. 5, 2016).
`
`
`2016 WL 4151240 at *2 (Fed. Cir. 2016). In WBIP, LLC v. Kohler Co., the Federal Circuit
`
`stated that “[w]e do not interpret Halo as changing the established law that the factual
`
`components of the willfulness question should be resolved by the jury.” 2016 WL 3902668, at
`
`*15 (Fed. Cir. 2016) (citing Richardson v. Suzuki Motor Co., 868 F.2d 1226, 1250 (Fed. Cir.
`
`1989) (“Absent sufficient basis for directing the verdict, Richardson has the right of jury
`
`determination of this factual question. Willfulness of behavior is a classical jury question of
`
`intent. When trial is had to a jury, the issue should be decided by the jury.”)).
`
`As in Innovention, the Court determines that, due to the record in this case, including the
`
`jury’s instructions, the predicate of willful misconduct was established by the jury’s findings that
`
`
`
`10
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 11 of 14 PageID #: 19144
`
`Defendants were subjectively willful under the second part of the Seagate standard. The Court,
`
`therefore, moves the enhancement inquiry to the stage at which the Court exercises its discretion.
`
`In exercising its discretion, the Court has reviewed the record, and for general guidance
`
`considered the non-exclusive factors the Federal Circuit has previously provided to assist in this
`
`discretionary determination. Read Corp. v. Portec Inc., 970 F.2d 816 (Fed. Cir. 1992), abrogated
`
`in part on other grounds by Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995)
`
`(en banc). The non-exclusive Read factors in deciding whether to enhance damages and the
`
`amount of the enhancement include the following: (1) whether the infringer deliberately copied
`
`the ideas of another; (2) whether the infringer investigated the scope of the patent and formed a
`
`good-faith belief that it was invalid or that it was not infringed; (3) the infringer’s behavior as a
`
`party to the litigation; (4) the defendant’s size and financial condition; (5) the closeness of the
`
`case; (6) the duration of the defendant’s misconduct; (7) remedial action by the defendant; (8)
`
`the defendant’s motivation for harm; and (9) whether the defendant attempted to conceal its
`
`misconduct. Id. at 827. An award need not rest on any particular factor, and not all relevant
`
`factors need to weigh in favor of an enhanced award. See SRI Int’l., Inc. v. Advanced Tech.
`
`Labs., Inc., 127 F.3d 1462, 1469 (Fed. Cir. 1997). While the Read factors remain helpful to the
`
`Court’s execution of its discretion, an analysis focused on “egregious infringement behavior” is
`
`the touchstone for determining an award of enhanced damages rather than a more rigid,
`
`mechanical assessment.
`
`The Court finds that enhancement of damages is appropriate in this case. In weighing
`
`potentially egregious behavior, the Court notes testimony regarding allegations of Defendants’
`
`copying. Mr. Melfi testified that during his time working at ESS (prior to investment from
`
`Plaintiff), Defendants, unique among its customers, sought information on how ESS made its
`
`
`
`11
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 12 of 14 PageID #: 19145
`
`camera (Trial Tr. 2/1/2016 PM at 71:14-75:4). Mr. Melfi testified that Samsung asked
`
`specifically about anti-flicker and flash technology, requested source code, and, in regard to
`
`higher megapixel cameras, control registers, signals, and the circuitry for the interface (Trial Tr.
`
`2/1/2016 PM at 73:22-74:17; 78:5-79:5). Further, Mr. Melfi testified that shortly before winding
`
`down business with ESS, Samsung used information gleaned from a training to duplicate ESS’
`
`camera testing lab (Trial Tr. 2/1/2016 PM at 79:6-22).
`
`In addition, the Court notes that Mr. Bang testified, by way of videotaped depositions
`
`regarding Defendants’ tracking of Imperium’s patent portfolio, that Defendants did not perform
`
`an analysis of Plaintiff’s patents after 2011 and did not monitor Plaintiff’s previous litigation
`
`involving the patents-in-suit. Mr. Lee testified that in 2011, Defendants dropped pursuit of
`
`Plaintiff’s patents. However, evidence produced at trial indicated that this testimony was
`
`demonstratively false and not worthy of belief (Trial Tr. 2/5/2016 PM at 111:14-112:16).
`
`Evidence indicates Defendants did track and attempt to obtain, despite testimony otherwise,
`
`Plaintiff’s patents for years before this lawsuit. Samsung also failed to offer any evidence at trial
`
`that it had independently developed and/or acquired the camera technologies at issue in this case.
`
`Despite knowing of Plaintiff’s patents since at least April 2011, Defendants never
`
`undertook any serious investigation to form a good-faith belief as to non-infringement or
`
`invalidity. Instead, Defendants used a patent broker to try and purchase the patents from
`
`Plaintiff without revealing their identity.
`
`Defendants made multiple material misrepresentations under oath. In their sworn
`
`response to Interrogatory No. 7, Defendants misrepresented that they only knew of Plaintiff’s
`
`patents when the case started in June 2014. This response remained unchanged until after
`
`depositions and other discovery showed this to be incorrect. During trial, the Court found
`
`
`
`12
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 13 of 14 PageID #: 19146
`
`Defendants’ witnesses, Mr. Bang and Mr. Lee, gave false testimony, including testimony that
`
`Defendants proffered to the jury. Defendants misrepresented key facts bearing on infringement
`
`and willfulness, including whether Defendants were tracking Plaintiff’s patents in the first
`
`Imperium case, the extent of their discussions about obtaining Plaintiff’s patents, and
`
`Defendants’ alleged pre-suit analysis of them. As a result of this conduct, the Court sanctioned
`
`Defendants at trial, based in part on these misrepresentations.
`
`Defendants also failed to produce relevant documents. Defendants knew at least by July
`
`15, 2015, about the need to produce e-mails and other documents relating to Mr. Kaler. Plaintiff
`
`had specifically requested such documents. Defendants apparently never searched for nor
`
`produced any such documents until the fourth day of trial at 2:19 a.m. Defendants then only
`
`produced documents found on Mr. Kaler’s laptop during witness preparations—not any
`
`documents from Defendants’ files. Defendants searched their own files for such Kaler
`
`documents only after Plaintiff and the Court had raised the issue of sanctions. Defendants then
`
`provided on the fifth day of trial a February 4 declaration by Mr. Bang and a handful of hard-
`
`copy documents. The time to produce these Kaler documents was during discovery, not during
`
`trial.
`
`In view of evidence of Defendants’ conduct at the time of accused infringement and after
`
`reviewing the Read factors, the Court finds that enhancement is warranted. Enhancement is
`
`appropriate here to address Defendants’ willful infringement and conduct. Enhancement of
`
`damages by three times the jury verdict of $6,970,380.50 would result in a total amount of
`
`$20,911,141.50. The Court enhances damages to the maximum extent allowable under § 284
`
`given the totality of the circumstances. The Court, therefore, exercises its discretion, given the
`
`
`
`13
`
`

`
`Case 4:14-cv-00371-ALM Document 329 Filed 08/24/16 Page 14 of 14 PageID #: 19147
`
`nature and circumstances particular to this case, and concludes it is appropriate to enhance the
`
`damages by trebling the jury award.
`
`14