Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 1 of 10 PageID #: 20235
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`United States District Court
`EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
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`Civil Action No. 4:14-CV-00371
`Judge Mazzant
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`§§§§§§
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`IMPERIUM IP HOLDINGS (CAYMAN),
`LTD.
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`v.
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`SAMSUNG ELECTRONICS CO., LTD.,
`SAMSUNG ELECTRONICS AMERICA,
`INC., SAMSUNG
`TELECOMMUNICATIONS AMERICA,
`LLC, and SAMSUNG SEMICONDUCTOR,
`INC.
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`MEMORANDUM OPINION AND ORDER
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`Pending before the Court is Plaintiff’s Motion to Amend the Judgment and for Pre-
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`Judgment and Post-Judgment Interest (Dkt. #335). After reviewing the relevant pleadings, the
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`Court grants in part and denies in part Plaintiff’s motion.
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`BACKGROUND
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`On June 9, 2014, Plaintiff filed the instant action against Defendants, alleging
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`infringement of United States Patent Nos. 6,271,884 (the “’884 Patent), 7,092,029 (the “’029
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`Patent”), and 6,836,290 (the “’290 Patent”). On February 8, 2016, the jury returned a verdict in
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`favor of Plaintiff. Particularly, the jury found the following: (1) Defendants infringed Claims 1,
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`5, 14, and 17 of the ’884 Patent; (2) Defendants infringed Claims 1, 6, and 7 of the ’029 Patent;
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`(3) Defendants willfully infringed the patents-in-suit; and (4) Claim 10 of the ’290 Patent was
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`invalid for obviousness (Dkt. #253). The jury awarded $4,840,772 in damages for infringement
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`of the ’884 Patent and $2,129,608.50 in damages for infringement of the ’029 Patent (Dkt. #253).
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`On August 24, 2016, the Court awarded enhanced damages for willful infringement and entered
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`final judgment (Dkt. #329; Dkt. #330).
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`Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 2 of 10 PageID #: 20236
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`On September 21, 2016, Plaintiff filed its motion to amend (Dkt. #335). On October 11,
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`2016, Defendants filed a response (Dkt. #340). On October 24, 2016, Plaintiff filed a reply
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`(Dkt. #344). On November 3, 2016, Defendants filed a sur-reply (Dkt. #347).
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`LEGAL STANDARD
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`The Federal Rules of Civil Procedure do not specifically provide for motions for
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`reconsideration. Shepherd v. Int’l Paper Co., 372 F.3d 326, 328 n.1 (5th Cir. 2004). Depending
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`on when a party files such a motion, the Court may construe it under Rule 59(e) as a motion to
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`alter or amend a judgment or under Rule 60(b) as a motion for relief from a final judgment. Id.;
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`Williams v. Thaler, 602 F.3d 291, 303 (5th Cir. 2010) (“When a litigant files a motion seeking a
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`change in judgment, courts typically determine the appropriate motion based on whether the
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`litigant filed the motion within Rule 59(e)’s time limit.”). If a party files a motion within than
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`twenty-eight days from the judgment or order of which the party complains, it is considered a
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`Rule 59(e) motion; otherwise, it is treated as a Rule 60(b) motion. See Hamilton Rothschilds v.
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`Williams Rothschilds, 147 F.3d 367, 371 n.19 (5th Cir. 1998). Here, Plaintiff filed its motion
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`within twenty-eight days of the Court entering final judgment. The Court will construe
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`Plaintiff’s motion as a motion to amend the judgment under Rule 59(e).
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`A Rule 59(e) motion “calls into question the correctness of a judgment.” Templet v.
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`HydroChem Inc., 367 F.3d 473, 478 (5th Cir. 2004) (quoting In Re Transtexas Gas. Corp.,
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`303 F.3d 571, 581 (5th Cir. 2002)). “Reconsideration of a judgment after its entry is an
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`extraordinary remedy that should be used sparingly.” Id. at 479 (citing Clancy v. Emp’rs Health
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`Ins. Co., 101 F. Supp. 2d 463, 465 (E.D. La. 2000)). In the Fifth Circuit, Rule 59(e) standards
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`“favor the denial of motions to alter or amend a judgment.” S. Constructors Grp., Inc. v.
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`Dynalectric Co., 2 F.3d 606, 611 (5th Cir. 1993) (citations omitted). Under Rule 59(e),
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`2
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`Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 3 of 10 PageID #: 20237
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`amending a judgment is appropriate (1) where there has been an intervening change in the
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`controlling law; (2) where the movant presents newly discovered evidence that was previously
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`unavailable; or (3) where there has been a manifest error of law or fact. Demahy v. Schwarz
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`Pharma, Inc., 702 F.3d 177, 182 (5th Cir. 2012) (citing Schiller v. Physicians Res. Grp. Inc.,
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`342 F.3d 563, 567 (5th Cir. 2003)). A motion under Rule 59 cannot be used to raise arguments
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`or claims “that could, and should, have been made before the judgment issued.” Id. (citing
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`Marseilles Homeowners Condo. Ass’n v. Fid. Nat. Ins. Co., 542 F.3d 1053, 1058 (5th Cir.
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`2008)).
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`Amendment of the Judgment
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`ANALYSIS
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`Plaintiff seeks under Federal Rule of Civil Procedure 59(e) to amend the judgment to
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`reflect Defendants’ sales through trial.
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`The jury awarded $6,970,380.50 to Plaintiff for damages incurred through the date of the
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`verdict—$4,840,772 for infringement of the ’884 Patent and $2,129,608.50 for infringement of
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`’029 Patent. These damages figures relate to half of the amounts that Plaintiff’s damages expert
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`put forth at trial. See Dkt. #318, Feb. 3, 2016 P.M. Trial Tr. at 35:8–13 (calculating damages for
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`infringement of the ’884 Patent as $9,681,544 and $4,259,217 for the ’029 Patent). Plaintiff
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`claims—and Defendants do not contest—that the jury implicitly found that Defendants owed
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`Plaintiff a royalty of four cents and two cents per accused product for the ’884 and ’029 Patents,
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`respectively. See Dkt. #318, Feb. 3, 2016 P.M. Trial Tr. at 32:19–23 (showing Plaintiff’s expert
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`calculated a royalty rate of eight cents for the ’884 Patent (anti-flicker) and a royalty rate of four
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`cents for the ’029 Patent (preflash)). Following the trial, Defendants produced sales data for the
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`accused products through the first quarter of 2016. Plaintiff’s expert applied the jury’s four-cent
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`Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 4 of 10 PageID #: 20238
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`and two-cent rates to Defendants’ updated sales data and adjusted the data to accrue only through
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`the date of the verdict. The updated damages figure results in a total of $6,412,399.64 in
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`damages for infringement. Enhancing this updated damages figure results in a judgment totaling
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`$19,237,198.92. While maintaining the positions set forth in their Rule 50 motion, Defendants
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`do not dispute the updated damages figure or the new judgment amount.
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`To correct the error in the damages award, the Court therefore amends the judgment to
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`reflect the updated damages figure and the award of enhanced damages. As such, Plaintiff is
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`entitled to $6,412,399.64 as damages for infringement of the ’884 Patent and the ’029 Patent.
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`When such damages are enhanced, Plaintiff is entitled to $19,237,198.92 as a final judgment.
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`The Court adopts and incorporates its prior opinions setting forth why enhanced damages are
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`proper (Dkt. #329; Dkt. #361).
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`Imposition of an Ongoing Royalty
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`Plaintiff also seeks an ongoing royalty against Defendants for infringing sales that have
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`occurred and continue to occur after the jury rendered its verdict. Defendants respond that
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`Plaintiff fails to prove the need for an ongoing royalty. Specifically, Defendants contend that
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`Plaintiff has not proved that any new products introduced by Defendants are colorable variations
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`of infringing products. Defendants further contend that Plaintiff has not shown that an ongoing
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`royalty is necessary to effectuate a remedy.
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`Under 35 U.S.C. § 284, a successful patentee shall be awarded damages “adequate to
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`compensate for the infringement, but in no event less than a reasonable royalty for the use made
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`of the invention by the infringer, together with interest and costs as fixed by the court.” The
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`Federal Circuit has interpreted this provision to permit a court to award “‘an ongoing royalty for
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`patent infringement in lieu of an injunction’ barring the infringing conduct.” Prism Techs. LLC
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`4
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`Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 5 of 10 PageID #: 20239
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`v. Sprint Spectrum L.P., No. 2016-1456, 2017 WL 877221, at *12 (Fed. Cir. Mar. 6, 2017)
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`(quoting Paice LLC v. Toyota Motor Corp., 504 F.3d 1293, 1314 (Fed. Cir. 2007)). However, a
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`Court should not grant an ongoing royalty “as a matter of course whenever a permanent
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`injunction is not imposed.” Paice LLC, 504 F.3d at 1314–15.
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`Since Plaintiff seeks an ongoing royalty in lieu of an injunction, the Court exercises its
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`discretion to determine whether an ongoing royalty is appropriate. Here, the Court finds an
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`ongoing royalty should be imposed. The jury instructions were clear in providing Plaintiff with a
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`reasonable royalty as relief from past and present infringement only. The Court instructed the
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`jury, “[D]amages must be in an amount adequate to compensate Imperium for the infringement.
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`The purpose of a damage award is to put Imperium in about the same financial position it would
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`have been in if the infringement had not happened.” (Dkt. #250 at p. 21). In line with the jury
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`instructions, questions two, twelve, sixteen, and twenty-two of the verdict form indicate that the
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`jury would award damages to “fairly and reasonabl[y] compensate Imperium for Samsung’s
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`infringement” (Dkt. #253 at pp. 2, 5–6, 9). Nothing in the jury instructions or the verdict form
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`specified that the jury’s award was to compensate Plaintiff for ongoing or future infringement.
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`In addition, both parties’ damages experts calculated damages as extending only through the date
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`of trial. See Dkt. #274, Feb. 5, 2016 Trial Tr. at 30:12–13 (indicating Defendants’ expert
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`testified that his calculations were “only through the time of trial”); Dkt. #274, Feb. 5, 2016 Trial
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`Tr. at 160:20–21 (showing Plaintiff’s expert calculated damages through the date of trial). After
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`reviewing Defendants’ sales regarding the accused products through the first quarter of 2016, the
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`Court is convinced that there is evidence of ongoing infringement. See, e.g., Dkt. #344, Exhibit
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`1. Thus, an ongoing royalty is appropriate to address harm to Plaintiff that occurred after the
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`date of trial.
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`Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 6 of 10 PageID #: 20240
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`Prejudgment Interest
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`Plaintiff claims it is entitled to an award of prejudgment interest in an amount that
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`sufficiently compensates it for Defendants’ infringement. Plaintiff suggests the Court should
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`calculate prejudgment interest at the average prime rate during the infringement period beginning
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`in the first quarter of 2007.1 Plaintiff also asserts that prejudgment interest should be
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`compounded quarterly.
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`Defendants argue that the Court should not impose prejudgment interest at all,
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`considering Plaintiff’s delay in proceeding with its claim for infringement. Defendants mention
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`sworn testimony from Plaintiff’s executive officers, as well as internal documents, confirm that
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`Plaintiff substantially delayed bringing suit. Defendants point to testimony that shows Plaintiff
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`identified Defendants as a target for litigation before 2008, which contradicts Plaintiff’s assertion
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`that it became aware of Defendants’ potential infringement in 2011 (Dkt. #340 at p. 2). In the
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`event the Court determines an award of prejudgment interest is proper, Defendants contend the
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`Court should apply the U.S. Treasury Bill rate, compounded annually.
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`The Supreme Court has held that prejudgment interest “should be ordinarily awarded”
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`unless there is some justification for withholding such an award. Gen. Motors Corp. v. Devex
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`Corp., 461 U.S. 648, 654 (1983). The Devex Court explained:
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`In the typical case an award of prejudgment interest is necessary to ensure that the
`patent owner is placed in as good a position as he would have been in had the
`infringer entered into a reasonable royalty agreement. An award of interest from
`the time that the royalty payments would have been received merely serves to
`make the patent owner whole, since his damages consist not only of the value of
`the royalty payments but also of the foregone use of the money between the time
`of infringement and the date of the judgment.
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`1 According to Plaintiff, “Between the date of first infringement and the entry of judgment date, the average prime
`rate was 3.9%.” (Dkt. #335 at p. 5).
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`6
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`Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 7 of 10 PageID #: 20241
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`Id. at 655–56; see also Bio-Rad Labs., Inc. v. Nicolet Instrument Corp., 807 F.2d 964, 967
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`(Fed. Cir. 1986) (acknowledging the award of prejudgment interest should be from the date of
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`infringement to the date of final judgment, “since only such award will satisfy ‘Congress’
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`overriding purpose [in section 284] of affording patent owners complete compensation’”
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`(quoting Devex, 461 U.S. at 655)).
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`“The rate of prejudgment interest and whether it should be compounded or
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`uncompounded are matters left largely to the discretion of the district court.” Bio-Rio Labs.,
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`807 F.2d at 969. However, when exercising that discretion, the Court recognizes the purpose of
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`prejudgment interest, which is to compensate the patent owner for infringement. Prejudgment
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`interest applies to actual damages and not punitive or enhanced damages. Beatrice Foods Co. v.
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`New Eng. Printing & Lithographing Co., 923 F.2d 1576, 1580 (Fed. Cir. 1991).
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`The Court determines that Plaintiff has not unreasonably delayed filing suit against
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`Defendants such that prejudgment interest should be withheld. Plaintiff did not have reason to
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`know that Defendants were infringing before 2008. Plaintiff commenced litigation regarding
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`Defendants’ patent infringement on June 9, 2014. There is evidence in the record that Plaintiff
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`took measures to avoid litigation with Defendants before filing suit. See, e.g., Dkt. #335, Exhibit
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`6 at pp. 1–9 (revealing from 2011 to 2013, Plaintiff and Defendants engaged in discussions
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`related to a license or purchase of the patents-in-suit). Contrary to Defendants’ arguments, the
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`record does not indicate that Plaintiff or ESS knew of Defendants’ infringement before 2008.
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`For example, Mr. Bob Blair, CEO for ESS and Plaintiff, testified that “long before 2008,
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`[Defendants] were selling lots of digital imaging products[] [and] products with digital images in
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`them” (Dkt. #344, Exhibit 5 at 56:7–9). Blair continued, “[I]n 2008, we started . . . looking at
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`who might be the people we should go talk to . . . license the portfolio. Samsung of course
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`Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 8 of 10 PageID #: 20242
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`would be on the list.” (Dkt. #344, Exhibit 5 at 56:9–11). This deposition testimony shows that
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`Blair did not know specifically if Defendants were infringing in 2008, only that Defendants
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`might need a license because it sold digital imaging products. See Dkt. #344, Exhibit 5 at 54:5–
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`12 (showing Blair was questioned about whether ESS thought Defendants were infringing its
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`patents from 2003 to 2006 and he responded that ESS “never discussed anything like that or
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`thought about it. We were trying to sell products, not litigate patents.”).
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`Next, the Court must calculate the rate of prejudgment interest. The first question
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`requires the Court to determine when prejudgment interest begins to accrue. Plaintiff contends
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`that such date should be the first quarter of 2007 (Dkt. #335 at p. 5). Defendants do not offer a
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`firm date but asserts that Plaintiff cannot begin to recover until June 9, 2008 (Dkt. #340 at p. 8).
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`Section 286 states, “No recovery shall be had for any infringement committed more than six
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`years prior to the filing of the complaint or counterclaim for infringement in the action.” 35
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`U.S.C. § 286. Here, prejudgment interest cannot accrue before June 9, 2008, which is six years
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`before Plaintiff filed its complaint. The Court also instructed the jury that the earliest the
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`damages period could begin was June 9, 2008 (Dkt. #250 at p. 22). Since prejudgment interest
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`can apply only to the actual damages portion of the judgment, Plaintiff cannot receive
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`prejudgment interest dating back to 2007. Beatrice Foods, 923 F.2d at 1580. The Court will
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`therefore award prejudgment interest on the actual damages awarded to Plaintiff, covering June
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`9, 2008, to the date of final judgment.
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`Common practice in the Eastern District of Texas is to apply a prejudgment interest rate
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`that compounds the prime rate quarterly. See Georgetown Rail Equip. Co. v. Holland L.P., No.
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`613-cv-366, 2016 WL 3346084, at *10 (E.D. Tex. June 16, 2016) (awarding prejudgment
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`interest at the prime rate compounded quarterly); Fractus, S.A. v. Samsung Elecs. Co., 876 F.
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`Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 9 of 10 PageID #: 20243
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`Supp. 2d 802, 856 (E.D. Tex. 2012) (same); Clear with Computs., LLC v. Hyundai Motor Am.,
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`Inc., No. 6:09-cv-479, 2012 WL 8144915, at *8 (E.D. Tex. Jan. 9, 2012) (same); Glob. Ground
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`Automation v. Groundrez, LLC, No. 6:08-cv-374, 2011 WL 13098293, at *6 (E.D. Tex. June 29,
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`2011) (same); Tycho Healthcare Grp. v. Applied Med. Res. Corp., No. 9:09-cv-176, 2010 WL
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`11469881, at *5 (E.D. Tex. May 17, 2010) (same); see also VirnetX, Inc. v. Apple Inc., 925 F.
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`Supp. 2d 816, 844 (E.D. Tex. 2013) (listing cases where the Court awarded prejudgment interest
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`at the prime rate compounded quarterly). After carefully considering the parties’ positions and
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`the jury’s award, the Court decides to follow common practice of this district. The Court awards
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`Plaintiff prejudgment interest on the updated damages award of $6,412,399.64. The
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`prejudgment interest on this amount should be compounded quarterly at the prime rate. Interest
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`should accrue from June 9, 2008, to the date of final judgment.
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`Post-Judgment Interest
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`Plaintiff asserts that it is entitled to post-judgment interest under 28 U.S.C. § 1961, which
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`states that “[i]nterest shall be allowed on any money judgment in a civil case recovered in a
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`district court.” The Court agrees. Accordingly, the Court awards post-judgment interest at the
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`statutory rate from the date of the Court’s final judgment until the date of payment. Post-
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`judgment interest covers the entire judgment amount, enhanced damages, and prejudgment
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`interest, as well as any attorneys’ fees awarded. Because Plaintiff has not sought attorneys’ fees
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`or costs, Defendants have reserved the right to oppose any such motion.
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`CONCLUSION
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`It is therefore ORDERED that Plaintiff’s Motion to Amend the Judgment and for Pre-
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`Judgment and Post-Judgment Interest (Dkt. #335) is GRANTED IN PART and DENIED IN
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`PART.
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`Case 4:14-cv-00371-ALM Document 360 Filed 04/27/17 Page 10 of 10 PageID #: 20244
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`Since the Court awarded an ongoing royalty, the Court further ORDERS the parties
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`to negotiate a royalty rate. The parties shall have fifteen days from the entry of this order to
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`agree on an ongoing royalty rate and the products covered by that rate. If the parties require
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`additional time, they may so move the Court. If the parties do not reach an agreement, the
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`Court will set a briefing schedule and determine an appropriate ongoing royalty rate.
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