Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 1 of 54 PageID #: 11153
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`
`
`
`
`CAUSE NO. 6:13-CV-366
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` §
`
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`
`
`
`v.
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`HOLLAND L.P.,
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`Defendant.
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`
`
`
`
`
`GEORGETOWN RAIL EQUIPMENT
`COMPANY,
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`Plaintiff,
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`
`
`
`
`
`
`
`
`MEMORANDUM AND ORDER
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`Having considered the parties’ written submissions and argument at the June 30, 2015
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`post-trial hearing, and for the reasons below, the Court rules as follows:
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`• Holland L.P.’s (“Holland”) Motion for Judgment as a Matter of Law (Docket No.
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`301) is DENIED;
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`• Plaintiff Georgetown Rail Equipment Company’s (“Georgetown”) Motion for Pre-
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`Judgment and Post-Judgment Interest (Docket No. 298) is GRANTED;
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`• Georgetown’s Motion for Permanent Injunction (Docket No. 299) is GRANTED;
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`• Georgetown’s Motion for Finding of Willful Infringement (Docket No. 302) is
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`GRANTED;
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`• Georgetown’s Motion for Declaration of Exceptional Case and Award of Attorneys’
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`Fees (Docket No. 300) is GRANTED; and
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`• Holland’s Motion to Supplement Post-Trial Hearing Record (Docket No. 334) is
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`GRANTED.
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`

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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 2 of 54 PageID #: 11154
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`BACKGROUND
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`On May 1, 2013, Georgetown filed this action against Holland alleging that Holland
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`infringes U.S. Patent No. 7,616,329 (“the ’329 Patent”). Georgetown’s Aurora Track Inspection
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`System competes with Holland’s Laser Plate-Cutting System and Line Scan System
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`(collectively, Holland’s “Rail Vision Systems”) in the track inspection market. The market is
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`essentially composed of only seven customers in the United States, known as “Class I
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`Railroads,” who maintain the railroads used to ship goods.
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`The patent-in-suit generally relates to a system and method for inspecting railroad track
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`using lasers, cameras, and a processor. See ’329 Patent col. 2:14–34. Specifically at issue in this
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`case is a system for inspecting tie plates. Docket No. 21 at 1. Figure 2 of the ’329 Patent, below,
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`shows how a tie plate (14) secures the rail (12) to the crosstie (10) or “sleeper,” as well as the
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`lasers (40) and cameras (50) used to detect the tie plates.
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`’329 Patent, Fig. 2.
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`“Tie plates may sink or ‘cut’ into the [crosstie] or break over time.” Docket No. 21-9,
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`(Decl. of Greg Grissom, vice president of engineering for Georgetown) ¶ 5. Tie plates may also
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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 3 of 54 PageID #: 11155
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`be misaligned with respect to the crosstie. Measuring misaligned or sunken tie plates (also
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`known as plate cut or plate cutting) is valuable to Class I Railroads because it allows repairs to
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`be made before the crosstie fails. Historically, the process to measure plate cut required workers
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`to manually walk the tracks and visually inspect each and every tie. Georgetown automated this
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`process, patented the invention, and marketed it under its Aurora mark.
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`Georgetown asserted only claim 16 at trial. It recites in its entirety:
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`16. A system for inspecting a railroad track bed, including the railroad track, to be
`mounted on a vehicle for movement along the railroad track, the system
`comprising:
`at least one light generator positioned adjacent the railroad track for projecting a
`beam of light across the railroad track bed;
`at least one optical receiver positioned adjacent the railroad track for receiving at
`least a portion of the light reflected from the railroad track bed and generating a
`plurality of images representative of the profile of at least a portion of the railroad
`track bed; and
`at least one processor for analyzing the plurality of images and determining one or
`more physical characteristics of the said portion of the railroad track bed, the one
`or more physical characteristics comprising at least a geographic location of the
`plurality of images along the railroad track bed, wherein the processor includes an
`algorithm for detecting a misaligned or sunken tie plate of the railroad track bed,
`the algorithm comprising the steps of:
`(a) analyzing a frame of the plurality of images, the frame comprising a region of
`interest;
`(b) determining whether the region of interest contains a tie plate;
`(c) if a tie plate is present, determining a crosstie contour and a tie plate contour;
`(d) comparing an orientation of the crosstie contour and an orientation of the tie
`plate contour; and
`(e) determining whether the tie plate is misaligned or sunken based upon the
`comparison.
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`’329 Patent col. 11:41–12:2
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`Notably, claim 16 recites “at least one light generator” and “at least one optical receiver.”
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`‘329 Patent col. 11:43, 46. The specification describes the use of a “light generator such as a
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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 4 of 54 PageID #: 11156
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`laser 40 [and] a device for receiving light reflected from the area to be inspected such as a
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`camera 50,” as shown in Fig. 1. Id. at col. 3:30–3.
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`’329 Patent Fig. 1. Figure 1 also shows how “the cameras 50 are mounted at an angle θ with
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`respect to the beam 42 of light projected from lasers 40.” ’329 Patent col. 4:33–36. Specifically,
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`the specification provides that:
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`
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`“[w]ith the beams 42 projected onto the irregular surface of the track and viewed
`at an angle, the projected line L shown in FIG. 2 follows the contours of the
`surface and components of the track bed. An example image or frame showing the
`projected line L of the track bed is shown in FIG. 3. The image data or frame
`includes a plurality of pixels given X-Y coordinates and shows a contour of the
`track bed captured by the cameras 50. [Using] image processing techniques
`known in the art, the image includes two pixel values, where the dark pixels
`represent the contour of the track bed. Every pixel of a given image data is given
`the same Z-coordinate, which represents the particular position along the length of
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`the track at which the image data was captured. In this manner, a plurality of
`captured images produce a three-dimensional scan of the track bed in which each
`image of the scan has X-Y coordinates showing the contour of the track bed, and
`has a Z-coordinate representing the particular position of the contour along the
`length of rail.”
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`’329 Patent col. 5:31–49. Notably, Fig. 3 provides an example of the contour view of a track
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`bed, where the “dark pixels [appearing as black lines,] represent the contour of the track bed.”
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`’329 Patent col. 5:41, 7:51–52 (“the tie plate 14 and rail 12 are visible” in the contour image).
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`’329 Patent, Fig. 3.
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`Holland places several light generator and optical receivers of its accused Rail Vision
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`Systems on its track inspection vehicles (“TrackStar” vehicles).1 This data is collected on a hard
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`drive on the TrackStar vehicle, and then sent to non-party Rail Vision Europe Limited, a
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`company based in the United Kingdom (“Rail Vision UK”). Rail Vision UK processes the data
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`to determine the level of plate cut and misalignment in the inspected crossties. The resulting
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`report is delivered back to Holland, who provides the analysis to its customers. Holland’s
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`primary noninfringement position through trial was that it only collects the data and does not
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`control Rail Vision UK, who owns the processor and source code to carry out the claimed
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`algorithm. See generally Docket No. 260 at 47:14–49:7 (Holland’s closing argument).
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`1 The TrackStar vehicles contain several other systems that measure other railroad characteristics.
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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 6 of 54 PageID #: 11158
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`Georgetown and Holland are well acquainted—they attempted to combine the Aurora
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`and TrackStar technologies and at one point discussed Holland acquiring Georgetown. A turning
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`point in their relationship that played a significant role in this litigation occurred at a joint
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`demonstration for a potential customer. In January 2012, a Class I Railroad, Union Pacific
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`Railroad, invited both parties to participate in a head-to-head challenge between Holland’s Rail
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`Vision Systems and Georgetown’s Aurora services on Union Pacific’s test track at Yuma,
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`Arizona. PX53 (email from Union Pacific inviting Georgetown and Holland to participate in a
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`joint demonstration); Docket No. 261 (04-06-2015 P.M. Trial Tr., Sealed Portion No. 1) at 22:9–
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`24:7.
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`Greg Grissom, vice president of engineering for Georgetown, stated that it was at this
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`joint demonstration that Georgetown became aware that Holland’s Rail Vision Systems possibly
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`infringed the ’329 Patent. Id. at 24:8–25:17. Following the joint demonstration, Union Pacific
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`declined to contract with Georgetown and instead entered into a “change order” agreement with
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`Holland. See Docket No. 263 (04-7-2015 P.M. Trial Tr., Sealed Portion No. 5) at 70:8–72:13
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`(Holland’s former vice president, Robert Madderom, explaining the change order); PX159. The
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`2012 change order altered an existing contract Holland had with Union Pacific to allow Holland
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`to provide Rail Vision Systems services
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`.
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`Id.
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`After further communications with Holland regarding its Rail Visions Systems, see
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`Docket No. 253 (04-07-2015 A.M. Trial Tr.) at 23:24–34:9, Georgetown filed suit for patent
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`infringement on May 1, 2013 and moved for a preliminary injunction on July 11, 2013, Docket
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`No. 21. Magistrate Judge Love found that all four preliminary injunction factors favored
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`granting the injunction: (1) the likelihood of the patentee’s success on the merits; (2) irreparable
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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 7 of 54 PageID #: 11159
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`harm if the injunction was not granted; (3) the balance of hardships between the parties; and (4)
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`the public interest. Docket No. 51 at 5–10. On January 6, 2014, Chief Judge Davis (former
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`presiding judge) adopted Judge Love’s recommendation and ordered the preliminary injunction.
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`Docket No. 81.
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`The litigation proceeded after the Court entered the preliminary injunction. The Court
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`held a five-day trial that concluded on April 10, 2015. After approximately an hour of
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`deliberations, the jury returned a verdict that Holland’s Laser Plate-Cutting System and Line
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`Scan System infringed claim 16 of the ’329 Patent and that the infringement was willful. Docket
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`No. 273. The jury awarded Georgetown $1,541,333 in damages. Id. Both parties have filed
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`post-trial motions that the Court discusses below.
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`MOTION FOR JUDGMENT AS A MATTER OF LAW (Docket No. 301)
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`
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`Holland renews its Rule 50 motion for judgment as a matter of law on the issues of
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`infringement, willfulness, and damages; or, in the alternative, moves for a new trial on those
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`issues.
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`Applicable Law
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`Judgment as a matter of law is only appropriate when “a reasonable jury would not have
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`a legally sufficient evidentiary basis to find for the party on that issue.” FED. R. CIV. P. 50(a).
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`The grant or denial of a motion for judgment as a matter of law is a procedural issue not unique
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`to patent law, reviewed under the law of the regional circuit in which the appeal from the district
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`court would usually lie.” ACCO Brands, Inc. v. ABA Locks Mfrs. Co., 501 F.3d 1307, 1311
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`(Fed. Cir. 2007). The U.S. Court of Appeals for the Fifth Circuit “uses the same standard to
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`review the verdict that the district court used in first passing on the motion.” Hiltgen v. Sumrall,
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`47 F.3d 695, 699 (5th Cir. 1995). Thus, a jury verdict must be upheld, and judgment as a matter
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`of law may not be granted, unless “there is no legally sufficient evidentiary basis for a reasonable
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`jury to find as the jury did.” Id. at 700. “A jury verdict must stand unless there is a lack of
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`substantial evidence, in the light most favorable to the successful party, to support the verdict.”
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`Am. Home Assurance Co. v. United Space Alliance, 378 F.3d 482, 487 (5th Cir. 2004).
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`A court reviews all evidence in the record and must draw all reasonable inferences in
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`favor of the nonmoving party; however, a court may not make credibility determinations or
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`weigh the evidence, as those are solely functions of the jury. See Reeves v. Sanderson Plumbing
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`Prods., Inc., 530 U.S. 133, 150–51 (2000) (“Thus, although the court should review the record as
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`a whole, it must disregard all evidence favorable to the moving party that the jury is not required
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`to believe.”). The moving party is entitled to judgment as a matter of law “only if the evidence
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`points so strongly and so overwhelmingly in favor of the nonmoving party that no reasonable
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`juror could return a contrary verdict.” Int’l Ins. Co. v. RSR Corp., 426 F.3d 281, 296 (5th Cir.
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`2005).
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`Under Federal Rule of Civil Procedure 59, a new trial may be granted to any party to a
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`jury trial on any or all issues “for any reason for which a new trial has heretofore been granted in
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`an action at law in federal court.” “A new trial may be granted, for example, if the district court
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`finds the verdict is against the weight of the evidence, the damages awarded are excessive, the
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`trial was unfair, or prejudicial error was committed in its course.” Smith v. Transworld Drilling
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`Co., 773 F.2d 610, 612–13 (5th Cir. 1985). Remittitur is within the sound discretion of the trial
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`court. Alameda Films S.A. v. Authors Rights Restoration Corp., 331 F.3d 472, 482 (5th Cir.
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`2003).
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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 9 of 54 PageID #: 11161
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`Judgment as a Matter of Law of Noninfringement
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`
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`Holland describes Georgetown’s
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`infringement case as
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`three
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`theories of direct
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`infringement: “(i) Holland sold the entire Rail Vision Systems to Union Pacific, (ii) Holland
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`offered the entire Rail Vision Systems for sale to Union Pacific, and (iii) Holland used the entire
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`Rail Vision Systems in the United States by putting every element of the system into service.”
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`Docket No. 318 at 2–3. Holland argues that Georgetown failed to show how the evidence
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`presented at trial supports any of these theories. Id. at 3.
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`Holland first argues that it could not (i) sell or (ii) offer to sell “the patented system”
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`because the patented system “includes a processor and a specific five-step algorithm that is
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`carried out by the processor.” Id. at 3. That is, Holland claims it “only offered hardware and
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`‘systems required to collect data,’ ” while Rail Vision UK processed the data. Id. at 3–5.
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`Holland argues that under these circumstances, no reasonable jury could conclude that Holland
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`sold or offered to sell the entire Rail Vision Systems to Union Pacific. To support this argument,
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`Holland relies on its proposals and agreement with Union Pacific to show that Holland collects
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`the data while Rail Vision UK processes the data. See, e.g., PTX 169 at Schedule I (Holland’s
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`
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`
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`equipment lease to Union Pacific, showing
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`); PTX 151 at 3 (2012 track testing proposals that included
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`). Holland also shows that under their agreements, Rail
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`Vision UK retained all ownership of the software used to process the data. See, e.g., PTX 169 at
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`12 (Holland’s equipment lease to Union Pacific stating that “Rail-Vision will retain ownership of
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`the data collection and processing software provided through this Agreement”).
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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 10 of 54 PageID #: 11162
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`Holland next argues that Georgetown has not shown that (iii) “Holland uses the entire
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`system of Claim 16 by putting all of the elements of the Rail Vision Systems into service, i.e., by
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`showing that Holland benefitted from and controlled the Rail Vision Systems as a whole.”
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`Docket No. 318 at 8. Holland admits that it contracted with Union Pacific and received payment
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`from Union Pacific, but argues that is insufficient to demonstrate control over the entire Rail
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`Vision Systems. Id. at 9. Likewise, Holland argues that it does not control the entire Rail Vision
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`System because it neither owns nor develops the Rail Vison UK software. Docket No. 257 (04-
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`09-2015 A.M. Trial Tr.) at 63:3–6 (“Holland had nothing to do with developing [Rail Vision
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`UK’s] software”). Finally, Holland argues that Georgetown failed to show Holland benefited
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`from the Rail Vision Systems because (1) Georgetown’s damages expert admitted Union Pacific
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`never paid for the accused Rail Vision Systems and (2) Georgetown failed to show that any
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`alleged revenue was for the accused technology, as opposed to noninfringing uses of the Rail
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`Vision Systems. Docket No. 318 at 10.
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` By the time Holland filed its reply brief, the parties appeared to agree on the law
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`governing Georgetown’s infringement case. Docket No. 311 at 3–4; Docket No. 318 at 8 n.5.
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`That is, because Rail Vision UK processed the data in the United Kingdom, Georgetown must
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`show that Holland controlled and benefited from the accused Rail Vision Systems as a whole in
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`the U.S. Centillion Data Systems, LLC v. Qwest Communications Int’l. Inc., 631 F.3d 1279,
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`1284 (Fed. Cir. 2011) (“We hold that to ‘use’ a system for purposes of infringement, a party
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`must put the invention into service, i.e., control the system as a whole and obtain benefit from
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`it.”); NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282, 1317 (Fed. Cir. 2005) (abrogated on
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`other grounds, see IRIS Corp. v. Japan Airlines Corp., 769 F.3d 1359, 1361 n.1 (Fed. Cir. 2014))
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`(“The use of a claimed system under section 271(a) is the place at which the system as a whole is
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`put into service, i.e., the place where control of the system is exercised and beneficial use of the
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`system obtained.”).
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`While Georgetown consistently characterized its infringement case in this manner,
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`Holland frequently (but erroneously) claimed throughout the litigation that there is no “single
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`party infringer” because Rail Vision UK processes the data. See Centillion, 631 F.3d at 1284
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`(“The district court erred, however by holding that in order to ‘use’ a system under § 271(a), a
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`party must exercise physical or direct control over each individual element of the system.”).
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`Holland cannot escape liability merely because it contracted Rail Vision UK to perform the data
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`processing steps of the asserted system claim. See Golden Hour Data Sys., Inc. v. emsCharts,
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`Inc., No. CIV A 2:06 CV 381, 2009 WL 943273, at *3 (E.D. Tex. Apr. 3, 2009), aff’d, 614 F.3d
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`1367 (Fed. Cir. 2010) (“A party cannot avoid infringement, however, simply by contracting out
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`steps of a patented process to another entity. In those cases, the party in control would be liable
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`for direct infringement.”) (citation and quotation marks omitted).
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`As both parties now agree, the correct standard is whether Holland controlled and
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`benefited from the Rail Vision Systems as a whole. Accordingly, Holland’s cited evidence that
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`it collects the data while Rail Vision UK processes the data is only relevant in so much as it
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`answers that question. As detailed below, Georgetown provided a legally sufficient evidentiary
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`basis for the jury to find that Holland exercised control over the Rail Vision Systems and
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`benefited from that system. Therefore, Holland’s 2012 change order with Union Pacific to
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`provide the Rail Vision Systems is an offer to sell the Rail Vision Systems and Holland’s 2012
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`demonstration in Yuma is a use of the Rail Vision Systems.
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`Robert Madderom, Holland’s former vice president, testified extensively on this topic,
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`describing the very exhibits that Holland now relies on as evidence that Holland did not benefit
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`from or control the Rail Vision Systems as a whole:
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`Holland paid Rail Vision UK to develop the infringing technology and to
`specifically move Rail Vision’s software in the direction of grading wood ties.
`Docket No. 263 (04-07-2015 P.M. Trial Tr., Sealed Portion No. 5) at 106:13–
`108:20 (Madderom); PX111 (email exchange between Holland and Rail Vision
`UK to develop the Rail Vision Systems on Holland’s TrackStar vehicles).
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`Holland operated its TrackStar vehicle(s) equipped with the Rail Vision Systems
`in the United States. Docket No. 254 (04-07-2015 P.M. Trial Tr.) at 53:21–54:9
`(Madderom).
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`Holland contracts with customers in the United States to use its Rail Vision
`Systems. Docket No. 263 (04-07-2015 P.M. Trial Tr., Sealed Portion No. 5)
`11:18–14:14 (Madderom).
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`Holland’s contracts with its customers required the customers to pay Holland, not
`Rail Vision UK, for use of the Rail Vision Systems. Id. at 70:10–71:18
`(Madderom); PX168).
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`Holland collected the data to be processed by the Rail Vision Systems for its
`customers in the United States. Id. 7:5–8:6 (Madderom).
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`Holland sends the collected data to Rail Vision UK, instructing Rail Vision UK to
`process the data in order to provide information to Holland’s customers. Id. at
`10:24–11:3, 11:7–12, 49:11–16 (Madderom); PX130.
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`Holland pays Rail Vision UK to process the data that Holland collects in the
`United States. Id. at 48:2–8 (Madderom).
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`Holland provides Rail Vision UK with its customers’ unique specifications for the
`purpose of directing Rail Vision on how to process the data. Id. at 12:22–15:5
`(Madderom); PX138.
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`Holland, not Rail Vision UK, decides which customers to approach and how
`much to charge them. Id. at 12:10–14 (Madderom).
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` of revenue from the Rail Vision Systems
`Holland earned approximately
`before it was preliminary enjoined. Id. at 84:18–85:12 (Madderom); PX67.
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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 13 of 54 PageID #: 11165
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` contract with
`Holland, not Rail Vison UK, entered into a
`Union Pacific Railroad that included work using the infringing Rail Vision
`technology. PX158.
`
`Holland, not Rail Vision UK, entered into a separate lease with Union Pacific
`under which Holland installed the infringing Rail Vision Systems on a Union
`Pacific-owned vehicle. PX168; PX169.
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` monthly lease and data
` for installing that system,
`Holland received
`processing revenues for supporting the infringing system. Docket No. 263 (04-07-
`2015 P.M. Trial Tr., Sealed Portion No. 5) at 50:13–53:13; 53:14–55:18
`(Madderom); PX168; PX169.
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`the “quickest
`that cross-ties were “absolutely”
`testified
`Mr. Madderom
`opportunity to generate market value and revenue from [the small number of]
`customers.” Id. at 109:14–16 (Madderom).
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`Holland has provided no basis for the Court to reevaluate the evidence, which must be
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`viewed in the light most favorable to the verdict. See Reeves v. Sanderson Plumbing Prods.,
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`Inc., 530 U.S. 133, 150–51 (2000). A reasonable jury could find that Holland exercised control
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`of and benefited from the Rail Vision Systems where Holland (1) decides which customers to
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`approach, Docket No. 263 (04-07-2015 P.M. Trial Tr., Sealed Portion No. 5) at 11:7–12:21; (2)
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`decides how much to charge for the Rail Vision Systems, id.; (3) receives all revenue from Rail
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`Vision Systems, id.; (4) collects the data for the Rail Vision Systems and directs Rail Vision UK
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`on how to process the data collected from Holland’s equipment, id. at 12:22–15:5; and (5)
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`entered into a
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` change order agreement with Union Pacific allowing
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`Holland to provide the Rail Vision Systems to Union Pacific, PX159.
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`Holland’s arguments to the contrary are not persuasive. Holland argues it does not
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`control the Rail Vision Systems because Holland does not own the claimed processor or
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`software, it never mounted the processor on its track inspection vehicles, and the contracts (and
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`proposals) sent to customers specify different rates for data collection and data processing. See,
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`e.g., Docket No. 318 at 4–6. However, Holland need not have physical control and ownership of
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`each claimed system component (i.e., the processor) to meet the control and benefit standard.
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`See Centillion, 631 F.3d at 1284 (“The district court erred, however by holding that in order to
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`‘use’ a system under § 271(a) party must exercise physical or direct control over each individual
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`element of the system.”). Likewise, the fact that Holland itemized its contracts (at rates that
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`Holland, not Rail Vision UK, set) is not sufficient to overturn an otherwise supportable jury
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`finding that Holland controlled the accused system. Finally, Holland’s argument that it did not
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`benefit from the Rail Vision System because it never received payment from Union Pacific is
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`without merit. Holland was preliminary enjoined from putting the Rail Vision Systems into use,
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`so it could not offer the services it was contractually allowed to provide.2
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`Holland makes one argument separate from the control and benefit test. Holland argues
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`that “[e]ven if a reasonable jury could determine that Holland obtained the benefit of and
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`controlled the entire system, no reasonable jury could find that the data was processed using the
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`specific five-step algorithm required in Claim 16.” Docket No. 301 at 26. Holland’s
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`infringement expert, Dr. John Martens, explained that the Rail Vision Systems cannot infringe
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`because
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`
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`. Id.; Docket No. 267 (04-10-15, 2015 A.M. Trial
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`Tr., Sealed Portion No. 12) at 21:2–13. The jury heard this testimony and was free to balance it
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`against Georgetown’s evidence that the Rail Vision algorithm includes every element of the
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`claimed algorithm. See, e.g., Docket No. 264 (04-08-2015 P.M. Trial Tr., Sealed Portion No. 6)
`
`at 23:2–56:23 (Dr. Harley Myler, Georgetown’s infringement expert, testifying that each claim
`
`element is present in the Rail Vision Systems). The jury resolved this contrasting testimony, and
`
`
`2 Even if Holland could rely on the preliminary injunction as evidence that it cannot infringe, there was other
`evidence presented that Holland received the benefit of the system. See, e.g., Docket No. 311 at 5–6 (receiving
` from the Rail Vision Systems prior to injunction and receiving
` for installing Rail Vision Systems
`on a Union Pacific vehicle).
`
`Page 14 of 54
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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 15 of 54 PageID #: 11167
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`all the attendant credibility determinations, see Docket No. 311 at 11 (identifying Georgetown’s
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`cross-examination of Dr. Martens), in Georgetown’s favor.
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` Accordingly, because there is substantial evidence to support the jury’s finding of
`
`infringement, the Court DENIES Holland’s motion for judgment as a matter of law as to
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`noninfringement.
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`Judgment as a Matter of Law of No Willful Infringement
`
`
`
`For the reasons stated with respect to Georgetown’s Motion for Finding of Willful
`
`Infringement below, the Court DENIES Holland’s motion as to willfulness.
`
`Judgment as a Matter of Law that Georgetown is Not Entitled to Lost Profits
`
`
`
`At trial, Georgetown based its damages case on a lost profits model that centered on the
`
`2012 change order agreement between Union Pacific and Holland. The change order
`
`contemplated that Holland would continue to provide its existing services to Union Pacific, but
`
`allowed Holland to perform Rail Vision Systems services
`
`.
`
`Docket No. 350 (04-09-2015 P.M. Trial Tr., Sealed Portion No. 26) at 3:3–4:23; DTX 33; DTX
`
`38. Approximately 10 months after Holland entered into the change order with Union Pacific,
`
`the Court granted Georgetown’s motion for preliminary injunction, which prevented Holland
`
`from performing any Rail Vision Systems services. See Docket No. 21.
`
`Georgetown’s damages expert, Dr. Keith Ugone, testified that had Union Pacific selected
`
`Georgetown instead of Holland, Union Pacific would have entered into a contract for
`
`
`
`with Georgetown. Docket No. 265 (04-09-2015 A.M. Trial Tr., Sealed Portion No. 7) at 30:25–
`
`32:8 (testifying that Georgetown would have inspected
`
` miles of track at a rate of
`
`
`
`per mile). According to Dr. Ugone, Georgetown’s profits resulting from this hypothetical
`
`contract equaled $1,541,333. Id. at 38:4–10. Holland argued that Georgetown did not establish
`
`Page 15 of 54
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`any lost profits and that the jury should not have awarded damages. Docket No. 258 (04-09-
`
`2015 P.M. Trial Tr.) at 41:13–23 (Daniel Jackson, Holland’s damages expert). The jury returned
`
`a verdict for Georgetown’s requested amount of $1,541,333. Docket No. 273.
`
`The parties’ damages models followed the traditional Panduit factors for lost profits.
`
`Panduit Corp. v. Stahlin Bros., Fibre Works, Inc., 575 F.2d 1152, 1156 (6th Cir. 1978). The
`
`factors are: (1) demand for the patented product, (2) absence of acceptable noninfringing
`
`substitutes, (3) capacity to exploit the demand, and (4) the amount of profit Georgetown would
`
`have made but for Holland’s infringement. See id. In cases that involve a two-supplier market
`
`and demand for the patented product, the first two Panduit factors collapse into one “two
`
`suppliers in the relevant market factor.” Micro Chem., Inc. v. Lextron, Inc., 318 F.3d 1119, 1124
`
`(Fed. Cir. 2003).
`
`
`
`Georgetown provided substantial evidence on each of the Panduit factors to support the
`
`jury’s verdict. For Panduit factor (1), Georgetown showed the demand for the patented product.
`
`See, e.g., Docket No. 262 (04-07-2015 A.M. Trial Tr., Sealed Portion No. 4) 42:3–43:5 (Joan
`
`Maier, Georgetown’s chief financial officer, stating that Georgetown generated
`
`
`
`from Aurora); PX236 (Aurora financial data); Docket No. 261 (04-06-2015 A.M. Trial Tr.,
`
`Sealed Portion No. 1) at 20:21–22:14 (Grissom stating that Georgetown entered into contracts
`
`with four of the seven Class I Railroads). Holland likewise agreed that its customers wanted a
`
`technology to automate the measurement of plate cutting. Docket No. 263 (04-07-2015 P.M.
`
`Trial Tr., Sealed Portion No. 5) at 18:20–20:14 (Madderom explaining that measuring plate
`
`cutting was a “high goal[]” for Holland).
`
`For Pandiut factor (2), Georgetown provided substantial evidence that it and Holland
`
`were the only two suppliers measuring plate cutting in the United States. Docket No. 252 (04-
`
`Page 16 of 54
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`

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`Case 6:13-cv-00366-RWS Document 363 Filed 06/16/16 Page 17 of 54 PageID #: 11169
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`06-2015 P.M. Trial Tr.) at 91:6–14 (Grissom’s testimony); Docket No. 255 (04-08-2015 A.M.
`
`Trial Tr.) at 38:4–14 (testimony of Georgetown’s former vice president of Marketing, Lynn
`
`Turner). Dr. Ugone analyzed the relevant market and testified that Georgetown and Holland are
`
`the “sole providers” of this technology. Docket No. 257 (04-09-2015 A.M. Trial Tr.) at 17:12–
`
`25. In its reply brief, Holland appears to concede that Holland and Georgetown were the only
`
`competitors in the relevant market. See generally Docket No. 318 at 19–20 (stating that the only
`
`companies Union Pacific could have partnered with to automate the measuring of plate cut were
`
`Holland and Georgetown).3
`
`Holland did not dispute that Georgetown satisfied Panduit factor (3), which requires
`
`Georgetown to show it has capacity to perform under the contract that it lost to Holland.
`
`Georgetown and its expert took into account the capital expenditures, including the costs to build
`
`additional Aurora vehicles, when reconstructing the market and addressing Georgetown’s
`
`capacity to perform the patented services for Union Pacific. Docket No. 265 (04-09-2015 A.M.
`
`Trial Tr., Sealed Portion No. 7) at 34:12–35:14 (Dr. Ugone explaining Georgetown could add
`
`several
`
` vehicles to meet this capacity); Docket No. 262 (04-07-2015 A.M. Trial Tr.,
`
`Sealed Portion No. 4) at 40:20–41:7 (Maier testifying the cost of
`
` per truck).
`
`Accordingly, there is substantial evidence to support this factor.
`
`For Panduit factor (4), Georgetown provided substantial evidence in support of its
`
`calculatio