has been made. To support this assertion, Brooktree has provided a statistical survey of all of the cases that have been appealed to the Federal Circuit in which either a finding of willful infringement was made at the trial level or the Federal Circuit made a finding of willful infringement on appeal. In only four of the 33 cases cited in the plaintiff's survey did the trial court make a finding of willful infringement and yet refuse to impose enhanced damages. In addition to this statistical analysis, Brooktree also argues that AMD's "aggressive" conduct in this case (continuing to sell the infringing products without advice of counsel and without, according to Brooktree, a reasonable belief of non-infringement), as well as AMD's financial condition, make the award of enhanced damages particularly appropriate.
AMD in essence asserts that enhanced damages should not be awarded because: 1) AMD asserted a vigorous and good-faith defense to the infringement claims; 2) the injunction and damages awards already imposed have sufficiently punished AMD; and 3) Brooktree has already been fully compensated for any damages it suffered due to the infringement.
Imposition of enhanced damages lies solely within the discretion of the trial court, with that discretion informed by the court's familiarity with the matter in litigation and the interests of justice. Rite-Hite Corp. v. Kelley Co., 819 F.2d 1120, 1126, 2 U.S.P.Q.2D (BNA) 1915 (Fed. Cir. 1987). In addition, in deciding whether to impose enhanced damages, a court may take into consideration the weight and strength of the evidence upon which the finding of willful infringement was based. See Modine Mfg. Co. v. The Allen Group, Inc., 917 F.2d 538, 16 U.S.P.Q.2D (BNA) 1622 (Fed. Cir. 1990) (declining to award treble damages because the evidence upon which the willfulness finding was based was not very strong).
In this case, the jury has found that AMD willfully infringed Brooktree's patents. As discussed in the previous section of this opinion, there was sufficient evidence upon which to base that finding to defeat a motion for JNOV on that issue. However, the evidence supporting the jury's finding was not as strong as it could have been, and is not of the weight and strength that would support the imposition of enhanced damages. Lack of an opinion letter from counsel, and the continued production of the infringing products during litigation are a not a sufficient hook upon which to hang an award of enhanced damages. The weakness of the evidence bearing upon the willfulness issue, the court's familiarity with the matter, and the interests of justice all counsel this court to decline to award enhanced damages in this case. Accordingly, Brooktree's statistical advantage notwithstanding, its request for the imposition of enhanced damages is denied.
AWARD OF ATTORNEYS' FEES AND OTHER EXPENSES
Under the relevant section of the U.S. patent code, 35 U.S.C. § 285, "the court in exceptional cases may award reasonable attorney fees to the prevailing party." In addition, the Semiconductor Chip Act permits a court, at its discretion, to allow recovery of full costs, including reasonable attorney's fees, by a prevailing party. Brooktree asks this court to award attorney fees and other expenses under these two statutes.
1) Attorneys' Fees Entitlement Under Patent Law
As stated above, attorneys' fees may be awarded under 35 U.S.C. § 285 only in exceptional cases. The Federal Circuit has recognized that awards for attorney's fees are proper where there is a finding of willful infringement. Del Mar Avionics, Inc. v. Quinton Instrument Co., 836 F.2d 1320, 1329, 5 U.S.P.Q.2D (BNA) 1255 (Fed. Cir. 1987). However, such an award is discretionary, and does not automatically follow from a finding of willfulness. Avia Group International, Inc. v. L.A. Gear California, 853 F.2d 1557, 1567, 7 U.S.P.Q.2D (BNA) 1548 (Fed. Cir. 1988). As with the decision of whether to award enhanced damages, the court's exercise of its discretion should be informed by the court's familiarity with the matter in litigation and the interests of justice. Rite-Hite Corp. v. Kelley Co., Inc., 819 F.2d 1120, 2 U.S.P.Q.2D (BNA) 1915 (Fed. Cir. 1987).
Given the above framework, this court's analysis of Brooktree's request for an award of attorneys' fees under patent law is identical to the above discussion regarding enhanced damages. Here, as there, the same finding of willfulness is at the heart of the plaintiff's request. Here, as there, the court's discretion should be informed by the court's familiarity with the case and the interests of justice. As discussed in the previous section of this opinion, the relatively weak evidence upon which the finding of willful infringement was based, and consequentially the interests of justice, counsel against an award of attorneys' fees. Accordingly, this court finds that this case is not an "exceptional" one justifying the award of attorneys' fees based on § 285.
2) Attorneys' Fees Entitlement Under the Semiconductor Chip Protection Act
The Semiconductor Chip Protection Act permits the court, at its discretion, to allow recovery of full costs, including reasonable attorneys' fees, to a prevailing party. 17 U.S.C. § 911(f). Under this section, this court may allow Brooktree to recover that portion of its costs related to the pursuance of its mask work claims.
The Semiconductor Chip Protection Act was sui generis, and there is no case law upon which this court may base its exercise of discretion. However, a substantial portion of the provisions of the Chip Act were modeled after U.S. copyright laws. Both parties ask this court to look to copyright precedent to find guidance in this area.
Brooktree, for its part, argues that applicable copyright law supports an award of attorneys' fees and attendant litigation costs. As support for this proposition, Brooktree cites McCulloch v. Albert E. Price, Inc., 823 F.2d 316 (9th Cir. 1987). In that case, the court noted that because 17 U.S.C. § 505 of the copyright statute, which is similarly worded and substantively identical to 17 U.S.C. § 911(f), was "intended in part to encourage the assertion of colorable copyright claims . . . to deter infringement . . . and to make the plaintiff whole . . . . fees are generally awarded to a prevailing plaintiff." McCulloch, 823 F.2d at 322-323. Brooktree argues that by analogy, the Chip Act should be given a similarly broad reading, and that on this basis the court should grant the award of litigation expenses.
AMD also cites to McCulloch, but argues that the case supports its claim that litigation expenses should not be awarded under the Chip Act. The court in McCulloch stated that "the presence of a complex or novel issue of law the defendant litigates vigorously and in good faith" is a factor justifying denial of attorneys' fees. AMD, building from this language, argues that given the recent vintage of the Chip Act, and that this court's earlier ruling in Brooktree, supra, was the first reported case under the Act, this case presented nothing but novel issues of law. Specifically, AMD asserts that the issues of originality and infringement of the mask work, whether the mask work was to be considered as a whole, and the scope of the reverse engineering defense under the Chip Act were all novel issues of law that were vigorously litigated in good faith by AMD. AMD also notes that the jury's finding of willful infringement applied only to the patent infringement.
Under the traditional "American Rule," each side bears his own attorneys' fees. The purpose of this rule is "to avoid penalizing a party 'for merely defending or prosecuting a lawsuit.'" Rohm & Haas Co. v. Crystal Chemical Co., 736 F.2d 688, 690, 222 U.S.P.Q. (BNA) 97 (Fed. Cir. 1984). However, Congress has seen fit to carve out statutory exceptions to this rule to promote particular goals. Two of these exceptions are found in the copyright laws and the Chip Act. While decisions based on the copyright laws can provide support only by way of analogy, the analogy argued for by both sides in this case is well taken. Given the similarity of the language in the two sections, and the conceptual similarity between the "products" being protected under the copyright laws and the Chip Act, it follows, in the absence of contrary legislative history, that the purposes of the sets of provisions are broadly the same. This conclusion leads, under the interpretation of the copyright laws by the McCulloch court, to a view that the award of litigation expenses, including reasonable attorneys' fees, should be the rule rather than the exception.
However, it also follows that if this broad view of § 911(b) of the Chip Act is to be taken, then judicial exceptions similar to those found in copyright law should also apply. For this reason, Brooktree's request for an award of litigation expenses based upon the Chip Act must be denied. This litigation has led to the first reported case to interpret the provisions of the Chip Act. By virtue of this fact, and also by virtue of the complexity and evolving nature of the technology to which the Chip Act applies, many of the questions presented in this litigation were inherently novel. On this basis, the "complex and novel" exception articulated by the McCulloch court should apply in this case. Accordingly, Brooktree's request for an award of litigation expenses under the Chip Act is denied.
Finally, Brooktree has asked this court to award prejudgment interest for damages from AMD's infringement of Brooktree's patents and mask works. As with Brooktree's request for an award of attorneys' fees, both the Chip Act and § 284 of the patent laws must be examined separately to determine whether Brooktree's request should be granted.
1) Prejudgment Interest Under The Chip Act
There is no provision under the Chip Act for the recovery of prejudgment interest by a successful plaintiff. In addition, there is no case law under the Act regarding such an award. Brooktree argues that silence on the part of the statute does not mean that this court is prohibited from awarding prejudgment interest. As support for this proposition, Brooktree cites Frank Music Corp. v. Metro-Goldwyn-Mayer Inc., 886 F.2d 1545 (9th Cir. 1989), cert. denied, 494 U.S. 1017, 108 L. Ed. 2d 496, 110 S. Ct. 1321 (1990). In that case, the court held that an award of interest under the 1909 Copyright Act supported the underlying purposes of the Act. The court expressed no opinion as to whether such an award would be available under the Copyright Act of 1976, the statute from which much of the Chip Act was modeled.
AMD argues that the court should not imply a remedy that is not contained in the Chip Act, and further cites to authority from other circuits in which courts have held that prejudgment interest may not be awarded under the Copyright Act of 1976. See, e.g., Robert R. Jones Associates, Inc. v. Nino Homes, 858 F.2d 274, 282 (6th Cir. 1988); Broadcast Music, Inc. v. Golden Horse Inn Corp., 709 F. Supp. 580, 581 (E.D. Pa. 1989).
AMD's argument is well taken. Certainly, the authority they cite, from other circuits and pertaining only to an analogous statute, does not provide a conclusive basis for their position. However, given that the Chip Act itself is silent as to the award of prejudgment interest, this court should not imply an additional remedy without some indication in the statute or the legislative history -- and Brooktree has pointed to none -- which would justify the conclusion that it was Congress' intention that such awards should be granted. Accordingly, the award for prejudgment interest for damages under the Chip Act is denied.
2) Prejudgment Interest Under the Patent Laws
Prejudgment interest is a proper element of damages in a patent infringement suit under 35 U.S.C. § 284, and should generally be awarded to a successful plaintiff absent some justification. General Motors Corp. v. Devex Corp., 461 U.S. 648, 656-657, 76 L. Ed. 2d 211, 103 S. Ct. 2058 (1983). AMD argues that the court has discretion whether to award prejudgment interest, and there is language in General Motors to the effect that such an award is not mandatory. It seems clear, however, from both the language of § 284 and General Motors that an award of prejudgment interest is the rule rather than the exception. Accordingly, Brooktree's request for prejudgment interest should be granted.
However, even though Brooktree is entitled to prejudgment interest under the patent statute, it can only recover such interest if it can successfully segregate the damage award between the patent and mask work damages. This court rejects AMD's argument that such an allocation cannot, as a matter of law, be done after the jury has already rendered a verdict and damage figure. But the burden to make this allocation with sufficient certainty rests with Brooktree. Therefor, this court's granting of Brooktree's request for prejudgment interest under the patent laws is conditioned upon the submission of data that clearly shows the allocation of damages between the patent and mask work claims. In addition, both parties will submit supplemental briefs as to the interest rate at which these damages should be calculated.
Upon due consideration of the parties' memoranda and exhibits, the arguments advanced at hearing, and for the reasons set forth above, the court hereby:
I. Denies AMD's motion for a JNOV based upon its contention that it had proved its reverse engineering defense as a matter of law.
II. Denies AMD's motion for a JNOV based upon its assertions of the invalidity or non-infringement of the '189, '282, No. 4,831,282 and '688 Patents.
III. Denies AMD's motion for a declaratory judgment with respect to claims 13-19 of the '282 patent and claims 11-18 of the '688 patent.