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Wordtech Systems, Inc. v. Integrated Network Solutions

January 14, 2009

WORDTECH SYSTEMS, INC., A CALIFORNIA CORPORATION PLAINTIFF,
v.
INTEGRATED NETWORK SOLUTIONS, INC., A NEVADA CORPORATION, DBA INTEGRATED NETWORK SOLUTIONS, CORP. AKA INTEGRATED NETWORK SOLUTIONS AKA INTEGRATED SYSTEMS AKA INTEGRATED NETWORK STORAGE COMPANY AKA INSC; NASSER KHATEMI, AN INDIVIDUAL; HAMID ASSADIAN, AN INDIVIDUAL; EHTERAM GHODSIAN, AN INDIVIDUAL; SHOHREH JAVADI, AN INDIVIDUAL; MICHAEL F. ELLSWORTH, AN INDIVIDUAL; BRIAN J. DEAN, AN INDIVIDUAL; SAN JUAN UNIFIED SCHOOL DISTRICT; AND DOES 1-50, DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Plaintiff filed the instant action on September 22, 2004, alleging that Defendants infringed on various of Plaintiff's patent rights. On November 17, 2008, a jury unanimously found for Plaintiff and determined that such infringement was willful. The jury awarded Plaintiff $250,000.

The Court directed the parties to submit simultaneous briefing on the issues of enhanced damages and attorneys' fees. Pursuant to the Court's Order, the parties filed their papers on December 4, 2008. Plaintiff requests enhanced damages pursuant to 35 U.S.C. § 284, a determination that this case is "exceptional" such that attorneys' fees are warranted under 35 U.S.C. § 285, pre-judgment and post-judgment interest, and costs. After considering the record in this case, along with the parties' current briefs, the Court hereby grants Plaintiff's requests.*fn1

ANALYSIS

I. PLAINTIFF IS ENTITLED TO TREBLE DAMAGES

Pursuant to 35 U.S.C. § 284, "the [C]court may increase the damages up to three times the amount found or assessed." "An award of enhanced damages for infringement, as well as the extent of the enhancement, is committed to the discretion of the trial court."

Informatica Corp. v. Business Objects Data Integration, Inc., 489 F. Supp. 2d 1075, 1084 (N.D. Cal. 2007), quoting Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992), abrogated on other grounds by Markman v. Westview Instruments, Inc., 52 F.3d 967, 975 (Fed. Cir. 1995) (en banc).

"The purpose of so empowering district judges is to provide them with a tool they can use, in their discretion, to punish and to deter conduct that was more threatening to the patent system than naked acts of infringement. A judgment of infringement, without more, is imposed under a standard of strict liability. The purpose of empowering judges to enhance damages is to equip them to respond appropriately when the defendant's conduct moved beyond mere liability and into the zone of culpability." Sharper Image Corp. V. Honeywell Intern., Inc., 222 F.R.D. 621, 628 (N.D. Cal. 2004).

"If the Court decides to enhance damages, the Court looks to the totality of circumstances and considers the egregiousness of the defendant's conduct as well as factors that are mitigating or ameliorating to set the amount of enhancement." Informatica, 489 F. Supp. 2d at 1084. "Although willful infringement may authorize the award of enhanced damages, 'a finding of willful infringement does not mandate that damages be enhanced, much less mandate treble damages.'" Id., quoting Read Corp., 970 F.2d at 826. "Upon a jury finding of willfulness, however, the Court must provide reasons for not increasing a damages award." Id.

The following factors are relevant to the Court's evaluation:

(1) whether the infringer deliberately copied the ideas or design of another;

(2) whether the infringer, when he knew of the other's patent protection, 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 ...


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