August 12, 2013
PRESIDIO COMPONENTS, INC., Plaintiff,
AMERICAN TECHNICAL CERAMICS CORP., Defendant.
(1) GRANTING MOTION FOR PERMANENT INJUNCTION [Doc. No. 432]; (2) AWARDING
SUPPLEMENTAL DAMAGES IN THE AMOUNT OF $1, 508, 114 [Doc. No. 431]; (3) DENYING AS MOOT MOTION TO STRIKE RABE DECLARATION [Doc. No. 446];
(4) DENYING MOTION TO STRIKE NEWMAN DECLARATION [Doc. No. 454]; and (5) DENYING AS MOOT MOTION TO STRIKE DEVOE DECLARATION [Doc. No. 454].
IRMA E. GONZALEZ, District Judge.
Presently before the Court are the motions of Plaintiff Presidio Components Inc. ("Presidio") for a permanent injunction and for supplemental damages. [Doc. Nos. 432; 431.] Presidio has also filed a motion to strike the Rabe declaration. [Doc. No. 446.] Defendant American Technical Ceramics Corporation ("ATC") has filed a motion to strike the Newman and Devoe declarations. [Doc. No. 454.] For the following reasons, the Court GRANTS the motions for a permanent injunction and for supplemental damages. The Court awards supplemental damages in the amount of $1, 508, 114 to Presidio. The Court DENIES AS MOOT Presidio's motion to strike the Rabe declaration. The Court DENIES ATC's motion to strike the Newman declaration and DENIES AS MOOT ATC's motion to strike the Devoe Declaration.
The Court summarizes the procedural history of the above-captioned case following the parties' post-trial motions. On April 13, 2010, this Court denied Presidio's post-trial motions for a permanent injunction, enhanced damages, and attorney's fees, but granted Presidio supplemental damages. [Doc. No. 348, Order on Post-Trial Mots.] In response to ATC's post-trial motions, this Court vacated the willfulness verdict and set an ongoing royalty rate of 12% of the 545L capacitor's wholesale price. [Id.] The Court denied ATC's motions for judgment as a matter of law ("JMOL") or a new trial, and JMOL on the jury's lost profit damages award and on false marking prior to October 24, 2008. [Id.] This Court also fined Presidio $0.35 per unit for false marking. [Id.]
On December 19, 2012, the Federal Circuit affirmed-in-part, vacated-in-part, and remanded this Court's orders on the post-trial motions of ATC and Presidio. Presidio Components, Inc. v. Am. Tech. Ceramics, Corp. , 702 F.3d 1351 (Fed. Cir. 2012). The Federal Circuit affirmed the majority of this Court's determinations, with the exception of its finding of no irreparable injury, the related denial of a permanent injunction, and the ongoing royalty determination. Id. at 1354. The Federal Circuit stated that this Court's "finding of no competition for the purpose of irreparable harm conflicts with the clear finding of competition for the purpose of awarding damages" and that "the record shows direct and substantial competition between the parties." Id. at 1363. The Federal Circuit also stated that the jury's finding that ATC's 545L capacitor sales caused Presidio to lose sales of its BB capacitors "squarely supports a finding of irreparable harm." Id. at 1363. Because the Federal Circuit held that this Court clearly erred in finding no irreparable injury, it vacated this Court's denial of Presidio's motion for a permanent injunction and remanded for a re-weighing of the four factors consistent with the Federal Circuit's opinion. The Federal Circuit also vacated this Court's ongoing royalty determination, which was predicated on the denial of the permanent injunction. Id. at 1364.
On May 15, 2013, Presidio filed motions for permanent injunction and for supplemental damages. [Doc. No. 432, Mot. for Permanent Injunction ("PI"); Doc. No. 431, Mot. for Supp. Damages.] On June 12, 2013, ATC filed sealed oppositions to both motions. [Doc. No. 443, Opp. to Mot. for PI; Doc. No. 444, Opp. to Mot. for Supp. Damages.] On June 13, 2013, Presidio filed sealed reply memoranda in support of both motions. [Doc. No. 447, Reply to Mot. for PI; Doc. No. 448, Reply to Mot. for Supp. Damages.] Also on June 13, Presidio filed a motion to strike the declaration of Mr. Stephan Rabe. [Doc. No. 446, Mot. to Strike Rabe Decl.] On June 18, 2013, ATC filed a motion to strike the declarations of Mr. Glenn Newman and Mr. Lambert Devoe. [Doc. No. 454, Mot. to Strike Newman and Devoe Decl.] On June 19, 2013, the Court ordered ATC to file a surreply addressing the merits of Presidio's reply memorandum in support of its motion for supplemental damages. [Doc. No. 460.] On June 21, 2013, ATC filed a sealed surreply memorandum. [Doc. No. 465, Surreply to Mot. for Supp. Damages.] On June 26, 2013, the Court held oral argument on the motions for permanent injunction, for supplemental damages, and to strike. [Doc. No. 472.]
I. Motion for Permanent Injunction
In eBay Inc. v. MercExchange, L.L.C., the Supreme Court overruled the Federal Circuit's "general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances." 547 U.S. 388, 390-94 (2006). The Supreme Court held that a "plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." Id. at 391. The Court must balance the four factors to determine whether an injunction is appropriate. Acumed LLC v. Stryker Corp. , 551 F.3d 1323, 1329 (Fed. Cir. 2008); Canadian Lumber Trade Alliance v. United States , 441 F.Supp.2d 1259, 1264 (C.I.T. 2006) (citing Amoco Prod. Co. v. Village of Gambell , 480 U.S. 531, 542, 546 n.12 (1987)) ("All parties agree, as they must, that the four-factor test' is a balancing test.").
"[T]he decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and... such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards." eBay, 547 U.S. at 394. However, the Federal Circuit recently reaffirmed that "[w]hile a patentee is not entitled to an injunction in every case, it does not follow that courts should entirely ignore the fundamental nature of patents as property rights granting the owner the right to exclude.'" Presidio Components , 702 F.3d at 1363 (quoting Robert Bosch LLC v. Pylon Mfg. Corp. , 659 F.3d 1142, 1149 (Fed. Cir. 2011)).
In its post-trial motions, Presidio initially moved for a permanent injunction in light of the jury's finding that the '356 patent is valid and infringed. [Doc. No. 348, Order on Post-Trial Mots. at 62.] When ruling on the post-trial motions, this Court found that Presidio failed to carry its burden in demonstrating irreparable injury, inadequacy of money damages, and that the public interest tips in its favor, and denied the motion for a permanent injunction. [Id. at 68.] On appeal, the Federal Circuit held that "the district court clearly erred in finding no irreparable injury" and "abused its discretion when it denied Presidio a permanent injunction." Presidio Components , 702 F.3d at 1364. The Federal Circuit did not specifically address any of the other permanent injunction factors. See id. at 1362-64.
Presidio requests that the Court enter a permanent injunction in light of the Federal Circuit's ruling that there was irreparable injury. [Doc. No. 432-1, Mot. for PI at 6-7 (citing Presidio Components , 702 F.3d at 1354, 1362-64).] ATC stresses that the Federal Circuit did not direct the Court to enter an injunction, but rather remanded for "re-weighing of the four [eBay] factors." [Doc. No. 443, Opp. to Mot. for PI at 1 (quoting Presidio Components , 702 F.3d at 1364).] ATC argues that the "[r]eevaluation and reweighing of the eBay factors is prospective." [Doc. No. 443, Opp. to Mot. for PI at 1.] The Court considers each factor in turn.
A. Irreparable Injury
"The essential attribute of a patent grant is that it provides a right to exclude competitors from infringing the patent." Acumed , 551 F.3d at 1328 (citing 35 U.S.C. § 154(a)(1) (2000)). "In view of that right, infringement may cause a patentee irreparable harm not remediable by a reasonable royalty." Acumed , 551 F.3d at 1328. "Direct competition in the same market is certainly one factor suggesting strongly the potential for irreparable harm without enforcement of the right to exclude." Presidio Components , 702 F.3d at 1363.
The Federal Circuit disagreed with the Court's initial finding on the post-trial motions that ATC and Presidio are not direct competitors for the purpose of irreparable harm. In the context of the four-factor Panduit test for lost profits, the Federal Circuit affirmed the Court's finding that Presidio and ATC are direct competitors. Presidio Components , 702 F.3d at 1363 (citing Panduit Corp. v. Stahlin Bros. Fibre Works, Inc. , 575 F.2d 1152 (6th Cir. 1978)). The Federal Circuit highlighted the tension between this Court's clear finding of competition for the purpose of awarding damages and the finding of no competition for the purpose of irreparable harm. Id. at 1362.
In support of its holding that Presidio and ATC are direct competitors, the Federal Circuit stressed that the BB and 545L capacitors "are both one-piece broadband capacitors with a substantially monolithic design." Id . The Federal Circuit also cited the testimony of Presidio's damages expert, Mr. Newman, that the two products compete "head-to-head" in the one-piece capacitor market for the same customers and applications. Id . Additionally, in its discussion of the permanent injunction, the Federal Circuit favorably cited this Court's finding on the damages issue that "substantial evidence supported the jury's finding that demand existed for the BB capacitors, which compete with the 545L capacitors." Id. at 1362 (quoting Doc. No. 348, Order on Post-Trial Mots. at 51).
In light of this record evidence of direct competition, the Federal Circuit held that this Court "placed too much weight on Presidio's failure to practice the #356 patent." Presidio Components , 702 F.3d at 1363. The Federal Circuit also held that this Court "correctly found Presidio's unwillingness to license favored finding irreparable injury." Id.
Presidio stresses that "the principal value of a patent is the right to exclude arch competitors from making, selling and using an infringing product." [Doc. No. 432-1, Mot. for PI at 11 (quoting Fresenius Med. Care Holdings v. Baxter Int'l, 2008 U.S. Dist. LEXIS 79689, at *13 (N.D. Cal. Apr. 4, 2008).] It argues that Presidio and ATC are "direct competitors, selling competing capacitor products in the same market and to the same customers and potential customers." [Id.] In view of this direct competition, Presidio argues that it has adequately demonstrated irreparable harm. [Id. at 12.] Presidio also cites its smaller size relative to ATC and the fact that it never licensed the patent in question to support its claim of irreparable injury. [Id. at 14-15.]
ATC contends that the Federal Circuit found irreparable harm on the 2009 trial record. It argues that changed circumstances that are now before the Court, which were not before the Federal Circuit and the jury, show that Presidio had strong marketplace success from 2010-2013. ATC points to Presidio's sales data, which shows growing BB capacitor sales from 2010-2013. [Doc. No. 443, Opp. to Mot. for PI at 3.] ATC argues that in 2013, BB capacitors and 545Ls "do not compete" because 545L capacitors have a lower insertion loss and were designed to compete in a higher performance market than BB capacitors, which have a higher insertion loss. [Id. at 5.]
Although ATC now presents emails from several customers who state that they cannot use BB capacitors when they require a low-insertion-loss capacitor, and instead use the 545L, these statements are insufficient for this Court to reject the Federal Circuit's conclusion that BB capacitors directly compete with the 545L capacitors. The Federal Circuit was aware of the difference in insertion loss between the two capacitors. Presidio Components , 702 F.3d at 1360. Nonetheless, it held that the capacitors directly competed with each other and that there was irreparable harm. Furthermore, as Presidio argues, these emails from customers demonstrate that customers are evaluating the BB and 545L capacitors for the same projects and therefore support the finding that Presidio and ATC are direct competitors. [Doc. No. 439, Presidio's Reply to Mot. for PI at 5.] Therefore, the Court finds that Presidio has shown irreparable harm.
B. Inadequacy of Monetary Damages
"The essential attribute of a patent grant is that it provides a right to exclude competitors from infringing the patent.... In view of that right, infringement may cause a patentee irreparable harm not remediable by a reasonable royalty." Acumed , 551 F.3d at 1328 (internal citation omitted). "[T]he issues of irreparable harm and the adequacy of remedies at law are inextricably intertwined." ActiveVideo Networks, Inc. v. Verizon Comms., Inc. , 694 F.3d 1312, 1337 (Fed. Cir. 2012); see also Acumed , 551 F.3d at 1327-29 (analyzing irreparable harm and adequacy of monetary damages together).
"While money damages are generally considered inadequate to compensate for the violation of a patentee's right to exclude, [the patentee] nonetheless [has] a burden to iterate specific reasons why [the] infringement can not be compensated for with a money award. "Loss of business opportunity or damage to brand recognition could provide a basis for concluding that monetary relief would be inadequate." ActiveVideo Networks, 649 F.3d at 1340. Praxair, Inc. v. ATMI, Inc. , 479 F.Supp.2d 440, 444 (D. Del. 2007) (citation omitted) (emphasis added). Loss of market share, brand recognition, and customer goodwill "may frequently defy attempts at valuation." i4i Ltd. Parternship v. Microsoft Corp. , 598 F.3d 831, 862 (Fed. Cir. 2010). The fact that a patentee has previously chosen to license the patent may indicate that a reasonable royalty does compensate for infringement. Acumed , 551 F.3d at 1328.
"Difficulty in estimating monetary damages is evidence that remedies at law are inadequate." Id . However, record evidence must establish these losses. See ActiveVideo Networks, 649 F.3d at 1340 (holding that money damages were adequate when there was no record evidence that the patentee had "lost any market share or any customers at all due to [the] infringement").
In Praxair, a case cited by this Court in its previous order on the post-trial motions, the district court found that the patentee's product was in "direct and head-to-head competition" with the infringing product. Praxair , 479 F.Supp.2d at 442. The Praxair court also found that the two products were the only ones of their kind on the market and that therefore, the infringing product was "taking sales from the [patentee's product]." Id. at 442-43. The Praxair court ultimately found, however, that the patentee did not "[meet] its burden under eBay to put forward sufficient proof vis-a-vis the broad scope of relief requested." The district court found the patentee's general arguments that the infringing products' presence in the market will cause it to "likely lose additional market share, profits, and goodwill" without further explanation did not make a sufficient showing of the inadequacy of monetary damages. Id. at 443-44.
This Court previously found that Presidio did not meet its burden to show the inadequacy of monetary damages. [Doc. No. 348, Order on Post-Trial Mots. at 66.] The Court stated that although "Presidio argue[d] that the effects of future infringement cannot be fully measured in dollars, [it] fail[ed] to explain why money damages would not adequately compensate it for any alleged lost market share' or any future lost opportunities." [Id.] The Court found that Presidio "provide[d] no evidence that it lost or will lose any specific customers or sales due to ATC's infringement, or that it has suffered any lost market share' or price erosion.'" [Id. at 67.]
In its motion for a permanent injunction, Presidio centers its argument regarding inadequacy of monetary damages on Federal Circuit case law stating that irreparable harm and inadequacy of monetary damages are "inextricably intertwined." [Doc. No. 432-1, Mot. for PI at 15 (citing ActiveVideo Networks , 694 F.3d at 1337).] Presidio argues that when the Federal Circuit "determined that... Presidio demonstrated that ATC's infringement causes irreparable harm[, ]... the Federal Circuit effectively determined that ATC's infringement has resulted in the type of harm which no monetary compensation can cure." [Doc. No. 432-1, Mot. for PI at 15.] Presidio also uses the fact that it has never licensed the '356 patent and the fact that the 545L is competing with Presidio's main product to support a finding of the inadequacy of monetary damages.
Presidio also makes speculative arguments regarding harm to its reputation and goodwill. In its motion, Presidio cites the trial testimony of Mr. Lambert Devoe, a principal with Presidio: "[I]f someone comes up to [Presidio] at a trade show and says, hey, I just saw this ATC product. I thought you guys were innovators. What do you guys have that's new? That's very difficult for us because essentially, you know, in our opinion, it's, that's our design and they're basically taking away our relationship that we have with our customer, basically. So that has a strong negative impact on our future business." [Doc. No. 280, Tr. Transcript Day 2 at 110.] This speculative testimony, however, does not explain how ATC's 545L capacitors negatively impact Presidio's future business on the grounds of innovation. In fact, this testimony is just a hypothetical - there is no indication that this situation ever arose. Furthermore, Presidio does not cite to any actual examples where customers have switched from Presidio to ATC on the basis of believing that Presidio is no longer an innovator.
ATC argues that "[a] finding of irreparable harm does not ipso facto produce a finding of inadequacy of monetary damages." [Doc. No. 443, Opp. to Mot. for PI at 8.] ATC cites the Court's previous finding that there "is no evidence... that Presidio's reputation as [an innovator and] provider of unique solutions [was] damaged by the infringement." [Id. at 8-9 (quoting Doc. No. 348, Order on Post-Trial Mots. at 67).] ATC then argues that the damage to Presidio's goodwill and reputation is due to Presidio's "inability or refusal to design a capacitor that solves the very high insertion loss present in BBs." [Doc. No. 443, Opp. to Mot. for PI at 9.] ATC also contends that Presidio is not the only innovator in the market, and that ATC has launched a new market segment for customers who previously made their own broadband capacitors. [Id.] ATC again reiterates its argument from the irreparable harm prong that BBs and 545Ls are in different markets. [Id.] Finally, ATC concludes that "any economic and tangential interests such as reputation and goodwill of Presidio have been and can be adequately compensated with money damages." [Id. at 10.] However, ATC's only attempt at an explanation for this statement is that Presidio's sales of BBs and other capacitors skyrocketed, which "proves" that 545Ls "did no actual harm to Presidio or BBs." [Id.]
The Court finds that this factor does not tip in favor of either party. The fact that Federal Circuit case law states that irreparable harm and inadequacy of monetary damages are inextricably intertwined supports the inadequacy of monetary damages, as the Federal Circuit held that Presidio was irreparably damaged. Furthermore, although Presidio does not specifically mention the difference in size between ATC and Presidio, Mr. Lambert Devoe testified that when customers see that ATC, a much larger supplier, offers the same product as Presidio, they may be more likely to buy from ATC because they want to consolidate their component suppliers. [Doc. No. 280, Tr. Transcript Day 2 at 111-12.] The difference in size between the two companies could be circumstantial evidence of the inadequacy of monetary damages.
However, because irreparable harm and inadequacy of monetary damages are two separate factors under the eBay test, Presidio may not simply rely on the Federal Circuit's holding of irreparable harm to demonstrate inadequacy of monetary damages. In the present motion, Presidio failed to address the shortcomings of Presidio's arguments regarding inadequacy of monetary damages that the Court identified in the order on post-trial motions. More specifically, Presidio failed to provide evidence to support its claims of lost customers and sales, and explanations as to why monetary damages would not compensate for future lost opportunities and lost market share. Therefore, the Court finds that this factor does not support Presidio. However, in light of the fact that irreparable harm and inadequacy of monetary damages are "inextricably intertwined, " this factor also cannot tip in favor of ATC as Presidio has shown irreparable harm.
C. Balance of Hardships
The balance of hardships prong considers only the balance between a plaintiff and a defendant. Acumed , 551 F.3d at 1330. "One who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected." Windsurfing Int'l, Inc. v. AMF, Inc. , 782 F.2d 995, 1003, n.12 (Fed. Cir. 1986).
The Court previously found that the balance of hardships tips in Presidio's favor because the mere fact that ATC would have to stop selling the infringing 545L capacitors is not a hardship. [Doc. No. 348, Order on Post-Trial Mots. at 68.] Although the Federal Circuit did not specifically address this finding, it did state at the outset of its opinion that it "affirms the vast majority of [this Court's] determinations, " subject to a few exceptions. Presidio Components , 702 F.3d at 1354. Accordingly, and because circumstances have not changed to tip the balance of hardships in favor of ATC, this Court again finds that the balance of hardships favors Presidio.
D. Public Interest
Public interest is implicated where the product at issue is of unusual social benefit. Advanced Cardiovascular Sys., Inc. v. Medtronic Vascular, Inc. , 579 F.Supp.2d 554, 561 (D. Del. 2008). The Court previously found that the public interest favors ATC because "enjoining the sale of the 545L capacitors will hurt important government, military, space, and infrastructure projects, as well as many critical civilian industries." [Doc. No. 348, Order on Post-Trial Mots. at 68.] The Court found that the interests advanced by Presidio, (1) the interest in maintaining a strong patent system; (2) the interest in fair and healthy competition; and (3) the interest in discouraging future wrongdoing, are always present in a patent case. [Id.]
Presidio acknowledges that the Court determined this factor favors ATC, but states that its slight weight should not outweigh the other factors. [Doc. No. 432-1, Mot. for PI at 20.] Presidio also argues that at the present time, ATC's infringing 545L capacitor "is not so important as to significantly affect society or the public's interest" because ATC has stated that it can provide its customers a different, non-infringing product and because ATC appears to be discontinuing the 545L capacitor. [Id. at 21-22 (citing Doc. No. 323-7, Decl. of Joseph Tierney ¶ 7; Doc. Nos. 432-3, 432-4, 432-5, Ex. B-D).]
In light of the Court's previous finding that 545L capacitors are used in government, military, space, and infrastructure projects, the Court again finds that this factor still favors ATC. However, in light of the fact that ATC is discontinuing the 545L capacitor, this factor supports ATC less than what the Court originally found.
Summing up all four permanent injunction factors, the Court finds that irreparable harm and the balance of hardships favors Presidio, whereas the public interest slightly favors ATC. The inadequacy of money damages does not favor either party. Thus, balancing the factors supports a permanent injunction. Accordingly, the Court GRANTS Presidio's motion for a permanent injunction.
Presidio seeks entry of the following paragraphs in the permanent injunction:
3. It is hereby Ordered that ATC and its successors, assigns, officers, agents, servants, employees, attorneys, and persons in active concert or participation with them, including any parent and subsidiary entities during the period commencing on the date hereof and through the date of expiration of the '356 patent are hereby enjoined and restrained from infringing Claims 1-5, 16, and 18-19 of the '356 patent and are further hereby enjoined and restrained from making, using, selling, or offering to sell in the United States, or importing into the United States the 545L capacitor or any other product of another name that is not colorably different from the 545L capacitor.
[Doc. No. 432-6, Ex. E, Proposed Permanent Injunction.]
The Court declines to adopt in full paragraph 3 of Presidio's proposed injunction because it is overbroad. First, the Court does not include successors, assigns, and parent and subsidiary entities in the language of the injunction because Federal Rule of Civil Procedure 65(d) does not include these entities as among those that an injunction order binds. Eli Lilly and Co. v. Premo Pharm. Labs., Inc. , 843 F.2d 1378, 1381 (Fed. Cir. 1988) (citing Regal Knitwear Co. v. NLRB , 324 U.S. 9, 14 (1945)); see also Int'l Rectifier Corp. v. IXYS Corp , 383 F.3d 1312, 1313, 1315 (Fed. Cir. 2004) (holding that an injunction must satisfy the requirements of Rule 65(d)). The Court notes, however, that these entities "may come within the description of persons in active concert or participation with [a defendant] in violation of an injunction. If they are, by that fact they are brought within the scope of contempt proceedings by the rules of civil procedure." Eli Lilly , 843 F.2d at 1381 (citing Regal Knitwear , 324 U.S. at 14).
The Court also excludes the language from the proposed injunction which enjoins and restrains the infringement of Claims 1-5, 16, and 18-19 of the '356 patent because it is overly broad. "In the patent infringement context, [the Federal Circuit] has rejected as overly broad a permanent injunction that simply prohibits future infringement of a patent." Int'l Rectifier , 383 F.3d at 1316; see also Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc. , 986 F.2d 476, 479-80 (Fed. Cir. 1993) (rejecting an injunction as overly broad because "the order failed to state which acts constituted infringement or to expressly limit its prohibition to the manufacture, use, or sale of the specific device found to infringe...."). Because the language does not specify which acts constitute infringement of Claims 1-5, 16, and 18-19, the Court finds that this language is overbroad.
Finally, the effective date of the injunction will be September 1, 2013, to allow ATC to finish shipping those 545L capacitors that had been ordered prior to the date of oral argument. ATC stated at oral argument that the last batch of 545L capacitors will be delivered in August of 2013.
The Court declines to adopt the remainder of ATC's revisions to Presidio's proposed injunction because the Court finds no case law precedent requiring them. [Doc. No. 443, Ex. R, ATC's Proposed Permanent Injunction.]
The Court hereby ORDERS as follows:
1. ATC has been found to infringe Claims 1-5, 16, and 18-19 of United States Patent No. 6, 816, 356 ("'356 patent").
2. The Court of Appeals for the Federal Circuit has determined that ATC's infringement results in irreparable harm to Presidio.
3. It is hereby ordered that ATC and its officers, agents, servants, employees, attorneys, and persons in active concert or participation with them, during the period commencing on September 1, 2013 and through the date of expiration of the '356 patent are hereby enjoined and restrained from making, using, selling, or offering to sell in the United States, or importing into the United States the 545L capacitor or any other product of another name that is not colorably different from the 545L capacitor.
4. ATC is required, within ten (10) business days of issuance, to provide notice of this Order to all distributors, customers, or other third parties who have ordered, received, or purchased any 545L capacitor from ATC or any entities recited in Paragraph 3 above.
II. Motion for Supplemental Damages
Under the Patent Act's damages provision, "the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court." 35 U.S.C. § 284 (emphasis added). There is a scarcity of analysis and case law "regarding the proper method for calculating supplemental damages...." in the patent context. Apple, Inc. v. Samsung Elecs. Co., ___ F.Supp.2d ___, 2013 WL 772525, at *3 (N.D. Cal. Mar. 1, 2013) ("[T]he cases discussing supplemental damages in the patent context are few....").
The court may award supplemental damages for infringement between a jury verdict and the entry of judgment. See Hynix Semiconductor Inc. v. Rambus, Inc. , 609 F.Supp.2d 951, 960-61 (N.D. Cal. 2009); see also Stryker Corp. v. Davol, Inc. , 234 F.3d 1252, 1254 (Fed. Cir. 2000).
"The patentee bears the burden of proving damages." Uniloc USA, Inc. v. Microsoft Corp. , 632 F.3d 1292, 1315 (Fed. Cir. 2011); Lucent Techs., Inc. v. Gateway, Inc. , 580 F.3d 1301, 1324 (Fed. Cir. 2009). "To properly carry this burden, the patentee must sufficiently [tie the expert testimony on damages] to the facts of the case.'" Uniloc USA , 632 F.3d at 1315 (quoting Daubert v. Merrell Dow Pharmaceuticals, Inc. , 509 U.S. 579, 591 (1993)). "If the patentee fails to tie the theory to the facts of the case, the testimony must be excluded." Uniloc USA , 632 F.3d at 1315.
Although calculation of damages may involve some approximation, "damages may not be determined by mere speculation or guess." Del Mar Avionics Inc. v. Quinton Instrument Co. , 836 F.2d 1320, 1327 (Fed. Cir. 1987) (quoting Story Parchment Co. v. Paterson Parchment Paper Co. , 282 U.S. 555, 563 (1931)).
A. Number of Infringing Units
In its reply memorandum, Presidio argues that the number of infringing units for the 2010-2013 period is 1, 966, 871. [Doc. No. 448, Reply to Mot. for Supp. Damages, Ex. 1, Ex. 2] In its opposition brief, ATC contends that the number of 545Ls sold in the relevant period is 1, 928, 921. [Doc. No. 444, Opp. to Mot. for Supp. Damages at 2.] At oral argument, the parties agreed that the number of infringing units for the relevant 2010-2013 period is 1, 966, 871. Therefore, the Court accepts this number.
B. Amount of Damages
"[S]upplemental damages are calculated consistent with the damages awarded in the jury verdict." See Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc. , 2009 WL 920300, at *3 (D.Ariz. Mar.31, 2009); accord Aero Prods. Int'l, Inc. v. Intex Recreation Corp., 2005 WL 1498667, at *2 (N.D. Ill. June 9, 2005) (setting supplemental damages for the period between the jury verdict and the imposition of permanent injunction at 13.5% based upon extrapolation from the jury's general verdict); Stryker Corp. v. Davol, Inc. , 75 F.Supp.2d 746, 746-47 (W.D.Mich.1999) (setting supplemental damages for the period between the jury verdict and the imposition of a permanent injunction at 20%, which was the reasonable royalty found by the jury for the period of infringement); Oscar Mayer Foods Corp. v. Conagra, Inc. , 869 F.Supp. 656, 668 (W.D.Wis.1994) (setting additional damages for post-judgment infringing sales at the ratio of damages to sales determined from the jury's verdict).
Thus, "[i]n most... cases, a jury determined what the appropriate royalty rate would be, allowing the court to simply apply the jury's stated methodology to the proven or estimated post-verdict sales." Hynix Semiconductor Inc. v. Rambus Inc. , 609 F.Supp.2d 951, 964 (N.D. Cal. 2009). "[I]n applying the same royalty rate used by the jury, courts have explained that the rationale for continuing the jury's award, rather than using some other method, is that there is an absence of any meaningful distinction between pre-verdict and post-verdict infringement." Apple, 2013 U.S. Dist. LEXIS 29051, at *20 (internal quotation omitted).
In the present case, the jury did not award Presidio a reasonable royalty, but rather lost profits. The jury awarded Presidio $1, 048, 677 in lost profits based on the 782, 000 545L capacitors sold by ATC between mid-2006 and September 30, 2009. [Trial Tr. Day 4, at 177:6-178:24.] The jury calculated the lost profits award by considering Presidio's sales and profits for 2006, 2007, 2008, and 2009. However, the majority of the cases that Presidio cites in its motion for supplemental damages are cases where the jury awarded a reasonable royalty.
1. $1.34 Per Unit as Supplemental Damages Amount
Presidio in its motion for supplemental damages argues that supplemental damages should be calculated consistent with the damages awarded in the jury verdict and contends that the damages should be $1.34 per infringing 545L capacitor. [Doc. No. 431, Mot. for Supp. Damages at 2.] Presidio argues that the average of the jury award was $1.34 per infringing unit.
Presidio arrived at this amount from a previous order of this Court that "extrapolate[d] that the jury awarded Presidio approximately $1.34 per 545L capacitor sold between the period of 2006 and 2009" "based on the ratio of damages to sales...." Presidio Components Inc. v. Am. Technical Ceramics Corp. , 2010 WL 3070370, at *2 (S.D. Cal. Aug. 5, 2010) aff'd in part, vacated in part, 702 F.3d 1351 (Fed. Cir. 2012). Presidio argues that this amount should be assessed for all sales made by ATC from April 13, 2010 until entry of the injunction. [Id. at 4-5.]
Presidio also argues that "the Federal Circuit has repeatedly advised that the jury's verdict is typically increased to account for the considerable strengthening of the patent owner's post-verdict bargaining position." [Doc. No. 431-1, Presidio's Mot. at 8.] Presidio argues that because its request for supplemental damages is "merely equal to (and not higher than) the amount determined to be adequate compensation by the jury[, it] is more than reasonable." [Id.] However, the case that Presidio cites, Amado v. Microsoft, was in the context of increasing a reasonable royalty to account for post-verdict bargaining position. 517 F.3d 1353, 1361-62 (Fed. Cir. 2008).
This this rationale is not applicable to lost profits as the purpose of supplemental damages is to compensate the patentee; increasing the amount of lost profits to account for post-verdict bargaining position would result in a windfall to the patentee. Presidio appears to conflate reasonable royalties with lost profits. The Court finds that $1.34 per unit is inappropriate as the supplemental damages award. First, the $1.34 figure was never found by the jury; rather, it was a figure adopted by the Court as a weighted average for the limited purpose of awarding supplemental damages for the short time period between December 1, 2009 and April 13, 2010. Presidio Components , 2010 WL 3070370, at *1-2. Using this number would be contrary to the methodology Presidio presented to the jury for lost profits. See Bard Peripheral Vascular , 2009 WL 920300, at *3.
Second, the jury adopted the approach of Presidio's expert, Mr. Newman. Mr. Newman stated on direct examination that the proper method to calculate lost profit would be to "look at it from a year-to-year basis." [Doc. No. 444, ATC's Opp., Ex. B, 12/409 Tr. Transcript at 179.] Mr. Newman testified that "it wouldn't be appropriate to look at sales that occurred in 2009 of 545s and apply the old 2006 profit [as t]hat would misstate the loss of profits." [Id.] He also testified that the BB sale price and profit margins have been decreasing "consistent with the marketplace." [Id. at 178.]
Finally, awarding Presidio $1.34 per unit would result in a windfall to Presidio under ATC's calculations that the average selling price between 2010 and 2013 was between $1.23 and $1.32. [Doc. No. 444, Opp. to Mot. for Supp. Damages at 2, 4-7.] Even Mr. Newman, Presidio's expert, calculated lost profits to be less than $1.34 per unit. [Doc. No. 440, Reply to Mot. for Supp. Damages at 7.] For all the reasons above, the Court finds that $1.34 per unit is inappropriate as the measure of supplemental damages between 2010 and 2013.
2. Alternate Amount
Because the Court rejects Presidio's $1.34 per unit for supplemental damages, the Court considers alternate amounts to determine what amount of supplemental damages is appropriate.
a. $0.25 per Unit
ATC argues that the Court should award $0.25 per infringing unit, which is the ongoing royalty amount rate that the Court determined. [Doc. No. 444, Opp. to Mot. for Supp. Damages at 8; Doc. No. 465, Surreply to Mot. for Supp. Damages at 9.] ATC contends that this amount "is the very same amount that Presidio's Mr. Newman endorsed as the rate which was adequate to compensate Presidio for infringement." [Doc. No. 444 Opp. to Mot. for Supp. Damages at 8.] Moreover, ATC asserts that "for four years, [it] has reasonably and justifiably relied on this rate as its cost to compensate Presidio and set its pricing and strategy for 545L sales based on the $0.25 rate." [Id.]
ATC does not provide any case law or reasoning to support why awarding the royalty payment determined by the Court would be appropriate as a measure of supplemental damages. The Court also cannot find any precedent to support the award of supplemental damages based on a reasonable royalty when the jury awarded lost profits. See Bard Peripheral Vascular , 2009 WL 920300, at *3. Accordingly, the Court declines to award supplemental damages in the amount of $0.25 per unit.
b. $0.35 per Unit
ATC also argues that Presidio should be compensated at a rate of $0.35, which is the amount the Court awarded ATC as a per-BB capacitor fine for Presidio's false marking. [Doc. No. 444, Opp. to Mot. for Supp. Damages at 8; Doc. No. 465, Surreply to Mot. for Supp. Damages at 9.] Again, ATC does not present any case law to support its argument. Therefore, the Court declines to accept $0.35 per unit for supplemental damages as this figure is not consistent with the damages awarded by the jury. See Bard Peripheral Vascular , 2009 WL 920300, at *3.
c. Hybrid Amount
The Court next analyzes the method used by the jury to determine lost profits, using price per unit and costs to calculate supplemental damages.
i. Price Per Unit
The method used by Mr. Newman at trial, and adopted by the jury is that average price per unit should be based on actual unit and dollar sales to customers, subject to certain volume thresholds. [Doc. No. 440, Ex. A, Newman Decl. at 3.] Mr. Newman used actual historic prices when calculating lost profits. [Id.] The Court replicates the table provided by Mr. Newman in his declaration, summarizing the BB 0502's average selling price in the relevant time period.
BB 0502 Average Selling Price (Newman) 2010 2011 2012 2013 2010-2013 $1.47 $1.48 $1.60 $1.42 $1.52
[Id.] The Court adopts Mr. Newman's methodology for calculating the average selling price as it is the method accepted by the jury at trial.
Dr. Kennedy suggests a different methodology to calculate average price, which uses Presidio's year-by-year list price schedules for the BB 502 capacitors and the pricing agreements it offered to certain overlapping customers. [Doc. No. 444, Ex. A, Kennedy Decl. at 5-6.] Mr. Newman criticizes Dr. Kennedy's approach as being "inconsistent with the methodology presented to and accepted by the jury at trial." [Doc. No. 440, Ex. A, Newman Decl. at 3.] Although Dr. Kennedy believes this approach is "more realistic and more appropriate" than that of Mr. Newman [Doc. No. 444, Ex. A, Kennedy Decl. at 6], the Court declines to adopt Dr. Kennedy's approach to calculate average price per unit, as the jury did not utilize this method during trial. See Bard Peripheral Vascular , 2009 WL 920300, at *3.
Revenue alone, without costs, is insufficient to prove lost profit damages. See Designing Health, Inc. v. Erasmus, 132 Fed.Appx. 826, 832 (Fed. Cir. 2005) (unpublished). The Federal Circuit has stated: "The evidence of DH's gross sales figures... is also insufficient to establish damages. This evidence fails to establish the profits, if any, that DH derived from sales of [its] products...." Id.
In response to discovery requests, Presidio only produced evidence of its gross revenues from BB sales for the years 2010-2013. [Doc. No. 444, Opp. to Mot. for Supp. Damages at 10.] Presidio did not produce BB-specific cost or profit information for 2010-2013. [Id.] Presidio compiled and annually updated a BB-specific cost file from 2006-2009, which both parties' experts relied upon to calculate lost profits at trial. [Id.] A letter from Presidio's counsel Brett Schatz to counsel for ATC, Timur Slonim confirmed that Presidio has not maintained this cost file since 2009. [Doc. No. 444, Ex. G, 5/3/13 Letter from Schatz to Slonim.] ATC also contends that "[d]espite being asked by ATC for costs and profits, and ordered by the Court on April 23, 2013 to produce everything related to BB costs and profits, Presidio did not produce the source documents - materials' costs, labor costs, production yields, sales commissions, etc. - from which such annual BB-specific cost information could have been compiled by ATC's expert." [Doc. No. 444, Opp. to Mot. for Supp. Damages at 11.]
Because Presidio discontinued maintenance of BB-specific cost information, the Court is unable to follow the exact methodology expounded by Mr. Newman and adopted by the jury at trial, The cost information that Mr. Newman used to calculate his lost profits amounts is not available for 2010-2013. Therefore, the Court must approximate the amount of costs for the relevant time period. The Court considers in turn the methodology of each party's expert to determine which is more reliable as an estimate of costs.
The Court declines to adopt Mr. Newman's determination of costs because it is speculative. Mr. Newman estimates that BB 0502 direct costs for 2010-2013 are consistent with those presented at trial. He therefore concludes that the costs were $0.16 per unit, based on 2009 costs. To support his conclusion, Mr. Newman summarily states that "[b]ased on discussions with Lambert Devoe and Alan Devoe, Presidio does not believe that its unit costs for the BB 0502 capacitors have increased since 2009." [Doc. No. 440, Ex. A, Newman Decl. at 4.] Mr. Newman fails to explain the basis of Mr. Lambert Devoe's and Mr. Alan Devoe's conclusions that unit costs have not increased. The declaration of Mr. Lambert Devoe also does not provide adequate support for his conclusion that costs have not increased. [Doc. No. 440, Ex. B, Lambert Devoe Decl.] Because Mr. Newman fails to adequately support his conclusion that costs between 2010 and 2013 are the same as those in 2009, the Court does not adopt Mr. Newman's cost methodology as it is speculative.
Dr. Kennedy uses information from Presidio's company-wide profit and loss statements covering the period between September 2010 through January 2013 to determine cost. [Doc. No. 465, Ex. C, Kennedy Decl. at 4.] Dr. Kennedy uses these financial statements to determine the costs of goods sold and incremental operating expenses. [Doc. No. 444, Ex. A, Kennedy Decl. at 7.] Dr. Kennedy states that he used Presidio's financial statements because Presidio did "not maintain cost of goods sold for the BB capacitors by model and represents that Presidio's financial statements represent Presidio's costs and profits related to the BB product line, to the fullest extent possible." [Id.] Dr. Kennedy summarizes his findings for cost of goods in a table attached to his declaration, which is reproduced below.
BB 0502 Gross Profit Margin and Cost of Goods (Kennedy) 2010 2011 2012 2013 Avg. Cost of 31.5% 32.2% 29.4% 29.4% 30.6% Goods Sold (%) Cost of $0.39 $0.41 $0.39 $0.37 $0.39 Goods Sold ($)
[Doc. No. 465, Ex. C, Kennedy Decl. at 5; Doc. No. 444, Ex. A, Kennedy Decl. at Ex. E.] The Court also reproduces Dr. Kennedy's table summarizing his findings for other incremental costs.
BB 0502 Other Incremental Costs 2010 2011 2012 2013 Avg. Incremental 19.9% 18.6% 17.3% 17.3% 18.21% Costs (%) Incremental $0.24 $0.24 $0.23 $0.22 $0.23 Costs ($)
[Doc. No. 465, Ex. C, Kennedy Decl. at 7.]
Presidio has not met its burden to show that the Court should adopt 2009 costs for the 2010-2013 time period. See Uniloc USA , 632 F.3d at 1315. The Court adopts Dr. Kennedy's analysis using Presidio's financial statements to determine costs. As the method adopted by the jury using BB capacitor-specific cost data cannot be reproduced as that data is no longer available, the Court finds that Dr. Kennedy's method is the best approximation presented to the Court. See Del Mar Avionics , 836 F.2d at 1327.
iii. Damages Figure
Combining Mr. Newman's analysis on selling price and Dr. Kennedy's analysis on costs, the Court finds that incremental profit is $0.78. The Court summarizes Dr. Kennedy's analysis in the following chart:
Incremental Profit Per Unit Newman Selling Price/Kennedy Costs Average Selling Price $1.52 Direct Material (0.47) Gross Profit 1.05 Other Incremental Costs (0.28) Incremental Profit $0.78
[Doc. No. 465, Ex. C, Kennedy Decl. at 5.] The following chart summarizes the damages to be awarded to Presidio based on the number of units sold, 1, 966, 871.
Newman Selling Price/Kennedy Costs Damages Calculation Incremental Profit $0.78 All Units 1, 966, 871 Damages $1, 530, 578
ii. Retained Sales
ATC then argues that the above amount should be reduced by the amount of sales to TriQuint and Agilent, which stated that they would or could not buy BB capacitors. [Doc. No. 465, Surreply to Mot. for Supp. Damages at 6-7.] ATC also argues that the amount of damages should be reduced by the amount of sales to Inphi because Presidio refused to do business with Inphi. [Id.] Presidio did not address ATC's request to reduce damages by retained sales in its briefing or at oral argument. [See Doc. No. 440, Reply to Mot. for Supp. Damages.]
To support its argument that the Agilent would not or could not buy BB capacitors, ATC cites the following language from an email between Gunter Vorlop and John Steward from Steward Technology, and CC to Lambert Devoe of Presidio, regarding a meeting with Bobby Wong and Jonathan Storie: "There is a compelling reason... to start using ATC545-L inside box (20 places) due to its reduced loss and reduced price ($1.50 each)." [Doc. No. 443, Opp. to Mot. for PI at 4; Doc. No. 443, Ex. E, PCI-10176.] The context of this email is unclear. It is also unclear whether this comment was a passing observation by Jonathan Storie, or a solid commitment to move away from using BB capacitors.
To support its argument that TriQuint would not or could not buy BB capacitors, ATC cites an email from Gunter Vorlop to Lambert Devoe, and consisted of his notes from a visit with TriQuint. ATC specifically cites the following sentence from Gunter Vorlop's summary of the impressions of Kurt Cimino, a TriQuint engineer: "Kurt is looking for (lower) loss improvements at the high frequency end." [Doc. No. 443, Opp. to Mot. for PI at 4-5; Doc. No. 443, Ex. F, PCI-10163.] However, this statement does not demonstrate that TriQuint would not buy BB capacitors.
From the statements cited by ATC, it is far from clear that Agilent and TriQuint demonstrate that these companies would not buy BB capacitors when the 545Ls become unavailable. Accordingly, the Court declines to reduce the amount of supplemental damages by the amount of sales to TriQuint and Agilent.
ATC also contends that sales to Inphi should be excluded because Presidio refused to do business with them. [Doc. No. 443, Opp. to Mot. for PI at 4; Doc. No. 443, Ex. D, PCI-10416.] ATC cites a chart that lists Inphi and contains the following note in the comments field: "VB4040 cracks at Kyocera CM. Not our fault. Inphi handled badly. LD doesn't want bus anymore." ATC interprets this statement to mean that Lambert Devoe no longer wants Inphi's business. [Doc. No. 465, Surreply to Mot. for Supp. Damages at 7.] ATC argues that therefore, the 28, 800 units of 545L capacitors that ATC sold to Inphi should not be included in supplemental damages. [Id.; Doc. No. 443, Opp. to Mot. for PI at 4.] Presidio did not refute ATC's argument, nor did it dispute the number of units that ATC states it sold to Inphi in its briefing or at oral argument. Because Presidio was unwilling to continue sales to Inphi, who then bought 545L capacitors from ATC, the Court excludes 28, 800 units from the supplemental damages calculation. The final amount of damages is then $1, 508, 114, as summarized by the chart below.
Final Supplemental Damages Calculation Damages $1, 530, 578 Units Sold to Inphi 28, 800 Incremental Profit $0.78 Inphi Reduction in Damages $22, 464 Adjusted Damages $1, 508, 114
Presidio argues that it is entitled to an award of prejudgment interest on the entire supplemental damages award. [Doc. No. 431-1, Mot. for Supp. Damages at 8-9.] ATC does not oppose an award of prejudgment interest on supplemental damages for the 269, 725 units sold between April 14, 2010 and the date this Court entered judgment in this case, October 26, 2010. [Doc. No. 444, Opp. to Mot. for Supp. Damages at 12.] However, ATC contends that infringing units sold after October 26, 2010 should be subject to post-judgment interest. [Id.]
Several courts of appeals have held that where a first judgment is vacated, post-judgment interest accrues from the entry of judgment on remand. Lewis v. Whelan , 99 F.3d 542, 545 (2d Cir. 1996); see also Cordero v. De Jesus-Mendez , 922 F.2d 11, 16 (1st Cir. 1990) (citing Kaiser Alum. & Chem. Corp. v. Bonjorno , 494 U.S. 827, 836 (1990)); FDIC v. Rocket Oil Co. , 865 F.2d 1158, 1161 (10th Cir. 1989).
On October 26, 2010, the clerk entered judgment in this case. [Id.] On February 25, 2013, the Court spread the mandate of the Federal Circuit, which affirmed-in-part and vacated-in-part the judgment, and remanded to this Court for further proceedings. Because the Federal Circuit vacated this Court's judgment on the issuance of the permanent injunction, the date judgment is entered for the permanent injunction and supplemental damages is the date of the entry of judgment on remand. In accordance with the aforementioned case law, the Court awards prejudgment interest on supplemental damages until the date of entry of judgment on remand, to be reflected on the docket after the filing of this Order.
III. Motions to Strike
A. Presidio's Motion to Strike Rabe Declaration
Presidio moves to strike the declaration of Mr. Stephan Rabe, arguing that it is based on hearsay and not based on personal knowledge. [Doc. No. 446, Mot. to Strike Rabe Decl.] Because the Court did not consider Mr. Rabe's declaration when ruling on the motions for permanent injunction and supplemental damages, the Court DENIES AS MOOT Presidio's motion.
B. ATC's Motion to Strike Newman and Devoe Declarations
ATC argues that the Court should strike both the Newman and Devoe declarations because they provide affirmative evidence, which is not permitted in a reply brief. [Doc. No. 454, Mot. to Strike Newman and Devoe Decl.; Doc. No. 461, P. & A. for Mot. to Strike Newman and Devoe Decl. at 1.] Presidio contends that the motion should be denied as the "declarations... are solely in rebuttal to ATC's... theory regarding supplemental damages." [Doc. No. 462, Opp. to Mot. to Strike Newman and Devoe Decl. at 2.]
"Rebuttal evidence is properly admissible when it will explain, repel, counteract or disprove the evidence of the adverse party.'" Crowley v. Chait , 322 F.Supp.2d 530, 551 (D. N.J. 2004) (quoting United States v. Chrzanowski , 502 F.2d 573, 576 (3d Cir. 1974)). "As long as a rebuttal expert witness speaks to the same subject matter addressed by opposing counsel's expert and does not introduce novel arguments, his testimony is proper under Rule 26 and the case law interpreting it in the Ninth Circuit and in this district. The fact that Plaintiff has only designated a rebuttal expert, and not an initial expert, is not grounds to strike his report or exclude his testimony." Donell v. Fid. Nat. Title Agency of Nevada, 2012 WL 170990, at *3 (D. Nev. Jan. 20, 2012). "The admissibility of evidence in rebuttal is committed to the discretion of the trial judge." Crowley, 322 F.Supp.2d at551 (citing Chrzanowski , 502 F.2d at 576).
1. Newman Declaration
ATC asserts that the Newman Declaration presents both affirmative and rebuttal testimony. [Doc. No. 461, P. & A. for Mot. to Strike Newman and Devoe Decl. at 2.] ATC asks the Court to strike the portions that present affirmative testimony. [Id.] ATC also argues that Presidio's decision to not submit a declaration from Mr. Newman with its opening brief, but instead to withhold it until its rebuttal, "severely prejudices" ATC. [Id.] Presidio, conversely, argues that Mr. Newman's declaration is limited to those issues discussed by Dr. Kennedy: Presidio's lost profits at trial; average selling price of the BB capacitor; incremental costs for the BB capacitor; and supplemental damages. [Doc. No. 462, Opp. to Mot. to Strike Newman and Devoe Decl. at 4-8.] The Court permitted ATC to address Mr. Newman's declaration in a surreply. The Court also allowed ATC to respond to Mr. Newman's declaration at oral argument. Accordingly, the Court DENIES ATC's motion to strike the Newman declaration.
2. Devoe Declaration
ATC argues that the Court should strike the Devoe declaration for five reasons: (1) it is affirmative evidence that Presidio filed to present in its opening brief; (2) it is not rebuttal to the Kennedy declaration; (3) it is a summary of undisclosed and undefined cost and comparative probability information; (4) it should be excluded as a sanction for Presidio's discovery misconduct; and (5) it should be excluded as unreliable. [Doc. No. 461, P. & A. for Mot. to Strike Newman and Devoe Decl. at 7-8.] Because the Court does not rely on the Devoe declaration for its rulings, the Court DENIES AS MOOT ATC's motion to strike the Devoe declaration.
In light of the foregoing, the Court GRANTS Presidio's motion for a permanent injunction. The Court GRANTS Presidio's motion for supplemental damages and awards damages in the amount of $1, 508, 114. The Court DENIES AS MOOT the motion to Presidio's motion to strike the Rabe declaration. The Court DENIES ATC's motion to strike the Newman declaration. The Court DENIES AS MOOT ATC's motion to strike the Devoe declaration.
The parties shall submit a stipulated judgment correctly reflecting the prejudgment interest on the supplemental damages awarded.
IT IS SO ORDERED.