ORDER GRANTING-IN-PART POST-TRIAL MOTIONS (Re: Docket Nos. 243, 244, 245, 246 and 247)

PAUL S. GREWAL, Magistrate Judge.

Before the court in this patent case remain various post-trial motions. Accessories Marketing Inc. moves for (1) judgment as a matter of law that TEK's marking defense does not limit its damage recovery,1 (2) supplemental damages and prejudgment interest,2 (3) a permanent injunction3 and (4) attorney's fees.4 TEK Global S.R.L. and TEK Corporation (collectively, "TEK") in turn seek JMOL or a new trial based on (1) non-infringement of the asserted claims of U.S. Patent No. 6,789,581 ("the '581 patent"), (2) invalidity of the '581 pursuant to 35 U.S.C. §§ 102 and 103, (3) failure to prove damages, (4) failure to mark products and (5) remittitur.5 Each motion is opposed. The court appreciates the well-considered arguments presented by the parties — in their papers and at a hearing on these motions. After considering these arguments, the court GRANTS-IN-PART the motions, as set forth below.

I. BACKGROUND

AMI and Sealant Systems International, Inc. are California corporations engaged in the manufacture and sale of onboard tire repair kits. TEK is an Italian limited liability company involved in the same.6 On November 10, 2010, TEK initially sued AMI and SSI for infringement of U.S. Patent No. 7,789,110 ("the '110 patent") in the Southern District of New York. The '110 patent discloses "a kit for inflating and repairing inflatable articles, in particular, tires."7 The kit includes "a compressor assembly, a container of sealing liquid and connectors for connecting the container to the compressor assembly and to an inflatable article for repair or inflation."8 On February 18, 2011, AMI and SSI responded with suit against TEK in this district, seeking a declaratory judgment of noninfringement of the '110 patent. AMI and SSI moved successfully to transfer the New York case here9 and consolidate the two cases.10 AMI and SSI later amended their complaint to include an affirmative claim against TEK for infringement of the '581 patent.11

In advance of trial, the parties moved for summary judgment on a number of key issues — certain motions were granted, others were denied.

A. Clear and Convincing Evidence Established the Asserted Claims of the '110 Patent Are Invalid as Obvious

In its summary judgment order, the court held that even with all genuine factual disputes resolved in TEK's favor, the record established by "clear and convincing evidence" that asserted claims 1-5, 11-15 and 21-31 of the '110 patent are "obvious in light of Eriksen, Bridgestone, and other prior art references."12 Among other things, the court found that no reasonable jury could find other than that Bridgestone disclosed two key limitations, "a three-way valve" and "an additional hose." In light of the court's invalidity determination regarding the asserted claims of the '110 patent, the court denied-as-moot the parties' cross-motions on the issue of infringement of those same claims.13

B. The Asserted Claims of the '581 Patent Survived Summary Judgment

In that same summary judgment order, the court weighed TEK's motion for summary judgment that the '581 patent was anticipated by or, in the alternative, obvious in light of the prior art. Based on a variety of genuine issues of disputed fact, the court held that summary judgment of invalidity based on anticipation or obviousness was not warranted.14

1. A Genuine Dispute Existed Whether U.S. '282 Discloses "A Receptacle Formed in the Housing"

The patented apparatus described in claims 1-3, 8, 10, 11, 13, 15, 17, 21-24, 27-31, 34, 36, 40 and 43 of the '581 patent includes "a receptacle formed in said housing."15 The court construed this term as having its plain and ordinary meaning.16 The court further held that word "receptacle" connotes depth such that the device can receive a tire sealant container and provide for sealant to leave the container and enter the air flow path.17 Additionally, the court held the receptacle's function was "to connect to the flow of compressed air and to sealingly receive a container of sealant."18

The court found a genuine dispute of material fact as to whether U.S. Patent Publ. No. U.S. 2004/0173282 ("US '282") disclosed the receptacle required by the '581 patent. This dispute was drawn out through conflicting testimony from the parties' experts, Dr. King and Dr. Kazerooni. After considering this conflicting testimony, a "jury might properly conclude that due to the differences between the receptacles in the two inventions, a person skilled in the art would not have found" the'581 patent anticipated.19

2. A Genuine Dispute Existed Whether U.S. '282 Discloses the Claimed Port

Claims 27-28, 30-31, 37-41 and 45-47 all claim a port.20 The court construed "port" to mean "an enclosure that may be formed within and as an integral part of the housing or a separate structure that sealingly receives air and/or tire sealant."21 Because of the conflicting testimony presented on the sealing of the bottle of tire sealant and the presence of an intake and exhaust, the court held that AMI and SSI had raised "a triable issue of fact," regarding anticipation.22

3. A Genuine Dispute Existed Whether U.S. '282 Discloses a Reservoir

Claim 42 requires a "reservoir formed in said housing in communication with said air flow path adapted to receive tire sealant."23 The claim also states that "when said air compressor is activated and tire sealant is received in said reservoir, air from said air compressor is forced into said reservoir and pushes tire sealant out of said reservoir, into said air path, and into the tire."24 Here, the court held that the testimony of Dr. King that "the hole in US '282 is not configured to receive sealant without leaking" the sealant was sufficient to create a genuine dispute as to whether U.S. '282 discloses a reservoir.25

C. SSI Does Not Possess Standing To Seek Damages For Infringement of the '581 Patent

TEK next urged the court to hold that SSI lacked standing to seek infringement damages, because, unlike AMI, SSI is neither an owner nor an assignee of the '581 patent. In response, the court first observed the Federal Circuit has held that "a party has standing to receive damages only if it shows it has legal title to the patent — either by way of title to the entire patent, an undivided share of the entire patent, or exclusive rights to the patent in a specific geographical region of the United States."26 After further observing that TEK's motion was essentially unopposed, the court concluded that "as agreed upon by the parties, only AMI has standing to seek damages from TEK on the '581 patent."27

D. A Genuine Dispute Existed Whether AMI Could Claim Pre-Suit Damages

Relying on 35 U.S.C. § 287(a), TEK moved for summary judgment that AMI could not recover damages prior to the filing of this suit because they did not provide notice — actual or constructive — to TEK. Without addressing who bears the burden of proof on the issue, the court observed that "AMI and SSI stated in their interrogatory responses that their products do not practice the '581 patent."28 The court further noted that where a patentee's products do not practice the product, no marking or notice obligation is triggered.29 Because a reasonable jury could find that that neither AMI nor SSI practiced the '581 patent, summary judgment limiting damages based on the marking statute was not warranted.

E. The Jury Found Claims 27-31, 34, 38, 40 and 42 of the '581 Patent Valid and Infringed

On April 15, 2013, the court empanelled a nine-person jury to try all issues that remained in genuine dispute.30 AMI asserted sixteen claims at trial.31 At the close of the case both TEK and AMI brought Rule 50(a) motions. TEK moved for JMOL on the issues of infringement, validity, damages, marking and willfulness.32 AMI moved for JMOL on the issues of no anticipation, no willfulness, infringement and marking.33 All Rule 50(a) motions were denied and the case was then submitted to the jury. Twelve claims were found infringed.34 Four were invalidated as anticipated.35 None were deemed obvious.36 The jury found eight of the twelve infringed claims of the '581 patent valid.37 As part of its obviousness findings, the jury found that the two-piece port and receptacle system was not disclosed in the prior art.38 The jury invalidated as anticipated claims 22, 23, 24 and 38.39 Claims 22, 23 and 24 require only a receptacle (but not a port) and claim 38 requires only a port (but not a receptacle). The claims that were infringed, but not invalidated, required either (1) a receptacle and a port (claims 27-31, 34, and 40) or (2) a reservoir (claim 42). The jury applied a 7% royalty rate to a royalty base of $17,965,000 and awarded damages of $1,256,920 to compensate AMI for TEK's infringement.40

FINDINGS ON DAMAGES (IF APPLICABLE)

(if you answered questions 1 yes and question 3 no, proceed to answer the remaining question. If you did nto so answer, do not anser the remaining question and proceed to check and sing the verdict form.

5. AMI is entitled to a reasonable royalty in the following amount:

II. LEGAL STANDARDS

A. Judgment as a Matter of Law and New Trial

Fed. R. Civ. P. 50(b) provides that, upon a renewed motion for judgment as a matter of law, the court may: (1) "allow judgment on the verdict, if the jury returned a verdict," (2) "order a new trial" or (3) "direct the entry of judgment as a matter of law." To grant a Rule 50(b) motion, the court must determine that "the evidence, construed in the light most favorable to the non-moving party, permits only one reasonable conclusion, and that conclusion is contrary to the jury's."41 In other words, to set aside the verdict, there must be an absence of "substantial evidence" — meaning "relevant evidence that a reasonable mind would accept as adequate to support a conclusion" — to support the jury's verdict.42 "Substantial evidence is more than a mere" scintilla;43 it constitutes "such relevant evidence as reasonable minds might accept as adequate to support a conclusion even if it is possible to draw two inconsistent conclusions from the evidence."44 In reviewing a motion for judgment as a matter of law, the court "must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor."45 "In ruling on such a motion, the trial court may not weigh the evidence or assess the credibility of witnesses in determining whether substantial evidence exists to support the verdict."46

Fed. R. Civ. P. 59 states that the court "may, on motion, grant a new trial on all or some of the issues." The "trial court may grant a new trial, even though the verdict is supported by substantial evidence, if `the verdict is contrary to the clear weight of the evidence or is based upon evidence which is false, or to prevent, in the sound discretion of the trial court, a miscarriage of justice.'"47

B. Permanent Injunctive Relief Following a Finding of Patent Infringement

There is no presumption in favor of an injunction in patent infringement cases.48 Instead, a patentee retains the burden of showing that the four traditional equitable factors support entry of a permanent injunction: (1) that the patentee has suffered irreparable harm; (2) that "remedies available at law 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."49 Because the Supreme Court has cautioned that an "injunction is a drastic and extraordinary remedy, which should not be granted" as a matter of course,50 if "a less drastic remedy" is sufficient to redress a patentee's injury, "no recourse to the additional and extraordinary relief of an injunction" is warranted.51

C. Supplemental Damages and Prejudgment Interest

35 U.S.C. § 284 provides.

Patentees are entitled to supplemental damage awards "for any infringement prior" to the entry of a permanent injunction that were not considered by the jury.52 "Courts routinely grant motions for further accounting where the jury did not consider certain periods of infringing activity."53 Courts have applied this reasoning to the situation in which an infringer provides sales data that does not cover all sales made prior to trial.54 Where the jury was unable to consider all infringing sales, its damages award is insufficient.55 In calculating supplemental damages to correct this deficiency, courts may apply the reasonable royalty rate found by the jury.56

Prejudgment "interest should ordinarily be awarded" to a victorious patentee57 and "is ordinarily awarded from the date of the infringement to the date of judgment."58 The Federal Circuit has accepted the prime rate to calculate prejudgment interest.59 This court, too, "has held that the prime rate is appropriate for a calculation of prejudgment interest in a patent"60 because "the prime rate was the most accurate estimate of the interest rate the patentee would have charged the infringer for a loan since it is the rate charged by banks to its most credit-worthy customers."61

A patentee does not have to make any "affirmative demonstration, i.e., proof of borrowing at or above prime" to "be entitled to an award of prejudgment interest at the prime rate."62 In "applying prejudgment interest, courts have recognized that compounding is necessary to fully compensate the patentee."63 "Because a patentee's damages include the foregone use of money, compounding is needed to account for the time value of money."64 Thus, "courts have approved annual compounding and even daily compounding."65 In Atmel, for example, the court ordered prejudgment interest on the reasonable royalty judgment to be compounded quarterly, because the evidence showed that "royalty agreements are typically paid on a quarterly basis."66

D. Exceptional Case Awards

"The court in exceptional cases may award reasonable attorney fees to the prevailing party."67 "When deciding whether to award attorney fees under § 285, a district court engages in a two-step inquiry. First, the court must determine whether the prevailing party has proved by clear and convincing evidence that the case is exceptional."68 "If the district court finds that the case is exceptional, it must then determine whether an award of attorney fees is justified."69

Litigation "misconduct and unprofessional behavior may suffice, by themselves, to make a case exceptional under § 285."70 "Absent litigation misconduct or misconduct in securing the patent, sanctions under § 285 may be imposed against the patentee only if both (1) the patentee brought the litigation in bad faith; and (2) the litigation is objectively baseless."71 When the "the alleged infringer prevails in the underlying action, factors relevant to determining whether a case is exceptional include `the closeness of the question, pre-filing investigation and discussions with the defendant, and litigation behavior.'"72 "Where a patentee `prolongs litigation in bad faith, an exceptional finding may be warranted.'"73

III. DISCUSSION

A. Substantial Evidence Supports the Jury's Finding that TEK Did Not Prove the '581 Patent Invalid by Clear and Convincing Evidence

TEK initially challenges the sufficiency of the evidence supporting the jury's verdict that claims 27-31, 34, 40, and 42 of the '581 patent were all not invalid and infringed.74

1. TEK Bore the Burden of Proving the '581 Patent Invalid by Clear and Convincing Evidence

Section 282 "creates a presumption that a patent is valid and imposes the burden of proving invalidity on the attacker. That burden is constant and never changes and is to convince the court of invalidity by clear evidence."75

2. Substantial Evidence Supports the Jury's Finding that TEK Did Not Prove Anticipation by Clear and Convincing Evidence

"Anticipation requires a showing that each element of the claim at issue, properly construed, is found in a single prior art reference."76 At trial, TEK relied on only four pieces of prior art and Kazerooni admitted that three of them — (1) Japanese Patent Pub. 2002-212883883,77 (2) U.S. Patent No. 6,736,17078 and (3) German Patent DE 1010646879 — do not anticipate asserted claims 27-31, 34, 36, 40 and 42. TEK's anticipation argument thus turned entirely on the teaching of the fourth prior art reference: U.S. '282.80

b. Substantial Evidence Supports the Jury's Finding that U.S. '282 Does Not Anticipate Independent Claim 27 and Dependent Claims 28-31, 34, 36 and 40 of the '581 Patent

With respect to the so called "port and receptacle" claims, independent claim 27, and dependent claims 28-31, 34, 36 and 40, King first testified that the prior art did not disclose a receptacle as the term was construed by the court.81 King explained that U.S. '282 lacked any such receptacle because it merely provided a hole into which socket 18 was inserted.82 King's testimony alone is substantial evidence supporting the jury's verdict of no anticipation. In any event, Kazerooni also confirmed that U.S. '282 does not disclose a "receptacle." On cross-examination, Kazerooni admitted that his theory was that "the hole in the housing forms" a receptacle83 and that the hole did not perform the function of sealingly receiving sealant.84

As to the required "port," as noted earlier, the court construed the term to mean "an enclosure that may be formed within and as an integral part of the housing or as a separate structure that sealingly receives air and/or tire sealant."85 King testified that U.S. '282 does not disclose any separate piece that is disposed or seated in the receptacle.86 King's testimony, even if contradicted by Kazerooni, supports the jury's verdict.87 This is a classic example of a patent jury crediting one expert's opinion over another, something it is perfectly entitled to do.

Because substantial evidence supports the finding that U.S. '282 does not disclose both a receptacle and a port that satisfies the claim limitations of claim 27 of the '581 patent, there also is substantial evidence that U.S. '282 does not anticipate dependent claims 28, 29, 30, 31, 34, 36 or 40, all of which require both.

c. Substantial Evidence Supports the Jury's Finding that U.S. '282 Does Not Anticipate Claim 42 of the '581 Patent

The court construed the claim term "a reservoir formed in said housing" to mean a "cavity where sealant collects separate from the container."88 Kazerooni specifically testified that none of the prior art disclosed such a reservoir.89 King, too, testified that "none of the prior art discloses a reservoir."90 Testimony from both parties' experts constitutes substantial evidence supporting the jury's verdict on anticipation.91

TEK cites King's testimony that "even one milliliter of sealant" collecting separately from the bottle could constitute a reservoir.92 On that basis TEK claims U.S. '282 discloses a reservoir because sealant collected outside the bottle. But TEK ignores King's explanation of his testimony that one milliliter would be sufficient "if you have a reservoir that meets the requirements of the patent."93 And, as noted above, both experts agreed at trial that U.S. '282 does not disclose any such reservoir.

TEK also claims that the jury found that a reservoir was disclosed in prior art because it was not listed among the differences between the '581 patent and the prior art in the obviousness inquiry.94 But TEK's reliance on the jury's factual findings is misplaced in part at least because the nature of the question within the questionnaire is properly read to be open-ended. For example, the jury also did not list the "disposable" feature of claims 45-47 as missing in the prior art. Yet, that feature was the only pertinent difference between claim 38, which the jury found invalid, and claims 45-47, which it did not. The jury thus determined that this feature was not disclosed in the prior art. Because of the open-ended nature of the question, the court finds the jury's factual findings consistent.

d. Substantial Evidence Supports the Jury's Finding that U.S. '282 Does Not Anticipate Claims 45-47 of the '581 Patent

The jury's verdict reflects its finding that U.S. '282 does not anticipate claims 45 through 47 of the '581 patent.95 TEK argues that the jury should have found anticipation of these claims because the prior art devices "are all disposable devices."96 To support this argument TEK leans on Kazerooni's testimony that "the prior art devices, including that of U.S. '282, are all disposable devices" because they have "a bottle having a seal that is to be broken and requiring change of the device."97 But the testimony cited by TEK either discusses (1) different prior art98 or provides only Kazerooni's unsupported conclusion that this claim element is anticipated.99 The jury's verdict shows that it found this testimony insufficient to meet the clear and convincing standard.100 In any event, King offered testimony that U.S. '282 and the other references did not disclose any kit that is disposable.101 TEK's attempt to apply the jury's obviousness findings, which did not list the "disposable device" limitation as a difference between the patent and the prior art, to contradict the anticipation verdict also is unavailing. As explained above, because of the open-ended nature of the question put to the jury, TEK cannot rely on the jury's factual findings regarding obviousness to dispute its verdict on anticipation.102

3. Substantial Evidence Supports the Jury's Factual Findings on Obviousness

The jury concluded that the port and receptacle the two-piece port and receptacle system was not obvious.103 TEK argues asserted claims 27-31, 34, 36, 40, 42 and 45-47 of the '581 patent are invalid as obvious. A patent is invalid as obvious "if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains."104 "Whether a patent claim is obvious is a question of law based on four underlying facts: (1) the scope and content of the prior art; (2) the level of ordinary skill in the pertinent art; (3) the differences between the prior art and the claims at issue; and (4) such secondary considerations as commercial success, long felt but unsolved need, and the failure of others."105 "Generally, a party seeking to invalidate a patent as obvious must demonstrate by clear and convincing evidence that a skilled artisan would have had reason to combine the teaching of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success from doing so."106

"The Supreme Court has warned, however, that, while an analysis of any teaching, suggestion, or motivation to combine known elements is useful to an obviousness analysis, the overall obviousness inquiry must be expansive and flexible."107 The obviousness inquiry must be "expansive and flexible" accounting for the fact that a person having ordinary skill in the art is also "a person of ordinary creativity, not an automaton."108 There need not be "precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ."109 "Almost any invention, no matter how nonobvious at the time, will appear obvious when looking backward from the solution. It is for that reason that `[c]are must be taken to avoid hindsight reconstruction by using the patent in suit as a guide through the maze of prior art references, combining the right references in the right way so as to achieve the result of the claims in suit.'"110

Even though advisory obviousness verdicts are not binding, the court is "required to accept all implicit factual findings supporting the jury's conclusion with respect to the ultimate conclusion of obviousness" that are "supported by substantial evidence."111 Here, substantial evidence supports the jury's findings.

a. Substantial Evidence Supports the Jury's Finding that TEK Did Not Prove a Motivation to Combine the Prior Art to Achieve the Two-Piece Port and Receptacle System Required by Claims 27-31, 34, 36, and 40

AMI urges, and the court agrees, that the proper obviousness inquiry in this case centers on whether there was a motivation in the art to combine known, existing elements in the way accomplished by the patent.112 Courts must guard against hindsight bias by grafting an unsupported motivation to combine references.113 Because the jury specifically rejected TEK's argument that U.S. '282 disclosed both a receptacle and a port — i.e. the '282 reference did not anticipate the '581 patent114 — TEK was obligated to prove that the person of ordinary skill possessed a motivation to modify or combine prior art to create the two-piece structure claimed in the '581 patent. Substantial evidence supports the jury's finding that TEK's efforts were unsuccessful.

"Expert testimony of a lack of motivation to combine and the use of hindsight by opposing experts constitutes substantial evidence of nonobviousness."115 King testified that a person of ordinary skill in the art would not be motivated to modify prior art to create a two-piece receptacle and port system. In particular, King explained the lack of motivation to modify the prior art by tying it to cost, complexity, the function of tire repair kits and the '581 patent.116 This is substantial evidence to support the jury's factual findings of nonobviousness.117

b. Substantial Evidence Supports the Jury's Finding that Claimed Features of Claims 42 and 45-47 Were Missing in the Prior Art and There Was No Motivation to Combine the Prior Art

TEK also failed to specifically identify the claimed features of claims 42 and 45-47 in the prior art or offer clear and convincing evidence that a person of ordinary skill in the art would be motivated to modify prior art to include them. Kazerooni admitted no prior art disclosed a reservoir.118 Kazerooni's admission constitutes substantial evidence supporting the jury's findings on non-obviousness as to claim 42.

As to claims 45-47, TEK does not clearly articulate what prior art combinations would have been obvious to try. Instead, TEK argues that because the jury invalidated claim 38, then any reasonable jury should have also found claims 45-47 obvious, based on the jury's obviousness findings. But the question put to the jury was open-ended and not exclusive. TEK's papers do not provide the court with a clear argument for why it believes claims 45-47 should be invalidated as obvious. Indeed, no argument as to claims 45-47 is included in TEK's reply briefing.119

No finding of obviousness is warranted on claims 42 and 45-47.120

B. Substantial Evidence Supports a Finding of Infringement

1. TEK Waived Its Claim Construction Arguments Related to Airflow Path

TEK's moving papers make no mention whatsoever of an improper construction. "Generally, `[i]t is improper for a moving party to introduce new facts or different legal arguments in the reply brief than those presented in the moving papers' and such arguments are deemed waived."121 Because TEK challenges the court's claim construction for the first time in its reply brief, TEK waived its argument for the purposes of this motion. Nonetheless, even a substantive evaluation of TEK's construction arguments, demonstrates that judgment as a matter of law is not warranted in this case.

2. The Court's Construction of "Airflow Path" Did Not Prejudice TEK

TEK claims its noninfringement arguments ripened at trial as the parties clearly focused their attention on the definition of airflow path. The key disputed term "an airflow path from said compressor adapted to be connected to a tire" was construed by the court as "a route from a compressor to a tire into which, when sealant is received, a mixture of sealant and air is directed."

King testified that if at any discrete point in the airflow route the jury found a mixture of air and sealant, that would be enough to find infringement. Kazerooni took the opposite position: for AMI to establish infringement there must have been a mixture found at every cross-section along the route all the way into the tire. The parties thus dispute where the two substances — air and sealant — needed to constitute a mixture. The contentions between the parties on this point first surfaced at the charging conference when each side submitted competing further constructions interpreting airflow path as part of their debate over jury instruction number 18.122

AMI proposed:

TEK proposed:

Ultimately, the court concluded that the term "airflow path" required no additional construction.125

At bottom, the court finds the jury verdict was supported by substantial evidence that the air and sealant mixed. Two alternatives are supported by substantial evidence. Mixing either occurred in the container or in the hose leading to the tire. Even accepting TEK's preferred construction of airflow path, requiring a mixture downstream of the container, there was testimony from both experts that there was a mixture in the hose downstream from the container.

i. The Path Runs From the Compressor to the Container And Down Through the Container And Out the Hose to the Tire

King and Kazerooni agreed that the path runs from the compressor to the container, then down through the container and out the hose to the tire.126 Both the container and hose therefore are part of the air flow path.127 Because the container and hose are both part of the air flow path, both experts agreed that a mixture in either the container or hose satisfies this limitation.128 Mr. Mueller testified that, "by definition," a mixture is "two substances that occupy the same volume."129 Kazerooni further testified that the presence of air and droplets of sealant together constitutes a mixture130 and that air and sealant do not need to mix at a molecular level to satisfy this claim limitation.131

ii. Substantial Evidence Supports a Finding that There Was a Mixture in the Container

King testified that air and sealant mix in the container because air "[b]ubbles up through the sealant and flows back out the sealant bottle."132 Kazerooni agreed that air flows up through the sealant in the container.133 Mr. Marini also admitted that air travels through the sealant.134 Any of this expert testimony, taken alone, is sufficient to support the jury's finding that TEK infringed the "air flow path" claim limitation.135 Together they are more than sufficient.

iii. Substantial Evidence Supports a Finding that there Was a Mixture in the Hose

a. TEK's 2005 Video

In 2005, TEK created a video "to illustrate" how its tire repair kits function.136 Marini testified that the video was "close enough" to the accused products and was an "accurate enough" representation of those products for purposes of the litigation.137 As King explained, TEK's video shows air in the hose, then sealant entering the hose, then air again entering the hose, and then more sealant.138 Marini admitted that "there's air in between the sealant" on the video.139 Thus, TEK's video shows air and sealant mixing in the hose at the same time.140

b. King's Testimony and Test

King performed a test of TEK's infringing tire repair kits, which corroborated the mixture shown in the video.141 While reviewing the video for the jury, King pointed out that "you can see a couple of times where there were bubbles in the sealant."142 King's test also showed that sealant was "sputtering out of the hose," which indicated "a mixing between air and sealant."143 Kazerooni's testimony agreed that the presence of "droplets" of air and sealant together at any point in the air flow path would be a mixture.144 While discussing King's test, Kazerooni initially claimed that the hose tested by King should not contain sealant.145 Only after he was shown the hose from King's test, which contained air and dozens of droplets of sealant,146 did Kazerooni change course. He then changed his mixture definition.147

In its renewed JMOL, TEK challenges the accuracy of King's test,148 but its challenge fails for several reasons. First, the challenges go to the evidentiary weight of King's test, not its admissibility.149 Even crediting TEK's criticisms, the jury was entitled to consider King's test.150 Second, King was specifically cross-examined about each of these criticisms, and he testified that none of them had any effect on the reliability of his test.151 When an expert testifies that any differences in the design of his test versus the precise operation of an accused product would not affect the test's reliability, and the expert's test is subject to cross-examination. The Federal Circuit is clear that trial courts must not "contravene the province of the jury by reweighing [the expert's] testimony."152

Accordingly, King's test provides an additional, independent basis to support the jury's verdict of infringement and deny the motion for new trial.153

c. Mueller's Testimony

Mueller testified that AMI measured the density of the sealant both before and after it goes through the air flow path.154 Mueller testified that the discharged sealant has a lower density than the sealant in the container, which indicates that the discharged sealant "contains entrapped air."155 Thus, air and sealant mix in the air flow path. AMI has analyzed "all of the competitive products on the market," including TEK's products, and that the operation of TEK's products and SSI's products are the same with respect to the mixing of air and sealant.156 Mueller's testimony thus applied to TEK's products and was not confusing or misleading.

Although Marini testified at length that air and sealant do not "mix" in TEK's tire repair kits, he admitted that air and sealant "travel together" in both the container and the hose.157 Marini also did not marshal test data or other documentary evidence.158 In any event, Mueller countered that testing reveals that air is "entrapped" within the sealant, and thus air and sealant mix in the air flow path.159 Even if Marini's statements were not undermined, Mueller's testimony constitutes substantial evidence that there was a mixture of air and sealant in the hose.160

iv. The Reservoir

TEK argues that its products do not satisfy the reservoir element within certain asserted claims. The court construed the term "reservoir" as a "cavity where sealant collects separate from the container."161 King testified that, in TEK's tire repair kits, the sealant collects in a cavity separate from the container before going out of a hole into the hose.162 Although TEK urges that the reservoir in its tire repair kits "would not hold sufficient volume of sealant to fix" a tire,163 King explained that this position is not persuasive because neither the '581 patent nor the court's construction specifies any size requirement for the reservoir.164 Moreover, when expert testimony conflicts and the jury finds for the patentee, the court "must infer that the jury found" the patentee's "experts to be credible and persuasive," which provides substantial evidence supporting the jury's factual finding.165 Even when there is "sufficient evidence to support each position argued to the jury," "the jury's factual conclusion may not be set aside by a JMOL order."166 Consequently, the jury's credibility determination cannot be set aside on JMOL.167 Because King's opinion is in line with the clear weight of the evidence, TEK is not entitled to a new trial on this issue.168

As to TEK's arguments that the court's construction of reservoir was off-target because it "impermissibly expanded the scope of the claim" by using the term "collect" rather than "pour," TEK waived its construction argument on this issue because "at no time before or during trial" did TEK "object to the district court's claim construction, request clarification, or offer the construction" it now advances.169

In sum, substantial evidence supports the jury's infringement verdict.

C. Permanent Injunction

As explained above, in "accordance with the principles of equity, a plaintiff seeking a permanent injunction `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.'"170 The court considers each factor in turn.

1. Irreparable Injury

a. Causal Nexus

The Federal Circuit recently recognized a "preexisting" requirement that the party seeking injunctive relief identify a causal nexus between infringement and the alleged harm.171 The court has explained:

To show a causal nexus a patent owner is not "necessarily required to show that a patented feature is the sole reason" for consumers' purchases, but rather must "show that the infringing feature drives consumer demand for the accused product."173 A patent owner does not have to "show that a patented feature is the one and only reason for consumer demand. Consumer preferences are too complex—and the principles of equity are too flexible—for that to be the correct standard. Indeed, such a rigid standard could, in practice, amount to a categorical rule barring injunctive relief in most cases involving multi-function products, in contravention of eBay."174

Patent owners "must show some connection between the patented feature and demand" and there are "a variety of ways to make this required showing, for example, with evidence that a patented feature is one of several features that cause consumers to make their purchasing decisions. It might also be shown with evidence that the inclusion of a patented feature makes a product significantly more desirable. Conversely, it might be shown with evidence that the absence of a patented feature would make a product significantly less desirable."175

In this case, the jury found that the '581 patent contained an advancement over prior art in that it teaches a two-piece port and receptacle system.176 Use of this feature allows TEK's sealant containers to be removed from the tire repair kit, disposed of, and replaced, without having to replace the entire tire repair kit.177 Because TEK's kits rely on this feature of the '581 patent — and, indeed, could not operate without this feature — TEK's infringement is traceably tied to its products' success causing irreparable injury.

b. AMI and SSI Directly Compete with TEK Within the Same Market

"Direct competition in the same market is certainly one factor suggesting strongly the potential for irreparable harm without enforcement of the right to exclude."178 Facts "relating to the nature of the competition between the parties" are therefore "undoubtedly are relevant to the irreparable harm" inquiry.179 "Where two companies are in competition against one another, the patentee suffers the harm—often irreparable—of being forced to compete against products that incorporate and infringe its own patented inventions."180 It is also "well-established that the `fact that other infringers may be in the marketplace does not negate irreparable harm.'"181 "The notion that a firm sustains irreparable harm only" if it "offers a precise product-for-product replacement is too narrow and ignores that true scope of competition in the market place. Indeed, one need not even necessarily be a direct competitor to suffer irreparable harm sufficient to support an injunction."182 "Even without practicing the claimed invention, the patentee can suffer irreparable injury."183 At bottom, "traditional equitable principles do not permit" broad classifications that a patent owner has — or has not been — irreparably harmed.184 A more nuanced approach is called for.

In this case, SSI directly competes with TEK for the same customers in the OEM market. Both SSI and TEK's witnesses admit that SSI and TEK are direct competitors who "bid on the same platforms [such] as General Motors."185 For example, SSI and TEK each derive substantial business from GM.186 AMI's sales are bound at the hip to SSI's sales,187 such that when SSI sales to OEMs lag, AMI feels the pain.188 Thus, even though AMI does not practice the '581 patent, its tire repair kits directly compete with TEK's infringing repair kits.189 The only significant dispute here is whether the patentee (AMI) can be irreparably harmed by infringing sales even though it competes with the infringer (TEK) through an intermediary (SSI). The Federal Circuit's decision in Robert Bosch credited a finding of irreparable harm based, in part, on such indirect competition.190 While TEK is right that Robert Bosch involved a different type of indirect competition, it nevertheless affirmed that indirect competition generally can support a finding of irreparable harm. Here, it is clear that AMI and TEK compete for the same market — even if indirectly.

c. AMI, Through SSI, Has Lost Market Share to TEK

A patentee's loss of market share due to a competitor's infringement supports a finding of irreparable injury.191 Because TEK and SSI compete for the same sales in a constrained OEM market, SSI has lost business to TEK.192 As discussed above, fewer sales for SSI mean fewer sales for AMI.193 AMI thus has lost market share to TEK, favoring a finding of irreparable injury.

d. TEK Has Obtained Unfair Incumbency Benefits From Design Wins

Actual "and potential exclusion from a fair opportunity to compete for design wins constitutes irreparable harm."194 Because OEMs tend to give repeat business to their current tire repair kit suppliers,195 TEK's infringement allows it to take market share from AMI. Design wins TEK obtained by infringing the '581 patent "carry over from one design cycle to the next."196 The infringing tire repair kits thus let TEK align itself with OEMs generating unwarranted additional business.197 Absent equitable relief, AMI and SSI face an uphill battle to retake market share it should not have ceded. The incumbency benefits springing from design wins based on sales of infringing product favor a finding of irreparable harm.

e. TEK Did Not Offer to License the '581 Patent Beyond This Case

AMI's "unwillingness to license" favors "finding irreparable injury."198 That the patentee may have engaged in settlement discussions during the case is of no moment: to hold otherwise would contravene the spirit of Fed. R. Evid. 408 and broader policy concerns encouraging parties to resolve their disputes. As Judge Koh recently observed, settlement discussions between AMI and TEK are of "minimal probative value, as they are `tainted by the coercive environment of patent litigation.'"199 Nevertheless, the probativeness of AMI's unwillingness to license the '581 patent — and others in its portfolio — in this case is near de minimis in this case, because as TEK correctly points out, AMI controlled the rights to the '581 patent for only a brief period of time before litigation ensued. Both sides concede there are only a few competitors in this market, so additional opportunities to license the patents in this space are limited.

On balance, the court finds this factor neutral.

f. TEK Appears to Have the Financial Wherewithal to Satisfy the Current Judgment

Uncertainty whether an infringer may satisfy a judgment support a finding of irreparable harm and the ultimate issuance of an injunction.200 In contrast to its earlier claims, AMI's papers question TEK's ability to pay up.201 TEK counters with adequate assurances of its financial resources. In light of AMI's shifting positions on this issue,202 the court finds that TEK should not be prejudiced by AMI's assertions that it lacks the financial resources to satisfy the judgment. This factor does not favor a finding of irreparable harm.

No matter the neutrality of certain factors, TEK's infringement clearly and causally bred unwarranted gains in market share and incumbency benefits in a competitive market. In so doing only one reasonable conclusion may be arrived at: TEK irreparably harmed AMI.

2. Inadequate Remedies at Law

Where there "is no reason to believe" that infringement or the irreparable harm resulting from infringement will otherwise cease, absent an injunction, money damages are inadequate.203 "While competitive harms theoretically can be offset by monetary payments in certain circumstances, the likely availability of those monetary payments helps define the circumstances in which this is so."204 Here, the availability of prospective money damages is disputed. More fundamentally, TEK's infringement is significant — TEK's sales of infringing kits comprise a majority of TEK's sales.205 The losses AMI through SSI incurred "defy attempts at valuation" because TEK's infringing acts have significantly changed the market.206 As sketched above, TEK reaped unwarranted design wins and market share. Those unquantifiable benefits leave AMI without an adequate remedy at law.

3. The Balance of Hardships Favors Equitable Relief

AMI faces substantial hardship because it must compete with its own patented invention in the marketplace.207 In opposition, TEK may not point to its relative size,208 the success of its infringing product,209 or costs flowing from the design-around.210

TEK's claim that "AMI will not suffer if TEK is not enjoined because AMI does not sell '581-enabled" products is not compelling.211 Nor, too, is TEK's overreach that its infringing sales will actually grow AMI's market.212 As spelled out above, AMI and TEK compete for the same sales even though AMI markets its kits through its sister company SSI. Any sale that TEK makes is therefore a sale that AMI through SSI necessarily cannot make. While it may be true that TEK will be harmed by an injunction because a significant portion of its current sales infringe the '581 patent, any hardship TEK faces is the product of its actions and the result of a "calculated business risk to enter the relevant market with its [potentially infringing] devices."213 Put another way, one "who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against a continuing infringement destroys the business so elected."214

At bottom, the balance of hardships favors AMI.

4. Public Interest

Narrowly tailored injunctive relief paired with the public's general interest in upholding patent rights favors equitable relief in this case.215 The proposed injunction:

Following the Federal Circuit's guidance in i4i that injunctive relief be narrowly-tailored, it has become common for patentee's to include sunset provisions to tip the public interest factor of the eBay test in its favor.217 Recently, the Circuit endorsed a "the district court's selection of an eighteen month sunset" period.218 An eighteen-month period "allowed for time to remove the infringing product from the market without causing significant downstream disturbance for OEMs and consumers."219 Here, too, the right balance is struck. Because the equitable relief is forward-looking and does not bar continued use of products already in the hands of the consuming public, the public interest is well cared for. The court thus adopts the proposed injunction, with one change. A 7% royalty rate during the sunset period rather than the requested 14% is more appropriate. This percentage was identified by the jury as a reasonable royalty rate for past infringement that fell within the 6-8% rate requested by AMI at trial.220

In sum, equitable relief is warranted. A permanent injunction will be entered.

D. Marking

Both AMI and TEK believe judgment as a matter of law is warranted on the issue of marking pursuant to 35 U.S.C. § 287. AMI moves for judgment as a matter of law that TEK did not produce sufficient evidence such that a reasonable jury could credit TEK's marking defense. AMI's damages should therefore not be limited on account of TEK's marking defense. TEK counters that it was AMI that failed to meet its burden that the marking statute had been complied with. The parties' marking arguments fall into two categories: (1) IDQ's sale in 2008 and (2) AMI's offer for sale to Honda at some time in 2011.

1. TEK Bore the Burden to Show AMI Failed to Satisfy the Marking Requirement

35 U.S.C. § 287(a), provides:

The parties initially dispute who bears the burden of satisfying the marking requirement where it is disputed whether a patentee has ever made, offered for sale, sold or imported the patented product within the United States. Both sides agree that the court is without clear guidance from the Federal Circuit on this issue. TEK urges the court to impose an affirmative burden on AMI to satisfy the marking requirement.221 Although TEK finds several district court cases from beyond this district persuasive,222 it concedes the case law is split.223 At oral argument and in its papers, TEK suggested that the issue is one of first impression in this district;224 AMI's papers, however, refocus the court to a recent case on point from this district — Oracle v. Google.225

In Oracle v. Google, Google raised a defense based on the patent-marking statute. Judge Alsup found that "in order to limit patent-infringement damages to infringement that post-dated actual notice, Google must show that Oracle failed to mark patented articles offered for sale, sold, or imported into the United States before" the date it was put on notice.226 The court held that Google "failed to produce evidence establishing acts by Oracle that would trigger the damages limitation in the patent-marking statute" and therefore Google "did not show that the statute" applied.227 The burden of production thus did not shift to Oracle and the court held that summary judgment was not warranted on the issue.

This is the better view. "The marking statute serves three related purposes: 1) helping to avoid innocent infringement,228 2) encouraging patentees to give notice to the public that the article is patented,229 and 3) aiding the public to identify whether an article is patented."230 Although the "law is clear that the notice provisions of § 287 do not apply where the patent is directed to a process" or method, "a party that does not mark a patented article is not entitled to damages for infringement prior to actual notice."231 In this case, TEK has not produced sufficient evidence that AMI or its predecessor-in-interest triggered the obligations housed within the marking statute. AMI thus did not have to comply with Section 287.

It would be an odd result to require AMI to bear the burden to show that its predecessor-in-interest either did not sell any product embodying the patent or, if it did, it complied with the marking statute. Absent guidance from the other side as to which specific products are alleged to have been sold in contravention of the marking requirement, a patentee like AMI is left to guess exactly what it must prove up to establish compliance with the marking statute. Without some notice of what marketed products may practice the invention, AMI's universe of products for which it would have to establish compliance with, or inapplicability of, the marking statute would be unbounded. TEK therefore bore the initial burden to put AMI on notice that IDQ may have sold specific products practicing the '581 patent. Only then would the question of whether those products were properly marked be implicated.

The parties also dispute whether AMI or TEK bore the burden to establish whether or not AMI's purported offer to Honda constituted a sale pursuant to the marking statute. Here, too, the court finds that TEK bore an initial burden to show that AMI made an offer before the filing of the first amended complaint in this case. Through discovery TEK could have served interrogatories and RFAs or noticed depositions to draw out commercial activity by AMI that could be interpreted to be an offer for sale. With that information in hand TEK could have then brought its case that Section 287 should apply. Absent particularized notice of the specific commercial activity in question, AMI would be left to prove a negative — something that is not easily accomplished. In this case, the only temporal record evidence on point suggests that AMI's disputed offer to Honda occurred in mid-2011.232 Because the clouded record does not establish that the purported offer occurred prior to the amended complaint or that the commercial negotiations constituted an offer for sale pursuant to Section 287, TEK did not meet its initial burden to show that the marking statute was implicated.

2. IDQ's Sale in 2008

TEK presented demonstratives at trial — not admitted into evidence — relating to a tire repair kit manufactured by IDQ.233 TEK did not, however, present admissible evidence that the kit was sold in the U.S., embodied the claims of the '581 patent, or was not marked. The only testimony on this issue was provided by Mueller who stated that IDQ's product looked "like a product embodying the '581 patent."234 But Mueller also pointed out that AMI performed a market analysis and concluded that no commercial products embodied the '581 patent. Because TEK had an initial burden to show that a commercial product subject to the marking requirement was on sale in the United States and failed to do so, judgment as a matter of law is warranted on this point.

3. AMI's Offer to Honda

The parties also disagree whether AMI offered a product embodying the patent or merely offered a request for quotation ("RFQ") to Honda. The parties do not contest the underlying facts of the purported offer, the dispute lies in whether the offer constituted an offer for sale or a mere RFQ. AMI argues that it was merely communicating to Honda that it had two different repair kits for which Honda could request an RFQ: an automatic or semi-automatic repair kit. Honda elected a RFQ for the fully automatic kit and not the semi-automatic kit embodying the '581 patent. Thus, no subsequent offer for sale of the semi-automatic kit issued. The key battle before the court is whether the disclosure of the prototype and the RFQ process were themselves an offer for sale.

Mueller provided the only testimony on the purported offer at trial.235 After hearing Mueller's testimony, the jury had to make a call and it necessarily found in favor of AMI — the jury did not limit damages before the filing of the amended complaint in this case. Because the court finds that this is a fact-bound inquiry, judgment as a matter of law on this point is not warranted for either side.

E. AMI Sits at the Hypothetical Negotiating Table

At trial AMI sought damages based on "the hypothetical negotiation or the `willing licensor-willing licensee' approach" that "attempts to ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agreement just before infringement began."236 "The hypothetical negotiation tries, as best as possible, to recreate the ex ante licensing negotiation scenario and to describe the resulting agreement. In other words, if infringement had not occurred, willing parties would have executed a license agreement specifying a certain royalty payment scheme. The hypothetical negotiation also assumes that the asserted patent claims are valid and infringed."237 In its motion for JMOL TEK claims AMI improperly focused the jury upon the wrong parties to the hypothetical negotiation at the dawn of the infringement in this case: only TEK and IDQ may properly be considered within the negotiation. AMI counters that the interests of TEK, IDQ, AMI and SSI may all inform the negotiation.

As a preliminary matter, the Federal Circuit has cautioned that parties must "accept that any reasonable royalty analysis `necessarily involves an element of approximation and uncertainty.'"238 At bottom, jurors must place a value on the patented technology to the parties in the marketplace when infringement began through evaluation of the fifteen Georgia-Pacific factors with an understanding that the "parties had full knowledge of the facts and circumstances surrounding the infringement at that time."239 "Indeed, the basic question posed in a hypothetical negotiation is: if, on the eve of infringement, a willing licensor and licensee had entered into an agreement instead of allowing infringement of the patent to take place, what would that agreement be? This question cannot be meaningfully answered unless we also presume knowledge of the patent and of the infringement at the time the accused inducement conduct began."240 Courts are advised "to pin down how the prospective infringement might have been avoided via an out-of-court business solution."241

To this end, the Circuit has instructed — in line with Supreme Court case law — "that factual developments occurring after the date of the hypothetical negotiation can inform the damages" calculation.242 The "hypothetical negotiation analysis `permits and often requires a court to look to events and facts that occurred thereafter and that could not have been known to or predicted by the hypothesized negotiators.'"243 "Consideration of evidence of usage after infringement started can, under appropriate circumstances, be helpful to the jury and the court in assessing whether a royalty is reasonable. Usage (or similar) data may provide information that the parties would frequently have estimated during the negotiation."244

In this case the parties dispute whether it was permissible to consider AMI as a party to the hypothetical negotiation alongside TEK and IDQ. It is telling that, during the trial, TEK's respected damages expert Dr. Mody "gave testimony placing AMI at the negotiating table in the hypothetical negotiation."245 Nonetheless, TEK urges that "the issue of who belonged at the hypothetical negotiating table presents a purely legal issue for the Court's determination."246 At oral argument, TEK argued that the eye of the jury was not placed on the right factors. According to TEK, AMI's counsel improperly substituted AMI for IDQ masking the proper negotiation. Because the wrong party to the negotiation was considered by the jury, the jury's damages verdict — which recreated the hypothetical negotiation — was improperly arrived at and not supported by substantial evidence.

But at trial, and as mentioned above, TEK's expert had a different take.247 In light of the permissive guidance from the Federal Circuit that "that factual developments occurring after the date of the hypothetical negotiation can inform the damages calculation" and the reasonableness of royalty calculations combined with TEK's tacit acceptance that AMI was a proper party to the negotiation, the court finds that AMI was properly seated at the negotiating table.248

The court also credits Mr. Hansen's consideration of the interests of AMI's closely-related sister company, SSI, at the hypothetical negotiation.249 AMI manufactures all of the tire repair kits that SSI sells to automotive OEMs, and it sells those tire repair kits to SSI via an inter-company sale.250 Thus, when SSI makes more sales to OEMs, AMI makes more sales to SSI.251 Even Mody admitted that TEK "is a direct competitor of SSI."252

Mody also conceded that AMI would consider its "broad financial interest" and profitability at the hypothetical negotiation.253 Hansen explained that, because of the close-knit financial relationship between AMI and SSI, it would "absolutely not" make any economic sense for AMI to not consider SSI's economic interest at the hypothetical negotiation.254

The case law confirms that AMI may consider the effect of the license on SSI at the hypothetical negotiation.255 It is of no moment that AMI and SSI are sister companies and do not stand in a parent-subsidiary posture. In Poly-Am., L.P. v. GSE Lining Tech., Inc., the Federal Circuit held that the patentee could not recover a sister company's lost profits because the patentee had "not sold any item on which it claims damages to itself from [the infringer's] infringement."256 The Federal Circuit noted that "the patentee needs to have been selling some item, the profits of which have been lost due to infringing sales, in order to claim damages consisting of lost profits."257 Poly-America does not hold, as TEK argues, that sister companies cannot take each other's economic interests into account at a hypothetical negotiation.258

In sum, the interests of both AMI and SSI were properly considered.

F. Supplemental Damages and Prejudgment Interest

AMI requests prejudgment interest in the total of $161,454 based on the application of the prime rate compounded annually.259 TEK does not dispute AMI's right to prejudgment interest or AMI's arithmetic. The court, too, is satisfied with AMI's figures. It finds AMI's request for prejudgment interest warranted.

The parties dispute over supplemental damages boils down to who should carry the fault for the jury's inability to assess damages over the period from 2012 to 2013. It is undisputed that AMI propounded discovery requests on damages during those periods. TEK objected to that discovery. AMI did not move to compel, move for sanctions, seek recourse under Rule 16 or present hypothetical royalties for the 2012-13 period to the jury. Both sides lob accusations that the other is foisting each other's shortcomings on one another inappropriately. The court thus must determine who should bear the burden of this trial failure.

As an initial matter, the court finds this case distinguishable from Apple, Inc. v. Samsung Elecs. Co., Ltd.260 In Apple v. Samsung the jury confronted a verdict form spanning 20 pages and dozens of accused products.261 Here, the accused products were fewer in number and the verdict form — comparatively — simple.262 At trial Hansen testified that TEK's infringing sales for 2007 through 2011 totaled $17,955,662.263 During closing argument AMI identified TEK's sales for 2007 through 2011 as the proper royalty base.264 The jury apparently agreed with AMI and awarded damages based on a royalty base of $17,956,000.265 The court is left with one reasonable conclusion: AMI was awarded damages for the period 2007 through 2011. While AMI did not do everything it could have to compel TEK to comply with its discovery obligations, it asked for damages information relating to 2012-2013 and was essentially stonewalled. TEK cites no case holding that a failure to move to compel or some other relief warrants capping AMI's access to supplemental damages. Because the jury calculated a royalty rate and applied it to a damages base running from 2007 to 2011 it is clear that the jury did not compensate AMI for damages during 2012 to 2013. Far from invading "the jury's province to determine actual damages," in this instance the court is leveraging the jury's verdict to arrive at a damages award that fully compensates the patentee pursuant to Section 284. AMI's request for supplemental damages is warranted.266

E. This Case is Not Exceptional

AMI urges the court to find this case exceptional under the meaning of 35 U.S.C. § 285. The court does not accept the invitation.

First, AMI argues that events surrounding the English mistranslation of Italian patent application TO2004A0117 warrant an exceptional case finding. But here AMI has not shown by clear and convincing evidence that TEK or its counsel engaged in any "material inappropriate conduct related to the matter in litigation," such as "misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed. R. Civ. P. 11, or like infractions."267 Indeed, the absence of evidence is telling in light of a court-sanctioned stipulation that AMI could subpoena discovery and depose Ultra Translate.268 AMI does not marshal evidence that details TEK's counsel's conscious or knowing request for a mistranslation of the Italian patent application. For its part, TEK's counsel insists the original mistranslation occurred due to oversight, poor communication, and lack of attention due to a busy workload. Even though TEK was undoubtedly at fault, there is no record evidence of knowing misconduct.269 The court gave AMI the leeway to investigate and the onus was on AMI to ferret out the evidence. But it didn't. Or at least it did not find enough to warrant a Rule 11 motion. Now is not the time to point backwards and cry foul.

Second, AMI focuses on TEK's argument that its devices did not infringe the '581 patent because the devices contain no "air flow path" as required in each independent claim in the '581 patent. The court construed "air flow path" to mean a "route from a compressor to a tire into which, when tire sealant is received, a mixture of air and tire sealant is directed."270 But because the court elected not to construe the word "mixture," the parties advocated differing interpretations of that term to the jury. TEK argued that a "mixture" of fluid and gas requires the creation of a foam or mist, AMI argued that no chemical reaction is necessary to form a "mixture" within the meaning of the '581 patent, as long as the fluid and gas shared the same space. AMI suggests TEK's noninfringement defense at trial rested on an interpretation of the word "mixture" was unreasonable and made in bad faith.

To show that TEK's "mixture" argument was baseless, AMI must prove by clear and convincing evidence that "no reasonable litigant could reasonably expect success on the merits."271 AMI has not done so here. TEK's mixture argument was rooted in the testimony of Kazerooni and Marini. Kazerooni testified at trial that he holds a doctorate in mechanical engineering and has taught at University of California Berkeley since 1991.272 Kazerooni testified that a "mixture" of air and sealant must be either a foam made of air and fluid or a mist made of air and fluid, and that, if mixing had occurred, one would see both fluid and gas at the same time at any given cross-section of the flow pathway.273 Kazerooni testified that, on the basis of his conversations with Marini and his own experience as a scientist, there was at no point a foam or mist mixture of sealant and air in the TEK devices at issue.274 The court does not put much stock in Kazerooni's failure to test the disputed products — such tests might be avoided for any number of reasons beyond TEK's purported acknowledgement that its mixture defense was baseless. Kazerooni also explained that the central purpose of the tire valve in TEK's products is to ensure non-mixing of sealant and air prior to the sealant's entry into the tire itself, so that the fluid does not solidify and clog the tire valve.275 Kazerooni never testified that a mist or foam was present in the air flow pathway.

Marini testified that the tire valve was specifically designed to protect against mixing of sealant and air because that mixing could lead to coagulation and clogging of the valve.276 He also explained that TEK decided to use a silicon hose in its product because that more expensive material helps prevent clogging of the tire value due to residual sealant.277 Fionally, Marini testified that he did not believe that the simple touching of air and sealant constituted a chemical "mixture."278

Although TEK's marshaled mixing defense was not a winner it was not baseless or presented in bad faith. TEK presented two witnesses — whose testimony the jury could have credited. That those witnesses did not persuade the jury does not mean those defenses were not reasonably relied upon.

Because the court finds neither of AMI's exceptional case arguments compelling, attorney fees are not warranted in this case.

IT IS SO ORDERED.