KEITH P. ELLISON, District Judge.
Pending before the Court are the following motions:
This is a patent infringement case originally brought by WesternGeco L.L.C. ("Plaintiff" or "WesternGeco") against ION Geophysical Corporation ("ION"). At issue in this case is marine seismic streamer technology that is deployed behind ships. These streamers, essentially long cables, use acoustic signals and sensors to create three-dimensional maps of the subsurface of the ocean floor in order to facilitate natural resource exploration and management. For many seismic studies, greater control over the depth and lateral position of streamers is important in order to achieve optimal imagery from the signals and to maneuver around impediments such as rocks and oil rigs. WesternGeco's patents all pertain to streamer positioning devices, or devices that are used to control the position of a streamer as it is towed. At trial, WesternGeco argued that ION had infringed on four of its U.S. patents — U.S. Patent No. 7,293,520 (the "'520 Patent"); 7,162,967 (the "'967 Patent"), 7,080,607 (the "'607 Patent") ("Bittleston Patents" collectively);
After a three and a half week trial, the jury returned a verdict in favor of WesternGeco. (Doc. No. 536.) The jury found that ION infringed the '520 Patent, the '967 Patent, the '607 Patent, and the '038 Patent pursuant to Section 271(f)(1) & (2). The jury did not find anticipation or non-enablement of the '520 Patent or the '967 Patent. The jury did not find anticipation, obviousness or non-enablement of the '607 Patent or the '038 Patent. The jury did find that ION willfully infringed. The jury awarded $93.4 million in lost profits and a reasonable royalty of $12.5 million. Both parties have now filed numerous post-trial motions. The Court will address each of the motions in turn.
The Fifth Circuit reviews a district court's ruling on a motion for judgment as a matter of law de novo. See Cambridge Toxicology Grp., Inc. v. Exnicios, 495 F.3d 169, 179 (5th Cir.2007). Judgment as a matter of law is appropriate "[i]f a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." See Fed.R.Civ.P. 50(a)(1); Gomez v. St. Jude Med. Daig Div. Inc., 442 F.3d 919, 927 (5th Cir.2006). "The decision to grant a directed verdict ... is not a matter of discretion, but a conclusion of law based upon a finding that there is insufficient evidence to create a fact question for the jury." Omnitech Int'l v. Clorox Co., 11 F.3d 1316, 1323 (5th Cir.1994) (citations omitted) (internal quotation marks omitted). A legally sufficient evidentiary basis requires more than a mere scintilla of evidence. Hollywood Fantasy Corp. v. Gabor, 151 F.3d 203, 211 (5th Cir.1998).
The trial court is required to consider the entire record when considering a renewed judgment as a matter of law motion. Reeves v. Sanderson Plumbing Prod., Inc., 530 U.S. 133, 149-50, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). Therefore, a court "should consider all of the evidence — not just that evidence which supports the non-mover's case — but in the light and with all reasonable inferences most favorable to the party opposed to the motion." Goodner v. Hyundai Motor Co., Ltd., 650 F.3d 1034, 1040 (5th Cir.2011).
The district court's ruling on a Rule 59 motion for new trial is reviewed for an abuse of discretion. Beckham v. Louisiana Dock Co., L.L.C., 124 Fed.Appx. 268, 270 (5th Cir.2005). A district court can grant a new trial under F.R.C.P. 59(a) "for any reason for which a new trial has heretofore been granted in an action at law in federal court." A new trial should not be granted "unless, at a minimum, the verdict is against the great weight of the evidence." Dawson v. Wal-Mart Stores, Inc., 978 F.2d 205, 208 (5th Cir.1992). The Court must again view the evidence "in a light most favorable to the jury's verdict, and the verdict must be affirmed unless the evidence points so strongly and overwhelmingly in favor of one party that the court believes that reasonable [jurors] could not arrive at a contrary conclusion." Id. "Where the jury could have reached a number of different conclusions, all of which would have sufficient support based on the evidence, the jury's findings will be upheld." Id. If an issue is raised for the first time on a motion for a new trial, the issue is waived. Auster Oil & Gas, Inc. v. Stream, 835 F.2d 597, 601 (5th Cir.1988).
ION has filed a Partial Motion to Dismiss for Lack of Subject Matter Jurisdiction. (Doc. No. 565.) ION moves to dismiss for lack of subject matter jurisdiction with respect to WesternGeco's claims that ION infringed the Bittleston Patents. ION claims that WesternGeco does not own the Bittleston Patents and therefore lacks standing to sue for infringement.
"Standing is a constitutional requirement pursuant to Article III and it is a threshold jurisdictional issue" that may be decided on a Rule 12(b)(1) motion. Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1363 (Fed.Cir.2010). WesternGeco bears the burden of proving standing by a preponderance of the evidence. A case can be dismissed for lack of subject matter jurisdiction at any time. A court may consider evidence outside the pleadings when resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1). See Ramming v. U.S., 281 F.3d 158, 161 (5th Cir.2001). Only a patent owner may have a remedy by civil action for infringement. Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304, 1308 (Fed.Cir.2003). The Patent Act defines a patentee as the person to whom the patent as issued and any successors in title to the patentee. 35 U.S.C. § 100(d). Patent rights can only be assigned in writing. 35 U.S.C. § 261.
ION argues that WesternGeco has not proved it has ownership of the Bittleston patents, and therefore, its standing to sue. WesternGeco has provided ION two types of documents, a Merger Agreement between Schlumberger Technology Corporation ("STC") and WesternGeco and assignments from the inventors to STC, but not from the inventors to WesternGeco. ION argues that WesternGeco must possess a written chain of title from the inventors. ION further argues that the USPTO assignment records do not contain any executed assignment document from the inventors to WesternGeco. Based on these facts, ION argues that WesternGeco has not proved it is the owner of the patents.
ION has never raised this issue in a motion before and had stipulated earlier in the suit that WesternGeco did own the patents. While "[c]onsent of parties cannot give the courts of the U.S. jurisdiction... the parties may admit the existence of facts which show jurisdiction, and the courts may act judicially upon such admission." Ry. Co. v. Ramsey, 89 U.S. (22 Wall.) 322, 327, 22 L.Ed. 823 (1875). First, ION had stated in its Answer and Counterclaims that "[o]n information and belief, the Bittleston Patents were assigned to WesternGeco." (Doc. No. 6 ¶ 106.) In the same Answer, ION also stated it did not know for certain whether WesternGeco owned the patents, but proceeded for three years as if WesternGeco did own them. Second, ION agreed the jury should be instructed that WesternGeco owns the patents and is entitled to collect damages. ION now attempts to assert a position that is wholly different from its position regarding patent ownership throughout this litigation.
Additionally, the Patent Office issued each of the Bittleston patents to WesternGeco as the "Assignee." The entity to whom the Patent Office issues a patent is the presumptive owner. ION has the burden to rebut that presumption, which it has not done. Conversely, WesternGeco has presented sufficient evidence to prove its ownership of the patents. WesternGeco presented evidence at the trial that the inventors assigned their patent to STC. Then in the November 30,
"Intellectual Property" was defined in the agreement to include any patent rights. ION argues that an "agreement" to assign is not the same as assigning. However, the language of the agreement states clearly that STC "agrees to and hereby does grant, transfer, and assign." The Court is satisfied that WesternGeco was assigned the rights.
ION further argues that the assignment to STC occurred in 2001. Since STC and WesternGeco merged in 2000, STC did not have the patent rights to assign and therefore the patents still belonged to STC. The Court finds this argument unconvincing. The 2001 assignments state that the inventors "acknowledge [they] have sold, assigned, transferred and conveyed" the U.S. patent rights to STC. (Doc. No. 606, Ex. 11 at WG 955146; Ex. 12 at WG 955144.) This is a confirmation of the inventors' assignments to STC that dates back to the 1998 Cost Sharing Agreement, which states:
STC was designated the "Participant" for the "Respective Area". Therefore, STC owned the patents when it assigned the patents to WesternGeco in 2000.
ION has proceeded throughout the years as if WesternGeco owned the patents and the record reflects that WesternGeco does own the patents by written assignment. Therefore, the Court must deny ION's Motion to Dismiss.
ION has filed a Rule 59 Motion for New Trial on Invalidity Under 35 U.S.C. §§ 102 and 103. (Doc. No. 550.) ION moves for a new trial on the basis that all the asserted patent claims but two are invalid as anticipated or obvious under 35 U.S.C. §§ 102 and 103. Specifically, ION contends that Claim 18 of the '520 Patent and Claim 15 of the '607 Patent were anticipated by U.S. Patent No. 5,790,472 ("Workman Patent"). Claim 14 of the '038 Patent was anticipated by International Application Publication WO 2000/20895 (the "'895 Publication"). Also, ION asserts that Claim 15 of the '967 Patent and Claim 15 of the '607 Patent were obvious based on the combination of the Workman Patent; and the International Application Publication WO 98/28636 (the "'636 Patent") and Claim 14 of the '038 Patent were made obvious by the '895 Patent. After considering the arguments, the Court finds that the jury's verdict was reasonable and there was no indication of unfairness to warrant a new trial. This motion must be denied.
A patent is invalid as anticipated under 35 U.S.C. § 102 when "every element and limitation of the claim was previously described in a single prior art reference, either expressly or inherently, so as to place a person of ordinary skill in possession of the invention." Sanofi-Synthelabo v. Apotex, Inc., 550 F.3d 1075, 1082 (Fed. Cir.2008). The standard for proving anticipation is clear and convincing evidence. Id. The prior art that ION asserts anticipates WesternGeco's patents were all considered by the United States Patent and Trademark Office ("PTO") during prosecution, yet the PTO still granted WesternGeco the patents at issue. While not dispositive, this is further evidence the jury could
ION claims that the Workman Patent anticipated Claim 18 of the '520 Patent. However, the jury could reasonably find from evidence and testimony presented at trial that the Workman Patent does not teach or enable lateral steering or the "streamer positioning devices" claimed in the Bittleston Patents. The streamer positioning devices mentioned in the Workman Patent refers to depth control devices, not lateral positioning devices as used in the Bittleston patents. (Doc. No. 574 p. 7.)
Likewise, ION claims that the Workman Patent anticipates this claim because it discloses the "streamer separate mode." The Court construed "streamer separation mode" to mean "a control mode that attempts to set and maintain the spacing between adjacent streamers" (Doc. No. 120 p. 45.) The Workman Patent states only that a "threshold parameter" of "at least 100 meters" be maintained. (Doc. No. 583 p. 5.) This threshold parameter does not specify that a precise spacing be set and maintained between adjacent streamers. WesternGeco aptly points out that, without maintaining any space, the streamers could range from 100 meters apart to 100 miles. (Doc. No. 602 p. 3.) With this, and other evidence and testimony, the jury could reasonably find that Claim 18 of the '520 Patent was not anticipated.
ION argues that the Workman Patent anticipates Claim 15 of the '607 Patent by disclosing limitation (a), (b), and (c) of the Claim. Claim 15 states:
However, at trial, ION's expert witness, Robert Brune admitted that Claim 15 of the '607 patent requires lateral steering and Workman does not enable lateral steering. To anticipate, a patent must teach and enable all claim limitations. Since lateral steering is a limitation of Claim 15, it is reasonable that the jury would conclude that Claim 15 of the '607 Patent was not anticipated.
ION argues that Claim 14 of the '038 Patent is anticipated based on the '895 Publication, which discloses all of the limitations of Claim 14. However, Mr. Brune admitted at trial that the '895 Publication does not disclose the 4D surveys claimed in the '038 Patent. The jury could weigh this evidence and testimony and conclude that Claim 14 was not anticipated.
A patent is invalid for obviousness "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." 35 U.S.C. § 103(a). "Obviousness is a legal determination that may be submitted to a jury with proper instruction." In re Hayes Microcomputer Products, Inc. Patent Litigation,
ION argues that Claim 15 of the '967 Patent is obvious based on the combination of the Workman Patent and the '636 Publication, which are prior art. Claim 15 reads:
An array of seismic streamers towed by a towing vessel comprising:
However, ION has failed to show that any person of ordinary skill in the art would have selected and combined these prior art elements in the normal course of research and development to yield the claimed invention. Unigene Labs., Inc. v. Apotex, Inc., 655 F.3d 1352, 1360 (Fed.Cir. 2011). ION has not met its burden to overturn the jury's finding of nonobviousness.
ION argues that Claim 15 of the '607 Patent is obvious based on the combination of the Workman Patent and the '636 Publication, which are prior art. At trial, Mr. Brune explained that the Workman Patent, '636 Publication and '607 Patent are in the same field. Therefore, ION argues, a person of ordinary skill in the art would be motivated to combine the Workman Patent and the '636 Publication. However, ION fails to explain how the combination could disclose and enable all of these limitations and harmonize the differences in the two patents. In re Kumar, 418 F.3d 1361, 1369 (Fed.Cir.2005) ("To render a later invention unpatentable for obviousness, the prior art must enable a person of ordinary skill in the field to make and use the later invention."). ION has not met its burden to overturn the jury's finding of nonobviousness.
ION argues that Claim 14 is obvious based on the '895 Publication. Mr. Brune testified that, even assuming that the tracking systems are not expressly or inherently disclosed in the '895 Publication, they would have been obvious to a person having ordinary skill in the art. Mr. Brune further testified that, at least since the late 1980s, compass navigation, acoustic navigation, and satellite navigation have existed. However, Mr. Brune also remarked during cross examination that using laterally steerable streamers in order to match a later survey to a reference position from a prior survey or reference file "is definitely a notable improvement." (Trial Tr. At 3988:20-25.) The jury could weigh this admission and reasonably conclude that Claim 14 was not obvious.
ION has not demonstrated that the jury's verdict on anticipation or obviousness was against the great weight of the evidence. See Dresser-Rand Co. v. Virtual Automation, Inc., 361 F.3d 831, 838-39 (5th Cir.2004). Therefore, ION's Rule 59 Motion for New Trial on Invalidity Under 35 U.S.C. §§ 102 and 103 must be denied.
ION has filed a Request for Findings and Conclusions on Enablement and, Alternatively,
35 U.S.C.A. § 112.
To be enabled, a patent specification must provide sufficient information to enable a person skilled in the relevant art to make and use the claimed invention without undue experimentation. The Federal Circuit has set forth the following factors that courts may weigh in deciding whether a disclosure would require undue experimentation:
Martek Biosciences Corp. v. Nutrinova, Inc., 579 F.3d 1363, 1378 (Fed.Cir.2009). ION must "prove invalidity based on nonenablement by clear and convincing evidence." MagSil Corp. v. Hitachi Global Storage Technologies, Inc., 687 F.3d 1377, 1380 (Fed.Cir.2012). After considering the motion, all responses, oral argument, and the applicable law, the Court must deny this motion.
ION claims that the Court must state its findings of facts and conclusions of law because the enablement question was sent to the jury as an "advisory determination." Rule 52(a)(1). However, both parties agreed to submit the question of enablement to the jury and neither party indicated this was merely an advisory verdict. The Federal Circuit has held that "it is not error to submit legal questions to the jury as part of a Rule 49(a) special verdict form, since the answer to the legal question necessarily resolves any disputed underlying factual issues, the court must accept implicit factual findings upon which the legal conclusion is based when they are supported by substantial evidence." Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1359 (Fed.Cir.2012). The Federal Circuit has held that enablement is a question of law, but "is amenable to resolution by the jury where the issues are factual in nature." BJ Services Co. v. Halliburton Energy Services, Inc., 338 F.3d 1368, 1372 (Fed.Cir.2003). Therefore, the Court need not enter findings and conclusions of law since the question was properly submitted to the jury.
In the alternative, ION moves for a new trial on enablement on the Bittleston Patents (composed of Claims 18, 19, 23 of '520 Patent; Claim 15 of '967 Patent; and Claim 15 of the '607 Patent), and Claim 14 of the Zajac Patent ('038 Patent).
The Bittleston Patent claims in suit require a control system and ION argues that there is not sufficient information to enable a deterministic control system. ION relies on the trial testimony of two
However, ION's expert, Dr. Edgar, admitted in cross-examination that there is no mention of deterministic calculations, and since this is not a claimed invention, it need not be enabled. Dr. Edgar also testified that a person of ordinary skill in the art could use a "simple feedback control loop" with the patent's disclosure to make and use the claimed control modes. (Trial Tr. 3148:11-3150:19.) Furthermore, Mr. Martin stated that he did not know whether the withheld information had to do with the control mode. This testimony, from witnesses not under WesternGeco's control, are sufficient to support a jury verdict that the Bittleston Patents were enabled, and ION has not met the standard of clear and convincing evidence to warrant a new trial.
ION claims that Claim 14 of the Zajac Patent is not enabled because it fails to teach one skilled in the art how to make or use the invention in order to determine what positioning commands to issue to active streamer positioning devices. ION cites various parts of Mr. Zajac's testimony in which Mr. Zajac admits that the device is very complex and the patent does not enable one to implement the claimed invention. However, WesternGeco presented testimony that the Zajac Patent is an improvement of the Bittleston Patents and it explicitly builds on and cites to those patents. Mr. Brune also testified that the Zajac Patent, read in conjunction with the Bittleston Patents, enabled the claimed invention. Furthermore, other portions of Mr. Zajac's testimony reveal that Mr. Zajac did not include some specifications because those practices were already known to and available to one of ordinary skill in the art. Koito Mfg. Co. v. Turn-Key-Tech., LLC, 381 F.3d 1142, 1156 (Fed.Cir.2004) (a patentee does not "need to include in the specification that which is already known to and available to one of ordinary skill in the art."). Furthermore, ION's expert, Dr. Edgar, also conceded on cross-examination that the active streamer positioning device was enabled. (Trial Tr. at 3167:19-23.) The jury had the opportunity to weigh this evidence and the verdict is not against the great weight of evidence. Therefore, ION has not shown that a new trial is warranted on enablement and its motion should be denied.
ION's has filed a Renewed Motion for Judgment as a Matter of Law and Alternative Motion for New Trial Regarding Non-Infringement (Doc. No. 556) on all claims because it asserts that no claims have been infringed. WesternGeco asserted that the following claims were literally infringed: Claims 18, 19 and 23 of the '520 Patent; Claim 15 of the '967 Patent; Claim 15 of the '607 Patent; and Claim 14 of the '038 Patent. To literally infringe, the accused system must embody every claim limitation as construed by the court. Gen. Elec. Co. v. Nintendo Co., 179 F.3d 1350, 1357-58 (Fed.Cir.1999). WesternGeco also asserted that the following claims were infringed under the doctrine of equivalents ("DOE") if they were not literally infringed: Claims 18, 19 and 23 of the '520 Patent; and Claim 15 of the '967 Patent. DOE requires that the accused system contain each limitation of the claim
ION argues that Claims 19 and 23 of the '520 Patent do not infringe literally or under the Doctrine of Equivalents. ION argues that Claim 19 does not infringe literally because ION's system does not include a "feather angle mode." The Court construed "feather angle mode" to mean "a control mode that attempts to set and maintain each streamer in a straight line offset from the towing direction by a certain feather angle." (Doc. No. 530, "Jury Instructions", No. 6.) ION argues that only the ghost streamer, and not "each streamer," is set to the feather angle. However, sufficient evidence supports the jury's verdict that Claim 19 of the '520 Patent was literally infringed. The remaining streamers align themselves with the reference streamer at that same feather angle. A number of Fugro's and ION's employees and customers testified at trial that ION's system operates in feather mode. (Trial Tr. 3468:25-3469:8, 3474:19-25 (Daniel Seale, ION's senior systems engineer); id. at 2055:12-15, 2062:7-9, 3340:17-3342:1, 3353:2-11, 3362:14-23, 3433:15-24, 3435:3-3436:6 (Crawford Macnab, ION's Orca software project manager); id. at 1008:5-7, 1009:4-8, 1013:22-1014:19, 1024:21-1025:10, 1028:18-22, 1030:1-3 (Leif Morten By, Fugro's former Navigation Manager); id. at 3025:8-13 (David Moffat, ION's Senior Vice President)). The jury could reasonably determine that there was literal infringement.
ION argues that Claim 23 of the '520 Patent does not infringe literally because it does not have the "feather angle mode" or a "turn control mode." ION argues that, because there is no feather angle mode and the "turn control mode" depends on it, there is no literal infringement. However, the preceding paragraph demonstrates that there is not enough evidence to overturn the jury's verdict on "feather angle mode." As for the "turn control mode," the Court construed it to mean a "mode wherein streamer positioning device(s) generate a force in the opposite direction of a turn and then directing each streamer positioning device to the position defined in the feather angle mode." (Jury Instruction, No. 6.) ION argues that both DigiBIRD and DigiFIN products would have to "generate a force in the opposite direction", but the DigiBIRD is undisputedly a depth-control device only that cannot generate forces in the opposite direction of a turn. Evidence and testimony at trial showed that DigiFIN products did generate a force in the opposite direction of the turn. Literal infringement does not depend on DigiBIRD products also generating a force in the opposite direction. The Court's construction did not require all of the streamer positioning devices to participate in the turn control mode, only one or more devices. Therefore, the jury could have found that DigiFIN's turn control mode was sufficient to literally infringe Claim 23 of the '520 Patent. ION has not shown that the weight of the evidence was against the jury's verdict on Claims 19 and 23 of the '520 Patent.
Claim 15 of the '607 Patent reads:
ION argues that Claim 15 of the '607 Patent cannot be infringed because of how the word "predict" is defined. ION argues that the jury instructions obligate the jury to apply the ordinary meaning of the term "predict" because the Court did not construe the term. ION claims that the plain and ordinary meaning of the term "predict" requires a future element, and ION's devices do not tell the future positions of the streamer position devices. ION made this argument before this Court previously and this Court held that "predict" is not limited to future "wall-clock" times. The Court held that the future sense of "predict" is not the plain and ordinary meaning of "predict" to a person of ordinary skill in the art. Predict could mean using a past position to "predict" position at a later time, such as the present position. At an earlier time, this Court rejected ION's construction of "predict" and finds no reason to overturn its decision now. Therefore, ION's Motion for JMOL or New Trial on claim 15 of '607 Patent must be denied.
Claim 15 of the '967 Patent reads:
The Court construed "location information" to mean "information regarding location." (Jury Instruction, No. 6.) ION argues that its system does not transmit location information from the Lateral Controller to DigiFINs as required by Claim 15. However, WesternGeco presented testimony at trial by expert, Dr. Michael Triantafyllou, stating that the DigiFIN did receive the fin angle, which is "an equivalent concept, whether you send location or a fin calculated on location." (Trial Tr. 1463:9-22.) Other evidence was also presented at trial to show that this fin angle was location information. Crawford Macnab, ION's software project manager, confirmed that ORCA sends location information to the lateral controller and that the lateral controller manipulates and sends this location information to the DigiFIN. (Trial Tr. 2053:24-2054:4; see also id. at 3431:24-3432:4, 3433:7-10.) Sufficient evidence supports the jury's finding on Claim 15 of the '967 Patent.
Relevant to ION's argument, Claim 14 of the '038 Patent reads:
ION argues that it could not infringe literally since the Lateral Controller does not send "target depth" to the DigiFIN and it does not perform a comparison function as required by Claim 14. However, neither Claim 14 nor the Court's construction
ION also argues that its system does not include the "active streamer positioning device" ("ASPD") recited in Claim 24. An ASPD was construed by the Court as "a device capable of controlling the vertical and horizontal position of the seismic streamer". (Jury Instructions, No. 6.) Before trial, the Court decided that ION's DigiFIN device could control the vertical and horizontal position of the streamer, thereby preventing ION from arguing that DigiFIN was not an ASPD. (Doc. No. 402 p. 9.) ION argues that the Court decided wrongly because DigiFIN cannot control depth. ION does not present any new evidence and the Court need not overrule its previous decision that DigiFIN is an ASPD. Accordingly, ION's Motion regarding for Claim 14 of the '038 Patent must be denied.
ION has filed a Motion for New Trial on Infringement Under 35 U.S.C. § 271(f)(2) (Doc. No. 557), claiming the evidence cannot support a finding that ION possessed the requisite knowledge to infringe 35 U.S.C. § 271(f)(2). Section 271(f) was enacted in response to the Supreme Court's decision in Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 92 S.Ct. 1700, 32 L.Ed.2d 273 (1972). The loophole presented in Deepsouth was that shipping an unassembled patented product abroad for later assembly avoids patent infringement. This Court interpreted § 271(f)(2) to have the same intent requirement as contributory infringement under § 276(c). (Doc. No. 372 p. 7.) Specifically, this Court held that the intent requirement of § 271(f)(2) "requires a plaintiff to prove that the defendant (1) intended the combination of components; (2) knew that the combination he intended was patented; and (3) knew that the combination he intended would be infringing if it occurred in the United States." (Id.) Neither party disputes this statutory construction.
ION denies intent to infringe on all claims because it contends it did not know it was infringing. First, ION argues that it could not have intended to infringe Claim 19 of the '520 Patent because it reasonably understood that its system did not comprise the required feather angle mode. Second, ION argues it could not have intended to infringe Claim 23 of the '520 Patent because it required ION's system to have a feather angle mode and the turn control mode and ION claims it did not think its system had either of these modes. Third, ION argues it could not have intended to infringe Claim 15 of the '967 Patent because it did not think its system had location information. Fourth, ION argues it could not have intended to infringe Claim 15 of the '607 Patent because it did not think its system had a prediction unit. Lastly, ION argues it could not have intended to infringe Claim 14 of the '038 Patent because it asserts its system did not have a master controller or an ASPD.
ION has filed a Motion for JMOL and New Trial Due to Incorrect Claim Construction. (Doc. No. 561.) ION moves for JMOL or new trial for non-infringement of Claims 18, 19, and 23 of the '520 Patent, Claim 15 of the '967 Patent, and Claim 15 of the '607 Patent, claiming there was not sufficient evidence to sustain the verdict of infringement under 35 U.S.C. § 271(f) when the correct construction of "streamer positioning device" is applied. ION similarly argues there is not sufficient evidence to sustain the verdict if the correct construction of "active streamer positioning device" is used with respect to Claim 14 of the '038 Patent. The Court already decided these claim constructions in 2010. (Doc. No. 120.)
It appears that ION's motion is procedurally improper since it failed to move under Rule 50(a) on the basis of an "incorrect claim construction." ION contends that it argued JMOL for non-infringement on each of the patents, but JMOL for non-infringement is not a motion for incorrect claim construction, which ION now argues. Second, ION failed to object to the jury instructions, which construed the terms at issue. Third, ION's motion could be understood as a motion for reconsideration of this Court's claim construction order (Doc. No. 120), in which case the motion is untimely since it comes two years after the order. It appears to the Court that ION is merely rehashing its prior claim construction arguments and has not presented any change in law or fact that would cause the Court to overturn its previous ruling. Therefore, ION's motion regarding incorrect claim construction must be denied.
Both parties have filed motions on the issue of willful infringement. ION has filed a Motion for Entry of Findings and Conclusions of No Willful Infringement, Renewed Motion for Judgment as a Matter of Law of No Willful Infringement, and Alternative Motion for New Trial. (Doc. No. 559.) WesternGeco has filed a Motion for Willfulness and Enhanced Damages. (Doc. No. 560.) In 2007, the Federal Circuit altered the willful infringement inquiry to one of recklessness. In re Seagate Tech., LLC, 497 F.3d 1360, 1371
The Federal Circuit has recognized that "in ordinary circumstances, willfulness will depend on an infringer's prelitigation conduct." Seagate, 497 F.3d at 1374. The Court must base its determination of objective recklessness "on the record ultimately made in the infringement proceedings". Bard, 682 F.3d at 1008. WesternGeco argues that objective recklessness is proven because the jury found subjective recklessness and the Court ruled in favor of WesternGeco as a matter of law regarding ION's infringement of the '520 Patent, ION's defenses of laches, equitable estoppel, waiver, and unclean hands, and ION's § 101, written description, best mode and indefiniteness invalidity defenses. However, WesternGeco's assertion that the Court's grant of summary judgment and the jury's infringement findings are dispositive of the objective recklessness inquiry is incorrect. The Federal Circuit is clear that "[d]efeat of a litigation position, even on summary judgment, does not warrant an automatic finding that the suit was objectively baseless; all of the circumstances must be considered." Aspex Eyewear Inc. v. Clariti Eyewear, Inc., 605 F.3d 1305, 1315 (Fed.Cir.2010). Instead, to prove the objective prong, WesternGeco must show by clear and convincing evidence that "[ION] acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." Bard, 682 F.3d at 1005. Thus, WesternGeco has the burden to show that "no reasonable litigant could realistically expect success on the merits." Id. at 1006, 1008; iLOR, LLC v. Google, Inc., 631 F.3d 1372, 1378 (Fed.Cir.2011); Old Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d 539, 544 (Fed.Cir.2011).
ION claims that it was not unreasonable for it to rely on its belief that there was no infringement because it reasonably believed:
At issue are the "feather angle mode" and the "turn control mode" limitations of these claims. The Court construed these modes as:
(Doc. No. 120, 24-27, 45.) At trial, it was uncontroverted that ION's system does not set and maintain each streamer at a certain feather angle. Instead, ION's system only sets the "ghost streamer" at a specific feather angle. (Trial Tr. 3781:3-3784:9.) The Court finds that ION's defense against infringement is not objectively baseless in that no reasonable litigant could realistically expect to succeed. Likewise, the uncontroverted evidence at trial was that the streamer positioning devices in ION's system could not all generate a force in the opposite direction of a turn and then be directed to the position defined in the feather angle mode. (Trial Tr. 3786:7-23.) Specifically, the DigiBIRDs could not "generate a force in the opposite direction of the turn." Though the jury found in favor of WesternGeco, ION's defense for turn control mode was not unreasonable.
Claim 15 of the '607 Patent requires "a prediction unit adapted to predict positions of at least some of the [SPDs]." ION claims that the use of the word "predict" led it to believe the claim required a forecasting of future positions rather than an estimation of current positions. Though the Court ultimately construed the term "predict" to mean the ability to not be bound by wall-clock times and could mean present time, ION's argument is not unreasonable by clear and convincing evidence.
WesternGeco contends that ION's user manual and DigiFIN's product specification both describe transmission of location information from a global control system to a local control system as in Claim 15 of the '967 patent. Claim 15 of the '967 Patent requires "a global control system transmitting location information to at least one local control system on the at least one [SPD]." ION construed an SPD to have the capacity to steer both laterally and vertically. (Doc. No. 73 p. 6.) Therefore, because the DigiFINs only receive a fin angle command from the alleged global control system, it did not transmit "information regarding location." (Trial Tr. 2767:9-25.) It was ION's position that the fin angle does not represent the location, latitude, longitude, depth, or lateral position to which the DigiFIN is to be moved. (Trial Tr. 3451:22-25, 3462:16-3463:24.)
WesternGeco argues that infringement of this claim was objectively reckless because a third party, StatoilHydro, conducted an infringement investigation and concluded that the '967 Patent "clearly envisages a system working along broadly the same lines as described above in relation to ION." (Doc. No. 560 p. 8.) The parties argue about the admissibility of
Bard, 682 F.3d at 1005 (citations omitted). Therefore a third party's opinion regarding ION's possible infringement is more appropriate for the subjective recklessness inquiry rather than for objective recklessness. Focusing only on ION's asserted defenses, the Court does not find them objectively baseless.
The Court construed an ASPD as a device capable of controlling the vertical and horizontal position of the seismic streamer. (Doc. No. 120 p. 46.) ION's litigation defense for the '038 Patent was that DigiFIN was not an ASPD because the DigiFIN could not be commanded to steer a streamer to a particular depth and lateral position so as to maintain a specified array shape. (Trial Tr. 3499:15-3500:2.) ION further argued that it believed its system did not consist of a master controller for issuing vertical and horizontal positioning commands to
ION's defenses at trial were lack of enablement, anticipation and obviousness. The Court considered ION's defenses above in ION's Rule 59 Motion for New Trial on Invalidity Under 35 U.S.C. §§ 102 and 103. (Doc. No. 550.) Though the Court does not find for ION on invalidity, its arguments are not objectively baseless. Therefore, the Court finds no objective recklessness.
Because the Court finds no objective recklessness, the threshold standard, it need not evaluate the jury's finding of subjective recklessness for reasonableness. WesternGeco must prove both subjective and objective recklessness by clear and convincing evidence. Since WesternGeco has not proven objective recklessness by clear and convincing evidence, the Court finds no willful infringement.
WesternGeco has filed a Motion to Find this Case Exceptional Under Section 285 and for Attorneys' Fees. (Doc. No. 554.) "The court in exceptional cases may award reasonable attorney fees to the prevailing party." 35 U.S.C. § 285. The award of attorneys' fees serves as a "deterrent[] to blatant, blind, willful infringement of valid patents." Mathis v. Spears, 857 F.2d 749, 754 (Fed.Cir.1988). The first step is to decide whether the case is exceptional by clear and convincing evidence within the meaning of § 285. Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547, 1551 (Fed.Cir.1989). Second, if the case is deemed exceptional, the Court must determine whether an award of fees is appropriate and, if so, in what amount. Highmark, Inc. v. Allcare
To find a case exceptional, there must be some "material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed.R.Civ.P. 11, or like infractions." Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d 1378, 1381 (Fed.Cir. 2005). "Litigation misconduct generally involves unethical or unprofessional conduct by a party or his attorneys during the course of adjudicative proceedings." Highmark, 687 F.3d. at 1315-16. Further, a lawyer's conduct cannot be evaluated with the benefit of hindsight. Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421-22, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978). If the court finds the case to be exceptional, then it can determine whether attorneys' fees are appropriate. Beckman Instruments, Inc., 892 F.2d at 1551. "[B]efore imposing sanctions under its inherent power, a court must make a specific finding that the sanctioned party acted in "bad faith."" Maguire Oil Co. v. City of Houston, 143 F.3d 205, 209 (5th Cir.1998).
WesternGeco makes a number of arguments as to why the Court should find this case exceptional. Each will be discussed in turn, and ultimately, the Court finds that this case is not exceptional.
A finding of willfulness does not require a finding that a case is exceptional under § 285. Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1582 (Fed.Cir.1992) (affirming district court decision declining to find a case exceptional despite a jury finding of willfulness due, in part, to the closeness of the willfulness question); Laitram Corp. v. NEC Corp., 115 F.3d 947, 955 (Fed.Cir. 1997) (affirming district court's finding case not exceptional and denial of attorneys' fees despite jury's willfulness finding given infringer's presentation of a good faith defense against willfulness and substantial challenge to infringement). However, as discussed above, the Court found no willful infringement so this cannot be a factor in favor of finding the case exceptional.
Another criteria for declaring a case exceptional includes vexatious litigation and litigation misconduct. "Any attorney... who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927. An exceptional case based on litigation misconduct is reserved for extreme cases. Such sanctions are an extraordinary remedy that should be "sparingly applied." FDIC v. Calhoun, 34 F.3d 1291, 1297 (5th Cir.1994). A court "may not shift the entire financial burden of an action" under § 1927 "except when the entire course of proceedings were unwarranted and should neither have been commenced nor persisted in." Calhoun, 34 F.3d at 1297.
WesternGeco claims ION was a vexatious litigant because it asserted meritless defenses and counterclaims; used unnecessary tactics such as Hague requests during discovery; and filed repeated motions for reconsideration. According to WesternGeco, vexatious litigation tactics during trial included attempting to re-litigate infringement and inventorship and argue an irrelevant "own patent" defense. Further, vexatious tactics post-trial included new
ION moves for JMOL, new trial, or remittitur on damages. (Doc. No. 562.) ION claims that the $105.9 million award decided by the jury was based on two defective and overlapping damage models: lost profits and reasonable royalty. The jury awarded WesternGeco 100% of the lost profits it sought and 84% of the reasonable royalty it sought. This amounted to $93.4 million for lost profits and $12.5 million in reasonable royalty. "[A] decision on remittitur ... is within the sound discretion of the trial court ... and damages are set aside `only upon a clear showing of excessiveness.' An excessive award exceeds the `maximum amount calculable from the evidence.'" Fractus, S.A. v. Samsung Elecs. Co., 876 F.Supp.2d 802, 831 (E.D.Tex.2012).
ION argues that the lost profits award must be vacated because it is not based on the domestic acts of infringement in this case but on the revenues that WesternGeco estimated its overseas competitors received for their non-infringing uses of ION's equipment in ten seismic surveys performed in foreign waters. ION says to do so is not permitted by § 271(f) and would give improper extraterritorial effect to U.S. law. ION insists that it can only be liable for "supplying" the component and cannot extend to subsequent "making" or "using" of a device abroad. However, Section 271(f)(1) in whole states:
If ION were strictly held liable for supplying, then § 271(f) would lose all its weight, allowing a loophole for manufacturers to export components for infringing uses abroad. The legislative history noted that § 271(f) was intended to prevent copiers from avoiding U.S. patents by supplying components of a patented product in this country so that the assembly of the components may be completed abroad. Patent Law Amendments, Pub.L. No. 98-622, 1984 U.S.Code Cong. & Admin. News (98 Stat.) at 5828. This section of the patent law amendment was proposed in response to the U.S. Supreme Court's decision in Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 92 S.Ct. 1700, 32 L.Ed.2d 273 (1972), which created a loophole in prior patent law, allowing copiers
Furthermore, while 35 U.S.C.A. § 271(a) limits infringing sales to those sales made within the United States, lost profits based on an accused infringer's sales of a patented product in a foreign country may be properly recoverable as an item of lost profits if the patentee can show "a reasonable probability that but for the infringement," it would have made the foreign sales that were made by the accused infringer. Such foreign sales are only proper to include in the damage calculus when there is an act of infringement occurring in the United States directly associated with the foreign sale, such as the making of the product in the United States, if the predicates of § 271(f) can be met. 4 Annotated Patent Digest § 30:44. It was undisputed at trial that every Digi-FIN that ION sold was made in and supplied from the United States. (See, e.g., Trail Transcript 2788:22-2790:10.) Therefore, lost profits can appropriately be recovered from these infringing sales.
Although not separately required, the Panduit factors support the jury's lost profits award. The Panduit test provides that to obtain profits on sales the patentee would have made but for the infringement, the patent owner must prove: (1) demand for the patented product; (2) absence of acceptable non-infringing substitutes, (3) his manufacturing and marketing capability to exploit the demand, and (4) the amount of the profit he would have made. Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152, 1156 (6th Cir. 1978).
The record evidence satisfies the Panduit test, which creates a presumption of "but for" causation when met. But before the Panduit factors are analyzed, the Court must address ION's argument that the Panduit test does not apply. ION proceeded before trial and during trial as if the Panduit test applied. Before trial, both parties agreed that the Panduit factors were appropriate. (Doc. No. 402 p. 6 ("Mr. Sims applied the methodological approach that all parties agree is appropriate by utilizing the Panduit factors.")) During trial, ION's damages expert, Mr. Gunderson, spent over an hour and a half explaining to the jury his analysis of the Panduit factors in this case. (See, e.g., Trial Tr. 4665:16-4698:9, 4701:23-4742:5.) Even ION's actions aside, applying the Panduit factors was one appropriate means by which the jury could find lost profits. (Jury Instruction No. 19 ("it would have made the sales it says it lost but for the infringement."))
ION argues that even if the Panduit test is applicable, the factors are not met with sufficient evidence. The Court finds that WesternGeco presented sufficient evidence to prove each of the four prongs. First, ION conceded at trial that there was demand for the patented product. (Doc. No. 562 pp. 15-24; Trial Tr. 4669:9-4670:3.) Second, WesternGeco presented evidence regarding the Nautilus and eBird, which the jury could reasonably
ION claims there was improper recovery of both measures of damages because a patentee may recover either lost profits or a reasonable royalty for each infringing act, but not both. Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir.2009) ("Two alternative categories of infringement compensation are the patentee's lost profits and the reasonable royalty he would have received through arms-length bargaining."). ION claims the jury was instructed in such a way that they could award both a reasonable royalty and lost profits for the same acts of infringement. However, the jury instructions were clearly worded to avoid double counting:
(Jury Instruction No. 20.) The jury instruction is the exact wording of the Model Patent Jury Instructions provided by the Federal Circuit Bar Association:
(Model Patent Jury Instruction p. 88.) ION did not object to this jury instruction at trial and even if it had, the instructions are worded clearly to avoid double counting.
ION argues that the reasonable royalty found by the jury fails to apportion the damages to account for the value of WesternGeco's patented improvement. ION argues that a reasonable royalty may be calculated on the sale of a product provided that the royalty reflects only the contribution of the patented technology, not the entire value of the product. ION claims WesternGeco's patents offer an improvement to existing technology rather than a
ION also argues it was erroneous for the Court to deny ION's requested marking instruction, allowing the jury to award excessive damages. When a patentee fails to show either that it marked or was not required to mark, the patentee is precluded from recovering damages for any infringement that occurred prior to the date the alleged infringer was notified of the infringement. ION claims that, because Mr. Sims's testimony on the reasonable royalty included damages for infringement prior to the date of actual notice, the Court's failure to instruct on marking resulted in an improper award of damages. This Court has already considered and rejected ION's arguments regarding a marking instruction. (Doc. No. 562 p. 32; Doc. No. 508 p. 5; Doc. No. 530 p. 24.) ION has not presented new evidence that would require the Court to overturn its previous decisions.
WesternGeco has filed a Motion for Prejudgment Interest and Post-Discovery Damages. (Doc. No. 553.) ION does not dispute that prejudgment interest is appropriate, and both parties agree that the prejudgment interest should be compounded annually. The Supreme Court has interpreted 35 U.S.C. § 284
"Courts have recognized that the prime rate best compensates a patentee for lost revenues during the period of infringement because the prime rate represents the cost of borrowing money, which is "a better measure of the harm suffered as a result of the loss of the use of money over time."" IMX, Inc. v. LendingTree, LLC, 469 F.Supp.2d 203, 227-28 (D.Del.2007) (citing Mars, Inc. v. Conlux USA Corp., 818 F.Supp. 707, 720-21 (D.Del.1993), aff'd, 16 F.3d 421, 1993 WL 516659 (Fed.Cir. 1993)). Other courts have found that "[t]he prime rate, compounded quarterly, is a conservative, middle-of-the road approach that takes into account normal market fluctuations." NTP Inc. v. Research in Motion, Ltd., 270 F.Supp.2d 751, 763 (E.D.Va.2003) amended, CIV.A. 3:01CV767, 2003 WL 22746080 (E.D.Va. Aug. 5, 2003). Therefore, the Court finds that the prime rate is the appropriate rate to be used in prejudgment interest. Since the parties have reached agreement, the interest will be compounded annually. Prejudgment interest should be awarded on both the lost profits and the royalty portions of the damages awarded for patent infringement. The interest should be awarded from the date of infringement to the date of judgment. ION is instructed to submit appropriate calculations to the Court within ten days.
At the hearing on February 21, 2013, the Court ordered ION to submit its post-trial accounting because of a concern that ION's executive chairman and former CEO, Robert Peebler, was not truthful during his trial testimony. On August 13, 2012, Mr. Peebler testified under oath to the jury that ION had stopped selling DigiFIN after the Court's June 29, 2012 entry of summary judgment regarding Claim 18 of the '520 Patent. At the hearing, the Court asked ION if Mr. Peebler's testimony was truthful. ION's response was that ION Geophysical Inc. had not, but that ION Dubai, a foreign subsidiary of the Defendant, had.
ION filed its post-trial accounting which described two "sales" that occurred in September 2012. (Doc. No. 620.) ION argues that one of the "sales" was a delivery required under a March 2012 contract with Shanghai Offshore Petroleum Geophysical Corporation ("SOPGC"). ION argues that since the contract was signed in March 2012, before the Court's ruling, the sale also occurred in March 2012. The other sale was a sale and supply that occurred outside of the United States. The transaction was between ION S.a.r.l., a Luxemburg company, and a foreign buyer, where DigiFINs were shipped from Dubai to places outside of the United States. This is very troubling to the Court despite ION's argument that such "sales" were not sales in violation of the Court's order. At trial, WesternGeco had records of sales up until May 2011. These new records show that 1,353 more units were sold by ION than were disclosed at the time of trial. It also appears that ION relocated all of its U.S. manufactured DigiFIN units to Norway the week after the Court's summary judgment decision.
WesternGeco has filed a Motion for Costs in the amount of $535,542.03. (Doc. No. 555.) Local Rule 54.2, FRCP 54(d)(1), 35 U.S.C. § 284 and 28 U.S.C. § 1920
Costs relating to fees of the clerk and docket fees may be recovered as authorized by 28 U.S.C. § 1920(1) & (5). (Doc. No. 555, Ex. 2.) WesternGeco claims it incurred $350.00 in these fees and ION does not dispute this amount.
WesternGeco has withdrawn its request for subpoena costs.
Video and written transcripts are recoverable under 28 U.S.C. § 1920(2). WesternGeco claims it incurred $399,052.36 in costs relating to depositions and transcripts. (Doc. No. 555, Ex. 4.) ION argues that a substantial part of that requested cost is not recoverable. ION claims that the costs are bloated with incidentals, which are generally not recoverable.
First, ION argues that costs for synchronizing videotaped depositions ($25,340) are not recoverable. The Court agrees. Other courts have found that video synchronization is not a necessity but for the convenience of counsel. See, e.g., U.S. ex rel. Gonzalez v. Fresenius Med. Care N. Am., 761 F.Supp.2d 442, 450 (W.D.Tex.2010) aff'd sub nom. Gonzalez v. Fresenius Med. Care N. Am., 689 F.3d 470 (5th Cir.2012) ("The Court finds, however, that video synchronization was a convenience to the parties and not a necessity."). The Fifth Circuit has held that
Second, ION contests expenses for RealTime transcription of depositions ($11,911). Courts may award RealTime costs when it is found to be a necessary cost. Kinzebaw v. Case LLC, 05-1483, 2006 WL 1096683 (Fed.Cir. Apr. 26, 2006). This was a complex and lengthy trial. ION filed more than twenty briefs during trial which required responses from WesternGeco. The Court finds that RealTime was a necessary cost. Therefore, WesternGeco can recover the costs of RealTime.
Third, ION disputes fees charged by court reporters for the original and
Fourth, ION contests deposition costs in fees for original and one copy of depositions provided on an expedited basis ($88,394.36). Expedited costs are not taxable unless prior court approval is obtained or the special character of the litigation necessitates expedited receipt of the transcript. Expedited costs seem minimal based on third party invoices (Doc. No. 579 p. 7 n. 5 ("Two expedition charges (totaling $2996.78) are itemized.")), and the complicated nature of this case necessitated expediting depositions. WesternGeco may recover for these costs.
Lastly, ION contests fees for rough draft charges ($1,968). WesternGeco has made no argument that it should recover for rough draft charges, so the requested amount should also be reduced by that amount ($1,968). Therefore, the costs of video synchronizing ($25,340) and rough drafts of depositions ($1,968), which totals $27,308, are unrecoverable as incidental costs.
WesternGeco requests costs for obtaining video files of depositions ($51,361.07). Video depositions are generally recoverable under § 1920(2) and the Court will allow it here.
ION contests the costs that relate to WesternGeco's claims related to Fugro. WesternGeco took 51 depositions in this case and of those, 18 related directly to Fugro. WesternGeco claims it only seeks its own costs from ION, not Fugro's costs, (Doc. No 585 p. 9) so the Court will allow this recovery.
ION also contests trial transcription costs related to Fugro. ION estimates that Fugro's witness examinations account for about 15% of the transcript. WesternGeco claims that it has already removed Fugro time. The Court finds that WesternGeco may recover this cost since it does not include Fugro time.
WesternGeco originally sought $9,864.49 in witness fees. After objections from ION, WesternGeco reduces the amount sought to $7,147.97, which ION does not dispute.
WesternGeco seeks $109,036.93 in costs relating to exemplification, copying and printing. ION disputes a portion of these charges. First, ION disputes $26,010.94 in costs for processing documents produced to ION, including charges for litigation support, creating databases, and creating TIFF images. WesternGeco does not make an argument for costs associated with litigation support or creating databases and has not met its burden to demonstrate these costs are necessary. WesternGeco may not recover the $26,010.94.
Second WesternGeco seeks to recover $28,002.54 in costs processing documents produced by ION, namely converting ION's documents into another format to make them searchable. ION did produce a large number of documents, but this cost was for the convenience of attorneys rather than a necessity. Therefore, WesternGeco may not recover the $28,002.54.
Third, WesternGeco requests $32,522 in costs of up to six copies of a variety of documents used for trial. WesternGeco does not segregate the costs nor make an argument for why it should recover these costs. ION estimates that the costs of copies for trial should be reduced by 15%, or $4,878.30, which the Court accepts.
Fourth, WesternGeco seeks $5,099 in costs for office supplies. These are incidentals not enumerated in the statute and therefore not recoverable.
WesternGeco requests $14,100 for the costs of the Court's appointed expert. ION argues that a portion of this cost should be attributable to Fugro, but WesternGeco states that this is the cost to WesternGeco, not Fugro's cost. Therefore, the Court finds this is an appropriate amount for WesternGeco to recover.
In conclusion, from WesternGeco's requested amount of $535,542.03, the following amounts should be subtracted because they are not recoverable costs:
WesternGeco can recover costs in the amount of $438,388.48.
WesternGeco has filed a Motion for a Permanent Injunction or, in the Alternative,
ION asks the Court to compel production of the Fugro license agreement ("Fugro license"), letters to ION's customers and potential customers seeking to begin negotiations to enter into additional licensing agreements, and all related documentation ("Licensing Documents"). ION claims this information is directly relevant to WesternGeco's request for a permanent injunction, the scope of any such injunction, and the terms and rate for any postjudgment royalty in lieu of an injunction. ION argues that WesternGeco's permanent injunction is premised on exclusivity, which may be undermined by its license to Fugro and offer to license the patents to ION's other customers.
WesternGeco has worked with Fugro to provide a redacted version of the agreement to ION. (Doc. No. 611, Ex. 14.) The Court finds that this is sufficient. Discovery after trial is the exception and not the rule. ION has not shown the need for an exception. The Motion to Compel is denied.
After the jury issued its verdict, ION's CEO announced ION's intention to "challenge the verdict," and stated that ION "ha[s] sufficient inventory of DigiFIN available to satisfy customer need." (Doc. No. 558, Ex. 1.) Media reports confirmed that, notwithstanding the verdict, "DigiFIN [] will remain available for sale." (Doc. No. 558, Ex. 3.) WesternGeco moves the Court to enter a permanent injunction or, in the alternative, award an ongoing royalty for the sales of ION's infringing products. (Doc. No. 558.) The Court finds that a permanent injunction is proper in this case.
Courts have discretion to grant injunctive relief "in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable." 35 U.S.C. § 283. By virtue of the Supreme Court's decision in eBay, a patentee must satisfy the well-established four-factor test for injunctive relief before a court may grant a permanent injunction:
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006).
The Court finds that a permanent injunction is proper. ION stated multiple times to the Court that "[f]ollowing the Court's finding of infringement, ION immediately ceased selling DigiFIN." (Doc. No. 577 p. 22; Doc. No. 559 p. 24.) ION represented the same to the jury:
(Trial Tr. 4491:15-4492:1.) However, ION's post trial accounting reveals that this assertion was false and ION did sell more DigiFIN after the Court's ruling and even after trial. The Court finds these misstatements deeply troubling.
ION claims that a September 2012 sale was not a sale because the contract for the infringing product occurred in March 2012. The Court cannot accept this thinly veiled excuse. It also appears that ION shipped DigiFIN abroad from the United States to ION Dubai, which continues to make sales. The Court need not delve into whether this conduct infringed § 271(f) at this time because the misleading statements and the September 2012 sale are enough for the Court to find that all four factors of MercExchange, L.L.C. weigh in favor of a permanent injunction. First, WesternGeco has suffered injury and may continue to suffer injury since ION has shown that it will continue to infringe. Second, since ION has not followed the Court's order, no remedy at law can fully compensate WesternGeco besides an injunction. Third, the Court does not find particular hardships to ION. Fourth, there is no evidence that an injunction will disserve the public. In fact, ION's disregard for the Court's order warrants a permanent injunction to support the public's interest in maintaining a strong patent system.
For the reasons discussed above, the Court finds that:
28 U.S.C.A. § 1920 (West)
