Verinata Health, Inc. et al v. Ariosa Diagnostics, Inc et al

Filing 721

ORDER RE: CLARIFICATION (Illston, Susan) (Filed on 10/4/2018)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

VERINATA HEALTH, INC., ET AL.,

8

Plaintiffs,
Re: Dkt. No. 720
ARIOSA DIAGNOSTICS, INC, et al.,
Defendants.

11

United States District Court
Northern District of California

ORDER RE CLARIFICATION

v.

9
10

Case No. 12-cv-05501-SI

12
13

Currently before the Court is plaintiffs’ letter seeking clarification of the Court’s July 19,

14

2018 Order on the parties’ post-trial motions. Dkt. No. 705. Specifically, plaintiffs request the

15

Court clarify its decision regarding plaintiffs’ request for pre-and post-judgment interest so that

16

the record is complete for appeal. Dkt. No. 720.

17

On January 26, 2018 the Court signed a judgment that was entered on January 29, 2018 in

18

favor of plaintiffs, Verinata Health Inc., et al. and against defendants, Ariosa Diagnostics Inc., et

19

al. Dkt. No. 642. The Court recognized the “unique posture” of this case, caused by the parties’

20

stipulation that all equitable questions would be resolved post-trial, and found plaintiffs’

21

arguments regarding assignor estoppel timely. Dkt. No. 705 at 51:23-24. Given the outstanding

22

equitable questions, the Court recognizes that the judgment issued after trial was not final since

23

equitable issues were not resolved. Therefore, the Court will now consider plaintiffs’ outstanding

24

motion for pre-and post-judgment interest on the merits.

25

*

26

DISCUSSION

27
28

I.

Pre-Judgment Interest
35 U.S.C. § 284 provides that “[u]pon finding for the claimant the court shall award the

claimant damages adequate to compensate for the infringement, but in no event less than a

2

reasonable royalty for the use made of the invention by the infringer.” 35 U.S.C. § 284. “As a

3

rule, ‘prejudgment interest should be awarded under [35 U.S.C. § 284] absent some justification

4

for withholding such an award.’” Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 36

5

(Fed. Cir. 2012) (citing Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 657 (1983)). “An award

6

of prejudgment interest carries out Congress's ‘overriding purpose of affording patent owners

7

complete compensation’ since a patentee's damages also include the ‘forgone use of the money

8

between the time of infringement and the date of judgment.’” Id. (citing Gen. Motors Corp., 461

9

U.S. at 655–56). Defendants do not contest that pre-judgment interest is appropriate, only that it is

10

untimely. See Dkt. No. 685. The Court finds that plaintiffs’ motion for pre-judgment interest was

11

United States District Court
Northern District of California

1

timely and GRANTS plaintiffs’ motion for pre-judgment interest.

12

The Court “has wide latitude in selection of interest[.]” See Uniroyal, Inc. v. Rudkin–

13

Wiley Corp., 939 F.2d 1540, 1545 (Fed. Cir. 1991); Gyromat Corp. v. Champion Spark Plug Co.,

14

735 F.2d 549, 556–57 (Fed. Cir. 1984) (holding that “[a] trial court is afforded wide latitude in the

15

selection of interest rates”).

16

verdict using the prime interest rate, compounded quarterly, from the dates of first infringement.1

17

Plaintiffs submit a table of applicable prime rates ranging from 3.25% to 4.50%, “for a total

18

amount to be later determined subject to an accounting.” Dkt. No. 662 at 10; 13:3. Defendants

19

ask the Court to apply the Treasury bill rate, compounded annually, and to defer the issue of

20

accounting until after appeal. Dkt. No. 685 at 8:1-5.

Plaintiffs ask the Court to calculate pre-judgment interest on the jury

21

The Court finds that the 52-week Treasury Bill rate is appropriate. The Treasury Bill rate

22

has been accepted and employed by many courts in patent cases as a reasonable method of placing

23

a patent owner in a position equivalent to where it would have been had there been no

24

infringement. Apple, Inc. v. Samsung Elecs. Co., 67 F. Supp. 3d 1100, 1122 (N.D. Cal. 2014),

25

aff'd, 816 F.3d 788 (Fed. Cir. 2016), vacated in part on reh'g en banc, 839 F.3d 1034 (Fed. Cir.

26
27
28

Plaintiffs ask the Court to calculate interest for the ’430 Patent from the date the patent
issued, November 27, 2012, and to calculate the interest for the ’794 Patent from the date of first
sale of the Harmony Test, March 31, 2012.
2
1

2016), and aff'd, 839 F.3d 1034 (Fed. Cir. 2016); Mars, Inc. v. Coin Acceptors, Inc., 513 F. Supp.

2

2d 128, 134 (D.N.J. 2007) (citing Hoechst Celanese Corp. v. BP Chemicals Ltd., 846 F.Supp. 542,

3

550–51 (S.D.Tex.1994) (“[T]he Court is mindful that the purpose of pre-judgment interest is

4

solely to compensate the patentee for the lost use of the royalty income he should have been paid.

5

Accordingly, the Court finds the T-bill rate to the be appropriate standard.”) (sic), aff'd, 78 F.3d

6

1575 (Fed.Cir.1996)). In Apple, the court declined to apply a higher rate because there was no

7

evidence that the plaintiff borrowed money at a higher rate. Apple, 67 F. Supp. 3d 1121–22 (N.D.

8

Cal. 2014)(citing Laitram Corp. v. NEC Corp., 115 F.3d 947, 955 (Fed.Cir.1997) (upholding the

9

Treasury Bill rate where the was no evidence of “a causal connection between any borrowing and

10

the loss of the use of the money awarded as a result of the infringement.”). Here, plaintiffs have

11

United States District Court
Northern District of California

1

not presented evidence suggesting it needed to borrow money because it was deprived of the

12

damages award. Accordingly, the Court awards plaintiffs pre-judgment interest at the 52-week

13

Treasury Bill rate.

14

As to compounding, the Federal Circuit has explained that “the determination whether to

15

award simple or compound interest [ ] is a matter largely within the discretion of the district

16

court.” Gyromat Corp. v. Champion Spark Plug Co., 735 F.2d 549, 557 (Fed. Cir. 1984). Courts

17

“have recognized that compounding is necessary to fully compensate the patentee.” Sealant Sys.

18

Int'l, Inc. v. TEK Global S.R.L., No. 5:11–CV–00774–PSG, 2014 WL 1008183, at *6 (N.D. Cal.

19

Mar. 7, 2014) (citation omitted). Apple, Inc., 67 F. Supp. 3d at 1122. The Court is unconvinced

20

that quarterly compounding is necessary and awards plaintiffs annual compounding pre-judgment

21

interest. When the appeal of this case is resolved and the final damages amount settled, this Court

22

will award plaintiffs pre-judgment interest at the 52-week Treasury Bill rate, compounded

23

annually. In the interests of judicial economy, the Court will calculate the pre-judgment interest

24

after appeal, when the final amount of the judgment is known.

25
26

II.

Post-Judgment Interest

27

28 U.S.C.A. §1961 sets the standard for post-judgment interest in all federal civil cases and

28

provides that “[i]nterest shall be allowed on any money judgment in a civil case recovered in a
3

1

district court.” 28 U.S.C.A. §1961(a). Defendants do not contest that plaintiff is entitled to post-

2

judgment interest. Dkt. No. 685 at 6:1-15. The Court therefore GRANTS plaintiffs’ motion for

3

post-judgment interest. 28 U.S.C.A §1961 sets post-judgment interest “at a rate equal to the

4

weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors

5

of the Federal Reserve System, for the calendar week preceding” which is “computed daily to the

6

date of payment except as provided in section 2516(b) of this title and section 1304(b) of title 31,

7

and shall be compounded annually.” 28 U.S.C.A §1961(a)-(b). The Court will award plaintiffs

8

the statutory rate and will calculate the post-judgment interest after appeal, when the final amount

9

of the judgment is known.

10
CONCLUSION

United States District Court
Northern District of California

11
12

For the foregoing reasons, the Court GRANTS plaintiffs’ motion for pre-judgment interest

13

and GRANTS plaintiffs’ motion for post-judgment interest. Accounting is reserved for a later date

14

after the appeal is final.

15
16

IT IS SO ORDERED.

17
18
19
20

Dated: October 4, 2018
______________________________________
SUSAN ILLSTON
United States District Judge

21
22
23
24
25
26
27
28
4