Halo Electronics, Inc. v. Bel Fuse Inc. et al

Filing 551

ORDER Granting in part and Denying in part 530 Defendant Pulse Electronics, Inc. and Pulse Electronics Corporation's Motion to Approve Supersedeas Bond and Stay of Execution of the Judgment. Defendants shall have until 7/31/13 to post bond in the amount of $1,550,000.00. IT IS FURTHER ORDERED that 537 Defendants Pulse Electronics, Inc. and Pulse Electronics Corporation's Emergency Motion to Stay Enforcement of the Permanent Injunction is GRANTED. Enforcement of the Permane nt Injunction is stayed until October 15, 2013. Furthermore, Defendants shall pay Plaintiff a 4.5% royalty rate for infringing products sold during the stay of enforcement of the permanent injunction. Signed by Judge Philip M. Pro on 7/16/13. (Copies have been distributed pursuant to the NEF - EDS)

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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 DISTRICT OF NEVADA 7 8 HALO ELECTRONICS, INC., 9 Plaintiff, 10 v. 11 12 PULSE ELECTRONICS, INC. and PULSE ELECTRONICS CORPORATION, 13 Defendants. 14 15 *** ) ) ) ) ) ) ) ) ) ) ) ) ) 2:07-cv-00331-PMP-PAL ORDER Before the Court is Defendants Pulse Electronics, Inc. and Pulse Electronics 16 Corporation’s (collectively “Pulse”) Motion to Approve Supersedeas Bond and Stay 17 Execution of the Judgment (Doc. #530), filed on June 21, 2013. Plaintiff Halo Electronics, 18 Inc. (“Halo”) filed a Response (Doc. #543) on July 5, 2013. Pulse filed a Reply (Doc. 19 #548) on July 12, 2013. 20 Also before the Court is Pulse’s Emergency Motion to Stay Enforcement of the 21 Permanent Injunction (Doc. #537), filed on June 28, 2013. Halo filed a Response (Doc. 22 #544) on July 8, 2013. Pulse filed a Reply (Doc. #547) on July 10, 2013. 23 The parties are familiar with the facts in this action and the Court will not repeat 24 them here except as necessary. On November 26, 2012, the jury returned a verdict in favor 25 of Plaintiff Halo. (Jury Verdict (Doc. #482).) The Court entered its findings of fact and 26 conclusions of law on the remaining legal and equitable issues on May 28, 2013. (Order 1 (Doc. #522).) Following entry of the Court’s findings of fact and conclusions of law, the 2 Court entered Judgment in Halo’s favor. (J. (Doc. #523).) The Court also granted Halo a 3 permanent injunction against Pulse on June 17, 2013. (Order (Doc. #528); Permanent Inj. 4 (Doc. #529).) 5 Pulse filed a Notice of Appeal. (Notice of Appeal (Doc. #531).) Pulse then filed a 6 Motion for New Trial and a Renewed Motion for Judgment as a Matter of Law, and these 7 Motions are pending before the Court. (Defs.’ Mot. for New Trial (Doc. #534); Defs.’ 8 Renewed Mot. for J. as a Matter of Law (Doc. #535).) The United States Court of Appeals 9 for the Federal Circuit deactivated Pulse’s appeal upon the filing of Pulse’s post-judgment 10 Motions. (Order (Doc. #541); Notice to the Originating Tribunal (Doc. #542).) Pulse now 11 requests that this Court stay execution of the judgment and the permanent injunction. 12 I. STAY OF EXECUTION OF THE JUDGMENT 13 Pulse requests that this Court approve a $1,500,000 supersedeas bond and stay the 14 execution of the Judgment until the Court decides Pulse’s pending Motions, or until Pulse 15 completes its appeal if the Court denies Pulse’s Motions. Halo generally does not object, 16 however Halo submits the amount of the bond should be $2,000,000 and that it would be 17 premature for the Court to approve a bond for Pulse’s potential appeal. In its Reply, Pulse 18 contends the bond amount at most should be $1,550,000, which is the amount the jury 19 awarded Halo plus Halo’s undisputed costs, and that Pulse should be granted a stay until the 20 completion of its appeal. 21 “On appropriate terms for the opposing party’s security,” Federal Rule of Civil 22 Procedure 62(b) allows for a stay of execution of a judgment pending disposition of a 23 motion for judgment as a matter of law or a motion for new trial. Furthermore, Rule 62(d) 24 provides that an appellant may obtain a stay by supersedeas bond if an appeal is taken, and 25 that “the bond may be given upon or after filing the notice of appeal or after obtaining the 26 order allowing the appeal.” Whether to stay the execution of a judgment lies within the 2 1 district court’s discretion. AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 2 949-50 (9th Cir. 2006). 3 The Court, in its discretion, finds that a $1,550,000 bond will adequately secure Halo’s 4 interest in this matter, as that amount includes both Halo’s award from the jury and Halo’s 5 costs that are not in dispute. However, as Pulse’s appeal to the Federal Circuit is no longer 6 pending, the stay will remain in place only until the Court resolves Pulse’s pending Motion 7 for New Trial and Renewed Motion for Judgment as a Matter of Law, at which time Pulse 8 may move for a stay under Rule 62(d). Therefore, the Court approves a supersedeas bond 9 in the amount of $1,550,000 and will grant a stay of execution of the Judgment until the 10 Court rules on Pulse’s pending dispositive Motions. Pulse shall have until July 31, 2013 to 11 post bond in the amount of $1,550,000. 12 II. STAY OF ENFORCEMENT OF THE PERMANENT INJUNCTION 13 Pulse requests that the Court stay enforcement of the Permanent Injunction for a 90- 14 day period beginning the date this Order is entered. Pulse argues it has a reasonable 15 likelihood of success on the merits of its post-trial Motions and/or on appeal. Pulse also 16 argues that it will face substantial economic injury, and thus its customers will suffer 17 economically, if Pulse is not given a brief period of time in which to change the design of 18 its infringing products to a non-infringing design. Pulse further contends that Halo will 19 suffer no harm if a stay is granted because Pulse will keep records of all accused products 20 sold during the stay and will pay Halo a royalty fee for those products. Finally, Pulse 21 argues the public interest will be served by a stay because the disruption caused by the 22 immediate enforcement of the injunction will detrimentally affect Pulse’s customers’ 23 abilities to continue manufacturing products. 24 Halo responds that Pulse has not shown it is entitled to a stay of enforcement of the 25 injunction. Halo argues Pulse has a slim chance of success on its post-trial Motions or on 26 appeal because the Court already has considered and rejected Pulse’s arguments in those 3 1 Motions. Halo also argues Pulse has not shown it will suffer significant harm, but Halo has 2 been found to be irreparably harmed by Pulse’s infringement. Finally, Halo argues Pulse’s 3 claim that customers will be harmed without a stay is a non-specific and conclusory 4 allegation that does not show the public interest would be served by a stay. 5 Pulse replies that it has shown the public interest will be served by a stay because 6 immediate enforcement of the injunction will cause a shortfall in key components of 7 electronics and disrupt major electronics suppliers’ business and their customers’ business. 8 Pulse argues its customers need time to test and confirm replacement parts and that a 90-day 9 stay will provide enough time to transition with minimal disruption. 10 In effect, Pulse is asking the Court to modify the permanent injunction to include a 11 sunset provision to allow Pulse time to switch to a non-infringing design. “[D]istrict courts 12 possess broad equitable authority to modify injunctions.” Amado v. Microsoft Corp., 517 13 F.3d 1353, 1358 (Fed. Cir. 2008). The Federal Circuit has found “sunset provisions [can] 14 mitigate the harm to the public” and that a district court does not abuse its discretion “in 15 fashioning a remedy that protects [the patentee’s] rights while allowing [the infringer] time 16 to develop non-infringing substitutes.” Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 17 687, 701-02, 704 (Fed. Cir. 2008) (affirming a sunset provision in a permanent injunction 18 that allowed infringement for up to 20 months after the verdict because it properly 19 “balance[d] the policy of protecting the patentee’s rights against the desirability of avoiding 20 immediate market disruptions” (quotation omitted)). 21 Here, Pulse has demonstrated in both its Opposition to Halo’s Motion for a Permanent 22 Injunction and its present Motion to Stay Enforcement of the Permanent Injunction that 23 immediate enforcement of the injunction would cause disruption to Pulse’s customers’ 24 manufacturing of electronics that incorporate Pulse’s infringing products. (Decl. of Carrie 25 Munson in Support of Def.’s Opp’n to Pl.’s Mot. for Permanent Inj. (Doc. #515-1); Defs.’ 26 Emergency Mot. to Stay Enforcement of Permanent Inj. (Doc. #537), Ex. A; Decl. of John 4 1 A. Houston in Support of Defs.’ Emergency Mot. to Stay Enforcement of Permanent Inj 2 (Doc. #537); Supp. Decl. of John A. Houston in Support of Defs.’ Emergency Mot. to Stay 3 Enforcement of Permanent Inj. for 90 Days (Doc. #547-1).) Although this disruption to 4 Pulse’s customers’ business is not enough to overcome Halo’s evidence supporting a 5 permanent injunction, it is enough to warrant a brief stay of enforcement of the permanent 6 injunction. Pulse has provided a declaration from its representative that it believes, based 7 on its customers’ representations, that staying enforcement of the injunction for 90 days 8 would “permit most customers to transition to replacement products.” (Supp. Decl. of John 9 A. Houston in Support of Defs.’ Emergency Mot. to Stay Enforcement of Permanent Inj. for 10 90 Days (Doc. #547-1), ¶ 5); see i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 863-64 11 (Fed. Cir. 2010) (modifying an injunction’s effective date from 60 days from the date of the 12 order granting the injunction to 5 months from the date of the order when the infringer 13 presented a declaration from its representative that it would take about 5 months to comply 14 with the injunction). Therefore, the Court in its discretion will grant Pulse’s Motion to Stay 15 Enforcement of the Permanent Injunction. Enforcement of the Permanent Injunction is 16 stayed until October 15, 2013. 17 Pulse has agreed that it will pay Halo a reasonable royalty fee for all infringing 18 products sold while the enforcement of the permanent injunction is stayed. The jury 19 awarded Halo a 4.5% royalty rate. (Jury Verdict (Doc. #482) at 11.) Therefore, Pulse shall 20 pay Halo a 4.5% royalty rate for infringing products sold during the stay. 21 III. CONCLUSION 22 IT IS THEREFORE ORDERED that Defendants Pulse Electronics, Inc. and Pulse 23 Electronics Corporation’s Motion to Approve Supersedeas Bond and Stay Execution of the 24 Judgment (Doc. #530) is hereby GRANTED in part and DENIED in part. The Motion is 25 GRANTED to the extent that Defendants shall have until July 31, 2013 to post bond in 26 amount of $1,550,000. Furthermore, the stay on the execution of the judgment will be in 5 1 effect until the Court resolves Defendants’ Motion for New Trial (Doc. #534) and Renewed 2 Motion for Judgment as a Matter of Law (Doc. #535). The Motion is DENIED in all other 3 respects. 4 IT IS FURTHER ORDERED that Defendants Pulse Electronics, Inc. and Pulse 5 Electronics Corporation’s Emergency Motion to Stay Enforcement of the Permanent 6 Injunction (Doc. #537) is hereby GRANTED. Enforcement of the Permanent Injunction is 7 stayed until October 15, 2013. Furthermore, Defendants shall pay Plaintiff a 4.5% royalty 8 rate for infringing products sold during the stay of enforcement of the permanent injunction. 9 10 11 12 DATED: July 16, 2013 _______________________________ PHILIP M. PRO United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 6

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