Server Technology, Inc. v. American Power Conversion Corporation

Filing 663

ORDER Entering Ongoing Royalty. Signed by Judge Larry R. Hicks on 5/21/15. (Copies have been distributed pursuant to the NEF - JC)

Case 3:06-cv-00698-LRH-VPC Document 659-1 Filed 04/30/15 Page 1 of 4

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UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

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8 SERVER TECHNOLOGY, INC.,
a Nevada corporation,
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Plaintiff,
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v.
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AMERICAN POWER CONVERSION
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Case No. 3:06-CV-698-LRH-VPC
CORRECTED [PROPOSED]
ORDER ENTERING
ONGOING ROYALTY

Defendant.

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Following a jury trial in May 2014, certain of the AP7900 and AP8900 products sold

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by Defendant American Power Conversion Corporation (“APC”) were found to infringe claim

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15 of U.S. Patent No. 7,043,543 (“the ‘543 patent”) and claim 15 of U.S. Patent No. 7,702,771

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(“the ‘771 patent”). On March 31, 2015, the Court entered an Order directing the parties to

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prepare an appropriate compulsory license with an ongoing 15% royalty rate on sales of certain

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Licensed Products, defined below, that are sold by APC from the date of judgment, August 8,

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2014. (Doc. #651). The parties submitted a proposed order with the terms set forth below.

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The Court hereby enters the following ORDER:

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1.

The “Licensed Products” are defined to include the following products sold by

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APC: AP7930, AP7931, AP7932, AP7940, AP7941, AP7950, AP7951, AP7952, AP7953,

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AP7954, AP7960, AP7961, AP7968, AP7990, AP7991, AP7998, AP8941, AP8958,

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Case 3:06-cv-00698-LRH-VPC Document 659-1 Filed 04/30/15 Page 2 of 4

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AP8958NA3, AP8959, AP8959NA3, AP8961, AP8965, AP8981, and products that are not

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colorably different from one or more of the specifically identified Licensed Products.

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2.

For the period beginning on the date judgment was entered, August 8, 2014, and

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continuing until the expiration of the last to expire of the ‘543 patent or the ‘771 patent, APC

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shall pay plaintiff Server Technology, Inc. (“STI”) an ongoing royalty, as a percentage of gross

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sales, of 15% on all Licensed Products manufactured, sold, imported into, or exported from,

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the United States.

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a.

APC represents that it promptly will submit a supersedeas bond or

similar instrument (jointly referred to as the “bond”) for court approval pursuant to Rule 62(d)

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of the Federal Rules of Civil Procedure. The royalty payment obligation set forth in the

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following paragraph 2(b) is conditioned upon the inclusion of a provision in the bond

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providing that the proceeds of the bond may be used to satisfy both the amended judgment

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entered in this case and any royalty payments that are due pursuant to this order.

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b.

APC will be obligated to pay to STI all reasonable royalties from the

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date of judgment (August 8, 2014), plus post-judgment interest, owed under the terms of the

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compulsory license set forth in this Order within 45 days of the date the appellate court’s

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mandate would issue under Federal Rule of Appellate Procedure 41(b) in the appeal from the

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judgment in this case, regardless of whether a motion for stay of mandate is filed or the

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mandate is stayed pursuant to Rule 41(d)(2).

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c.

Thereafter, APC shall pay to STI all royalties owed on a quarterly basis,

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with payment to be made within 60 days of the end of each calendar quarter, except that for

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any payment that would be due less than 45 days after the date the appellate court’s mandate

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would issue as set forth in paragraph 2(a), the deadline for any such payment shall be extended

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to a date 45 days after the issuance of the mandate as set forth above. If for any reason any

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royalty is not paid when due, interest shall accrue on the unpaid balance at a rate of one and

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one-half percent (1.5%) per month from the date the payment was due.
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Case 3:06-cv-00698-LRH-VPC Document 659-1 Filed 04/30/15 Page 3 of 4

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3.

Each quarterly payment shall be accompanied by a written accounting of the

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sales of Licensed Products that (a) states total sales (in dollars) of Licensed Products during the

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quarter, and (b) provides by product number, total sales during the quarter (in units and dollars)

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of each Licensed Product. The accounting shall be certified under penalty of perjury as

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accurate by an appropriate representative of APC. APC shall keep proper records and books of

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account in accordance with past practices necessary to calculate royalties under this order.

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4.

APC shall allow STI to conduct an audit, to occur no more than once per

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twelve-month period, of APC’s records and documents to ensure compliance with this Order.

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Any such audit shall be conducted by an independent certified public accountant of STI’s

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choosing. The auditor shall obligate him or herself in writing to APC to maintain in

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confidence all information that it receives from APC, and shall submit a written report to STI

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(with a copy to APC) containing only its conclusions as to the quantity and sales of Licensed

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Products for which royalties should be paid under this order. The cost of the audit will be

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borne solely by STI unless the results of the audit show a 5% or more underpayment of

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royalties due to STI during the period audited, in which case all auditing costs including the

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fees of the auditor shall be paid by APC.

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5.

APC shall notify STI of any design changes that may be applied to the Licensed

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Products should APC take the position that such design changes take the modified product

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outside the scope of an ongoing royalty.

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6.

[DEFENDANT APC OBJECTS TO INCLUSION OF THIS in, imported into,
APC shall mark all Licensed Products manufactured in, sold PARAGRAPH IN

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or exported from the United States with the applicable manufactured in, sold in, imported into,
THIS ORDER] APC shall mark all Licensed Products patent number in compliance with

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or exported from the United States with the applicable patent number in compliance with 35
35 U.S.C. § 287.

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U.S.C. 7. 287. The Court specifically retains jurisdiction to enforce, modify, or terminate this
§

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7.
The Court require, and to resolve any disputes, including disputes over whether
Order as the equities mayspecifically retains jurisdiction to enforce, modify, or terminate this

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Order as the equities may require, and to resolve any disputes, including disputes over whether
///

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///
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Case 3:06-cv-00698-LRH-VPC Document 659-1 Filed 04/30/15 Page 4 of 4

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an APC product other than the Licensed Products is subject to the royalty provisions of this

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order or infringes claim 15 of the ‘543 patent or claim 15 of the ‘771 patent.

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IT IS SO ORDERED.

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Dated this ___ dayday of May, 2015.
DATED this 21st _______, 2015.

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LARRY R. HICKS
UNITED STATES DISTRICT JUDGE

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7722775_4

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