Mondis Technology Ltd v. LG Electronics Inc et al

Filing 607

OPINION & ORDER that LGs motion for judgment as a matter of law under Rule 50(b), a new trial under Rule 59, and/or remittitur regarding damages and willfulness (Docket Entry No. 489) is GRANTED in part and DENIED in part; that LGs motion for judgment as a matter of law and/or remittitur is DENIED; and that LGs motion for a new trial is GRANTED. Signed by Judge Stanley R. Chesler on 4/22/2020. (sm)

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UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
____________________________________
:
:
:
Plaintiff,
:
:
v.
:
:
LG ELECTRONICS, INC.
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et al.,
:
:
Defendants.
:
____________________________________:
MONDIS TECHNOLOGY LTD,

Civil Action No. 15-4431 (SRC)

OPINION & ORDER

CHESLER, U.S.D.J.
This matter comes before the Court on the motion by Defendants LG Electronics, Inc.
and LG Electronics U.S.A., Inc. (collectively, “LG”) for judgment as a matter of law under
Rule 50(b), a new trial under Rule 59, and/or remittitur regarding damages and willfulness.
This Court had previously considered this motion and, in the Opinion of September 24, 2019,
granted the motion in part, denied it in part, and reserved decision in part, pending further
briefing. The Court ordered supplementary briefing on the question of the application of the
Promega case. After the supplementary briefing was completed, the Court held further oral
argument on April 8, 2020. For the reasons that follow, the Court grants the motion for a new
trial, and denies both the motion for judgment as a matter of law and the motion for remittitur.
In the Order of September 24, 2019, this Court held that the jury verdict returned on
April 12, 2019, finding that LG’s infringement was willful and awarding $45 million in
compensatory damages, was vacated in part: the Court vacated the jury’s verdict awarding $45
million in compensatory damages, but did not alter the jury verdict of willful infringement.
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The parties then submitted supplemental briefing on the question of whether Plaintiff had
waived its right to a damages award, pursuant to Promega Corp. v. Life Techs. Corp., 875 F.3d
651, 666 (Fed. Cir. 2017), and argued this question at the telephonic hearing.
The Court concludes that Plaintiff has not waived its right to a damages award, and that
Promega is distinguishable. In Promega, the Federal Circuit held:
But, as explained above, a patent owner may waive its right to a damages award
when it deliberately abandons valid theories of recovery in a singular pursuit of an
ultimately invalid damages theory. When a plaintiff deliberately takes a risk by
relying at trial exclusively on a damages theory that ultimately proves
unsuccessful, and, when challenged, does not dispute that it failed to present an
alternative case for damages, a district court does not abuse its discretion by
declining to give that plaintiff multiple chances to correct deficiencies in its
arguments or the record.
875 F.3d at 666. This Court has ruled that the principal damages theory Mondis pursued at trial,
the threshold theory, is not valid under Federal Circuit law, for failure to satisfy the
apportionment requirement. The Court had queried whether Mondis, in its pursuit of this invalid
damages theory, had abandoned all valid theories, and whether the Promega decision controlled
the outcome of this case. The Court concludes that Promega does not determine the proper
remedy for the defects in Mondis’ damages case at trial.
At the hearing, Mondis argued persuasively that, under both Federal Circuit and Third
Circuit law, this Court cannot properly grant LG’s motion for judgment as a matter of law. This
is correct. Under Third Circuit law:
Entry of judgment as a matter of law is a sparingly invoked remedy, granted only
if, viewing the evidence in the light most favorable to the nonmovant and giving it
the advantage of every fair and reasonable inference, there is insufficient evidence
from which a jury reasonably could find liability.
Marra v. Phila. Hous. Auth., 497 F.3d 286, 300 (3d Cir. 2007) (citations omitted). At trial, LG’s

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expert, Mr. Hansen, based on a theory that apportioned, testified that his expert opinion was that
Mondis was entitled to damages in the amount of $1.9 million. Hansen’s opinion constitutes
sufficient evidence from which a jury might reasonably award damages.
The parties do not dispute that the Federal Circuit reviews JMOL motions under the law
of the regional Circuit. SRI Int’l, Inc. v. Cisco Sys., 918 F.3d 1368, 1380 (Fed. Cir. 2019). In
SRI, the district court was in the Third Circuit, and the Federal Circuit applied the Marra
standard, quoted above. Id. Viewing the evidence in the light most favorable to the nonmovant,
Mondis, the Court cannot conclude that there was insufficient evidence from which the jury
could reasonably award some amount of damages. 1 This Court may not, therefore, grant LG’s
Rule 50(b) motion. As Mondis argued, that option is not available. This Court need not strain to
apply Promega, because it may not be construed to contradict the Third Circuit law which is
controlling on this issue. 2 Promega cannot justify a grant of JMOL under these facts. LG’s
motion for judgment of no damages, as a matter of law, must be denied.

1

Moreover, LG contends, incorrectly, that this Court, in its Opinion vacating the jury’s damages
award, “rejected Plaintiffs’ reliance on their license agreements.” (LG Supp. Br. 17.) This Court
found Plaintiff’s threshold theory to violate the Federal Circuit’s apportionment requirement; it
did not reject the use of prior licenses as evidence relevant to the Georgia-Pacific analysis.
2
The Court observes, however, that Mondis effectively distinguished Promega on the facts: the
Federal Circuit found that the patentee had expressly disavowed any claim to reasonable royalty
damages, relying exclusively on a lost profits damages theory at both trial and during litigation
of the subsequent JMOL motion. 875 F.3d at 661. After an adverse Supreme Court decision
invalidated the lost damages approach, the Federal Circuit held that, in essence, the patentee,
having waived any reasonable royalty, had run out of options for patent damages. Id. at 666. As
the Federal Circuit stated, it was “an unusual case,” and it is not analogous. Id. LG has not
persuaded this Court that Mondis has run out of options for a patent damages case. Certainly,
having put on a case seeking reasonable royalties, Mondis cannot be said to have disavowed a
claim to reasonable royalty damages, as Promega had. Mondis may have offered expert
testimony for an invalid theory, but that is quite different from waiving an entire category of
damage theories, as Promega did.
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In the alternative, LG moves for a new trial, or remittitur to reduce the amount of
damages to $1,904,998 million. Federal Rule of Civil Procedure 59(a) states:
The court may, on motion, grant a new trial on all or some of the issues—and to
any party—as follows: (A) after a jury trial, for any reason for which a new trial
has heretofore been granted in an action at law in federal court . . . .
“The authority to grant a new trial resides in the exercise of sound discretion by the trial court.”
Wagner v. Fair Acres Geriatric Ctr., 49 F.3d 1002, 1017 (3d Cir. 1995). This Court finds that,
having already vacated the jury’s damages verdict, it is in the interest of justice to grant the
motion for a new trial on the amount of damages. Although, at trial, Mondis relied principally
on a theory of damages that did not meet the requirements of Federal Circuit law, the record
contains substantial evidence from which a reasonable jury could make a damages determination
that would be legally valid. The best and most just remedy here is a new trial. Indeed, LG
sought a new damages trial as one outcome in its initial motion to vacate the damages verdict. 3
Although, in its initial response to LG’s moving brief, Mondis sought to defend the jury award,
once this Court issued its decision to vacate the damages verdict, and Ordered supplementary
briefing, Mondis requested a new damages trial.
Mondis now argues that one important reason why there should be a new trial is that 35
U.S.C. § 284 requires the Court to award damages not less than a reasonable royalty. There is
merit to what Mondis contends, even if it may not be as absolute as Mondis would like. The

3

In the supplemental briefing, LG shifted course and argued that the Court should not allow
Mondis to proceed with a new trial premised on an undisclosed theory of damages. LG here
conflates two distinct issues. The Court today grants LG’s motion for a new trial, but does not
have before it any application from Mondis to present a new damages theory at that trial. While
this may well be the subject of future litigation in this case, the Court will cross that bridge if and
when it comes to it. Furthermore, LG appears to have forgotten that this Court has before it a
motion for a new trial filed by LG, not Mondis.
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statute says:
Upon finding for the claimant the court shall award the claimant damages
adequate to compensate for the infringement, but in no event less than a
reasonable royalty for the use made of the invention by the infringer, together
with interest and costs as fixed by the court.
35 U.S.C. § 284. Mondis points out, correctly, that the wording of this provision is mandatory,
not discretionary: “the court shall award.” As the discussion that follows will show, the Federal
Circuit has limited this mandate to a damages award that is reasonably supported by the evidence
at trial.
In support of this argument, Mondis points to the Federal Circuit’s decision in Dow
Chemical, in which it held:
The statute is unequivocal that the district court must award damages in an
amount no less than a reasonable royalty. Further, section 284 is clear that expert
testimony is not necessary to the award of damages, but rather “may [be] received
. . . as an aid.” 35 U.S.C. § 284 (2000) (emphasis added).
The district court’s conclusion that no damages could be awarded, in light of the
presumption of damages when infringement is proven, was in error. But, the
district court’s obligation to award some amount of damages does not mean that a
patentee who puts on little or no satisfactory evidence of a reasonable royalty can
successfully appeal on the ground that the amount awarded by the court is not
‘reasonable’ and therefore contravenes section 284. Should Dow prove
infringement of claims 23 and 24 the district court should consider the so-called
Georgia-Pacific factors in detail, and award such reasonable royalties as the
record evidence will support.
Dow Chem. Co. v. Mee Indus., 341 F.3d 1370, 1381-82 (Fed. Cir. 2003) (citations omitted.)
This indeed supports Mondis’ position. In Dow, the Federal Circuit made clear three key points.
First, after a patentee has proven infringement, § 284 gives rise to a presumption of entitlement
to an award of damages. Second, the absence of admissible expert testimony in support of a
damages theory does not alter this presumption. Third, under such circumstances, the trial court

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must apply the Georgia-Pacific analysis and award such reasonable royalties as the record
evidence will support.
This is not a case in which the exclusion of Bratic’s testimony, advancing a legally
invalid damages theory, leaves Mondis with no evidence of damages. To the contrary, at trial,
Mondis presented a great deal of relevant evidence, particularly the past licensing agreements
and the Innolux verdict. The record evidence without Bratic’s testimony was sufficient to allow
a reasonable jury to award reasonable royalties. Moreover, LG’s expert, Mr. Hansen, testified
that Mondis was entitled to an award of $1.9 million in damages. As Mondis argues, this in
itself provides a basis in evidence to calculate a reasonable royalty.
Mondis argues, persuasively, that, under Federal Circuit law, defects in a patentee’s
damages case do not mandate an award of zero damages, and that the proper remedy for material
and prejudicial defects at trial that require a verdict to be vacated is a new trial without those
defects. 4 Mondis also cites the Federal Circuit’s decision in Apple, where it held:
The district court agreed and concluded that Apple was not entitled to any
measure of damages because Apple had failed to show that its measure of
damages was correct. We disagree and hold that a finding that a royalty estimate
may suffer from factual flaws does not, by itself, support the legal conclusion that
zero is a reasonable royalty.
Due to the procedural posture in this case, we must assume that the patents at
issue are valid and infringed. With infringement assumed, the statute requires the
court to award damages “in no event less than a reasonable royalty.” 35 U.S.C. §
284. Because no less than a reasonable royalty is required, the fact finder must
determine what royalty is supported by the record.
4

LG cites the pre-Federal Circuit decision by the Third Circuit in Devex, but the Devex Court
took the same position: “In the absence of any evidence as to what would constitute a reasonable
royalty in a given case, a fact finder would have no means of arriving at a reasonable royalty, and
none could be awarded.” Devex Corp. v. GMC, 667 F.2d 347, 361 (3d Cir. 1981). The Devex
Court held that an award of zero damages is appropriate when there is no evidence to support
damages, not when a patentee’s case has legal defects. Id.
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If a patentee’s evidence fails to support its specific royalty estimate, the fact
finder is still required to determine what royalty is supported by the record.
Indeed, if the record evidence does not fully support either party’s royalty
estimate, the fact finder must still determine what constitutes a reasonable royalty
from the record evidence. Certainly, if the patentee’s proof is weak, the court is
free to award a low, perhaps nominal, royalty, as long as that royalty is supported
by the record.
Thus, a fact finder may award no damages only when the record supports a zero
royalty award. For example, in a case completely lacking any evidence on which
to base a damages award, the record may well support a zero royalty award.
Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1327-28 (Fed. Cir. 2014) (citations omitted).
Mondis argues, persuasively, that this confirms that the trial court has an obligation to award
damages in whatever amount is supported by the evidence of record. Furthermore, an award of
zero damages is appropriate only when the record supports it. The evidentiary record at trial
does not support an award of zero damages. Apple also supports Mondis’ position that the
proper remedy here is a new trial. See also Info-Hold, Inc. v. Muzak LLC, 783 F.3d 1365, 1372
(Fed. Cir. 2015) (“a patentee’s failure to show that its royalty estimate is correct is insufficient
grounds for awarding a royalty of zero.”)
Another apposite Federal Circuit case is Power Integrations, Inc. v. Fairchild
Semiconductor Int'l, Inc., 904 F.3d 965, 980 (Fed. Cir. 2018). In Power, in short, the Federal
Circuit found that the patentee’s damages evidence at trial was insufficient as a matter of law to
support the jury’s damages award – just as this Court has found in the instant case. Id. The
Federal Circuit held that the proper remedy was a new trial: “Because the evidence presented by
Power Integrations was insufficient as a matter of law to invoke the entire market value rule, we
vacate the award of damages and remand for a new trial.” Id. This Court having determined that
the patentee’s damages evidence at trial was insufficient as a matter of law to support the jury’s
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damages award, and having vacated the award of damages, the proper remedy is a new trial.
There is one subsequent Federal Circuit decision that cites Promega on these issues. In
Finjan, the Federal Circuit held:
While it is clear that Finjan failed to present a damages case that can support the
jury’s verdict, reversal of JMOL could result in a situation in which Finjan
receives no compensation for Blue Coat’s infringement of the ‘844 patent.
Ordinarily, the district court must award damages in an amount no less than a
reasonable royalty when infringement is found, unless the patent holder has
waived the right to damages based on alternate theories, Promega Corp. v. Life
Tech. Corp., 875 F.3d 651, 660 (Fed. Cir. 2017). We therefore remand to the
district court to determine whether Finjan has waived the right to establish
reasonable royalty damages under a new theory and whether to order a new trial
on damages.
Finjan, Inc. v. Blue Coat Sys., 879 F.3d 1299, 1312 (Fed. Cir. 2018) (citations omitted). This
supports Mondis’ argument that defects in a patentee’s damages case should not foreclose an
award of damages, unless the patentee has waived the right to establish damages under a new
theory. It also supports the position that proof of infringement gives rise to a presumption of
entitlement to an award of damages. A new trial is the appropriate remedy in this case.
LG’s motion sought, in the alternative, remittitur of the damages award. The Court
concludes that a new trial is the better remedy. Were the Court to decide to grant the motion for
remittitur, it would be required to apply the maximum recovery rule. Shockley v. Arcan, 248
F.3d 1349, 1362 (Fed. Cir. 2001). This would require a course of briefing, reweighing the
evidence at trial, making factual determinations, and calculation of the maximum damages award
supported by the evidence. Plaintiff would then have the right to decline the award and obtain a
new trial. Id. Mondis has made clear that, at this juncture, it seeks a new trial. There is no
advantage to anyone to litigate the damages award in post-trial proceedings, only to have Mondis
then assert its right to decline the award and obtain a new trial. It is a far more efficient use of
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everyone’s resources to proceed directly to a new trial.
This Court grants LG’s motion for a new trial, subject to the following limitations. At the
new trial, the parties may not offer evidence that was not presented at the previous trial, with one
potential exception: should Mondis seek to offer the expert testimony of Mr. Bratic, based solely
on the evidence presented at the previous trial, Mondis may submit an updated expert report,
which this Court will consider in a Daubert hearing. All expert testimony must reflect the
Federal Circuit law on apportionment, as discussed in the Court’s Opinion in which it vacated
the jury damages verdict.
For these reasons,
IT IS on this 22nd day of April, 2020
ORDERED that LG’s motion for judgment as a matter of law under Rule 50(b), a new
trial under Rule 59, and/or remittitur regarding damages and willfulness (Docket Entry No.
489) is GRANTED in part and DENIED in part; and it is further
ORDERED that LG’s motion for judgment as a matter of law and/or remittitur is
DENIED; and it is further
ORDERED that LG’s motion for a new trial is GRANTED.

s/ Stanley R. Chesler
Stanley R. Chesler, U.S.D.J.

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