Humanscale Corporation v. CompX International Inc, et al

Filing 334

MEMORANDUM AND OPINION; Signed by District Judge James R. Spencer on 8/23/10. (lsal)

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION HUMANSCALE CORP., Plaintiff/Counterclaim Defendant, v. COMPX INTERNATIONAL INC. and WATERLOO FURNITURE COMPONENTS LTD., Defendants/Counterclaim Plaintiffs. MEMORANDUM OPINION This matter is before the Court on CompX's Motion for Entry of Judgment on the Jury's Verdict and for Award of PreJudgment and PostJudgment Interest (Dock. No. 262). On April 29, 2010, the Court took this Motion under advisement pending a resolution of all posttrial motions (Dock. No. 293). Now that those remaining motions are resolved, the instant Motion will be GRANTED in part and DENIED in part. I. BACKGROUND In February 2009, Humanscale Corp. initiated this suit when it filed a Complaint a g a i n s t C o m p X I n t e r n a t i o n a l I n c . and CompX Waterloo (collective l y " C o m p X " ) r e g a r d i n g H u m a n s c a l e ' s U . S . P a t e n t N o . 5 , 2 9 2 , 0 9 7 ( " t h e ` 0 9 7 P a t e n t " ) . I n March, CompX filed a counterclaim, alleging that Humanscale infringes on two of CompX's patents, specifically U.S. Patent Nos. 5,037,054 ("the `054 Patent") and 5,257,767 (" t h e ` 7 6 7 P a t e n t " ) (collectively "CompX Patents"). Action No. 3:09­CV­86

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By Order of this Court, Humanscale's suit regarding the `097 Pa t e n t w a s s t a y e d pending an investigation by the International Trade Commission. CompX's counterclaims regarding the CompX Patents, however, were not stayed. After a seven day trial, the jury returned a verdict on February 25, 2010 in favor of CompX, finding that Humanscale Models KM, DS, 2G, 2C, 3G, 3C, 4G, 4GAD, 5G, 5GSM ( c o l l e c t i v e l y " I n f r i n g i n g P r o d u c t s " ) i n f r i n g e d C o m p X ' s ` 0 5 4 a n d `767 Patents (Dock. No. 249). The jury awarded CompX $19,372,500 in past damages, whi c h c o n s i s t s o f a n a w a r d of $17,220,000 for Humanscale's infringement from March 27, 2003 until March 27, 2009 and $2,152,500 for Humanscale's infringement from March 27, 2009 until December 31, 2009. The jury also determined that CompX should receive a rea s o n a b l e r o y a l t y r a t e o f 6 % for Humanscale's sales of the Infringing Products from January 1, 2010 until the expiration of the CompX's Patents on June 13, 2010. The jury also explicitly concluded that (1) neither of CompX's Patents were invalid as obvious; (2) there was no onsale bar for CompX's Patents; (3) CompX had not unreasonably delayed, without justification, in pursuing its suit against Humanscale; and (4) Humanscale had not suffered any economic or evidentiary prejudice as a result of any delay. Based on that verdict, CompX now asks the Court to enter judgement and to award prejudgment and postjudgment interest. Humanscale opposes the motion. II. DISCUSSION With the entry of judgment, to which Humanscale can no longer object, CompX asks the Court to include an award of p r e j u d g m e n t i n t e r e s t . P r e j u d g m e n t i n t e r e s t i s a w a r d e d p u r s u a n t t o 3 5 U . S . C . § 2 8 4 , w h i c h s t a t e s , i n p a r t , t h a t " [ u ] p on f i n d i n g f o r t h e c l a i m a n t , t h e

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court shall award the claimant damages . . . together with inte rest and costs as fixed by the court." "An award of interest [ ] serves to make the patent ow ner whole, since his damages consist not only of the value of the royalty payments but also of the foregone use of the m o n e y b e t w e e n t h e t i m e o f i n f r i n g ement and the date of the judg ment." General Motors Corp. v. Devex Corp., 461 U.S. 648, 65556 (1983). The Supreme Court has held "that prejudgment interest should be awarded under § 284 absent some justification for withholding such an award." Id. a t 6 5 7 . B e c a u s e p r e j u d g m e n t i n t e r e s t h a s n o p u n i t i v e purpose, it must be applied only to the compensatory damages, n o t e n h a n c e d o r o t h e r punitive damages. Id. a t 6 5 5 . Humanscale argues that CompX is n o t e n t i t l e d t o p r e j u d g m e n t i n t e r e s t b e c a u s e i t delayed bringing this lawsuit for nearly a decade and did so as a counterclaim only after Humanscale brought suit against CompX. While the Supreme Court did not provide an exhaustive list of reasons why prejudgment interest could be withheld, it did state that prejudgment interest could be re fused or limited "where the pat e n t o w n e r h a s b e e n responsible for undue delay in prosecuting the lawsuit." Id. at 657; see, e.g., Crystal Semiconductor Corp. v. Tritech Microelectronics Int'l, Inc., 246 F.3d 1336, 1362 (Fed. Cir. 2001) (upholding district court's refusal to award prejudgment i n t e r e s t b a s e d o n p l a i n t i f f ' s strategic delay in bringing suit); SaintGobain Autover USA, Inc. v. Xinyl Glass N. Am., Inc., No. 06cv2781, 2010 WL 1487818, at *23 (N.D. Oh. Apr. 13, 2010) (denying prejudgment interest where plaintiff "undul y delayed in bringing suit"). The Court agrees with Humanscale and thus denies an award of prejudgment interest. As detailed in the Court's Opinion on Humanscale's laches motion (Dock. No. 330),

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CompX unreasonably delayed bringing this suit for nine years. Although in the end the C o u r t c o n c l u d e d t h a t t h e d e l a y d i d n o t r e s u l t i n a n y p r e j u d i c e t o H u m a n s c a l e , t h e d e l a y w a s nevertheless undue and provides a justification for withholding prejudgment interest. See Church & Dwight Co. v. Abbott Labs., No. 052142, 2009 WL 2230941, at *7 (D.N.J. July 23, 2009). In addition to prejudgment interest, CompX also asks the Court t o a w a r d i t postjudgment interest. Under 28 U.S.C. § 1961, postjudgment interest "shall be allowed on any money judgment in a civil case recovered in a district court . . . ." "Such interest shall be calculated from the date of the e n t r y o f t h e j u d g m e n t , a t a r a t e e q u a l t o t h e w e e k l y a v e r a g e 1year constant maturity Treasury yield, . . . compounded annually." Id. The Court finds that postjudgment interest is a ppropriate and will be awarded. III. CONCLUSION F o r t h e f o r e g o i n g r e a s o n s , t h e C o u r t D E N I E S t h e r e q u e s t f o r p r ej u d g m e n t i n t e r e s t and GRANTS the request for postjudgment interest. Let the Clerk send a copy of this Memorandum to all counsel of record. An appropriate order will issue. It is SO ORDERED.

/s/ James R. Spencer Chief United States District Judge

ENTERED this 23rd d a y o f A u g u s t 2 0 1 0 4