Hafco Foundry and Machine Company, Incorporated v. GMS Mine Repair and Maintenance, Inc.

Filing 99

MEMORANDUM OPINION AND ORDER: Defendant's 94 motion for judgment as a matter of law or, in the alternative, a new trial is GRANTED in part and DENIED in part as follows: 1) The Motion for Judgment as a Matter of Law is denied in its entire ty; and 2) The alternative Motion for a New Trial is granted insofar as the court grants a new trial nisi remittitur. Hafco shall agree to remit damages in excess of $0 by filing a document no later than Thursday, 4/5/2018, indicating that it agrees to the remittitur. Failure to do so will result in the Court granting a new trial on the issue of damages. The motion for a new trial is denied in all other respects. Signed by Senior Judge David A. Faber on 3/30/2018. (cc: attys) (mk)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
AT BLUEFIELD
HAFCO FOUNDRY AND MACHINE
COMPANY, INCORPORATED,
Plaintiff,
v.

CIVIL ACTION NO. 1:15-16143

GMS MINE REPAIR AND
MAINTENANCE, INC.,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending before the court is defendant’s motion for judgment
as a matter of law (“JMOL”) or, in the alternative, for a new
trial.

(ECF No. 94).

For the reasons discussed below, the

motion for a new trial is GRANTED in part and DENIED in part.
The motion for judgment as a matter of law is DENIED.
I. Background
Plaintiff Hafco Foundry and Machine Company, Inc. (“Hafco”)
filed the instant action for patent infringement on December 15,
2015.

Hafco owns the patent for a Rock Dust Blower, U.S. Design

Patent No. D681,684S.

In 2014, Hafco entered into an agreement

with Pioneer Conveyor, an affiliate of GMS Mine Repair and
Maintenance, Inc. (“GMS”), by which Pioneer Conveyor was to
distribute Hafco rock dust blowers to mining customers.

The

distribution agreement between Hafco and Pioneer Conveyor was
terminated in or around April or May 2015.

According to Hafco,

following termination of the aforementioned distribution

agreement, GMS began selling infringing rock dust blowers within
the Southern District of West Virginia.

GMS, on the other hand,

contends that its rock dust blower did not infringe the ‘684
design patent.
Trial of this matter began on May 15, 2017.

After a three-

day trial, the jury returned a verdict finding that GMS had
infringed Hafco’s `684 patent and that the infringement was
willful.

The jury awarded Hafco damages in the amount of

$123,650.

On May 18, 2017, the court entered judgment in

plaintiff’s favor in the amount of $123,650.

The instant motion

followed.
II. Standard of Review
The United States Court of Appeals for the Federal Circuit
has exclusive jurisdiction over an appeal from a final decision
of a district court when the action “arise[s] under the patent
laws.”

Biotechnology Indus. Org. v. Dist. of Columbia, 496 F.3d

1362, 1367 (Fed. Cir. 2007) (citing Christianson v. Colt Indus.
Operating Corp., 486 U.S. 800, 807 (1988)).

The law of the

regional circuit controls the standard of review for the denial
of a motion for JMOL and a motion for a new trial.

Wordtech

Sys., Inc. v. Integrated Networks Solutions, Inc., 609 F.3d 1308,
1312 (Fed. Cir. 2010); see also AbbVie Deutschland GmbH & Co., KG
v. Janssen Biotech, Inc., 759 F.3d 1285, 1295 (Fed. Cir. 2014)
(“In patent appeals, we apply the law of the regional circuit to

2

which the district court appeals normally lie, unless the issue
pertains to or is unique to patent law.”) (internal quotation and
citation omitted).
Once a jury has returned its verdict, there are limited
circumstances that allow the court to overturn it.

The same

standard applicable to a motion for summary judgment controls the
analysis of a Rule 50(b) motion.

Dennis v. Columbia Colleton

Med. Ctr., Inc. et al., 290 F.3d 639, 644 (4th Cir. 2002).
“[W]hen a jury has returned a verdict, the district court may
grant a Rule 50(b) motion for judgment as a matter of law only
if, `viewing the evidence in a light most favorable to the
non-moving party (and in support of the jury's verdict) and
drawing every legitimate inference in that party's favor, the
only conclusion a reasonable jury could have reached is one in
favor of the moving party.’”

Pitrolo v. Cnty. of Buncombe, No.

09-2051, 407 F. App'x 657, at *1 (4th Cir. 2011) (quoting Int'l
Ground Transp. Inc. v. Mayor & City Council of Ocean City,
F.3d 214, 218-19 (4th Cir. 2007)) (unpublished).

475

Essentially, if

a reasonable jury could only rule in favor of defendant, the
court should grant its motion, but if reasonable minds could
differ, the court must affirm the jury's verdict.

See Dennis,

290 F.3d at 645 (citing Sales v. Grant, 158 F.3d 768, 775 (4th
Cir. 1998)).

In analyzing defendant's motion, the court must

draw all reasonable inferences in plaintiff's favor but may not

3

weigh the evidence or assess the credibility of the witnesses.
See id. (citing Baynard v. Malone, 268 F.3d 228, 234 (4th Cir.
2001)).
A similar set of strictures apply to the court's
consideration of a motion under Rule 59.

Pursuant to Federal

Rule of Civil Procedure 59, a court may “on motion grant a new
trial on all or some of the issues . . . after a jury trial, for
any reason for which a new trial has heretofore been granted in
an action at law in federal court.”

According to our court of

appeals, a new trial is warranted when (1) “the verdict is
against the clear weight of the evidence;” (2) the verdict “is
based upon evidence which is false;” or (3) the verdict “will
result in a miscarriage of justice.”

McFeeley v. Jackson Street

Entertainment, LLC, 825 F.3d 235, 247 (4th Cir. 2016) (quoting
Buckley v. Mukasey, 538 F.3d 306, 317 (4th Cir. 2008)).

“The

grant or denial of a motion for a new trial is entrusted to the
sound discretion of the district court and will be reversed on
appeal only upon a showing of abuse of discretion.”

Bennett v.

Fairfax Cnty., 432 F. Supp. 2d 596, 599 (E.D. Va. 2006).
III.

Analysis

GMS contends that it is entitled to JMOL and/or a new trial
for several reasons.

First, GMS argues that court erred in

excusing for cause prospective jurors with ties to Massey Energy
and/or Alpha Natural Resources (collectively “Massey”).

4

GMS also

contends that a new trial is warranted because of alleged
improprieties in Hafco’s closing argument and errors in the
court’s instructions to the jury.

In addition, GMS contends that

there was insufficient evidence to support the jury’s verdict as
to liability and that the court erred in not allowing GMS to
introduce evidence regarding patent invalidity.

Finally, GMS

argues that the damage award of $123,650 was not supported by the
evidence.
A.

The court takes each in turn.

Alleged errors in jury selection.
GMS argues that it was denied its right to a fair trial and

impartial jury because prospective jurors associated with Massey
Energy Company (“Massey”) were improperly excused.
On April 5, 2010, an explosion occurred at the Upper Big
Branch Mine (“UBB”) in Raleigh County, West Virginia, in which
twenty-nine (29) coal miners tragically perished.

See United

States v. Blankenship, 846 F.3d 663, 666 (4th Cir. 2017).
owned and operated the Upper Big Branch mine.

See id.

Massey

Although

vigorously disputed by Massey, investigators pointed to
inadequate rock dusting as one of the causes of the explosion at

5

UBB.1

See In re Massey Energy Co. Sec. Litig., 883 F. Supp. 2d

597, 605 (S.D.W. Va. 2012).
Counsel for Hafco, Andrew Fusco, represented a number of
employees involved in or associated with the Upper Big Branch
explosion in various lawsuits.

During voir dire, Hafco moved to

excuse those jurors with ties to Massey and/or Alpha Natural
Resources (“Alpha”).2

Although those prospective jurors

indicated that they did not know Mr. Fusco and that they could
nevertheless be fair and impartial, Hafco maintained that, given
the extensive publicity surrounding the UBB explosion and the
negative public opinion regarding Massey, those jurors should be
excused for cause.3

Although the court was initially inclined to

do individual follow-up questioning with each of these

1

At trial, William Fornaci, Hafco’s chief engineer and copresident, testified that it was a federal requirement that the
walls of a coal mine must be coated with rock dust. According to
Fornaci, coating the walls of a mine with rock dust makes the
mine safer because rock dust helps extinguish a fire. He further
testified that Hafco’s rock dust blower was used as a means of
distributing rock dust throughout the mine.
2

On June 1, 2011, Alpha acquired Massey. See Skeens v.
Alpha Natural Resources, Inc., Civil Action No. 5:12–cv–06854,
2013 WL 1966238, *2 (S.D.W. Va. May 10, 2013).
3

Donald Blankenship, Massey’s former chairman and CEO, was
convicted in this court of conspiring to violate federal mine
safety laws and regulations. See Blankenship, 846 F.3d at 666.
Because of the extensive negative media coverage surrounding his
trial and the UBB explosion, Blankenship filed three motions to
transfer venue. See United States v. Blankenship, CRIMINAL
ACTION NO. 5:14-cr-00244, 2015 WL 8485263 (S.D.W. Va. Dec. 9,
2015).
6

prospective jurors, the court determined that such questioning
would ultimately taint the prospective jurors.

The court granted

Hafco’s motion and excused Jurors 21, 26, 27, and 37 for cause.
The court explained to the parties that only one of the veniremen
stricken for cause had any possibility of serving on the jury
given the order in which the jurors were seated and the manner in
which the court allowed the parties to exercise their peremptory
challenges.4
“It is the settled law of this circuit that a district judge
retains `a very broad discretion in deciding whether to excuse a
juror for cause and his decision will not be overturned except
for manifest abuse of that discretion.’”

4

United States v.

Each prospective juror is assigned a number by the
computer. The numbers are randomly assigned by the computer and
the court has no input into the order of the prospective jurors.
In this case, the venire was composed of 37 jurors and each
assigned a number from 1 to 37. Because of the extra peremptory
strikes afforded to each side, the court needed a total of 20
persons to seat the jury in this case: eight people to serve on
the jury and six peremptory strikes per side. As is the court’s
customary practice, the first twenty people remaining on the
computer-generated list, taking into account persons excused for
cause, were the only ones who would have been able to serve on
this jury. See ECF No. 80. Therefore, the fact that the court
excused Jurors No. 26, 27, and 37 for cause, did not prejudice
GMS because, based upon the order in which the jurors were
seated, they never would have been selected to serve on this
jury. See Fierro v. Ruesch Corp., 610 F. Supp. 778, 783 (E.D.
Penn. 1985) (“The panel members that plaintiff asked to have
excused were #10 and #15. Because of the manner in which the
jury was selected, #15 could not have served as a juror in the
case in any event.”).
7

Turner, 389 F.3d 111, 115 (4th Cir. 2004) (quoting Poynter v.
Ratcliff, 874 F.2d 219, 222 (4th Cir. 1989)).
An abuse of discretion can be found in either of two
ways. First, a district court abuses its discretion if
it ignores a per se rule of disqualification after
counsel moves to exclude a venireman. Second, if the
court demonstrates a clear disregard for the “actual
bias” of an individual venireman, reversal is
justified.
Id.
“The decision whether to exclude prospective jurors . . .
should be made in each instance on the particular facts involved
and under the established principles governing excuse for cause.”
Poynter, 874 F.2d at 222.

“The decision of a trial judge to

dismiss a juror for cause is given deference.”

Shabazz v. Hall,

No. 12-CV-50355, 2015 WL 4561272, *4 (N.D. Ill. July 29, 2015);
see also Patton v. Yount, 467 U.S. 1025, 1038 (1984) (noting that
a trial court’s evaluation of a juror is entitled to “special
deference”); United States v. McCarthy, 961 F.2d 972, 976 (7th
Cir. 1992) (“There are few aspects of a jury trial where we would
be less inclined to disturb a trial judge’s exercise of
discretion, absent clear abuse, than in ruling on challenges for
cause in the empanelling of a jury.”) (internal quotation and
citations omitted).
GMS failed to demonstrate any prejudice it suffered because
Juror No. 21 was excused for cause.

“Our standard of review

mandates that a trial court’s decision to strike a juror for

8

cause be reversed only where a defendant can show actual
prejudice.”

Cravens v. Smith, 610 F.3d 1019, 1031 (8th Cir.

2010) (holding that district court did not abuse its discretion
in striking two jurors for cause, in part because movant was
unable to show “actual prejudice” by the court’s decision).
First, the parties were given three additional peremptory strikes
per side.

It is almost certain that Hafco would have used one of

its peremptory strikes on Juror Number 21 if the court had not
stricken him for cause.

Therefore, GMS can only speculate that

Juror No. 21 would have been empaneled but for the court’s
excusing him for cause.

Further, GMS does not argue that any

juror who actually decided this case was unqualified or biased.
See United States v. Jensen, 41 F.3d 946, 960 (5th Cir. 1994)
(holding that district court’s sua sponte dismissal of
prospective juror was not reversible error where movant did not
contend that any member of empaneled jury was biased); Shabazz,
2015 WL 4561272, at *7 (“[D]espite Plaintiff arguing that he
`would have likely exercised his last peremptory challenge on the
final juror’ he cannot show any harm in the form of an
unqualified or partial juror who actually decided the case. . . .
He is asking the Court to grant a new trial in the absence of
harm.”).
Finally, GMS’s argument that excusing Juror No. 21 for cause
“eliminated virtually every member of the jury panel who had any

9

significant connection to the coal industry,5 except one
potential juror whom Plaintiff subsequently got rid of with one
of its peremptory strikes[,]” see ECF No. 94 at p.2, does not
ring true.

During voir dire, the following veniremen testified

as follows:
!

Juror No. 4 indicated that her husband was a former
mine worker.

!

Juror No. 5 indicated that her stepfather worked in the
coal mines for Massey/Alpha.

!

Juror No. 7 stated that her husband was a retired coal
miner and that both her son and stepson were coal
miners (who had previously worked for Alpha).

!

Juror No. 9 was a coal miner and testified that he had
used rock dust blowers in his work.

!

Juror No. 12 stated that most of his wife’s family
worked in mines or were associated with mining and that
he had rock dusted in the past.

!

Juror No. 15 testified that her grandfather was a coal
miner.

!

Juror No. 16 indicated that her uncle worked in coal
mines for years.

!

Juror No. 17 indicated that his grandfather was a state
mine inspector.

!

Juror No. 18 indicated that her father did surface
mining for approximately 25 years and her grandfather
was involved in mining construction.

5

While GMS might have preferred to have coal miners on the
jury because it thought they would be helpful to its position, it
was entitled only to a fair and impartial jury – not a favorable
one. See Press–Enterprise Co. v. Superior Court of California,
464 U.S. 501, 511 n.9 (1984).
10

!

Juror No. 22 testified that both his father and
grandfather worked in underground mines for years.

All of these prospective jurors were on the final list from which
the parties exercised their peremptory strikes.

Jurors No. 5,

12, 15, 16, and 18 actually served on the jury while the others
were stricken through the use of peremptory strikes.

Given the

foregoing, it is clear that the court did not systematically
eliminate every prospective juror with a connection to the coal
mining industry.
The Supreme Court has long held that a litigant is
“entitled to a fair trial but not a perfect one.”
McDonough Power Equip., Inc. v. Greenwood, 464 U.S.
548, 553 (1984). The process of voir dire is designed
to help impanel a “fair [and] impartial jury, not a
favorable one.” Press–Enterprise Co. v. Superior Court
of California, 464 U.S. 501, 511 [n.9] (1984).
Kelley v. Wegman's Food Markets, Inc., 98 F. App'x 102, 104 (3d
Cir. 2004) (“It would have been preferable if the jurors had been
questioned on the record in the presence of the District Court
and if the jurors now at issue had been questioned in greater
depth about their familiarity with the Wegmans' store in question
and their ability to sit impartially.

Nevertheless, we cannot

say that the District Court abused its discretion under the
particular circumstances here [in excusing the jurors for
cause.]”).

Under the facts and circumstances of this case, GMS

has failed to show that Juror No. 21’s excusal for cause was
manifest error such that a new trial is warranted.

11

B.

Alleged improprieties in Hafco’s closing argument.
According to GMS, during closing arguments, Hafco did the

following: 1) “falsely declared to the jury . . . that Hafco and
GMS were the only competitors in the market segment”; 2)
“deceptively suggested to the jury that a prior distributorship
agreement between Plaintiff and Defendant . . . had a one year
term”; and 3) “deceptively referred to Plaintiff’s product as a
`machine’”.

ECF No. 94 at p.3.

Hafco contends that “[t]hese

false and misleading statements . . . were especially prejudicial
to Defendant because each of them goes directly to the factors by
which the jury was instructed to consider the issue of
willfulness.”

Id.

Notably, GMS did not make specific citations

to the trial transcript to support its arguments about what was
actually said during closing argument.
GMS failed to object to the allegedly improper argument
during trial.

According to our appeals court: “It is the

universal rule that during closing argument counsel cannot as a
rule remain silent, interpose no objections, and after a verdict
has been returned seize for the first time on the point that the
comments to the jury were improper and prejudicial.”

Dennis v.

Gen. Elec. Corp., 762 F.2d 365, 366-67 (4th Cir. 1985) (internal
citations and quotations omitted); see also United States v.
Socony-Vacuum Oil Co., 310 U.S. 150, 238-39 (1940) (“[C]ounsel .
. . cannot as a rule remain silent, interpose no objections, and

12

after a verdict has been returned seize for the first time on the
point that the comments to the jury were improper and
prejudicial.”).

Therefore, a motion for a new trial should be

denied “where the moving party has failed to timely object to the
alleged impropriety giving rise to the motion.”

Id. at 367.

“The failure to object at the proper time will be overlooked on
appeal only if exceptional circumstances exist such as when the
error is so obvious or so serious that the public reputation and
integrity of the judicial proceeding is impaired.”

Id.

Given GMS’s failure to object when the statements were made,
it is foreclosed from doing so now unless “exceptional
circumstances” exist.

GMS does not offer any reasons why the

court should consider its objections at this juncture, much less
any reason sufficient to overcome its failure to object.
Accordingly, the argument is waived.

See Dennis, 762 F.2d at 367

(“By remaining silent, plaintiffs provided the court no
opportunity to grant them the very relief they now request.
Instead, gambling on a favorable verdict, the plaintiffs
permitted the trial to proceed, and the jury to retire to reach a
verdict.

Only after an adverse verdict have the plaintiffs

raised this point.

In such a situation, they cannot claim harm

from what they had opportunity to remedy, but did not.”)
(internal citation omitted); West Franklin Preservation Limited
Partnership v. Nurtur North Carolina, LLC, 1:14cv266, 2016 WL

13

3039832, *2 (M.D.N.C. May 27, 2016) (“[I]mproper remarks in
closing arguments do not provide grounds for a new trial unless
the error is inconsistent with substantial prejudice. . . .

This

is particularly true when a party fails to object to the
allegedly improper argument at trial.”) (internal quotation and
citation omitted); Morris v. Bland, No. 5:12-cv-3177-RMG, 2014 WL
12637911, *8 (D.S.C. Dec. 31, 2014) (“Defendants did not object
to this statement when made or move for a mistrial after
closings, outside of the presence of the jury; this it is
waived.”);

VS Technologies, LLC v. Twitter, Inc., Civil Action

No. 2:11cv43, 2012 WL 1481508, *12 (E.D. Va. Apr. 27, 2012) (“As
Plaintiff failed to timely object to comments made to the jury
during closing argument, Plaintiff’s motion for a new trial
should not be granted.

Further, any failure to object to such

comments cannot be overlooked because they do not constitute
errors so obvious or so serious that the public reputation and
integrity of the judicial proceeding is impaired.”) (internal
quotation and citation omitted); Liggins v. Clarke County School
Board, Civil Action No. 5:09CV00077, 2010 WL 4286147, *3 (W.D.
Va. Oct. 28, 2010) (“While Liggins argues that counsel’s comments
were so prejudicial as to warrant a new trial, he did not object
when the statements were made during closing argument and may not
do so now for the first time.”); Liggett Group, Inc. v. Brown &
Williamson Tobacco Corp., 748 F. Supp. 344, 365-66 (M.D.N.C.

14

1990) (denying motion for a new trial where movant failed to
object to allegedly prejudicial closing arguments during trial).
Furthermore, even if exceptional circumstances did exist to
warrant the court’s consideration of GMS’s belated arguments, GMS
would still not be entitled to a new trial because there was no
improper argument.

With respect to the first of the allegedly

false and misleading statements, the record reflects that Hafco
did not argue that Hafco and GMS were the only competitors in the
market segment.

See Exhibits A and B (ECF Nos. 97-1, 97-2).

Furthermore, when confronted with plaintiff’s memorandum in
opposition on this point, GMS did not file a reply brief in order
to point out those specific parts of the record where this
statement was allegedly made.

Accordingly, GMS’s argument must

fail.
Likewise, counsel for Hafco did not “deceptively suggest[]”
during closing that the distributorship agreement had a one-year
term.

See id.

During his closing, plaintiff’s counsel actually

said this:
Hafco entered into this contract to hear about
this great new device that these folks had engineered,
designed, and patented. This is something good for the
business. This is something we can really sell. We
want to learn all about it.
Then for a year they made a half-hearted attempt
at selling it. And all they really did was provide
devices to customers we already had. They didn’t grow
the market like they were supposed to. So Hafco
terminated the agreement.

15

So at that point, they had been working with the
device for a year. They know the device. The device
is now identified in the marketplace with GMS because
they’re selling it. And we get terminated, or we
terminate them.
ECF No. 97-1 at pp.12-13.

As the foregoing makes clear,

plaintiff’s counsel was essentially arguing that GMS sold the
rock dust blower on behalf of Hafco and after approximately a
year, dissatisfied with the results, Hafco terminated the License
and Distributorship Agreement.

There is nothing to suggest that

counsel’s argument in this regard was false or that it
contradicted the terms of the distributorship agreement.
Defendant’s argument is without merit.
GMS also contends that Hafco’s reference to the rock dust
blower as a “machine” during closing argument mandates the grant
of a new trial because doing so violated the court’s ruling
regarding the exclusion of evidence regarding functionality of
design.

First, the rock dust blower is a machine so there is

nothing false or misleading about the use of that word.

Second,

the use of the word “machine” did not open the door to the type
of evidence that GMS sought to introduce during trial.

“[T]he

fact that the article of manufacture serves a function is a
prerequisite of design patentability, not a defeat thereof.

The

function of the article itself must not be confused with
“functionality” of the design of the article.”

Hupp v. Siroflex

of Am., Inc., 122 F.3d 1456, 1460 (Fed. Cir. 1997).

16

Furthermore, even if Hafco’s closing argument was improper,
the court’s jury instructions cured any prejudice resulting from
the allegedly improper remarks.

In its preliminary instructions

to the jury, the court specifically informed the jury that
The evidence from which you will find the facts
will consist of the testimony of witnesses, documents,
and other things received into the record as exhibits,
and any facts that the lawyers agree to or stipulate to
or that the Court may instruct you to find. Certain
things are not evidence and must not be considered by
you as evidence. And I’ll list them for you now.
First, statements, arguments, and questions by lawyers
are not evidence.
In addition, the jury in this case was specifically instructed:
Although the statements and arguments of counsel
are beneficial in aiding your understanding of the
issues and evidence, they do not constitute evidence in
the case, unless made as an admission or stipulation of
fact. When the attorneys on both sides stipulate or
agree as to the existence of a fact, however, you must
accept the stipulation as evidence, and regard that
fact as proved.
Jury Charge, Court Exhibit C at p.4 (ECF No. 89-3); see also
United State v. Smith, 918 F.2d 1551, 1562 (11th Cir. 1990)
(“Because statements and arguments are not evidence, improper
statements can be rectified by the district court’s instruction
to the jury that only the evidence in the case be considered.”).
Finally, “[i]n determining whether there is a reasonable
probability that the verdict of a jury has been influenced by
improper conduct, warranting a new trial, the Court must examine,
on a case-by-case basis, the totality of the circumstances,
including the nature of the comments, their frequency, their
17

possible relevancy to the real issues before the jury, the manner
in which the parties and the Court treated the comments, the
strength of the case (e.g. whether it is a close case), and the
verdict itself.”

Michigan First Credit Union v. Cumis Ins. Soc.,

Inc., No. 05-CV-74423, 2009 WL 1664088, at *7 (6th Cir. June 15,
2009) (holding that improper analogy used by plaintiff’s counsel
in closing did not warrant a new trial because it consumed little
more than one page in a transcript of argument that exceeded one
hundred pages and following a trial that spanned three weeks).
In this case, Mr. Fusco made one potentially objectionable
isolated comment, during closing arguments.

Accordingly, “there

is simply no evidence that Plaintiff’s argument `permeated the
entire atmosphere of the trial’ or caused the jury to make its
determination on improper grounds.”

Ventas, Inc. v. HCP, Inc.,

Civil Action No. 3:07-CV-238-H, 2009 WL 3855638, *6 (W.D. Ky.
Nov. 17, 2009); see also Third Wave Techs., Inc. v. Stratagene
Corp., 405 F. Supp. 2d 991, 1010 (W.D. Wis. 2005) (“Even if I
find that plaintiff’s counsel’s remarks closed the line, which I
do not, they were of minimal import in the context of the closing
argument and the ten days of trial.

The jury was instructed that

arguments of counsel are not evidence.”).
C.

Errors in the court’s jury instructions.
With respect to the court’s instructions to the jury, GMS

argues:

18

During jury instruction, the jury was instructed, at
one point and one point only, (Jury Instructions pages
15-16) on the Gorham test for infringement.
Thereafter, to Defendant’s prejudice and over
Defendant’s objection, the jury was repeatedly
instructed that the “sole” test for infringement is
whether the products are “substantially the same,”
(Jury Instructions page 16, paragraph 3, sentences 1
and 2) thus incompletely and prejudicially abridging
the Gorham test.
ECF No. 94 at p.5.
GMS concedes that the Gorham test for infringement is the
correct one and that the jury was so instructed.

GMS also

acknowledges that the court instructed the jury on the definition
of “substantially the same.”
the court’s instructions.”
Ct. 2139, 2140 (2009).

“[J]uries are presumed to follow

CSX Transp., Inc. v. Hensley, 129 S.

GMS’s real argument is that the court did

not repeat its definition of “substantially the same” twice on
the same page of its instructions.
A party seeking a new trial based on erroneous jury
instructions must establish that “(1) it made a proper and timely
objection to the jury instructions; (2) those instructions were
legally erroneous; (3) the errors had prejudicial effect; and (4)
it requested alternative instructions that would have remedied
the error.”

Advanced Display Sys. v. Kent State Univ., 212 F.3d

1272, 1281 (Fed. Cir. 2000) (internal citations omitted).

The

determination of whether the instructions were legally erroneous
is a question of law.

See id. at 1282.

“When reviewing an

instruction for legal error, this court reads the instructions as
19

a whole and considers them in light of the entire charge to the
jury.”

Id.

Reviewing the instructions in this case in their totality,
the court concludes that the jury was properly instructed and
finds no prejudice suffered by defendant.
D.

Issues surrounding patent invalidity.
On the eve of trial, GMS filed a motion challenging the

validity of the patent.

The court scheduled a hearing on the

motion and continued the trial.

At that hearing, the only

evidence offered by GMS with respect to the patent’s validity was
the concomitant utility patent.
expert or otherwise.

No witnesses were called –

“[P]atents are presumed to be valid and

overcoming this presumption requires clear and convincing
evidence.”

Alcon Research Ltd. v. Barr Labs., Inc., 745 F.3d

1180, 1188 (Fed. Cir. 2014).

Given the dearth of evidence

presented, the court concluded that GMS had not shown by clear
and convincing evidence that the patent was invalid and denied
GMS’s motion to that effect.

See ECF No. 59.

The court did,

however, leave the window open for GMS to argue the invalidity of
the patent to the jury if it presented sufficient evidence to get
that issue before the jury.

Therefore, it is disingenuous for

GMS to now argue that it “was precluded from offering evidence at
trial or arguing to the jury that Plaintiff’s design patent was
invalid. . . .”

ECF No. 94 at p.5.

20

GMS offered no evidence at

trial nor did it proffer to the court any proposed evidence on
this issue other than, perhaps, the utility patent.
Significantly, however, GMS did not propose how it expected to
introduce the utility patent at trial nor who it would call to
testify about it.

If GMS wanted to argue the invalidity of the

patent to the jury, it needed to offer evidence on this point.
The court did not prohibit GMS from doing so.
E.

Sufficiency of the evidence regarding infringement.
GMS challenges the sufficiency of the evidence supporting

the jury's finding of infringement.

In order to grant a Rule

50(b) motion regarding the sufficiency of the evidence to support
a jury’s verdict, a court must, “without weighing the evidence or
considering the credibility of the witnesses,” conclude that
substantial evidence does not support the jury's findings.
Konkel v. Bob Evans Farms, Inc., 165 F.3d 275, 279 (4th Cir.
1999).

All evidence is viewed in the light most favorable to the

prevailing party and all reasonable inferences drawn in his or
her favor.

See id.

Drawing all reasonable inferences in Hafco’s favor, the
court concludes the jury's finding of infringement was supported
by substantial evidence.

In this case, the jury had before it a

GMS rock dust blower accused of infringement.

As the United

States Court of Appeals for the Federal Circuit has opined, this
is “very pertinent evidence on this issue.”

21

Catalina Lighting,

Inc. v. Lamps Plus, Inc., 295 F.3d 1277, 1287 (Fed. Cir. 2002)
(“Catalina identifies no reason why its lamp alone does not
provide substantial evidence of whether an ordinary observer
would believe the patented lamp and the Catalina lamp to be
substantially the same.”).

GMS’s argument on this point has no

merit.
F.

Damage award not supported by the evidence.
The jury awarded Hafco $123,650 in damages.

GMS contends

that this amount represented the amount of gross revenue that GMS
realized from the sale of its infringing rock dust blower and
that gross revenue of the infringer is not a statutory remedy.
Hafco argues “there are no grounds on which the damage award
should be set aside, especially given Defendant’s decision not to
elicit a shred of evidence about damages or even cross-examine
Mr. Fornaci regarding Hafco’s claimed damages.”

ECF No. 97 at

p.10.
The only damages calculation in the record regarding Hafco’s
lost profits was William Fornaci’s testimony that Hafco realized
lost profits of $110,000 by GMS’s sales of its infringing rock
dust blower.

Therefore, the $123,650 award does not, under any

conceivable view of the evidence, represent Hafco’s lost profits
As to damages in a patent case, the United States Court of
Appeals for the Federal Circuit has stated:
The subject of damages is dual-sided, encompassing
the questions of whether there are any damages, and, if
22

so, what should be the amount. The former is a
question of fact, answerable by “yes” or “no” and
leaving no room for inference, speculation, estimation,
or discretion. The latter is subject to those
exercises and may on occasion be determinable only
through an effort of the court, as here, “to do
substantial justice.” As was said in Story Parchment
Company v. Paterson Parchment Paper Company, 282 U.S.
555, 562, 51 S.Ct. 248, 250, 75 L.Ed. 544 (1931):
Nor can we accept the view of that court that
the verdict of the jury, in so far as it
included damages for the first item, cannot
stand because it was based upon mere
speculation and conjecture. This
characterization of the basis for the verdict
is unwarranted. It is true that there was
uncertainty as to the extent of the damage,
but there was none as to the fact of damage;
and there is a clear distinction between the
measure of proof necessary to establish the
fact that petitioner had sustained some
damage, and the measure of proof necessary to
enable the jury to fix the amount. The rule
which precludes the recovery of uncertain
damages applies to such as are not the
certain result of the wrong, not to those
damages which are definitely attributable to
the wrong and only uncertain in respect of
their amount.
In patent law, the fact of infringement
establishes the fact of damage because the patentee's
right to exclude has been violated. 5 D. Chisum,
Patents § 20.03[3] at 20–142 (1986); see Zegers v.
Zegers, Inc., 458 F.2d 726, 729–30, 173 USPQ 385,
387–88 (7th Cir.), cert. denied, 409 U.S. 878, 93 S.
Ct. 131, 34 L. Ed.2d 132 (1972); cf. Del Mar Avionics,
Inc. v. Quinton Instrument Co., 836 F.2d 1320, 1326, 5
USPQ2d 1255, 1260 (Fed. Cir. 1987). The patentee must
then prove the amount of damage.
Lindemann Maschinenfabrik GmbH v. Am. Hoist & Derrick Co., 895
F.2d 1403, 1406 (Fed. Cir. 1990).
Upon a finding of infringement, Title 35 permits an award of
damages adequate to compensate the patentee for infringement, but
23

in no event less than a reasonable royalty. 35 U.S.C. § 284
(1994).

To recover lost profits, a patent owner must prove a

causal relation between the infringement and its loss of profits.
Oiness v. Walgreen Co., 88 F.3d 1025, 1029 (Fed. Cir. 1996).

In

other words, the burden rests on the patentee to show a
reasonable probability that “but for” the infringing activity,
the patentee would have made the infringer's sales.

See id.

To

show causation and entitlement to lost profits, a patentee must
reconstruct the market to show “likely outcomes with infringement
factored out of the economic picture.”

Grain Processing Corp. v.

Am. Maize–Prods. Co., 185 F.3d 1341, 1350 (Fed. Cir. 1999)
(“Reconstructing the market, by definition a hypothetical
enterprise, requires the patentee to project economic results
that did not occur.”).

“To prevent the hypothetical from lapsing

into pure speculation, th[e] court requires sound economic proof
of the nature of the market.”

Id.

Lost profits awards have been

affirmed “based on a `wide variety of reconstruction theories in
which the patentee has presented reliable economic evidence of
`but for’ causation.’”

Ericsson, Inc. v. Harris Corp., 352 F.3d

1369, 1377 (Fed. Cir. 2003) (quoting Crystal Semiconductor Corp.
v. TriTech Microelecs. Int’l, Inc., 246 F.3d 1336, 1355 (Fed.
Cir. 2001)).
One “useful, but non-exclusive, way for a patentee to prove
entitlement to lost profits damages” is the four-factor test

24

articulated in Panduit Corp. v. Shahlin Bros. Fibre Works, Inc.,
575 F.2d 1152 (6th Cir. 1978).

Rite-Hite Corp. v. Kelley Co.,

Inc., 56 F.3d 1538, 1545 (Fed. Cir. 1995).

“The Panduit test

requires that a patentee establish: (1) demand for the patented
product; (2) absence of acceptable non-infringing substitutes;
(3) manufacturing and marketing capability to exploit the demand;
and (4) the amount of profit it would have made.”

Id.

“A

showing under Panduit permits a court to reasonably infer that
the lost profits claimed were in fact caused by the infringing
sales, thus establishing a patentee’s prima facie case with
respect to `but for’ causation.”

Id.

Whether a patentee relies on Panduit or some other means of
showing entitlement to lost profit damages, it “must reconstruct
the market to determine what profits the patentee would have made
had the market developed absent the infringement product.”
Ericsson, 352 F.3d at 1377 (emphasis added).

In a two-supplier

market, “lost profits for all sales made by an infringer are
easier to obtain because there are only two suppliers in the
market.”

Water Techs. Corp. v. Calco, LTD., 850 F.2d 660, 672

(Fed. Cir. 1988).

However, “an accurate reconstruction of the

hypothetical `but for’ market takes into account any alternatives
available to the infringer.”

Grain Processing Corp. v. American

Maize–Products Co., 185 F.3d 1341, 1351 (Fed. Cir. 1999).

25

In the instant case, there was no attempt to reconstruct the
market.

“[Hafco] simply assumed that every sale made by [GMS]

would have been theirs in the absence of the infringement.”

Keg

Techs., Inc. v. Laimer, 436 F. Supp. 2d 1364, 1369 (N.D. Ga.
2006).

The record is silent with respect to the second and third

Panduit factors – absence of acceptable non-infringing
substitutes and manufacturing and marketing capability to exploit
the demand.
Nor did Hafco show that it was a “two-supplier market where
any sale made by one competitor can be presumed attributable to
its opponent were it not for the infringement.”

Id. at 1369-70;

see Lam, Inc. v. Johns-Manville Corp., 718 F.2d 1056, 1065 (Fed.
Cir. 1983) (“Where, as here, the patent owner and the infringer
were the only suppliers of the product, causation may be
inferred.”).

Indeed, Hafco aggressively fought to keep any

mention of other can rock dust blowers out of the record.

In so

doing, it made the tactical decision not to pursue a two-supplier
market theory.
At best, Hafco’s evidence was that its rock dust blower was
the first, but not the only, can rock dust blower in the
marketplace.

Furthermore, there is also evidence in the record

that there are “thousands” of other rock dust blowers in the
marketplace, albeit not of the can variety.

Therefore, there is

no evidence to support the notion of an absence of non-infringing

26

acceptable substitutes.

For these reasons, Hafco failed to meet

its burden to demonstrate an entitlement to lost profits.
“Upon a showing of infringement, a patentee is entitled to
`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.’”

ResQNet.com, Inc. v. Lansa, Inc.,

594 F.3d 860, 868 (Fed. Cir. 2010) (quoting 35 U.S.C. § 284).
The statute, therefore, sets a reasonable royalty as a “floor
below which damages shall not fall.”

Lucent Techs., Inc. v.

Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009).

A

reasonable royalty is “derive[d] from a hypothetical negotiation
between the patentee and the infringer when the infringement
began.”

ResQNet.com, 594 F.3d at 868.

“Ordinarily, an inadequate showing vis-a-vis lost profits
requires the Court to award the patentee a `reasonable royalty.’”
Keg Techs., 436 F. Supp. 2d at 1370.

In this case, Hafco elected

to recover lost profits and did not offer any evidence regarding
the alternative damages award of a reasonable royalty.6

6

With respect to damages, the jury was instructed as
follows:
Damages
If you find that GMS’ product infringes the `684
design patent, then you must determine the amount of
damages to be awarded to Hafco for the alleged
infringement. By instructing you on damages, I am not
suggesting which party should win on any issue. These
instructions are provided to guide you on the
calculation of damages in the event you find
27

Therefore, there is no evidence that would support an award of a
reasonable royalty.

infringement and thus must address the damages issue.
A plaintiff in a design patent case can elect to
prove either actual damages, known as compensatory
damages, or it may elect to prove the amount of
defendant’s profits from the sale of the infringing
product as its measure of recovery. With respect to
actual damages, if you believe GMS infringed the `684
patent, Hafco is entitled to receive damages adequate
to compensate it for infringement beginning on April
20, 2015 to the present. Those damages can be in the
form of lost profits or a reasonable royalty. The term
lost profits means any and all actual reduction in
business profits Hafco suffered as the result of GMS’
infringement of the `684 Patent. A reasonable royalty
is defined as the amount a patent owner and someone
wanting to use the patented design would agree upon as
a fee for use of the design.
In this case, Hafco seeks to recover lost profits
resulting from GMS’ infringement of the `684 Patent.
If you conclude that Hafco has proved that it lost
profits because of GMS’ infringement, the lost profits
you award should be the amount that Hafco would have
made on any sales that Hafco lost because of the
infringement.
Hafco has the burden of proving its calculation of
damages is correct by a preponderance of the evidence.
While Hafco is not required to prove its damages with
mathematical precision, it must prove them with
reasonable certainty. Hafco is not entitled to damages
that are remote or speculative.
Jury Charge at pp. 18-20 (ECF No. 89-3).
28

According to the Fourth Circuit, pursuant to Rule 59,7 a
damages verdict must be set aside as excessive if “(1) the
verdict is against the clear weight of the evidence, or (2) is
based upon evidence which is false[.]”

Knussman v. Maryland, 272

F.3d 625, 639 (4th Cir. 2001) (quoting Atlas Food Sys. & Servs.,
Inc. v. Crane Nat’l Vendors, Inc., 99 F.3d 587, 594 (4th Cir.
1996)).

Such review requires a “comparison of the factual record

and the verdict to determine their compatibility.”

Atlas Food

Sys., 99 F.3d at 594.
“Under Rule 59(a) of the Federal Rules of Civil Procedure, a
court may order a new trial nisi remittitur if it concludes that
a jury award of compensatory damages is excessive.”

Jones v.

Southpeak Interactive Corp. of Del., 777 F.3d 658, 672 (4th Cir.
2015) (internal quotation marks omitted).

7

GMS filed a Rule 50(b) motion or, in the alternative, a
motion for a new trial pursuant to Federal Rule of Civil
Procedure 59.
A party who neglects to raise an issue in a preverdict Rule 50(a) motion waives the opportunity to
include that issue in a post-verdict motion. See Fed.
Sav. & Loan Ins. Corp. v. Reeve, 816 F.2d 130, 137-38
(4th Cir. 1987). The Advisory Committee Note makes
this clear: “Because the Rule 50(b) motion is only a
renewal of the pre-verdict motion, it can be granted
only on grounds advanced in the pre-verdict motion.”
Fed. R. Civ. P. advisory committee note.
United States v. Appalachian Regional Community Head Start, Inc.,
674 F. Supp. 2d 773, 777 (W.D. Va. 2009). Because GMS did not
raise the issue of the insufficiency of the evidence on damages
in its Rule 50(a) motion, the court has analyzed the issue under
Rule 59.
29

[W]e note that a remittitur, used in connection with
Federal Rule of Civil Procedure 59(a), is the
established method by which a trial judge can review a
jury award for excessiveness. Remittitur is a process,
dating back to 1822, by which the trial court orders a
new trial unless the plaintiff accepts a reduction in
an excessive jury award. See Blunt v. Little, 3 F.
Cas. 760 (C.C. Mass. 1822) (No. 1578) (Story, J.). And
the permissibility of remittiturs is now settled. See
11 Charles Alan Wright, Arthur R. Miller & Mary Kay
Kane, Federal Practice and Procedure, § 2815, at 163
(1995). Indeed, if a court finds that a jury award is
excessive, it is the court's duty to require a
remittitur or order a new trial. See Linn v. United
Plant Guard Workers, Local 114, 383 U.S. 53, 65–66, 86
S. Ct. 657, 664–65, 15 L. Ed.2d 582 (1966).
Atlas Food Sys., 99 F.3d at 593; see also Shockley v. Arcan,
Inc., 248 F.3d 1349, 1362 (Fed. Cir. 2001) (“This court, like the
Fourth Circuit, has a `maximum recovery rule’ which remits an
excessive jury award to the highest amount the jury could
`properly have awarded based on the relevant evidence.’”)
(quoting Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512, 519
(Fed. Cir. 1995)); see also Oiness v. Walgreen Co., 88 F.3d 1025,
1030 (Fed. Cir. 1996) (“A court is not at liberty to supplant its
own judgment on the damages amount for the jury’s findings. . . .
Therefore, in holding that a jury damage award is excessive, a[ ]
court has two options.

It may simply reverse the jury award and

order a new trial or allow plaintiff the option of agreeing to a
remittitur in a specificed amount).
Whether damages are excessive and subject to remittitur is
an issue left to the discretion of the trial court.

See Robles

v. Prince George's Cnty., 302 F.3d 262, 271 (4th Cir. 2002).
30

“A

trial court's evaluation of an award of compensatory damages is
less searching than an award of punitive damages.”

King v.

McMillan, 594 F.3d 301, 313 (4th Cir. 2010).
In the present case, the jury's award of $123,650 is against
the weight of the evidence.

On the evidence presented, $0 in

compensatory damages is the outermost award that could be
sustained.

The court therefore reduces the award to $0 and

grants a new trial nisi remittitur at Hafco's option.
IV.

Conclusion

For all the foregoing reasons, defendant’s motion for
judgment as a matter of law or, in the alternative, a new trial
is GRANTED in part and DENIED in part as follows:
1)

The Motion for Judgment as a Matter of Law is
denied in its entirety; and

2)

The alternative Motion for a New Trial is granted
insofar as the court grants a new trial nisi
remittitur.

Hafco shall agree to remit damages in

excess of $0 by filing a document no later than
Thursday, April 5, 2018, indicating that it agrees
to the remittitur.

Failure to do so will result

in the Court granting a new trial on the issue of
damages.

The motion for a new trial is denied in

all other respects.

31

The Clerk is directed to send copies of this Memorandum
Opinion and Order to counsel of record.
IT IS SO ORDERED this 30th day of March, 2018.
ENTER:

David A. Faber
Senior United States District Judge

32