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U.S. District Judge Gregory Sleet affirmed a jury verdict awarding Honeywell International Inc. $46.6 million in a patent infringement case against Hamilton Sundstrand Corp. In his ruling, Sleet denied Hamilton’s motion for judgment as a matter of law or a new trial. Sleet also refused to award Honeywell treble damages even though the jury labeled Hamilton’s infringement willful. Sleet’s ruling as trial judge adds weight to the jury’s verdict, and removes another obstacle Honeywell must overcome to collect damages, although the appeals process isn’t over. Both companies have appealed parts of Sleet’s decision before the Federal Circuit U.S. Court of Appeals in Washington, D.C., the usual next step in patent cases. “We believe there are truly appealable issues — we have some strong issues on appeal,” said defense counsel Richard D. Kirk of Morris James Hitchens & Williams’ Wilmington office. Plaintiffs’ counsel, Josy W. Ingersoll, a partner in the Wilmington, Del. office of Young Conaway Stargatt & Taylor, declined to comment except to confirm the plaintiffs were appealing. TWO PATENTS INVOLVED Honeywell sued Hamilton, a division of United Technologies Corp., in May 1999, claiming that Hamilton’s manufacture and sale of an airplane auxiliary power unit infringed two Honeywell patents, according to court papers. An APU, Sleet wrote in a 52-page opinion, is a small gas turbine engine in the tail section of an airplane that creates electricity the aircraft uses on the ground or in the air. The device also compresses air to start main engines and for the cabin’s air supply.The patents involved, Sleet stated, detailed a way of controlling surge, a condition in which the air being drawn into the APU reverses direction, possibly damaging the engine.In February 2001, a trial was held and the jury decided that Hamilton infringed both patents under the doctrine of equivalents. Honeywell won $45 million in damages for price erosion and royalty damages of $1.6 million. Post-trial motions included Honeywell’s request for judgment as a matter of law on the issues of literal infringement of one of the patents and overall damages; Hamilton’s motion for judgment as a matter of law or, alternatively, a new trial on the issues of liability and patent validity; plaintiffs’ motion for treble damages, attorneys’ fees and pre-judgment interest. “The essential question in deciding a motion for judgment as a matter of law is whether the evidence the jury could have believed in reaching its verdict was substantial enough to support its findings,” Sleet wrote. “Thus, the question is … what the jury could have reasonably determined.” Honeywell argued in its motion that it had proved at trial a prima facie case of literal infringement of a claim in one of its patents. “Literal infringement,” Sleet said, “occurs when every limitation recited in a claim appears in the accused device, i.e., when ‘the properly construed claim reads on the accused device exactly. …’ “ “Honeywell asserts that it is entitled to a JMOL because none of Sundstrand’s defenses to infringement provide a legally sufficient basis to support the conclusion” that the claim at issue was not literally infringed, Sleet stated. “The court,” he continued, “finds Honeywell’s argument that Sundstrand’s evidence was legally insufficient to support a conclusion of non-infringement to be unpersuasive.”Sleet also ruled that substantial evidence was presented at trial from which the jury could conclude there was no literal infringement. Honeywell also argued for $71 million in price erosion damages and a royalty rate of 12 percent, instead of the 7.5 percent the jury awarded. Sleet ruled against the company, again finding the jury had substantial evidence before it to support the lower award of damages. HAMILTON’S MOTIONS Hamilton argued that a JMOL or a new trial was warranted on the issue of infringement under the doctrine of equivalents because the jury lacked a legally sufficient basis for its findings. One of two tests, Sleet wrote, can be used to determine if there is a violation under the doctrine of equivalents. “An element of an accused device is equivalent to an element of the patented invention if the differences between them are insubstantial,” Sleet observed. This is called the insubstantial differences test. “Alternately, the accused product infringes under the doctrine of equivalents if the element in the accused device performs substantially the same function in substantially the same way to obtain the same result as the claim limitation,” Sleet said. This is the triple identity test. Sleet ruled that “Honeywell set forth competent evidence from which a jury could reasonably conclude” that there was non-literal infringement. Hamilton also claimed that it was entitled to a JMOL on the issue of patent validity because the patents were anticipated and obvious. Again Sleet found that enough evidence was presented at trial for the jury to find that the patents were not made obvious or anticipated by prior art. ENHANCED DAMAGES If a jury finds patent infringement was willful, the judge can enlarge damages up to three times the jury amount. Sleet denied Honeywell increased damages because “although the evidence was sufficient to support the jury’s finding of willfulness, the court finds that the evidence was not strong enough to warrant enhanced damages. … There was little direct evidence which evinced the sort of a culpable mindset that would make enhanced damages appropriate in this case.” “Sundstrand’s defenses, although ultimately unsuccessful, were not frivolous and were litigated in good faith. … The issue of infringement was a close case,” Sleet concluded.The judge, however, granted Honeywell prejudgment and post-judgment interest on the royalty award. Sleet didn’t approve prejudgment interest on the price erosion award because the interest was included in the calculation of such damages by a Honeywell expert witness. Thus the court found that the jury reasonably would have included such interest in its damages award. In its notice of appeal, Hamilton opposed the February 2001 judgment and Sleet’s denial of motions for JMOL or for a new trial, among other rulings challenged.Honeywell also is appealing the February 2001 judgment and an earlier court order limiting the damages period. The case is Honeywell International Inc. and Honeywell Intellectual Properties Inc. v. Hamilton Sundstrand Corp., CA No. 99-309. Plaintiffs also were represented by attorneys from Kirkland & Ellis’ New York and Los Angeles offices. Attorneys from Cleary Gottlieb Steen & Hamilton in New York and Marshall O’Toole Gerstein Murray & Borun in Chicago also defended Hamilton Sundstrand.

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