While Carnegie Mellon University presented three competent experts on damages during the jury trial that granted it a billion-dollar verdict in its patent suit against Marvell Technology Group, two of the defense’s three expert witnesses slept, a Western District of Pennsylvania judge said in an opinion on post-trial motions.
U.S. District Judge Nora Barry Fischer denied Marvell’s motion for a judgment as a matter of law on damages — it had argued that the $1.2 billion in damages that the jury had awarded last December was legally unsound and factually unsupported, according to Fischer’s opinion.
“While Marvell may believe the court’s purportedly flawed legal analysis precipitated its defeat, it is the undersigned’s impression as a judge and former trial lawyer that Marvell’s bad facts and even worse litigation strategy were fatal to its cause,” Fischer said in her 126-page opinion.
“Marvell’s strategy was always ‘all or nothing,’” Fischer said, adding in a footnote later that she was left with the impression that Marvell was treating this trial as a “dress rehearsal” for the U.S. Court of Appeals for the Federal Circuit, the federal appeals court for patent cases.
“Marvell is in its current predicament because it deliberately undertook a series of strategic risks,” she said. “It took the risk of incorporating technology into its products that it knew might have been covered by CMU’s patents. It took the risk of continuing its use of this technology even after this litigation was initiated. It bore the risk of failing to keep or to demonstrate it kept records pertaining to sales and use of its chips. Its trial team took the risk of taking this case to trial, despite repeated efforts to mediate this case, and knowing full well the size of the possible award.”
“Indeed, Marvell has known CMU’s position on damages since January 2012, when Catherine Lawton’s expert report was produced. Now, Marvell looks to the courts to relieve it from the damages award it faces from taking those risks,” Fischer said.
She was not convinced by Marvell’s arguments.
Fischer described Marvell’s strategy at trial as “all or nothing,” explaining that it chose to tell the jury that it could have agreed to a one-time payment of $250,000 to Carnegie Mellon rather than presenting evidence of a lower royalty amount that could have given the jury an opportunity to award a lower amount of damages.
“It likely would have been difficult for the jury to believe the technology at issue was only worth a one-time payment of $250,000 once they observed the number of lawyers in the courtroom at any given time during this trial,” Fischer said in a footnote. “Just the sight of these armies of attorneys would suggest to any casual observer that this case was about valuable technology and important for both sides.”
Marvell took on further risk by not offering any evidence about its sales, business strategy or technology regarding damages.
Carnegie Mellon’s expert was the only witness to offer evidence about Marvell’s sale of the technology, Fischer said.
“In effect, Marvell let CMU create a one-sided expert exposition, because it did not argue for any per chip royalty. This left the jury in a tough spot, with no reasonable options for a damages award other than $250,000 or $1.169 billion,” Fischer said, referring to the figures for damages offered by each side.
Fischer also ruled on the issue of willful infringement, finding in Carnegie Mellon’s favor.
“The court grants CMU’s motion for a finding of willful infringement and enhanced damages, in part, on willfulness, and reserves its ruling on enhanced damages for a forthcoming opinion,” she said. The judge also held off on ruling on the university’s motion for permanent injunction, post-judgment royalties and supplemental damages.
On proving the willfulness of the infringement, Carnegie Mellon had to show both that Marvell used the technologies despite an “objectively high likelihood that its actions constituted infringement of a valid patent” — a question of fact — and that the risk of infringement was known, or was so obvious that it should have been known.
Looking to fresh precedent from the Federal Circuit in its 2011 opinion in Powell v. Home Depot, which requires a question of fact to be considered by a jury, and its 2012 opinion in Bard Peripheral Vascular v. W.L. Gore & Associates, which held that objective recklessness is to be decided as a matter of law by a judge, Fischer offered the factual question of willfulness to the jury.
“Given the lack of further guidance by the Federal Circuit on how to reconcile these principles in a practical manner for trial, and the circuit’s own debate on the precedential value of Bard, the court sent the question of willfulness to the jury for factual findings on an advisory basis. This, the court believes, is in accord with Bard, which affirms that underlying fact questions should be sent to a jury,” she said.
Considering the whole of the record, including the jury’s verdict on infringement and its advisory verdict on objective reasonableness, Fischer held that Marvell had “acted in disregard of an objectively high likelihood that its actions constituted infringement of a valid patent.”
(Copies of the 126-page opinion in Carnegie Mellon University v. Marvell Technology Group, PICS No. 13-2687, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.)