Texas Advanced Optoelectronic v. Renesas was decided on July 9, 2018 on appeal from the Eastern District of Texas. The Federal Circuit granted petition for rehearing and reissued the opinion, modifying the opinion released on May 1, 2018. The principal change relates to the evidence relied on by Texas Advanced in its appeal. The May version of the opinion criticized Texas Advanced for relying in its appeal on evidence “not before the district court on summary judgment, [which] is not a proper ground for disturbing the summary judgment ruling.” That criticism is absent in the revised opinion. The remainder of the revised opinion is substantially the same as the earlier opinion.
Plaintiff Texas Advanced sued defendant Renesas for patent infringement, trade secret misappropriation, breach of contract, and tortious interference. Before trial, the district court granted Renesas’s summary judgment motion limiting damages by excluding 98.8% of Renesas’s allegedly infringing products because “a jury could not find those sales to be the result of sales or offers to sell domestically.” The jury returned a verdict for Texas Advanced, finding willful infringement, and “awarded (1) $73,653.51 as a reasonable royalty for patent infringement; (2) $48,783,007 in disgorgement of [Renesas]’s profits and $10 million in exemplary damages for trade secret misappropriation; (3) $12 million as a reasonable royalty for breach of contract; and (4) $8 million in lost profits and $10 million in exemplary damages for tortious interference.” After trial, the district court denied Texas Advanced’s motions for a permanent injunction and for enhanced damages, and denied Renesas’s motions for JMOL and for a new trial. Upon Texas Advanced’s motion for entry of final judgment, the district court “concluded that the damages awarded for breach of contract and for tortious interference were duplicative of the monetary award for trade secret misappropriation,” but “found no duplication in the patent infringement and trade secret misappropriation awards.” Both parties appealed.
The Federal Circuit affirmed the judgment of liability for trade secret misappropriation, reverse the verdict of infringement of certain patent claims, affirmed the verdict of infringement of certain patent claims, vacated the awards for trade secret misappropriation and patent infringement, affirmed the summary judgment grant excluding 98.8% of the proposed damages for patent infringement, vacated the denial of the injunction, vacated the denial of enhanced damages, and remanded.
The district court erred in concluding that the award for patent infringement was not duplicative of the award for trade secret misappropriation. “Double recovery for the same injury is inappropriate.” Here, the “award for patent infringement was based on a subset of the sales that form the basis of the award for trade secret misappropriation.” Texas Advanced’s expert calculated a trade secret disgorgement award in which all profits made from sales of the infringing products (plus all profits made from sales of additional products) would go to Texas Advanced. “The expert calculated a reasonable royalty for the patent infringement based on a fraction of the total profits for those infringing products. The jury chose to award the full amount ($48,783,007) of the expert’s proposed disgorgement award for the trade secret misappropriation and a partial amount ($73,653.51) of the expert’s proposed royalty for the patent infringement ($105,219).” (parenthesis in original). The patent royalty award was thus duplicative of some portion of the disgorgement award, “to the extent the awards cover the same period.” The jury’s disgorgement award for trade secret misappropriation covered the period from April 2006 through March 2014; whereas Texas Advanced’s expert’s proposed patent infringement royalty covered a subset of that period, January 2007 through March 2014. The Federal Circuit thus vacated the patent royalty award, and remanded.
The district court did not err in granting summary judgment as to Renesas’s extraterritorial sales. Under 35 U.S.C. § 271(a), “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention … infringes the patent.” Renesas “moved for summary judgment against [Texas Advanced] receiving damages for 98.8% of [Renesas’s] sales of the products accused of infringement,” having “submitted evidence that, except for 1.2% of the accused units, all of its accused products were manufactured, packaged, and tested abroad, and those units were shipped to manufacturers and distributors abroad.” Texas Advanced’s contrary evidence “of domestic negotiations and testing of some of [Renesas’s] products” did “not demonstrate substantial activities regarding sales sufficient to raise a material dispute of fact as to sales or offers to sell in the United States.”
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The district court abused its discretion by denying the injunction. The district court denied the injunction upon finding no irreparable harm, reasoning that because Texas Advanced had requested a reasonable royalty as compensation for past infringement, a reasonable royalty should be adequate to compensate Texas Advanced for future infringement. This was error. “A patent owner’s request for relief in the form of a reasonable royalty may be relevant to those inquiries, but it is not conclusive without further analysis. Irreparable harm, not adequately compensable at law, may exist even if there is evidence that, for example, the patent owner is willing to license its patent and does not commercially practice its patent.” The Federal Circuit thus vacated the denial of the injunction and remanded for the district court to fully consider “irreparable harm and inadequacy of compensation at law.”
The Federal Circuit vacated the denial of enhance damages, which was decided under the now defunct Seagate standard.
Tex. Advanced Optoelectronic Sols., Inc. v. Renesas Elecs. Am., Inc., 895 F.3d 1304 (Fed. Cir. 2018)