“This court also sees no reason why [the plaintiff's] decision not to argue pre-verdict willful infringement at trial should preclude the district court from finding willful infringement for post-verdict sales.”
On March 13, 2013, in SynQor, Inc. v. Artesyn Techs., Inc., the U.S. Court of Appeals for the Federal Circuit (Rader,* Lourie, Daniel) affirmed the district court’s summary judgment that the defendants infringed U.S. Patents No. 7,072,190, No. 7,272,021, No. 7,564,702, No. 7,558,083 and No. 7,269,034, which related to high-efficiency DC-DC power converter systems used to power circuitry in large computer systems and telecommunication and data communication equipment, and award of more than $95 million in lost profits damages. The Federal Circuit stated:
Liability for induced or contributory infringement under § 271(b) or (c) requires “knowledge that the induced acts constitute patent infringement.” This includes, in part, actual “knowledge of the existence of the patent that is infringed.” . . . The record contained sufficient evidence to support the jury’s conclusion that each Defendant had actual knowledge of the ’190 Patent when it issued.
SynQor did not present direct evidence that any Defendant possessed the ’190 Patent on the date it issued, nor did any Defendant admit it had actual knowledge of the ’190 Patent. Such direct evidence of knowledge is not required to support a finding of inducement. SynQor presented specific evidence for each Defendant that allowed the jury to infer actual pre-suit knowledge of the ’190 Patent. The district court recounted this evidence in detail and found it sufficient to support the jury’s verdict. Among other evidence, SynQor showed that each of the Defendants possessed SynQor datasheets or products marked with SynQor’s earlier patents, including U.S. Patent No. 5,999,417, to which the patents in suit claim priority. SynQor’s expert, Dr. Leeb, gave his opinion that “there was a significant effort by the Defendants in this case to cross/imitate SynQor’s products,” and that those efforts would have exposed Defendants to SynQor’s patents. Further, some Defendants admitted to monitoring SynQor’s patents and one was shown to have possessed the ’190 Patent prior to the time this suit was filed. After examining the record, this court concludes that it contains sufficient evidence from which a reasonable jury could infer that each Defendant had actual knowledge of the patents in suit during the relevant time period. Accordingly, this court affirms the denial of JMOL of noninfringement under § 271(b). . . .
“An award of damages by a jury is upheld on appellate review unless it is clearly not supported by evidence, grossly excessive, or based only on speculation and guesswork.” To establish entitlement to price erosion damages, SynQor had the “burden . . . to show that ‘but for’ infringement, it would have sold its product at higher prices.” A credible but-for analysis must account for the “effect of [a] higher price on demand for the product.” Further, because “a rational would-be infringer is likely to offer an acceptable noninfringing alternative, if available, to compete with the patent owner rather than leave the market altogether,” the analysis must consider the impact of such alternate technologies on the market as a whole.
Defendants argue the jury’s damages award is excessive because SynQor’s price erosion theory is unsupported by the evidence. To the contrary, the jury heard evidence that SynQor sold its bus converters for prices “in the 60s to as high as $110? per unit when it first entered the market and made sales to Hewlett-Packard and Sun for $84 per unit in 2002. Additionally, SynQor sold about 18,500 converters to Cisco in 2010 at $70 and $81 per unit during a market shortage. [T]he jury reasonably could have concluded that testimony from some of Defendants’ witnesses indicated customers would not have switched to noninfringing alternatives in response to SynQor’s higher prices. Cisco’s representative admitted his company would have had to incur significant costs to redesign its end products to use any noninfringing power converter that was not a “drop-in replacement,” and that drop-in replacements did not exist as of August 2010. Similarly, a defense witness testified he was not aware of any customers that had actually switched from unregulated intermediate bus converters to any noninfringing alternative for the same application. Upon review of the entire record, this court detects sufficient evidence for the jury to have accepted Mr. Reed’s “but for” pricing. As such, both the lost-profits and reasonable royalty damages are supported by substantial evidence and not excessive or based only on speculation and guesswork. Accordingly, this court affirms the denial of Defendants’ motion for JMOL or a new trial. . . .
The court enhanced the damages award for Defendants’ post-verdict sales by 1.75 times, citing its authority to do so under 35 U.S.C. § 284. Defendants argue the award of enhanced damages was improper because the court did not expressly find willful infringement and because SynQor did not pursue a willfulness claim at trial. The district court found Defendants’ conduct “egregious” in continuing, and even increasing, sales in the face of an infringement verdict. The district court made the appropriate determination for an award of enhanced damages. The court’s enhancement of damages was squarely based on a recognition of Defendants’ willful infringement and the enhancement therefore was proper under § 284. This court also sees no reason why SynQor’s decision not to argue pre-verdict willful infringement at trial should preclude the district court from finding willful infringement for post-verdict sales. [T]he district court did not abuse its discretion by awarding enhanced damages for Defendants’ post-verdict infringement.