Judge Rakoff Grants Permanent Injunction and Awards Attorneys’ Fees for Unreasonable Litigation Tactics and Redundant Post-Trial Motions, But Does Not Enhance Damages for Willful Infringement

by Robins Kaplan LLP

Cognex Corp., et al. v. Microscan Systems, Inc., et al.

Case Number: 1:13-cv-02027-JSR (Dkt. 252)

Following a six-day jury trial finding defendants’ infringement of U.S. Patent No. 7,874,487 (“Integrated illumination assembly for symbology reader”) to be willful, Judge Rakoff permitted plaintiffs to move for a permanent injunction, enhanced damages, and a classification of the case as “exceptional” so as to warrant an award of attorneys’ fees, while defendants were permitted to file certain post-trial motions.

Addressing plaintiffs’ injunction motion, Judge Rakoff found irreparable harm would result because the parties are competitors in the market.  For this reason, he said, monetary damages would be an inadequate remedy.  Further, plaintiffs had specifically adopted a policy of not sharing their technology with competitors, and defendants had developed a noninfringing alternative to the product at issue.  Thus, he concluded that the balance of hardships weighed in favor of granting an injunction, and reasoned that public policy promoted protection of plaintiffs’ rights in its patent.  Accordingly, Judge Rakoff enjoined defendants from further infringing plaintiffs’ patents. 

Plaintiffs also requested enhanced damages under 35 U.S.C. § 284, as the jury found defendants’ infringement to be willful.  Judge Rakoff reasoned that while willfulness is a prerequisite to an award of enhanced damages, such a finding does not mandate that damages be enhanced.  Rather, whether to enhance damages is dependent upon all the facts and circumstances.  Though plaintiffs alleged defendants lacked meritorious defenses, asserted defenses without a good-faith basis, and employed litigation tactics that unnecessarily increased the costs of litigation, Judge Rakoff declined to enhance the damages. He specifically noted defendants were able to substantially narrow the scope of the claims against them, and also prevailed on a motion for summary judgment to invalidate several claims. These factors, he said, weighed against enhancing damages.

Finally, Judge Rakoff granted plaintiffs’ motion for attorneys’ fees, finding the case to be “exceptional” under the standard defined by the Supreme Court in Octane Fitness.  Judge Rakoff found the defenses offered at trial were weak and lacked support in the evidence.  Additionally, Judge Rakoff noted that at several points in the case, defendants engaged in unreasonable litigation tactics that wasted the Court’s time and required plaintiffs to expend significant resources, such as the filing of each of defendants’ post-trial motions, which merely sought to relitigate issues decided by the Court at several points throughout the trial.  Concerning defendants’ post-trial motions, Judge Rakoff held that defendants provided no additional reasons for the Court to grant them, which was sufficient in and of itself to deny them.  Granting plaintiffs’ request for attorneys’ fees in part, Judge Rakoff ordered the parties to telephone his chambers to schedule further proceedings to relating to plaintiffs’ fee award.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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