Geigtech East Bay LLC v. Lutron Electronics Co., Inc.

Background

After a thirteen-day trial, a jury found that features of Lutron’s Palladiom Bracket infringed GeigTech’s U.S. Patent No. 10,294,717. GeigTech had elected to seek a reasonable royalty as its patent-infringement damages. During discovery, it identified an expert, Jeffrey Baliban, whose report calculated a 14.86% royalty, or approximately $3.84 million, using an entire-market-value theory.

At trial, GeigTech’s counsel told the jury that GeigTech was seeking $3,843,986 “not a penny more, not a penny less.” The jury instead awarded $34.6 million. The court set aside that award and ordered a remittitur of $3,843,986. GeigTech declined the remittitur and requested a new trial on damages.

The court scheduled the retrial with no new experts, expert discovery, or opinions outside the existing reports. Shortly before the retrial, GeigTech informed Lutron that it would no longer call Baliban, seek the previously disclosed royalty, or seek $3.84 million. Instead, GeigTech planned to present evidence about its earnings, financial situation, and expected revenue from an exclusive distribution deal, then let the jury determine the damages amount.

Motion for sanctions

Lutron’s submission was treated as a motion for sanctions under Federal Rule of Civil Procedure 37 and as a request to prevent GeigTech from using its newly announced damages approach. Rule 26 requires a party to disclose a computation of each category of damages, and Rule 37 can bar use of information that was not properly disclosed unless the failure was substantially justified or harmless.

The court held that GeigTech had disclosed only Baliban’s calculation as its damages computation. GeigTech had not timely disclosed another calculation or a method based on the financial information it planned to present. The court rejected GeigTech’s argument that it could provide financial evidence without a computation and leave the jury to determine a reasonable royalty on its own.

The court found that all four factors governing the sanction favored Lutron: GeigTech did not adequately justify its failure to disclose the new approach; the evidence was important because damages were the only issue remaining for retrial; Lutron would be prejudiced because it had prepared to address Baliban’s calculation and had no reason to develop rebuttal evidence for a different method; and a continuance was unwarranted because discovery had been closed for years and the retrial was imminent.

Ruling

The court granted Lutron’s motion for sanctions. At the damages retrial, GeigTech was precluded from offering evidence supporting any damages computation that it had not disclosed in its Rule 26 disclosures and response to Lutron’s damages interrogatory before the first trial. Because Baliban’s report was the only disclosed computation, GeigTech could use that calculation and update it with evidence of later sales. The court also permitted GeigTech to change its witness list and call Baliban, but did not grant a continuance.

The court’s conclusion states that GeigTech was precluded from proving damages by presenting evidence, giving the facts, and leaving the jury to decide the amount. The court also directed the clerk to remove the sanctions motion from the list of open motions if it had been docketed as a separate motion.

Motion for reconsideration

In an addendum, the court addressed GeigTech’s November 11, 2024 motion for reconsideration of the earlier decision concerning a new damages trial. The court held that the motion was untimely under Local Rule 6.3 because it was filed more than 14 days after the earlier decision, and also described it as lacking merit. The motion for reconsideration was denied, and the clerk was directed to terminate it.