Cyntec Company, Ltd. v. Chilisin Electronics Corp.

Background

Cyntec sued Chilisin Electronics Corp. and Chilisin America Ltd. for infringing patents concerning electronic chokes. After a seven-day trial, the jury found that Chilisin willfully infringed every asserted patent claim. The opinion reports that the jury awarded $1,552,493 in lost profits and $320,463 in reasonable royalties. The court later referred to the jury’s total as $1,872,596 when calculating enhanced damages.

Chilisin’s Rule 50(b) motion

The court denied Chilisin’s renewed motion for judgment as a matter of law in full. Judgment as a matter of law is appropriate only when the evidence permits one reasonable conclusion and that conclusion is contrary to the jury’s verdict. The court held that several of Chilisin’s arguments were waived because they had not been raised in its earlier trial motion, and it also concluded that the evidence supported the jury’s findings.

The court denied the motion concerning fourteen accused products that Cyntec allegedly had not analyzed. Cyntec’s expert testified that he reviewed the material specifications for each accused product. The court also denied Chilisin’s argument that direct sales could not infringe the ’037 patent, finding that Cyntec had made clear it was pursuing direct infringement under section 271(g) of the patent statute.

The court denied Chilisin’s arguments concerning the “by means of” claim limitation. It held that Chilisin’s post-trial causation argument differed from the argument made before the jury and therefore could not properly be raised in the renewed motion. The court added that, even if it considered the argument, the trial evidence supported the jury’s finding that the accused products met the limitation.

The court also denied challenges to lost profits, the royalty base, the royalty rate, and the damages period. Some arguments were waived because they were not raised before the case went to the jury. On the preserved issues, the court concluded that the jury had sufficient evidence to find that Cyntec would have made the sales absent infringement and that the importation data supported the damages award. The court likewise denied Chilisin’s challenge to willful infringement, finding that evidence of Chilisin’s efforts to copy Cyntec’s products supported the jury’s verdict.

Chilisin’s Rule 59 motion for a new trial

The court denied Chilisin’s motion for a new trial in full. It rejected the request to retry the issues addressed in the Rule 50(b) motion because Chilisin had not shown that the verdict was contrary to the clear weight of the evidence. The court also denied new-trial requests based on patent invalidity by anticipation and obviousness. It concluded that Chilisin had not met its burden to prove either defense by clear and convincing evidence.

The court denied Chilisin’s request for remittitur, which is a reduction of a jury’s damages award. Chilisin had not shown that the lost-profits and royalty-rate findings were contrary to the clear weight of the evidence.

Permanent injunction

The court granted Cyntec’s motion for a permanent injunction, subject to the court’s approval of a revised proposed injunction. A permanent injunction is a court order requiring a defendant to stop specified conduct. Applying the four factors for such an injunction, the court found that Cyntec showed irreparable harm, that monetary damages were inadequate, that the balance of hardships favored an injunction, and that the public interest favored protecting Cyntec’s patent rights.

The injunction was to be narrow, prospective, and directed only at Chilisin. The court directed Cyntec to submit a revised proposal containing a narrow exception for conveying safety information, within fourteen days of the order.

Enhanced damages

The court granted Cyntec’s request for enhanced damages and ordered a three-times multiplier for applicable damages. Enhanced damages are additional patent damages awarded because of particularly wrongful infringement. Applying the factors concerning deliberate copying, litigation conduct, the size of the business, the closeness of the case, the duration of the conduct, remedial action, and motivation for harm, the court found that the circumstances favored enhancement. The court emphasized evidence that Chilisin sought to make its products match Cyntec’s products closely, including after the lawsuit was filed.

The court did not apply the multiplier to damages from before Chilisin received Cyntec’s notice letter in December 2017, because Cyntec had limited its willfulness claim to infringement after that notice. The court determined that $1,840,144 represented damages from 2018 onward. After applying the multiplier to that amount and adding the non-enhanced damages, the court calculated $4,602,671 in lost-profits damages and $950,573 in reasonable royalties, for a total revised damages award of $5,553,244.

Motion to seal and final dispositions

The court denied Chilisin’s motion to seal the opposition brief and ordered Chilisin to file an unredacted version publicly. The court granted the motion only as to a limited portion of Exhibit H for which Cyntec maintained a confidentiality claim.

The final order therefore denied Chilisin’s Rule 50(b) motion, denied Chilisin’s Rule 59 motion, granted Cyntec’s motion for a permanent injunction and enhanced damages subject to approval of a revised injunction, and granted in part and denied in part Chilisin’s motion to seal.