Schwendimann v. Arkwright Advanced Coating, Inc.

Background

Jodi A. Schwendimann prevailed at trial against Arkwright Advanced Coating, Inc. (AACI) on a patent-infringement claim in October 2017. The jury awarded Schwendimann $2,624,228 in damages. The court later awarded $1,915,328 in prejudgment interest, calculated at a 10% simple annual rate from July 6, 2010, through entry of judgment.

AACI asked the court to reconsider the interest award. Before the original award, AACI had requested a 1.42% interest rate. It alternatively argued that, if the court used the 10% rate in Minnesota Statute § 549.09(b), the court should also apply that statute’s settlement-offer limitation. AACI said it had made a settlement offer of approximately $675,000 that was closer to the jury’s award than Schwendimann’s final $8 million offer. AACI later clarified that its offer was made in an email that was part of the record.

Schwendimann argued that the Minnesota statute was not controlling and that AACI had not previously provided a written offer. The court stated that it was satisfied with Schwendimann’s explanation concerning that assertion.

Legal standard

The court explained that reconsideration after judgment is generally treated like a motion to alter or amend the judgment. Such a motion is granted only in compelling circumstances, such as a clear legal or factual error or newly discovered evidence. It cannot be used simply to reargue issues that were already presented or to raise arguments that could have been made earlier.

Prejudgment interest

The court described prejudgment interest in patent cases as compensation intended to place the patent owner in roughly the position the owner would have occupied if the infringer had entered into a reasonable royalty agreement. Interest ordinarily should be awarded unless there is a justification for withholding or limiting it. The court noted that the recognized basis for withholding interest is undue delay by the patent owner in enforcing patent rights.

The court found no evidence that Schwendimann had caused undue delay, and AACI did not argue that she had. The court also held that Minnesota’s settlement-offer provision was not binding because this was a federal patent case. Although the provision may promote settlement under Minnesota law, the court concluded that federal patent courts had not treated a failure to settle as undue delay that would justify limiting prejudgment interest.

Disposition

The court held that AACI had not shown compelling reasons to change the prior award and denied AACI’s Motion for Reconsideration. The order was signed by Chief Judge John R. Tunheim.