Willis Electric Co., Ltd. v. Polygroup Limited

Background

Willis Electric brought this patent-infringement action in 2015 against Polygroup Limited (Macao Commercial Offshore), Polygroup Macau Limited (BVI), Polytree (H.K.) Co. Ltd., and Polygroup Trading Limited. The case involved several patents, but the only claim tried to the jury was claim 15 of U.S. Patent No. 8,454,186.

The jury trial began on January 8, 2024. On January 17, 2024, the jury unanimously found that Polygroup willfully infringed claim 15 and awarded Willis Electric $42,494,772 in damages. After the verdict, the court requested briefing on enhanced damages, and Willis Electric moved for prejudgment and post-judgment interest.

Enhanced damages

Under 35 U.S.C. § 284, a court may increase damages by up to three times the amount found by the jury. The court explained that enhanced damages are generally reserved for egregious misconduct beyond typical infringement. The court may consider the circumstances of the case, including the nonexclusive factors identified in Read Corp. v. Portec, Inc., such as deliberate copying, the defendant’s good-faith belief about infringement or patent validity, litigation conduct, the duration of the misconduct, remedial action, motivation, and concealment.

Willis Electric argued that several factors supported enhanced damages. It pointed to evidence suggesting that Polygroup deliberately copied its patented “One Plug” artificial-tree design, failed to develop a good-faith belief that it did not infringe or that the patent was invalid, engaged in troubling litigation conduct, had substantial financial resources, and waited until 2019 to switch to a noninfringing alternative. Willis Electric also cited the six-year infringement period and Polygroup’s rule against writing emails about intellectual-property issues.

Polygroup argued that it independently developed its initial “Quick Set” tree designs, that its engineers reasonably believed the designs did not infringe and that the patent was invalid based on prior art, and that its inter partes review challenges showed good faith. Polygroup also argued that both sides litigated aggressively, artificial trees were a minor product line, and the evidence did not show an egregious motive or concealment.

The court concluded that Polygroup’s conduct did not warrant enhanced damages. It found that the copying evidence was concerning but did not definitively establish egregious infringement. The court credited the engineers’ good-faith belief regarding noninfringement and invalidity, found that the alleged litigation misconduct did not clearly demonstrate extraordinary wrongdoing, and determined that Polygroup’s 2019 redesign efforts weighed against treating the conduct as egregious. The court therefore denied enhanced damages, and the jury’s $42,494,772 reasonable-royalty award was not increased.

Prejudgment interest

The court stated that prejudgment interest ordinarily should be awarded in patent cases and is intended to place the patent owner in roughly the position it would have occupied had the infringer entered into a reasonable royalty agreement. Willis Electric requested interest at Minnesota’s 10% statutory rate under Minn. Stat. § 549.09. Polygroup argued that a different Minnesota statute, Minn. Stat. § 334.01, supplied a maximum rate of 6%. Polygroup also argued that interest should be denied or reduced because of Willis Electric’s allegedly frivolous claims and the size of the jury’s award.

The court selected the 10% rate under Minn. Stat. § 549.09. It relied on the District of Minnesota’s practice in patent cases and found that substantial disputes among the damages experts meant the damages were not readily ascertainable until the jury’s verdict. The court also found that Polygroup had not shown the undue delay or prejudice necessary to limit interest. It concluded that Willis Electric reasonably pursued the case and that much of the delay identified by Polygroup resulted from court scheduling or Polygroup’s inter partes review challenges.

The court ordered prejudgment interest on the $42,494,772 reasonable-royalty award at the 10% Minnesota statutory rate, calculated from June 4, 2013, through the date of final judgment.

Post-judgment interest and disposition

Under 28 U.S.C. § 1961(a), post-judgment interest on a money judgment is calculated using the weekly average one-year constant-maturity Treasury yield for the calendar week preceding entry of judgment. Willis Electric had requested a 4.8% rate based on the week before its January 31, 2024, filing, but the court noted that judgment had not yet been entered.

The court granted Willis Electric’s motion for prejudgment and post-judgment interest. It ordered that the later judgment include post-judgment interest at the applicable weekly average one-year Treasury rate, accruing from entry of judgment until the judgment is satisfied. That interest applies to the total judgment, including prejudgment interest and any fee and cost awards. The order did not itself enter the later judgment.