Syntel Sterling Best Shores Mauritius Limited v. The Trizetto Group, Inc.

Background

Plaintiffs and counterclaim defendants Syntel Sterling Best Shores Mauritius Limited and Syntel, Inc., together called “Syntel,” filed a motion to exclude the testimony of Thomas Britven and documentary evidence concerning The Trizetto Group, Inc. and the other defendants’ claimed reasonable-royalty damages. Syntel sought to exclude evidence relating to alleged infringing acts occurring before September 30, 2013. The motion was made under 17 U.S.C. § 507(b), which establishes a three-year limit on copyright damages.

Court’s reasoning

The court explained that, in the Second Circuit, a reasonable royalty may serve as a proxy for actual copyright damages. The relevant measure is the fair market value of the reasonable license fee to which the copyright holder was allegedly deprived, rather than the amount the copyright holder would have charged.

The court also explained that copyright damages are available only for infringing acts occurring within three years before the filing of the action. Although the Second Circuit uses a discovery rule to determine when an infringement claim accrues, the court must separately apply a three-year lookback period to determine the damages that may be recovered.

The defendants’ original answer and counterclaims were filed on February 23, 2015. The court held that the later copyright claims related back to that pleading because they concerned the same conduct and occurrence, including alleged theft of two internal presentations and the Data Dictionary software. Therefore, the defendants could seek damages for infringing acts dating back to February 23, 2012.

The court noted that the defendants were not seeking damages for infringement before February 23, 2012. Instead, they sought to use testimony and documents about earlier events to support their calculation of the fair market value of a reasonable license during the three-year period for which actual damages could be recovered.

Ruling

Judge Lorna G. Schofield denied Syntel’s motion to exclude Thomas Britven’s testimony and the related documentary evidence. The order states that Britven may testify and that the defendants may offer documents concerning TriZetto’s claimed reasonable-royalty damages arising on or after February 23, 2012. The Clerk of Court was directed to close the motion at Docket No. 714.