Kaufman v. Microsoft Corporation
- Alvin Hellerstein
- 1:16-cv-02880
- U.S. District Court · Southern District of New York
- 3
In Kaufman v. Microsoft, Judge Hellerstein denied Kaufman’s motion to add prejudgment interest to his $7 million patent-infringement judgment.
Michael Philip Kaufman and Microsoft Corporation. The court left Kaufman’s $7 million patent-infringement judgment unchanged and did not add prejudgment interest.
What happened
In Kaufman v. Microsoft, a jury awarded Michael Philip Kaufman $7 million after finding that Microsoft Corporation infringed his patent. The judgment was entered for that amount.
Kaufman asked the court to add interest covering the period before judgment, starting when the patent issued in 2011. Microsoft argued that the jury’s damages award already included interest because it was based on a present-value calculation, and that Kaufman had delayed bringing the lawsuit despite knowing about the alleged infringement.
Judge Alvin K. Hellerstein denied the motion. He ruled that the jury’s award already included the relevant interest and found that Kaufman’s five-year delay, along with prejudice to Microsoft, also supported denying additional interest. The $7 million judgment remains unchanged.
The detailed version
- Kaufman v. Microsoft Corporation · No. 1:16-cv-02880
- Alvin Hellerstein
- Jan. 25, 2021
Background
Following a trial, a jury found that Microsoft Corporation infringed Michael Philip Kaufman’s U.S. Patent No. 7,885,981. The jury awarded Kaufman $7 million, and judgment was entered for that amount.
Kaufman moved under ECF No. 189 to amend the judgment by adding prejudgment interest—interest covering the period before entry of judgment—from February 8, 2011, the date the patent issued. The court denied the motion.
Reasons for the Decision
The court explained that the Supreme Court has said prejudgment interest ordinarily should be awarded to a prevailing patent owner because it generally helps place the owner in the position it would have occupied if the infringer had agreed to a reasonable royalty. In lump-sum royalty cases, however, the court, rather than the jury, typically adds prejudgment interest.
The court found this case different. The damages question asked the jury how much Kaufman had proved he was entitled to recover. The jury was instructed that damages were measured by the lump-sum payment the parties would have agreed to in a hypothetical negotiation in 2011, discounted to present value. The court concluded that the jury’s award therefore already included interest.
The court also considered Kaufman’s delay. It stated that prejudgment interest may be limited or denied when the patent owner unduly delays prosecuting the lawsuit. Kaufman did not dispute that he knew of Microsoft’s alleged infringement in 2011 and gave Microsoft no notice before filing suit in 2016. The court found that his explanation—that he was an individual inventor who needed time to bring a lawsuit—did not adequately explain the five-year delay.
The court further found that Microsoft experienced prejudice. According to Microsoft’s trial witness, Microsoft might have used a cost-effective workaround to disable the allegedly infringing part of Dynamic Data if it had known about the alleged infringement. The court also noted that other courts had denied prejudgment interest after shorter delays.
Disposition
Judge Alvin K. Hellerstein denied Kaufman’s motion to amend the judgment. The Clerk was directed to terminate the motion, and the $7 million judgment, identified as ECF No. 192, remained as entered.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.