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Postjudgment Sales Data Will Not Affect Damages Award

01-1193
February 15, 2002

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Last Month at the Federal Circuit - March 2002

Judges: Plager (author), Gajarsa, and Dyk

In Fiskars, Inc. v. Hunt Manufacturing Co., No. 01- 1193 (Fed. Cir. Feb. 15, 2002), the Federal Circuit affirmed a district court’s denial of a motion for relief from judgment pursuant to Fed. R. Civ. P. 60(b)(5) or (6) seeking vacatur of a damages award.

Fiskars OY AB and Fiskars, Inc. (collectively “Fiskars”) are, respectively, the owner and exclusive licensee of U.S. Patent No. 5,322,001 that is directed to a paper trimmer with a rotary blade. Fiskars filed suit against Hunt Manufacturing Company (“Hunt”) in the U.S. District Court for the Western District of Wisconsin for patent infringement. A jury found Hunt liable for infringement under the DOE and awarded Fiskars more than $3 million in lost-profits damages.

Upon receipt of the infringement verdict, Hunt discontinued sales of the infringing trimmer and began selling an alternative trimmer. It was undisputed that the alternative trimmer did not infringe, either literally or under the DOE. However, Hunt did not disclose at trial that it had developed the new, noninfringing trimmer.

Twenty-one months after the district court had entered judgment, Hunt filed a motion for relief from judgment pursuant to Fed. R. Civ. P. 60(b)(5) or (6), seeking vacatur of the damages award. Hunt contended that Fiskars was not entitled to lost-profits damages because postjudgment sales data established that Hunt’s new trimmer was a noninfringing alternative that was acceptable to consumers. The district court denied Hunt’s motion.

On appeal, the Federal Circuit concluded that Federal Circuit law should apply because the issue necessarily required an understanding of the distinctive characteristics of patent-damages law. Accordingly, the Court concluded that it should consider whether the denial of the Rule 60(b) motion was an abuse of discretion by the district court. Hunt contended that it could not have introduced evidence of its new trimmer at trial because sales data was not available until the new trimmer had been on the market for some time. The Court found, however, that sales data showing market acceptance of a noninfringing alternative was not the sole available means for demonstrating acceptability, noting that Hunt could have relied on expert testimony concerning the availability of a noninfringing alternative, but chose not to do so. Therefore, the Federal Circuit concluded that the district court did not abuse its discretion in denying the motion under Rule 60(b)(6).