Infringement of Design and Utility Patents by Same Product Does Not Permit Double Recovery
June 28, 2002
Last Month at the Federal Circuit - July 2002
Mayer, Bryson, Prost
In Catalina Lighting, Inc. v. Lamps Plus, Inc., No. 01-1563 (Fed. Cir. June 28, 2002), the Federal Circuit affirmed a district court’s rulings as to infringement, validity, and enforceability of Lamps Plus, Inc.’s (“Lamps Plus”) patents, but affirmed-in-part and reversed-in-part the damages award to Lamps Plus. Lamps Plus is the owner of U.S. Patent No. 5,221,141 (“the ‘141 patent”) and U.S. Design Patent No. 353,904 (“the ‘904 design patent”). The ‘141 patent concerns an electric lamp having a general area light source positioned at the top of a stem and a few adjustable light sources connected to the stem for providing lighting directed to specific areas.The ‘904 design patent is for the ornamental design of such a lamp.
Catalina Lighting, Inc. (“Catalina”) manufactured a similar lamp and sold it to Home Depot USA, Inc. (“Home Depot”), which in turn sold the Catalinamade lamps to the public. Catalina sued both.
After a jury found for Lamps Plus, Catalina moved for JMOL that it did not infringe the asserted patents, that the ‘904 design patent would have been obvious, and that Lamps Plus had failed to prove damages for infringement of the ‘904 design patent. The district court denied Catalina’s motion and found the patents valid, enforceable, and infringed. With respect to the damages, the jury concluded that (1) Catalina infringed the ‘141 patent and owed damages of $660,000 (representing a reasonable royalty); (2) Catalina infringed the ‘904 design patent and owed damages of $275,194(equaling Catalina’s profits); (3) Home Depot infringed the ‘141 patent and owed damages of $630,190 (representing a reasonable royalty); and (4) Home Depot infringed the ‘904 design patent and owed damages of $492,748 (equaling Home Depot’s profits). The district court modified the damages award for infringement of the ‘141 patent, replacing the jury’s separate damages award for Catalina and Home Depot with a single award of $660,000 (reasonable royalties under 35 U.S.C. § 284), for which Catalina and Home Depot were jointly and severally liable. The damages award for both patents totaled $1,636,589.78, including Catalina’s profits of $275,194 and Home Depot’s profits of $492,748 for the infringement of the ‘904 design patent (under 35 U.S.C. § 289), and interest.
On appeal, the Federal Circuit affirmed each of the judgments concerning infringement, validity, and enforceability of the patents at issue.
Regarding damages, however, the Federal Circuit reversed-in-part and affirmed-in-part. Concerning the damages awarded for the infringement of the ‘141 patent, having considered the evidence, including testimony by an expert for Lamps Plus and testimony by a former employee of Catalina, the Federal Circuit concluded that the jury’s royalty award was not grossly excessive or monstrous, was clearly supported by evidence, and was not based only on speculation or guesswork.
With respect to the damages award for the infringement of the ‘904 design patent, the Federal Circuit rejected Catalina’s argument that the infringer’s profits could be awarded under 35 U.S.C. § 289 only when a design patent is willfully infringed.
Finally, the Federal Circuit considered whether Lamps Plus was entitled to recover both a reasonable royalty for infringement of the ‘141 patent and the infringer’s profits for infringement of the ‘904 design patent.
Focusing on the conduct that damaged Lamps Plus, the sale of infringing lamps, the Federal Circuit observed that each sale of the lamps at issue constitutes an infringement of both the ‘141 patent and the ‘904 design patent. The Court ruled that although Lamps Plus is entitled to damages for each infringement, once it receives profits under § 289, Lamps Plus is not entitled to a further recovery from the same sale because the award of infringer’s profits under § 289 also constitutes damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer under § 284. Thus, the Court concluded that damages for infringement of the ‘904 design patent were sufficient to compensate for the infringement of the ‘141 patent. Accordingly, the Court affirmed the award of damages of infringer’s profits plus prejudgment interest against Catalina and Home Depot, but reversed the award based on a reasonable royalty.