Canon, Inc. v. Color Imaging, Inc.

292 F. Supp. 3d 1357
District Court, N.D. Georgia·Decided February 22, 2018·No. CIVIL ACTION NO. 1:11–CV–3855–AT·Published·Cited by 5 cases

Opinion

Amy Totenberg, United States District Judge *1360On June 19, 2017, the jury entered a verdict on Plaintiff's infringement claims and found that Defendants had willfully violated Plaintiff's patent rights. (Doc. 632.) Following the jury's verdict, Plaintiff filed a Motion for Enhanced Damages [Doc. 644] that is now before the Court.

I. Background

In April 2004, Plaintiff Canon, Inc. ("Canon") developed and sold the first Set On III toner bottle that can be used in Canon copier machines. Defendant General Plastic Industrial Co., Ltd ("GPI") manufactures aftermarket toner bottles and cartridges, meaning they can be used in copiers and printers made by other companies, such as Canon. One of GPI's customers is Defendant Color Imaging, Inc. ("Color Imaging"), which purchases empty toner bottles from GPI, fills them with toner, and sells them in competition with Canon and other OEM (original equipment manufacturer) companies.

In 2005, GPI made an aftermarket version of Canon's Set On III toner bottles known as Type A and began selling it, including in the United States. In 2008, GPI made Type B bottles, another aftermarket version of Canon's Set On III toner bottles, and also sold it in the United States.

Canon applied for the '012 patent, the patent at issue in this case, on July 9, 2008, and the '012 patent issued on January 12, 2010. Soon after, Canon sued Densigraphix, one of GPI's customers, for infringing the '012 patent based on Densigraphix's sales of Type A and Type B bottles. GPI and Color Imaging both learned of the '012 patent and Canon's infringement allegations against Type A and Type B bottles in January 2010, when Densigraphix was sued. A few months later, Densigraphix entered into a consent order that provided for a permanent injunction in the case brought by Canon, and Densigraphix told GPI it could no longer sell Type A and Type B bottles.

GPI continued selling Type A bottles to U.S. customers for over a year after January 2010. GPI also continued selling Type B bottles, and in April 2011, Color Imaging began selling Type B bottles in the United States.

On September 15, 2011, Canon brought the current suit against GPI and Color Imaging for infringing three claims of the '012 patent. The case was litigated for several years and went to trial in June 2017. On June 19, 2017, the jury returned a verdict finding that Defendants had infringed the three claims of the '012 patent, that their infringement was willful, and that Defendants had not sufficiently proven their affirmative defenses. The jury awarded Canon $3,740,603 in damages for GPI's infringement and $730,380 for Color Imaging's infringement based on a reasonable royalty rate.

Plaintiff now moves for enhanced damages based on the jury's finding of willful infringement.

*1361II. Discussion

If the jury or the district court finds in favor of the plaintiff in a patent infringement case, 35 U.S.C. § 284 requires the court to award damages to the plaintiff that are "adequate to compensate for the infringement." Section 284 further provides that the court "may increase the damages up to three times the amount found or assessed."

In its recent Halo Electronics, Inc. v. Pulse Electronics, Inc. decision, the Supreme Court "emphasized that the word 'may' clearly connotes discretion" and "there is no precise rule or formula for awarding [enhanced] damages under § 284." --- U.S. ----, 136 S.Ct. 1923, 1931, 195 L.Ed.2d 278 (2016) (internal quotations omitted). In particular, the Halo decision rejected the Federal Circuit's two-part test requiring a finding of objective recklessness before a district court could award enhanced damages. Id. at 1932. The Supreme Court in Halo characterized this two-part test as "unduly rigid" and instead held that, "[a]s with any exercise of discretion, courts should continue to take into account the particular circumstances of each case in deciding whether to award damages, and in what amount." Id. at 1933. Just as a court is not bound to find "objective recklessness" before awarding enhanced damages, a court is also not bound to award enhanced damages after a finding of willfulness or egregious misconduct. Id. Yet the Supreme Court still limited a court's discretion to some extent, stating that enhanced damages "should generally be reserved for egregious cases typified by willful misconduct." Id. at 1934.

When reviewing the particular circumstances of a case, a district court may use the nine factors laid out in Read Corp. v. Portec, Inc. to help assess whether enhanced damages are appropriate:

1. Whether the infringer deliberately copied the ideas or design of another;
2. Whether the infringer, when it knew of the other's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed;
3. The infringer's behavior as a party to the litigation;
4. The infringer's size and financial condition;
5. Closeness of the case;
6. Duration of the infringer's misconduct;
7. Remedial action by the infringer;
8. The infringer's motivation for harm; and
9. Whether the infringer attempted to conceal its misconduct.

970 F.2d 816, 827 (Fed. Cir. 1992) ; see WBIP, LLC v. Kohler Co. , 829 F.3d 1317 (Fed. Cir. 2016) (post- Halo , affirming the lower court's grant of enhanced damages after applying the Read factors).

Free access — add to your briefcase to read the full text and ask questions with AI

Canon, Inc. v. Color Imaging, Inc., 292 F. Supp. 3d 1357 (N.D. Ga. 2018).

292 F. Supp. 3d 1357 (Canon, Inc. v. Color Imaging, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related