Centricut v. Esab Group
Opinion
Centricut v. Esab Group CV-99-039-M 10/23/03 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Centricut, LLC, Plaintiffs
v. Crvrl No. 99-039-M Opinion No. 2003 DNH 179
Esab Group, Inc., Defendants
v.
Centricut, LLC (New Hampshire) and Centricut, LLC (Delaware), Counterclaim Defendants
O R D E R
Before the court are Esab's motions to Amend and/or Supplement Memorandum Order and Judgment (document no. 8 6) and for Entry of Permanent Injunction (document no. 91). Centricut objects to both motions. For the reasons given below, Esab's motion to amend is granted in part and denied in part, and its motion for an injunction is granted.
Motion to Amend and/or Supplement In its motion to amend and/or supplement the order and judgment, Esab seeks additional damages, in the form of lost
profits, as well as prejudgment interest. In addition to contesting Esab's motion on substantive grounds, Centricut argues that relief should be denied because Esab's motion is untimely.
Timeliness of Esab's motion. Esab filed a motion pursuant to F e d . R. C iv P. 59(e) within ten days after entry of judgment, but that motion failed to comply with LR 7.1(c). Conseguently, Esab was directed, by order dated July 25, 2003, to file a document curing the defect by August 4. Esab did so. Centricut argues that the court is without authority to extend Rule 59(e)'s ten-day limit, due to the rule's jurisdictional nature. However, even if that deadline is not subject to extension (and it probably is), this court may nevertheless grant the relief reguested in an untimely Rule 59(e) motion, under its "inherent power to correct errors in its own decrees." Air Line Pilots Ass'n v. Precision Valiev Aviation, Inc., 26 F.3d 220, 223 (1st Cir. 1994) (citing Jusino v. Zavas, 875 F.2d 986, 989-90 & n.3 (1st Cir. 1989)). Accordingly, while Esab's failure to strictly comply with LR 7.1(c) could, potentially, have implications with respect to the duration of the appeal period and, ultimately, the jurisdiction of the court of appeals, it does not bar this court
from considering the merits of Esab's requests for relief. See Air Line Pilots Ass'n, 26 F.3d at 225.
Lost Profits. According to Esab, Centricut's Silverline electrode was not a non-infringing substitute within the meaning of the second element of the Panduit1 test because the Silverline was available only for a brief period during the time that Centricut was infringing Esab's patent. Due to the lack of a non-infringing substitute, Esab argues, its patented electrodes competed with Centricut's infringing electrodes in a two-supplier market, which makes lost profits the appropriate measure of damages. Esab's argument fails for two reasons. First, while the market for electrodes may have had only two manufacturers, Esab and Centricut, it actually had four suppliers, Esab and Centricut plus the two companies to which Esab sold its electrodes for resale, American Torch Tip and Zap Plasmatherm/Thermacut. Second, the measure of damages employed in this case is more accurate than either of those typically used. Both traditional measures of patent infringement damages - a reasonable royalty and lost profits - are necessarily
1 Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152, 1156 (6th Cir. 1978).
speculative to a degree. Here, however, because Esab itself set the price it was willing to accept from other parties interested in selling its patented electrodes, there exists a very reliable means of establishing the proper award of damages. Accordingly, the court declines to amend the award of damages to reflect lost profits.
Preiudgment interest. Both parties agree that in patent infringement cases, prejudgment interest is typically awarded. See General Motors Corp. v. Devex Corp., 461 U.S. 648, 657 (1983) ("We hold . . . that prejudgment interest should be awarded under [35 U.S.C.] § 284 absent some justification for withholding such an award."). Centricut argues, however, that: (1) Esab waived its claim to prejudgment interest by failing to reguest it in its proposed findings of fact and conclusions of law; (2) Esab is not entitled to prejudgment interest because of its undue delay in prosecuting its infringement claim; and (3) even if Esab is entitled to prejudgment interest, it has not shown good cause for using an interest rate other than the weekly average one-year constant maturity treasury yield, nor has it shown good cause for awarding compound rather than simple interest.
Esab did not waive its claim to prejudgment interest.
" [P]rejudgment interest [is] the rule, not the exception." Crystal Semiconductor Corp. v. Tritech Microelectronics Int'l, Inc., 246 F.3d 1336, 1361 (Fed. Cir. 2001). Yet, despite that "default" rule, Esab did specifically seek prejudgment interest in its counterclaim. (Def.'s Answer & Countercl. at 7). Thus, Esab was entitled to presume that the court would award prejudgment interest as a matter of course should it prevail. Centricut's reguest for findings of fact and rulings of law, by contrast, did not offer any justification for making an exception to the general rule that prejudgment interest should be awarded in patent infringement cases. Moreover, unlike the patent holder in Crystal Semiconductor, who did not even contact the infringer until two years after it had determined that there was infringement, see 246 F.3d at 1362, Esab contacted Centricut promptly after it determined Centricut was infringing, and filed suit approximately one year after that first contact. In other words, unlike the situation in Crystal Semiconductor, this case does not present the sort of undue delay in prosecution that would justify a denial of prejudgment interest. Esab is entitled to the statutory rate of interest; nothing counsels persuasively
in favor of awarding any other amount. See 28 U.S.C. § 1961. Accordingly, Esab is entitled to prejudgment interest on its damage award, at the statutory rate, "from the date of infringement to the date of payment." Bio-Rad Labs., Inc. v. Nicolet Instr. Corp. 807 F.2d 964, 967 (Fed. Cir. 1986) (citations omitted). To that extent only, Esab's motion to amend and/or supplement the order and judgment is granted.
Motion for an Injunction
Esab also moves for a permanent injunction against any further infringement by Centricut. Centricut counters that Esab's motion is both moot (because Centricut has ceased its infringing activities) and untimely (because it was filed substantially after the ten-day limit stated in Rule 59(e)) .
While Esab's motion purports to be filed pursuant to 35 U.S.C. § 283 and F e d . R. C i v . P. 65, it is, in reality, another Rule 59(e) motion. As such, it is untimely, having been filed more than ten days after entry of judgment. However, as with Esab's reguest for prejudgment interest, untimeliness is not
necessarily a bar to awarding the relief Esab seeks. See Air Line Pilots Ass'n, 26 F.3d at 225.
Turning to the merits of Esab's reguest for an injunction, "[i]t is the general rule that an injunction will issue when infringement has been adjudged, absent a sound reason for denying it." Richardson v. Suzuki Motor Co., 868 F.2d 1226, 1247 (Fed. Cir. 1989) (citing W.L. Gore & Assocs., Inc. v. Garlock, Inc., 842 F.2d 1275, 1281 (Fed. Cir. 1988)). Centricut's claim that it is not now engaged in any infringing activity, even if true, is not a sound reason for denying Esab an injunction.
"The fact that the defendant has stopped infringing is generally not a reason for denying an injunction against future infringement unless the evidence is very persuasive that further infringement will not take place." Garlock, Inc., 842 F.2d at 1281-82. "If the defendant be honest in his protestations [that he will not infringe again, then] an injunction will do him no harm; if he be dishonest, the court should place a strong hand upon him . . . ."Id. at 1282 (guoting General Electric Co. v. New England Electric Mfg. Co., 128 F. 738 (2d Cir. 1904)).
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