Norfin, Inc. v. International Business Machines Corp.

81 F.R.D. 614, 202 U.S.P.Q. (BNA) 663, 1979 U.S. Dist. LEXIS 14814
CourtDistrict Court, D. Colorado
DecidedJanuary 26, 1979
DocketCiv. A. No. 76-F-293
StatusPublished
Cited by1 cases

This text of 81 F.R.D. 614 (Norfin, Inc. v. International Business Machines Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norfin, Inc. v. International Business Machines Corp., 81 F.R.D. 614, 202 U.S.P.Q. (BNA) 663, 1979 U.S. Dist. LEXIS 14814 (D. Colo. 1979).

Opinion

MEMORANDUM OPINION AND ORDER

SHERMAN G. FINESILVER, District Judge.

In a jury trial on the damages phase of this bifurcated patent infringement suit, Norfin, Incorporated (Norfin) prevailed against defendant International Business [615]*615Machines Corporation (IBM) to the extent of $7,500,000. By way of background, the patent asserted in this suit relates to a collator which can automatically sort and assemble successive pages of text as they come off an attached duplication (photocopying) machine. In the liability phase of the trial, a separate jury returned a special verdict finding willful and deliberate infringement on the part of IBM.

The instant trial was limited to the issue of damages. Norfin sought to recover for its lost profits. It prayed for an amount in excess of eleven million dollars. Defendant IBM denied that there were any ascertainable lost profits and contended that Norfin should recover, as its measure of damages, nothing more than a reasonable royalty. IBM submitted a figure of just over two hundred thousand dollars as constituting adequate compensation in this case.

The jury returned an unanimous special verdict in which it found that (1) Norfin was entitled to damages in the amount of $7,500,000, and (2) the foregoing award was based upon a lost profits measure of damages. The court entered judgment on the jury verdict and made certain additional rulings as well. We awarded Norfin its reasonable attorney’s fees under 35 U.S.C. § 285 and we declined to treble or otherwise increase the damages under 35 U.S.C. § 284. We set a hearing to determine the amount of such fees and expenses as were properly awardable and ultimately (upon the parties’ stipulation as to amount) awarded some $375,000 in fees, expenses, and costs.

We now rule on IBM’s motions for judgment notwithstanding the verdict, or in the alternative, for remittitur or new trial. Defendant’s motions take issue with the amount of damages found by the jury, alleging that the damages are excessive and not supported by the evidence.

The court denies the motion for judgment notwithstanding the verdict’ and the motion for remittitur or new trial.

I

IBM urges that the verdict must be set aside because it is, assertedly, grossly excessive and not supported by the evidence.

This court instructed the jury, in part, that it was Norfin’s burden (with respect to lost profits) to prove by a preponderance of the evidence that Norfin lost sales or leases because of IBM’s infringement and that Norfin would have made a profit on those sales or leases. See, Instruction No. 13 (attached as Appendix A). IBM maintains that Norfin failed to establish four essential facts necessary to its lost profit case within the ambit of the court’s instruction.

IBM asserts that Norfin failed to prove that (1) there was a demand for collators embodying the patented feature, (2) there was no acceptable substitute for such a collator, (3) there was a marketing and servicing capability on Norfin’s part to place as many collators as IBM had placed, and (4) there was a particular and quantifiable profit which Norfin would have made on any sales or leases which it lost by virtue of the infringement. It is IBM’s position that Norfin failed to prove any one of those four essential facts and therefore failed to carry its burden as to lost profits.

IBM concludes by pointing out that, where the patent owner has failed to prove lost profits and where there exists no established royalty (as it contends is the case here), damages can only be awarded on the basis of a reasonable royalty. IBM seeks to have the verdict set aside and prays for entry of judgment in the amount of $210,-872 (or for remittitur). Such a sum is based upon IBM’s evidence of what constitutes a reasonable royalty in this case.

Norfin responds that there is substantial evidence in the record to support a finding in its favor on each of the four essentials which IBM has challenged. That being so, Norfin concludes, the $7,500,000 award for lost profits is amply supported by the evidence.

II

Judgment n. o. v. is proper where the evidence and all the inferences to be drawn therefrom are so patent that reason[616]*616able men could not differ as to the conclusions to be drawn. Barnett v. Life Ins. Co. of the Southwest, 562 F.2d 15, 17 (10th Cir. 1977). The evidence, construed in the light most favorable to the party opposing the motion, must point but one way and be susceptible to no reasonable inferences in any other direction. Id.; see also, New Mexico Savings & Loan Ass’n v. United States Fidelity & Guaranty Co., 454 F.2d 328, 331 (10th Cir. 1972). This same standard applies equally to patent infringement cases. See, Burger Train Systems, Inc. v. Ballard, 552 F.2d 1377, 1381 (10th Cir.), cert, denied, 434 U.S. 860, 98 S.Ct. 185, 54 L.Ed.2d 132 (1977); Moore v. Schultz, 491 F.2d 294, 298 (10th Cir.), cert, denied, 419 U.S. 930, 95 S.Ct. 203, 42 L.Ed.2d 161 (1974).

IBM cannot meet this standard. The instant motion for judgment n. o. v. challenges the credibility of witnesses and the strength of the inferences which may be drawn from the evidence. It does not convince the court that the evidence, seen in a light most favorable to Norfin, is so overwhelmingly in IBM’s favor as to require the court to set aside the verdict. After having observed the whole trial, and having evaluated the testimony of the witnesses and having reviewed the exhibits, the court is satisfied that there is sufficient evidence to support the verdict. This was a hard fought case and one which was well presented by counsel for both parties. There was a wealth of detailed evidence, much of it introduced through witnesses qualified as experts in the discipline of accounting, much of it sharply contested. The jury resolved many of the disputes in Norfin’s favor, based on the evidence it heard.

We note that this was a case in which the jury was most attentive and, notwithstanding the difficulty of the subject matter, was well prepared for its deliberations. By stipulation of the parties, and in the court’s discretion, each juror was permitted to take a package of material into the jury room. The package included a full set of the court’s instructions and full exhibit books containing all those exhibits admitted into evidence. Among the exhibits was plaintiff’s number 138 which summarized plaintiff’s calculations leading to a lost profits figure of $11,645,657. Downward revisions in revenues or upward revisions in incremental costs (or both) could have been made by the jury from the evidence presented and the materials at hand.

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81 F.R.D. 614, 202 U.S.P.Q. (BNA) 663, 1979 U.S. Dist. LEXIS 14814, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norfin-inc-v-international-business-machines-corp-cod-1979.