The opinion of the court was delivered by: RUBEN CASTILLO
Currently pending before this Court is a motion by plaintiff General American Transportation Corporation ("GATC"), pursuant to Fed. R. Civ. P. 52(b) and 59(e) to amend and supplement the Court's findings and judgment of July 14, 1995. Specifically, GATC's motion seeks to have this Court address three discrete area's of this Court's Memorandum Opinion: (1) to clarify and/or amend the Court's findings with respect to amount of damages awarded to Cryo-Trans, Incorporated ("Cryo-Trans") on the basis of GATC's patent infringement; (2) to amend the language concerning the form and scope of the permanent injunction order entered by the Court; and (3) to make additional findings with respect to relevant prior art and GATC's claim of inequitable conduct. GATC's motion is granted, in part, and denied, in part, as fully set forth in this opinion. The Court will address each of the three subjects of the pending motion in the order addressed by GATC. Lastly, this opinion will also address the Bill of Costs sought by Cryo-Trans.
The Damages Awarded to Cryo-Trans
This Court awarded Cryo-Trans total lost profit damages of $ 8,920,732 (7/14/95 Mem. Op. P 39). GATC complains that this award should be reduced because this Court also enjoined GATC from any further patent infringement. GATC asserts that Cryo-Trans has admitted that its lost profit damages, in the event of an injunction, would be limited to $ 2,069,157 plus price erosion damages of $ 562,157 as found by the Court, prejudgment interest and any additional lost profits for the one-month extension of the effective date of the injunction to September 1, 1995.
GATC relied on the testimony of its expert witness, Raymond Sims, at trial. Mr. Sims analyzed Cryo-Trans' potential damages by making three assumptions -- all of which have proven to be true. Mr. Sims assumed that the disputed patent was valid, that GATC would be found to have infringed the patent and that an injunction would be entered at the conclusion of the trial. (Tr. 1127). Mr. Sims admitted that Cryo-Trans should be made whole and placed in the position that it would have been but for the infringement. (Tr. 1128). These damages would have included lost profits and some element of price erosion and were conservatively estimated by Mr. Sims to total $ 1.9 million. (Tr. 1128-1129).
The Court in its July 14, 1995 Memorandum Opinion rejected portions of all of the parties' alternative damage scenarios.
Instead, the Court awarded lost profits of $ 8,920,732 and rejected Cryo-Trans' additional price erosion damages as speculative. This Court specifically stated that based, in part, on the Court's injunction against GATC's further use of all of its infringing cryogenic railcars, it found that Cryo-Trans' additional price erosion damages of $ 7,926,259 for further price erosion on its potential future leases was speculative and unsupported by the preponderance of the evidence. (7/14/95 Mem. Op. P 40).
GATC's post-trial motion correctly notes that this Court relied on Mr. Levko's Scenario #1 calculations in deciding the appropriate damages in this case. The Court's current total damage award of $ 9,705,172 is the sum of lines I(A), I(B), II(A)(1) and III (A) of Scenario 1. The Court's use of these figures was its best estimate of the damages that would adequately compensate Cryo-Trans for GATC's infringement. Rite-Hite Corp. et al. v. Kelley Company, Inc., 56 F.3d 1538, 1544 (Fed. Cir. 1995); Smith Kline Diagnostics v. Helena Laboratories, 926 F.2d 1161, 1164 (Fed. Cir. 1991). However, because the Court recognizes that Mr. Levko's Scenario #1 calculations were based on the express premise that an injunction would not issue and because this Court still believes that the issuance of an injunction is a proper remedy in this case, this Court has decided to revise its award of damages to eliminate the internal inconsistency in using Mr. Levko's Scenario #1 calculations. Therefore, this Court has decided to modify paragraphs 39 through 42 of its July 14, 1995 Memorandum Opinion. These paragraphs of the opinion will be replaced by the following paragraphs:
39. This Court expressly credits the testimony of Cryo-Trans' damage expert Aron Levko as setting forth reasonable assumptions about the extent of infringement damages suffered by Cryo-Trans. In particular, this Court finds that the lost profits on GATC leases of F Plate cars which infringe the '876 Patent are $ 2,144,363. This Court further finds that Cryo-Trans has suffered price erosion damages as a result of GATC's infringement. Specifically, this Court finds that price erosion damages are appropriately awarded to Cryo-Trans because it will not be able to instantly lease replacement cars to the relevant companies on September 1, 1995 and there is a reasonable likelihood that the price it previously secured for its cars will be negatively impaired by GATC's prior infringement. (Tr. 293, 683, 685, 1144). Therefore, the Court finds Cryo-Trans has suffered price erosion damages of $ 3,024,052 on the current GATC leases of infringing F Plate cars; price erosion damages of $ 1,476,855 on the leased but not yet placed infringing GATC F Plate cars; price erosion damages of $ 567,954 on its current leases of F Plate cars; price erosion damages of $ 502,738 on its further lease renewal of F Plate cars; and price erosion damages of $ 1,030,273 on its future renewal of leases of its C Plate cars. (8/7/95 Supp. Declaration of A. Levko, Scenario #2; Schedules B-1, B-2, C-1, C-3 and C-4). The total damages suffered by Cryo-Trans are hereby determined by this Court to be $ 8,746,235. The Court specifically rejects some of the damage calculations made by GATC's expert, Mr. Sims, as being unduly conservative and unreasonable (Pl.'s Ex. HT).
40. With the elimination of GATC from the market on September 1, 1995, the Cryo-Trans car will become the most economical way to transport frozen foods. (Tr. 768-69). Because of this fact, as well as the Court's injunction against GATC's further use of all of its infringing cryogenic railcars, this Court finds that Cryo-Trans' additional price erosion damages of $ 6,486,093 for price erosion on Cryo-Trans' leases on F Plate cars based on anticipated growth occurring between 1996 and 2004 is speculative and unsupported by a preponderance of the evidence. (8/7/95 Supp. Declaration of A. Levko, Scenario #2; Schedule D-3).
41. Prejudgment interest, at a rate of 7.54%, as the parties have agreed, is appropriate. Therefore, the Court awards prejudgment interest of $ 237,205. (8/7/95 Supp. Declaration of A. Levko, Scenario #2; Schedule F).
42. Total damages suffered as a result of the infringement by GATC consisting of lost profits, price erosion and prejudgment interest amount to $ 8,983,440.
Scope Of The Court's Injunction
The injunction entered by this Court on July 14, 1995 merely stated that GATC was "permanently enjoined from any further infringement of the '876 Patent". (7/14/95 Mem. Op. P44). GATC asserts that this injunction is too broadly worded and thereby offends Fed. R. Civ. P. 65(d). See KSM Fastening Systems, Inc. v. H. A. Jones Co., Inc., 776 F.2d 1522, 1526 (Fed. Cir. 1985). GATC asserts that this Court's injunction should only prohibit the manufacture, use or sale of the specific GATC Arcticar which this Court found to be infringing. GATC intimates that, despite this Court's July 14, 1995 Memorandum Opinion, it may seek to undertake a further "colorable variation" of the '876 Patent. The Court expressly warns GATC that any further infringing activity may place GATC at risk of contempt. See KSM ...