The opinion of the court was delivered by: JAMES ZAGEL, District Judge
MEMORANDUM OPINION AND ORDER
CONSOLIDATED RULINGS ON POST-TRIAL MOTIONS
Post Trial Motions of Microsoft
1. Judgment As a Matter of Law and For a New Trial
This motion rehearses a series of arguments that failed the first time
around. The papers before me are, for the greatest part, a re-briefing of
what has already been thoroughly argued and, in my view, correctly
decided. The primary purpose of this motion is to avoid claims of waiver
if the judgment is appealed, and it will be another court that decides
whether this purpose has been
achieved.*fn1 The secondary purpose of this motion is to cite
decisions not available at the time of the original claim construction
with the hope that a change in law means a change in result.
That being said, I must review this motion and apply the widely held
standards for JMOL and a new trial. JMOL is appropriate "where there can
be but one conclusion from the evidence." McRoberts Software, Inc. v.
Media 100, Inc., 329 F.3d 557, 564 (7th Cir. 2003)(citation
omitted). When reviewing a motion for JMOL, 1 must consider "whether the
evidence presented, combined with all reasonable inferences permissibly
drawn therefrom, is sufficient to support the verdict when viewed in the
light most favorable to the party against whom the motion is directed."
Goodwin v. MTD Prods., 232 F.3d 600, 606 (7th Cir.
2000)(citations omitted). A new trial is appropriate where the verdict is
"against the manifest weight of the evidence." Billy-Bob Teeth, v.
Novelty, Inc. 329 F.3d 586, 591 (7th Cir. 2003). I may not overturn
a jury's verdict so long as it has. a "reasonable basis in the record."
Westchester Fire Ins. Co. v. General Star Indem. Co.,
183 F.3d 578, 582 (7th Cir. 1999).
As is demonstrated by the standards above, our judicial practice
requires a high level of deference to the findings of a jury. These
standards place a heavy burden on moving parties, like
Microsoft. Despite Microsoft's best arguments, I adhere to my prior
evidentiary rulings and my decisions excluding certain defenses from the
case submitted to the jury, and I find there has been no material change
in the law that would support another outcome in this case.
Finally, in asking for a new trial, Microsoft argues that there were
errors in jury instructions concerning inducement of infringement. Given
the whole set of instructions, I can not see how any jury could find
Microsoft liable without first determining that Microsoft actively
induced infringement. Accordingly, I do not perceive any error in the
2. New Trial with Respect to Damages or, in the Alternative, for
The amount of damages based on a reasonable royalty is an issue of
fact, Micro Chem., Inc. v. Lextron, Inc., 317 F.3d 1387, 1394
(Fed. Cir. 2003), over which the jury has a great amount of discretion,
Liu v. Price Waterhouse LLP, 302 F.3d 749, 756 (7th Cir. 2002).
The damages awarded by this jury are, in absolute terms, very large.
However, one could argue that, in relative terms, that $1.47 is a
relatively modest portion of a $60.00 selling price but relative terms
are relative terms. I am unwilling to say that roughly 2.5% of $60.00 is
either modest or immodest. In my view, the amount is not so huge in
relative or absolute terms that the law will not countenance it, so I do
not base any part of my decision on the size of the award per se. See
State Farm Mut. Auto. Ins. Co., v. Campbell, 123 S.Ct. 1513 (U.S.
Microsoft argues against the validity of any damage calculation wherein
the value of a complex, multi-functional product is the base from which a
percentage is extracted the percentage being the commercial value of a
single infringing functionality. Microsoft has an institutional concern
over such calculations because, as is widely known, it bundles together
of its Windows functionality as seamlessly as it can. It argues
that this bundling is good engineering; others argue that it has a more
nefarious purpose. Whatever the truth, the bundling makes it very
difficult for either party to assess the value of each individual
component.*fn2 Since Microsoft has created this difficulty for itself,
it must bear the legal risks attendant to its way of business. At times,
Microsoft's arguments seemed to border on proposing that an infringer
could wrap together, in a single product, 150 technological innovations
without having to any pay a cent in royalties so long as each innovation
contributed only a small part of the product's overall value and was not
itself a standalone product. But, few would be willing to adopt this
Microsoft seems to propose, in the alternative, that even if it must
bear the consequences of its bundling policy, a jury should not be
invited to determine the percentage of Windows or Internet Explorer's
value that is attributable to Eolas's invention. In short, Microsoft
argues that, for damages to be appropriate, the accused technology must
contribute in some meaningful way to consumer demand for Windows or
Internet Explorer. Here, Microsoft claims Eolas has failed to show that
its invention made a meaningful contribution and, thus, is not entitled
to damages. Microsoft's experts made this point by arguing that automatic
invocation of an application saved only a mouse click or two and could
not be regarded as a meaningful addition to Windows. Certainly, this
argument has some force. The jury may have accepted this argument as it
did assess a royalty rate far below the one asked for by Eolas. In the
end, even Microsoft's own experts did not really declare that Eolas's
invention was of no value to Windows or Internet
Explorer. At trial, sufficient evidence was presented from which
the jury could infer that Microsoft itself saw significant value in the
functionality at issue.
Microsoft's final arguments are that the jury's verdict makes no sense
in light of the royalty paid to Spyglass for a license to use an entire
browser technology, that the royalty far exceeds the amount of money
Microsoft invests in its annual research budget, that Microsoft could
have achieved the same functionality in a different way and that Eolas
could not sell the technology on its own. These arguments too are not
without force but have already been considered and rejected by the jury.
While I am not entirely comfortable with the large size of the
judgment, it is not my comfort which matters. See Oiness v. Walgreen
Co. 88 F.3d 1025 (Fed. Cir. 1996). Both sides presented complex
chains of evidence that could have supported a significantly higher or
significantly lower value than the one that appeared on the verdict.
Exactitude is difficult in all damage cases, and it was made far more
difficult here by the way Microsoft sells Windows. However, it was not
outside the ability of a jury to make a rational judgment. The jury, to
whom the decision was submitted, conscientiously reached a verdict as to
the running royalty that was within the realm of reason.
3. Motion to Exclude Foreign Sales
Microsoft has moved for judgment as a matter of law of noninfringement
with respect to products made and sold outside the United States and
argues that, in light of new Federal Circuit precedent, I must reconsider
and reverse my earlier decision in Eolas Techs. Inc. v. Microsoft
Corp., No. 99 C 626, 2003 U.S. Dist. LEXIS 13482 (N.D. Ill. Aug. 1,
2003). In that decision, I
found infringement damages could be awarded, pursuant to
35 U.S.C. § 271, for units of Windows ...