The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
The Plaintiffs, Aero Products International, Inc. ("Aero") and
Robert B. Chaffee, filed suit against the Defendants, Intex
Recreation Corporation ("Intex"); Quality Trading, Inc.; and
Wal-Mart Stores, Inc. A trial by jury was held, where Defendants
were found liable for willfully infringing Plaintiffs' patent,
United States Patent No. 5,367,726 ("the '726 patent"). The jury
awarded Plaintiffs $2,950,000.00 in damages for Defendants'
patent infringement. Presently before the Court is Plaintiffs'
Motion for Enhanced Patent Damages and Attorney's Fees.
Section 284 of Title 35 of the United States Code provides that
"[t]he court may increase the damages up to three times the
amount found or assessed." Section 285 of Title 35 states that a
court may award attorney's fees to prevailing parties in
"exceptional cases." Determining whether an award of enhanced damages is merited is
a two-step process:
(1) the jury must determine whether an infringer is guilty of
conduct warranting increased damages; and (2) the court
determines, in its discretion, whether, and to what extent, to
increase the damages award based upon the totality of the
circumstances. Jurgens v. CBK, Ltd., 80 F.3d 1566, 1570 (Fed.
Cir. 1996) (Jurgens).
A finding of willful infringement satisfies the first step; and
"[u]pon a finding of willful infringement, a trial court should
provide reasons for not increasing a damages award or not finding
a case exceptional for the purpose of awarding attorneys [sic]
fees." Jurgens, 80 F.3d at 1570, 1572. However, a finding of
willful infringement does not require that enhanced damages be
awarded. Jurgens, 80 F.3d at 1573.
In analyzing the second requirement, a court must consider all
the facts and circumstances, including those that make a
"defendant's conduct more culpable, as well as factors that are
mitigating or ameliorating." Read Corp. v. Portec, Inc.,
970 F.2d 816, 826 (Fed. Cir. 1992) (Read Corp.), abrogated on
other grounds, Markman v. Westview Instruments, Inc.,
52 F.3d 967 (Fed. Cir. 1995). These factors include: (1) whether the
infringer deliberately copied the idea or design of the patentee;
(2) whether the infringer, when he knew of the patent,
investigated the scope of the patent and formed a good-faith
belief that the accused device was non-infringing; (3) the
infringer's behavior as a party to the litigation; (4) the
infringer's size and financial condition; (5) the closeness of
the case; (6) the duration of the infringer's misconduct; (7) the
infringer's remedial actions; (8) the infringer's motivation for
harm; and (9) whether the infringer attempted to conceal its
misconduct. Read Corp., 970 F.2d at 827. Similarly, determining whether attorney's fees are warranted is
also a two-step process:
(1) it must first be determined whether the case is exceptional
and (2) whether an award of attorney's fees is warranted.
Interspiro USA, Inc. v. Figgie, Int'l, Inc., 18 F.3d 927,
933-34 (Fed. Cir. 1994). A "district court must normally explain
why a case is not exceptional when a factual finding of willful
infringement has been established and, if exceptional, why it
decides not to award attorney fees." Transclean Corp. v.
Bridgewood Servs., Inc., 290 F.3d 1364, 1379 (Fed. Cir. 2002)
The factors used to determine whether attorney's fees should be
awarded are similar to the factors used in determining whether
enhanced damages should be awarded. See Transclean Corp., 290
F.3d at 1379; Jurgens, 80 F.3d at 1573 n. 4. However, the
conduct used that supports an award under one statute does not
necessarily mandate an award under the other statute. Jurgens,
80 F.3d at 1573 n. 4.
Plaintiffs, the prevailing parties, seek enhanced damages under
35 U.S.C. § 284 and attorney's fees under 35 U.S.C. § 285.
Because the jury has found Defendants' infringement was willful,
Plaintiffs have satisfied the first requirement for an award
under each statute.
The first factor, whether Intex deliberately copied the patent,
weighs heavily in favor of Plaintiffs. As evidenced by Intex's
e-mails, Intex employees obtained an Aero mattress and sent it to
China; Intex marketed the similar mattress less than a year
later. Dr. Albert Karvelis testified that Intex's valve was a
copy of Plaintiffs' valve, and the valves themselves appear
substantially the same in all material respects. The second factor, whether Intex, when it knew of the patent,
investigated the scope of the patent and formed a good-faith
belief that the accused device was non-infringing, does not weigh
in favor of Intex. Intex learned of the '726 patent in April
2002, when Plaintiffs filed suit, and thereafter hired an
attorney to render an opinion regarding any possible infringement
by Intex. This opinion contains a detailed analysis of the '726
patent, its prosecution history, and the accused product. The
opinion also contains a number of defenses that Intex could
assert to defend itself. However, the attorney did not
independently investigate the two devices.
Thus, while an independent attorney may have rendered an
opinion, the attorney's basis for knowledge here was not
independent; and the opinion letter was not, therefore, reliable.
Moreover, the opinion does not rely upon independent technical
experts to determine the meaning of key terms. Instead, the
opinion relied on Richard Saputo, Intex's Product Quality
Manager, to provide information regarding the patented product
and the Intex products. For instance, the opinion assumed that
the Intex product did not contain a hermetic seal, but Saputo
failed to perform any test to confirm this fact.
The third factor, Intex's behavior as a party to the
litigation, clearly favors the Plaintiffs. First, Intex destroyed
e-mails for the first ten months of this litigation every thirty
days. While Intex argues that it retrieved e-mails from before
the filing of Plaintiffs' Complaint once it realized e-mails were
being deleted pursuant to an established company policy,
Plaintiffs were still forced to spend time to uncover the