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EKO Brands, LLC v. Adrian Rivera Maynez Enterprises, Inc.

United States District Court, W.D. Washington, Seattle

July 13, 2018

EKO BRANDS, LLC, Plaintiff,
v.
ADRIAN RIVERA MAYNEZ ENTERPRISES, INC., and ADRIAN RIVERA, an individual, Defendants.

          ORDER ON POST-TRIAL MOTIONS

          JAMES P. DONOHUE, UNITED STATES MAGISTRATE JUDGE

         I. INTRODUCTION AND SUMMARY CONCLUSION

         The five-day jury trial of this matter concluded on Friday, June 8, 2018, with the jury reaching a unanimous verdict on all issues. Dkt. 242. The jury awarded plaintiff Eko Brands, LLC ("Eko") damages in the amount of $ 192, 801.00 for infringement of U.S. Patent No. 8, 707, 855 ("DeMiglio '855 patent"), found for defendant Adrian Rivera Maynez Enterprises, Inc. ("ARM") on the question of willfulness, and found that Claims 5, 8, 18 and 19 of U.S. Patent No. 8, 720, 320 ("Rivera '320 patent") would have been obvious to a person having ordinary skill in the art. Id. Following the trial, Eko filed motions seeking (1) judgment as a matter of law or a new trial, enhanced damages, and pre-and post-judgment interest (Dkt. 248); (2) attorneys' fees and costs (Dkt. 256); and (3) permanent injunctive relief (Dkt. 247). Having reviewed the parties' submissions, the governing law, and the balance of the record, the Court ORDERS as follows: (1) Eko's request for judgment as a matter of law or a new trial on the issue of willfulness as well as enhanced damages, Dkt. 248, is DENIED; (2) Eko's motion for pre- and post-judgment interest, Dkt. 248, is GRANTED IN PART and DENIED IN PART; (3) Eko's motion for attorneys' fees and costs, Dkt. 256, is GRANTED IN PART and DENIED IN PART; and (4) Eko's motion for permanent injunctive relief, Dkt. 247, is GRANTED.

         II. DISCUSSION

         A. Eko's Motion for Judgment as a Matter of Law or a New Trial on Willfulness

         Federal Rule of Civil Procedure 50(a) provides that the Court may direct the entry of judgment as a matter of law where "the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." A directed verdict must be entered where "there is no substantial evidence to support the claim." Rutledge v. Elec. Hose & Rubber Co., 511 F.2d 668, 677 (9th Cir. 1975) (quoting Cleary v. Nat'l Distillers & Chem. Corp., 505 F.2d 695, 696 (9th Cir. 1974)). A motion pursuant to Rule 50(a) maybe made at any time before the case is submitted to the jury. Fed.R.Civ.P. 50(a)(2). However, the "failure to file a Rule 50(a) motion precludes consideration of a Rule 50(b) motion for judgment as a matter of law." Tortu v. Las Vegas Metro. Police Dep't, 556 F.3d 1075, 1083 (9th Cir. 2009).[1]

         Here, Eko's request for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(b) is denied, as no motion for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(a) was requested by Eko at trial. This forecloses any relief pursuant to Fed.R.Civ.P. 50(b), as there is no "renewed" Rule 50(a) motion before the Court. See Freund v. Nycomed Amersham, 347 F.3d, 752, 761 (9th Cir. 2003); Duro-Last, Inc. v. Custom Seal, Inc., 321 F.3d 1098 (Fed. Cir. 2003). Eko's alternative motion for a new trial pursuant to Fed.R.Civ.P. 59 is not so foreclosed.

         Under Fed.R.Civ.P. 59(a)(1)(A), the "court may, on motion, grant a new trial... after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in federal court." A trial court "enjoys broad discretion with regard to a new trial motion." United States v. Hinkson, 585 F.3d 1247, 1263 (9th Cir. 2009) (en banc) (citing Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 66 L.Ed.2d 193 (1980) ("The authority to grant a new trial... is confided almost entirely to the exercise of discretion on the part of the trial court.")). The Court may grant a new trial only "[i]f, having given full respect to the jury's findings, the judge on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Tortu v. Las Vegas Metro. Police Dep't, 556 F.3d 1075, 1087-88 (9th Cir. 2009) (internal quotation marks omitted).

         Eko argues that Jury Instruction 40, which was based entirely on the National Patent Jury Instructions ("NPJI") No. 4.1., impermissibly described the burden of proving willfulness following the U.S. Supreme Court's decision in Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1923 (2016), and that the evidence was such that a properly instructed jury would have rendered a different decision. Dkt. 248 at 6. In particular, Eko's concern focuses on the last few sentence of the first paragraph of the instruction, which state that willful infringement is "especially worthy of punishment" and reserved for "egregious behavior." Id. at 7. Eko argues that "these two statements invited the jury to make the legal decision as to whether damages should be enhanced, or whether it is an exceptional case, rather than limiting the jury to the underlying factual question of whether the infringement was willful." Id.

         Eko's own proposed jury instruction on willfulness provided to the Court, however, was modeled on NPJI 4.1 and still included this language. Dkt. 215-1 at 69. This was also true of ARM's proposed jury instruction on willfulness. Dkt. 215-1 at 72.[2] Thus, Jury Instruction 40, in its original form agreed to by both parties, provided as follows:

Eko argues that ARM willfully infringed the Eko 855 patent. For purposes of this case only, you are to assume direct infringement of amended claim 8 of the Eko 855 patent. Therefore, you must go on and address the additional issue of whether or not this infringement was willful. Willfulness requires you to determine whether Eko proved that it is more likely than not that the infringement was especially worthy of punishment. You may not determine that the infringement was willful just because ARM knew of the Eko 855 patent and infringed it. Instead, willful infringement is reserved for only the most egregious behavior, such as where infringement is malicious, deliberate, consciously wrongful, or done in bad faith.
To determine whether ARM acted willfully, consider all facts. These may include, but are not limited, to:
(1) Whether or not ARM intentionally copied a product of Eko that is covered by the Eko 855 patent;
(2) Whether or not ARM reasonably believed it did not infringe or that the patent was invalid;
(3) Whether or not ARM made a good-faith effort to avoid infringing the Eko '855 patent, for example, whether ARM attempted to design around the 855 patent; and
(4) Whether or not ARM tried to cover up its infringement.

Dkt. 235 (emphasis added).

         On the morning that the final jury instructions were to be read to the jury, Eko objected - for the first time - to the language of Jury Instruction 40 requiring "the most egregious behavior" that is "worthy of punishment." The Court directed the parties to file briefs on the issue by noon, if they wished to explain their respective positions before the jury was instructed, and Eko did so. Dkt. 234. The Court reviewed the relevant authority and took Eko's concerns into account by amending the last line of the first paragraph in Jury Instruction 40 to remove the words "only the most egregious behavior," and provide "[i]nstead, willful infringement is reserved for egregious behavior, such as where the infringement is malicious, deliberate, consciously wrongful, or done in bad faith." Dkt. 235. The jury was instructed accordingly. Dkts. 235-36.

         If the instruction on willfulness, as amended, was improper in light of the recent Halo decision, in this Court's view the error would not have been harmless as argued by defendants. In this case, ARM continued its infringing conduct for a period long after it conceded that- given the claims construction order-it was infringing. Indeed, ARM continues to do so today, and only recently began to develop a design-around to avoid infringement. ARM's conduct throughout the three and a half year period in question was quite intentional, something that Mr. Rivera acknowledged during the trial. Moreover, after approximately five and a half hours of deliberating, the jury advised the Court that they had reached a verdict on all questions except the issue of willfulness (question two of the special verdict form), and that they had strong views on both positions regarding that question and did not believe additional time would render a unanimous decision. Dkt. 241. It was only after the Court instructed the jury to go back and re-read the instruction on willfulness that the impasse was broken. Dkt. 23 9.[3]

         Accordingly, the Court DENIES Eko's motion for a new trial. Dkt. 254. Eko has failed to identify any authority - and the Court is aware of none - holding that National Patent Jury Instruction No. 4.1 is no longer a correct statement of the law, following the Halo decision. As a result, the jury's verdict was also supported by substantial evidence in the record, such as Mr. Rivera's testimony that he sincerely believed he would ultimately prevail in his ongoing litigation against Eko and therefore his products would be found to be noninfringing. If, however, this pattern instruction is no longer correct because it improperly conflates the issue of willfulness with the Court's ultimate decision whether to enhance damages, and places too high of a burden on a plaintiff seeking to prove willfulness, then the Court agrees with Eko that the erroneous instruction would not be harmless.

         B. Eko's Motion for Enhanced Damages

         As discussed above, the jury's verdict found that ARM's infringement was not willful. Dkt. 242 at 1. In light of this verdict finding, the Court will not enhance damages. See Halo Elecs., Inc. v. Pulse Elecs., Inc.,136 S.Ct. 1923, 1932 (2016) (noting that although district courts enjoy discretion in deciding whether to award enhanced damages, and in what amount, "such damages are generally reserved for egregious cases of culpable behavior."). See also Read ...


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