Two Product Market for Bamboo Decking Justifies Jury Award of Lost Profits

October 19, 2023

Reading Time : 3 min

The District of Delaware recently held that evidence addressing a lack of non-infringing alternatives from the perspective of the market as a whole, as opposed to customer-by-customer, may suffice when the market includes only two players—the patentee and the accused infringer.

Lost Profits

This case involved two competitors that sell outdoor decking products. More specifically, the Plaintiffs and Defendants both sell bamboo products for use in outdoor decking.

Following a jury’s determination that it infringed Plaintiffs’ patent, Defendants moved for judgment as a matter of law (JMOL) that the jury’s $1.5 million damages award was not supported by substantial evidence because Plaintiffs had failed to prove lost profits. According to Defendants, Plaintiffs failed to establish the absence of non-infringing alternatives on a customer-by-customer basis and, as a result, failed to present sufficient evidence to support the jury’s lost profits award.

The district court rejected Defendants’ argument, noting that a patentee is not required to intone the name of each customer or prove what each and every customer would have found to be an acceptable alternative. Rather, evidence that addresses the market as a whole may suffice in certain circumstances. Reviewing the evidence presented at trial, the district court explained that the evidence showed that both parties sell competing outdoor bamboo products. Both parties received certifications for their bamboo products that no other companies received. And according to at least one witness, the parties were the only companies in the market whose products were actually considered to be bamboo. A customer of both parties also testified that he considered the parties’ products complementary and that he had no other options for outdoor bamboo decking. Relying on this evidence, Plaintiffs’ expert testified that the market only had two players (Plaintiffs and Defendants) and, consequently, there were no acceptable non-infringing alternatives in the relevant outdoor bamboo decking market. According to the district court, this evidence provided sufficient proof of a lack of acceptable non-infringing alternatives even though Plaintiffs’ expert did not specifically analyze the preferences of each and every customer because there were no other companies making comparable products that might qualify as an acceptable non-infringing alternative.

Enhanced Damages

In addition to denying Defendants’ JMOL challenging the jury’s lost profits award, the court also granted Plaintiffs’ motion for enhanced damages. While acknowledging that the decision of whether to enhance damages only requires the court to consider the egregiousness of the circumstances of the case, the court did so by applying the Read factors. On the whole, the court found that seven of the nine Read factors were either neutral or, given the court’s finding that Defendants did not engage in litigation misconduct, weighed against enhancement.

Nevertheless, the court enhanced the jury’s damages award because two factors weighed so strongly in favor of enhancement. First, the court found strong evidence of copying—the accused products were produced in the same factory as Plaintiffs’ products and were, for all intents and purposes, identical to Plaintiffs’. Second, the court found strong evidence of Defendants’ motivation for harm. In particular, the court found that one of Defendants’ employees harbored animus towards Plaintiffs beyond a mere sense of competition. The court thus held that an enhancement of the damages award by 50% was warranted.

Practice Tip: A plaintiff seeking a damages award of lost profits should consider whether the relevant market can be defined in a manner such that it only includes two products—its own product and the accused product. Such a market may be sufficient to support the conclusion that there are no acceptable non-infringing alternatives.

Dasso Intl., Inc. v. Moso N.A., Inc., 17-CV-1574, 2023 WL 5349374 (D. Del. Aug. 21, 2023)

Share This Insight

Previous Entries

IP Newsflash

December 2, 2024

The Patent Trial and Appeal Board determined that a reference could be used as prior art because patent owner failed to provide sufficient evidence that the prior art’s disclosure was invented by all four named inventors, and thus the same “inventive entity,” as the challenged claims.

...

Read More

IP Newsflash

December 2, 2024

The Patent Trial and Appeal Board rejected a patent owner’s assertion that petitioner should have named a third party, which was a defendant in a related district court patent infringement litigation and a party to a joint defense agreement (JDA) with petitioner, as a real party-in-interest (RPI). Had the board ruled otherwise and found the third party to be an RPI, the petition would have been time-barred under 35 U.S.C. § 315(b).

...

Read More

IP Newsflash

November 27, 2024

A district court recently refused to exclude testimony regarding consumer surveys conducted by a design patent expert, holding instead that the consumer surveys may be probative of how an ordinary observer would view the designs at issue, and thus could assist the factfinder in determining design patent infringement under the ordinary observer test.

...

Read More

IP Newsflash

November 5, 2024

The Federal Circuit vacated a district court’s fee award because the district court considered certain information that was not relevant to the question of whether plaintiff’s case was exceptional. Specifically, the Federal Circuit held that only those “red flags” that related to the successful Section 101 defense, which served as the basis for the district court’s grant of summary judgment, could be used to show the case was fatally flawed.   

...

Read More

IP Newsflash

November 1, 2024

The Federal Circuit’s decision in Kyocera Senco Industrial Tools Inc. v. International Trade Commission articulated a bright-line test for patent expert admissibility: to testify from the perspective of a “person of ordinary skill in the art” (POSITA), the expert must at least meet the definition of a POSITA for the patents-in-suit. Absent that level of skill, Kyocera holds that the witness’s testimony is not sufficiently reliable or relevant enough to be relied on by a fact-finder.

...

Read More

IP Newsflash

October 29, 2024

The PTAB denied a petitioner’s motion to compel routine discovery that sought information from a parallel ITC investigation for alleged inconsistent positions taken by patent owner in the IPR. The board found that patent owner had not taken inconsistent positions but warned patent owner that it had an ongoing duty to produce any information inconsistent with arguments made during the present IPR, even if that information related to arguments patent owner had dropped at the ITC.

...

Read More

IP Newsflash

October 11, 2024

The Central District of California ruled that the heightened pleading standard of Federal Rule of Civil Procedure 9(b) applies to all three prongs of a false patent marking claim, including the third prong, competitive injury. In doing so, took a clear stand on an issue with a nationwide split among district courts.

...

Read More

IP Newsflash

October 10, 2024

In a patent case containing a variety of federal and state law claims, the District of Massachusetts retained supplemental jurisdiction over the state law claims even after all the federal law claims were dismissed.

...

Read More

© 2024 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.