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Rosco, Inc. v. Mirror Lite Co.

October 26, 2009

ROSCO, INC., PLAINTIFF,
v.
MIRROR LITE CO., DEFENDANT.



The opinion of the court was delivered by: Charles P. Sifton (electronically signed) United States District Judge

MEMORANDUM

SIFTON, Senior Judge.

OPINION AND ORDER

Plaintiff, Rosco, Inc., commenced this action, in 1996, against defendant, Mirror Lite Company, asserting claims of design patent infringement, trade dress infringement, false designation of origin, tortious interference with business relationships, misrepresentation in violation of 15 U.S.C. § 1125(a), and common law trademark infringement. In addition to damages, the complaint sought declaratory and injunctive relief pursuant to 29 U.S.C. §§ 2201 and 2202. Mirror Lite asserted a counterclaim of patent infringement in violation of 15 U.S.C. § 1125(a).

The matter was tried before the undersigned sitting without a jury between March 6 and March 10, 2000. After appeal to the Federal Circuit and remand for determination of infringement, I found that Rosco had infringed Mirror Lite's '984 patent.

The parties then filed cross motions for summary judgment as to damages. The determination of damages included the issue of whether Rosco's post trial mirrors infringed. On that issue, I granted Mirror Lite's motion for summary judgment in part, determining that two of Rosco's post trial mirrors continued to infringe, and denied Rosco's motion, finding that there was a genuine issue of fact as to whether three other Rosco post trial mirrors continued to infringe Mirror Lite's patent.

At the damages trial, I found that Mirror Lite was entitled to a reasonable royalty damages award in the amount of $397,843.25. I determined that Mirrors 1, 2, and 5 did not infringe on Mirror Lite's '984 patent, and that Mirror Lite was not entitled to future damages or enhanced damages. I granted Mirror Lite's request for an amended proposed permanent injunction, with the exception of paragraph 2(b).

Now before me are Mirror Lite's motions for prejudgment interest and for attorney fees and costs. For the reasons set forth below, Mirror Lite's motion for attorney fees is denied. Mirror Lite's motions for costs and prejudgment interest are granted. Mirror Lite is entitled to costs in the amount of $383,723.94 and prejudgment interest in the amount of $261,089.00.

BACKGROUND

The facts of this case have been stated in prior opinions. See, e.g., Rosco Inc. v. Mirror Lite Co., 506 F.Supp.2d 137 (E.D.N.Y. Aug. 6, 2007). It is unnecessary to repeat them here.

A procedural history is set forth in my most recent decision, Rosco Inc. v. Mirror Lite Co., 626 F.Supp.2d 319 (E.D.N.Y. June 17, 2009).

DISCUSSION

Prejudgment Interest

Mirror Lite seeks prejudgment interest, at a rate two percent above the prime rate, on its award of $397,843.25 for patent infringement by Rosco. Rosco does not object to Mirror Lite's request for prejudgment interest. However, Rosco argues that Mirror Lite should receive prejudgment interest at a rate equal to the interest rate of the three month United States Treasury Bill.

Mirror Lite argues that it should be awarded prejudgment interest at the prime rate plus two percent. Mirror Lite contends that such a rate is warranted because the damages it was awarded are wholly inadequate to compensate for ten years of infringement and as punishment for Rosco's knowing infringement of the '984 patent. Rosco's argument opposing Mirror Lite's rate request is three-fold. First, Rosco argues that Mirror Lite has misstated the purpose of prejudgment interest, and that the correct purpose is to compensate the patent owner for the use of its money during the infringing period. Second, Rosco argues that Mirror Lite has not provided any evidentiary support for its requested rate. Third, Rosco argues that Mirror Lite's request does not account for Rosco's design around.

35 U.S.C. § 284 states, "[u]pon finding for the claimant, the court shall award the claimant damages ... together with interest and costs as fixed by the court." This statute gives the court "general authority" to award prejudgment interest in patent infringement cases. General Motors Corp. v. Devex Corp., 461 U.S. 648, 653, 103 S.Ct. 2058, 76 L.Ed.2d 211 (1983). "[P]rejudgment interest should be awarded under § 284 absent some justification for withholding such an award." Id. at 657. Both the rate of prejudgment interest and the method of compounding the interest are in the Court's discretion. Cargill, Inc. v. Sears Petroleum & Transport Corp., 388 F.Supp.2d 37, 81 (N.D.N.Y. Aug. 25, 2005) (internal citation omitted). "An award of interest [] serves to make the patent owner whole, since his damages consist not only of the value of the royalty payments but also of the foregone use of the money between the time of infringement and the date of the judgment." General Motors Corp., 461 U.S. at 655-56. In patent cases, because the prejudgment interest is awarded to make the patent holder whole, the interest is awarded starting from the time royalty payments would have been received, in other words, from the date of the first infringement. Id. Prejudgment interest is not meant to punish the infringer. Lam, Inc. v. Johns-Manville Corp., 718 F.2d 1056, 1066 (Fed.Cir. 1983).

The Court "is afforded wide latitude in the selection of interest rates, and may award interest at or above the prime rate." Uniroyal, Inc. v. Rudkin-Wiley Corp., 939 F.2d 1540, 1545 (Fed.Cir.1991) (internal citation omitted). Awarding prejudgment interest at the prime rate of interest "better approximates a corporate borrower's cost of funds." U.S. Philips Corp. v. Iwasaki Elec. Co., Ltd., 607 F.Supp.2d 470, 483 (S.D.N.Y. Jan. 13, 2009) (citing Lam, Inc., 718 F.2d at 1066 (Fed.Cir. 1983)); see also Uniroyal, 939 F.2d at 1545. Mirror Lite has not submitted any evidence of the rate at which it borrows money. However, "it is not necessary that a patentee demonstrate that it borrowed at the prime rate in order to be entitled to prejudgment interest at that rate." Uniroyal, 939 F.2d at 1545. Yet, in order for a district court to set prejudgment interest at a rate higher than the prime rate, the patentee must "affirmatively demonstrate that a higher rate should be used." Lam, Inc., 718 F.2d at 1066 (internal citations omitted). Mirror Lite has not made such a demonstration.*fn1 And, though Rosco argues that I take their design ...


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