IP Law Daily Evidence supported $28 million jury award for Snap-On’s infringement of lithium-ion battery patents
Tuesday, January 2, 2018

Evidence supported $28 million jury award for Snap-On’s infringement of lithium-ion battery patents

By Sara Cracau, J.D.

In dispute over patents for a lithium-ion battery used in power tools, a jury’s finding of infringement liability and a damages verdict of nearly $28 million were supported by the evidence, the federal district court in Milwaukee has ruled. The court denied the defendant’s motion for judgment as a matter of law and a new trial. The court also denied the patent holder’s motion for treble damages and granted in part and denied in part the patent’s holder’s motion for pre- and post-judgment interest (Milwaukee Electric Tool Corp. v. Snap-On Inc., December 29, 2017, Stadtmueller, J.).

Milwaukee Electric Tool Corporation ("Milwaukee") joined efforts with Canadian battery manufacturer E-One Moli Energy (Canada) Ltd. ("Moli") to develop a lithium-ion ("Li-ion") battery used in power tools. After working together for many months, a joint team of Milwaukee and Moli scientists produced a working Li-ion battery pack as part of the "884 Project" and in June 2009, they secured patents on the Li-ion battery pack. Snap-On developed its own line of Li-ion tools launched in September 2009. Milwaukee and Moli filed an infringement action, more than three years later. Snap-On and other accused infringers sought to invalidate the patents and requested a stay pending a decision on their applications which was granted. After the Patent Trial and Appeal Board issued its decisions, the stay was lifted and discovery proceeded.

After the jury saw hundreds of documents and numerous physical exhibits and heard testimony from 24 witnesses, including seven experts, it returned a verdict for Milwaukee. The jury found that Snap-On’s accused products infringed each asserted claim of the patents-in-suit, that none of the subject claims were invalid as obvious, and that Snap-On’s infringement of the patents was willful. Furthermore, the jury awarded Milwaukee compensatory damages in a lump sum reasonable royalty consisting of $27.8 million. Both Milwaukee and Snap-On made several post-trial motions covering a myriad of issues relating to liability and damages. Snap-On sought judgment as a matter of law and a new trial. Milwaukee sought treble damages and pre- and post-judgment interest.

The court denied the post-trial relief to Snap-On and denied Milwaukee’s motion for treble damages, granting in part Milwaukee’s motion for pre-judgment interest.

Motion for judgment as a matter of law. The court denied Snap-On’s motion for judgment as a matter of law, finding that the jury’s conclusions that Snap-On did not prove that the patents-in-suit were obvious were supported by sufficient evidence. Furthermore, the court found that the trial record contained sufficient evidence to support the jury’s finding of willfulness.

Obviousness. With respect to the obviousness issue, the jury rejected Snap-On’s argument that Milwaukee’s patents simply substituted Li-ion battery cells created by Moli for certain cells used in existing battery cells. There was abundant evidence to support the jury’s conclusion. For example, the original prototype cells, which Moli provided to Milwaukee with a rated capacity of 15 amps, could not meet the 20 Amp limit. The later-developed cells which were more powerful, did not support an obviousness claim. The jury was entitled to regard testimony relating to performance requirements with skepticism.

The untested packs. Although the court noted that Milwaukee’s expert witness’ reading of the product specification as evidence of the pack’s capabilities was not as clear as actual test data, this was not sufficient to reject the jury’s finding. Snap-On did not offer any reason to conclude that his testimony was totally not believable.

Willfulness. The court noted that Milwaukee’s decision not to accuse Snap-On of infringement prior to filing suit did fatally undermine the jury’s determination on willfulness.

Snap-On’s motion for new trial. The court denied Snap-On’s motion for a new trial rejecting Snap-On’s contentions that errors were asserted warranting a new trial. With respect to obviousness, Snap-On contended that the court should have excluded certain testimony on secondary considerations because it "failed to link the inventive aspect of the claims." The court declined to give that instruction because the inference could not reasonably have been drawn from the evidence. Furthermore, there was no suggestion by either party or in the court’s instructions that the mere existence of confidentiality agreements or assignment disqualified the Moli cells.

With respect to infringement, Snap-On challenged the court’s exclusion of testimony about the purportedly unusual testing conditions to which the accused packs were subjected. However, the court noted that Snap-On devoted barely more than one page to this argument and, therefore, did nothing more than preserve the issue for appeal.

The court properly excluded testimony of two witnesses, a Snap-On consultant engineer and a former Moli employee, who planned to opine about the lack of innovation in the patents, because the witness’s lay invalidity opinions were not admissible. Viewing the totality of the circumstances, the court properly excluded the testimony.

Damages. The court denied Snap-On’s motion for new trial directed at damages, rejecting the contention that evidentiary errors prejudiced its ability to present its damages arguments. Because the trial record was replete with evidence supporting the jury’s damages determination, the court properly concluded that the few comments and questions posed by the court had minimal effect, if any in the grand scheme. Snap-On’s allegations of evidentiary errors were without merit and because the jury’s verdict was not against the significant weight of the evidence, the court properly denied the motion for a new trial.

Milwaukee’s motion for enhanced damages. The court denied Milwaukee’s motion for enhanced damages, determining that the case was not egregious and typified by willful misconduct "beyond typical infringement."

Motion for pre- and post-judgment interest. The court found Milwaukee entitled to "pre-judgment interest only from the institution of suit until the entry of judgment." It concluded that the prime rate should be used to calculate the applicable rate and quarterly compounding.

Calculation of pre-judgment interest. The court left it to the parties to propose jointly a calculation of pre-judgment interest.

Subpoena enforcement proceeding. The court denied Milwaukee’s motion to enforce a subpoena issued to counsel for Snap-On.

Motion to redact trial transcript. The court denied the parties’ request to redact the trial transcript noting that the court has an independent interest in open judicial proceedings.

The case is No. 14-CV-1296-JPS.

Attorneys: Jason C. White (Morgan Lewis & Bockius LLP) for Milwaukee Electric Tool Corp. Amol A. Parikh (McDermott Will & Emery LLP) for Snap-On Inc.

Companies: Milwaukee Electric Tool Corp.; Snap-On Inc.

MainStory: TopStory Patent WisconsinNews

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