IP Law Daily L’Oreal must pay enhanced damages and attorney fees for willful patent infringement and misappropriation of trade secrets relating to hair bleaching methods
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Tuesday, December 17, 2019

L’Oreal must pay enhanced damages and attorney fees for willful patent infringement and misappropriation of trade secrets relating to hair bleaching methods

By Brian Craig, J.D.

The court denied cosmetic company L’Oreal’s post-trial motions and awarded enhanced damages and nearly $16 million in attorney fees to the plaintiffs for L’Oreal’s willful patent infringement and trade secrets misappropriation related to hair bleaching technology.

Concluding that the evidence overwhelmingly supported a jury verdict and judgment of nearly $50 million in damages against cosmetic company L’Oreal for willful trade secret misappropriation, willful patent infringement, and breach of contract relating to hair bleaching technology, the federal district court in Wilmington, Delaware, has denied L’Oreal’s request for a new trial. In what was described as one of the most overly litigated cases it had ever seen, the court affirmed enhanced damages for patent infringement and misappropriation of trade secrets. In addition, the court awarded nearly $16 million in attorney fees, costs, and expenses in the complex case (Liqwd, Inc. v. L'Oreal USA, Inc., December 16, 2019, Bataillon, J.).

Liqwd, Inc. owns two patents directed to a method for bleaching hair. The patents relate to keratin treatment formulations and methods for rebuilding the disulfide bonds in keratin found in hair, skin, or nails. Liqwd and Olaplex LLC brought suit against L’Oreal for willful trade secret misappropriation, willful patent infringement, and breach of contract. On August 12, 2019, the jury returned a verdict finding L’Oreal liable for willful trade secret misappropriation, willful patent infringement, and breach of contract. The jury awarded $22,265,000 for the trade secret claims and breach of contract claims, $21,818,000 for infringement of U.S. Patent No. 9,498,419 and $24,960,000 for infringement of U.S. Patent No. 9,668,954. To avoid duplicative recovery, the court entered a judgment against L’Oreal USA for $49,920,000. Both parties filed various post-trial motions.

Bond. The court first granted L'Oreal unopposed request to post a $60 million bond pending resolution of its post-trial motions and appeal. The court found that the amount of the bond includes the amount of damages awarded in the judgment, $49,920,000, plus an additional 20 percent, which is more than sufficient to cover one year of interest.

Damages award and interest. The court denied Olaplex’s motion to amend the judgment and permit $97,085,00 in damages. The court found that the damages calculations are an accurate assessment of the damages found by the jury, less duplicative recovery. The court carefully calculated the dates that overlapping occurred and subtracted those amounts. The court, however, granted Olaplex’s request for pre-judgment and post-judgment interest at the appropriate rates.

Renewed motion for judgment as a matter of law. The court denied L'Oreal’s renewed motion for judgment as a matter of law concerning damages, willful patent infringement, trade secret misappropriation, willful and malicious trade secret misappropriation, breach of contract, and patent invalidity. The court upheld the jury verdict finding no grounds to support the renewed motion for judgment as a matter of law.

Enhanced damages. Weighing the relevant factors, the court granted Olaplex’s motion to support the court’s findings for enhancement of the patent and trade secret damages. The court found that all of the factors supported enhanced damages, including investigation and good-faith belief, copying, litigation behavior, defendant's size and financial condition, closeness of the case, duration of the misconduct, remedial action, motivation, and attempts to conceal misconduct. The evidence overwhelmingly supported a finding that L’Oreal intentionally copied and used the technology. In terms of litigation behavior, the court found that this is one of the most overly litigated cases it has observed. The briefs and filings filed by the defendants were often excessive and duplicative. The court had to intervene far too often and often the behavior and numerous filings were obstructive. L’Oreal’s is one the world’s leading beauty company. The merits of this case were not close as it took the jury only three hours to return the verdict. L’Oreal’s continued to sell the products, even after the jury returned the verdict. Therefore, the court confirmed the enhanced damages award for an aggregate two times enhancement of patent damages and three times enhancement of trade secret damages.

New trial. Concluding that the jury verdict is supported by the great weight of evidence, the court denied L’Oreal’s motion for a new trial. A new trial is warranted where the damages award is excessive, or the verdict was against the weight of the evidence and a miscarriage of justice would result if the verdict is allowed to stand. The court found no error with previous evidentiary rulings or the jury instructions. The verdict is reasonable in all respects that are challenged by L’Oreal. Thus, the court denied the request for a new trial.

Attorney fees. The court generally affirmed the request for nearly $14 million in attorney fees, costs, and expenses. The court noted that the case lasted two and a half years, was complex, and the amount at stake was large. In addition to the substantive causes of action, the case involved two preliminary injunction motions, an interlocutory appeal to the Federal Circuit, substantial and complex discovery, and multiple experts. The court observed that the plaintiff’s attorneys with the law firm Quinn Emanuel are highly qualified and highly educated in the field of patent law and related subject matter. The fees charged for the core attorneys range from their highest hourly rates of $705.00 to $1,040. The plaintiffs generally supported and itemized their request for fees with appropriate documentation and corroborating evidence. The evidence supported a finding that the requested hourly rates and the hours spent is reasonable. As such, the court denied L'Oreal’s request to reduce the fees by $6.5 million.

This case is No. 1:17-cv-00014-JFB-SRF.

Attorneys: Jack B. Blumenfeld (Morris, Nichols, Arsht & Tunnell LLP) for Liqwd, Inc. and Olaplex LLC. Jason James Rawnsley (Richards, Layton & Finger, PA) for L'Oreal USA, Inc., L'Oreal USA Products, Inc., L'Oreal USA S/D, Inc. and Redken 5th Avenue NYC, LLC.

Companies: Liqwd, Inc.; Olaplex LLC; L'Oreal USA, Inc.; L'Oreal USA Products, Inc.; L'Oreal USA S/D, Inc.; Redken 5th Avenue NYC, LLC

MainStory: TopStory Patent TradeSecrets DelawareNews

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