Lubby Holdings v. Chung (Fed. Cir. 2021)
Lubby’s US9750284 covers a vape-pen (“personal vaporizer”). Lubby sued Henry Chung for patent infringement and won at trial with a jury verdict of almost $1 million. On appeal though the Federal Circuit has reversed-in-part — holding that the pre-suit damages were not available under 35 U.S.C. § 287.
In general, the patent laws bar a remedy for any infringement that occurred more than six years prior to the filing of the lawsuit. “[N]o recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.” 35 U.S.C. § 286. Back damages are further limited in by the patent marking statute of Section 287. That provision calls for a patentee to to mark any “patented article” that it sells or licenses-for-sale with the patent number. If the patentee sells/licenses-to-sell a product covered by the patent without so marking, then back damages can only be recovered for infringement after the infringer is “notified of the infringement and continues to infringe thereafter.” Id.; See also 35 U.S.C. § 287(a) (“Filing of an action for infringement shall constitute . . . notice.”).
Here, the patent covers an article (a personal vaporizor) and Lubby sells articles that appear to be covered by the patent (the J-Pen). In this case, Lubby did not disclose its damages computations until the day before trial, and those computations included request for back damages. The court’s approach is actually to assume marking unless the defense objects with at least some minimal evidence of the lack of marking. Here, Chung objected on that same day and pointed to the J-Pen’s lack of marking of the patent number. At that point, Lubby should have presented its evidence of marking. However, Lubby did not present any such evidence at trial. As such, Lubby “can only recover damages for the period that it provided actual notice,” which is the date that it notified Chung of the infringement.
Chung did have notice that the patent existed, but that is also different than notice of infringement under the statute. “[T]he actual notice requirement of § 287(a) is satisfied when the recipient is informed of the identity of the patent and the activity that is believed to be an infringement, accompanied by a proposal to abate the infringement, whether by license or otherwise.” SRI Int’l, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462 (Fed. Cir. 1997).
The appellate court ordered a new trial on remand to calculate the post-filing sales numbers that will serve as the appropriate damages award.
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Chung also appealed on the merits of the infringement case. However, Chung did not file a R.50(a) JMOL motion on the issue and therefore lost his primary right to appeal. Chung did request a new trial under R.59, and the court does have power to hear an appeal of a denial of new trial. However, that standard is much higher — requiring an “absolute absence of evidence to support the jury’s verdict.” Here, the court found some evidence supporting infringement and thus upheld the verdict.