Western Digital (WD) managed to reduce the amount it had to pay in a patent case from $553 million to just $1 in post-trial motions. The judge ruled that the plaintiff’s claims had changed during the trial.
In October, a jury in California found Western Digital guilty of infringing patents on data encryption owned by SPEX Technologies. The case involved several self-encrypting hard drives, according to The Register.
Initially, WD was ordered to pay $316 million in damages. District Judge James Selna ruled earlier this year that the company also owed an additional $237 million in interest. This brought the total amount to over $500 million. In February, WD was given a week to post a bond or pay the full amount.
The ruling that WD storage devices, including some Ultrastar and My Book products, infringed SPEX patent No. 6,088,802 (the ‘802 patent) was upheld, despite requests from the manufacturer for a new trial and for the findings to be overturned.
These requests came in the form of a Rule 50(b) motion for a ruling as a matter of law—essentially a request for a judgment despite the jury’s verdict—and a Rule 59 motion for relief from the judgment and a new trial.
Liable, but lower damages
Judge Selna ruled that WD’s Rule 50(b) motion was denied with respect to the company’s liability but granted concerning the amount of damages.
The judge stated that SPEX’s theory of damages changed during this lawsuit when specific evidence and theories were no longer available. At that point, and for the reasons discussed, there was insufficient evidence to determine a reasonable royalty.
He referred to previous cases in which damages were not considered necessary if the plaintiff failed to link a monetary amount to the infringing acts sufficiently. The court, therefore, set the damages at a symbolic amount of $1.
For that reason, the part of WD’s Rule 59 motion relating to damages was no longer considered relevant. The request for a new trial was denied.
Although the judge rejected virtually all of the storage company’s post-trial motions, Gibson Dunn’s attorneys called the reduction in damages a significant victory.
SPEX presented a damages theory based on licensing efforts, supported by lay witness testimony during the trial. The court granted WD’s Rule 50(a) motion to strike this comparable licensing theory, but allowed SPEX to present an amended damages theory based on evidence already introduced during the trial.
The ‘802 patent at the heart of this case is titled Peripheral Device with Integrated Security Functionality. It describes a peripheral device, such as a portable hard drive, designed to perform security operations on data sent to or from a host computer.