After a jury verdict of willful infringement, almost $6,000,000 in patent-related damages, and a Chapter 7 bankruptcy, Judge Freeman increased WOSS’s legal troubles by granting TRX’s motions for enhanced damages and attorneys’ fees.[1]

Enhanced Damages.  Judge Freeman first granted TRX’s request for enhanced damages under 35 U.S.C. § 284 given its egregious behavior.  In making her determination, Judge Freeman considered the Read factors[2] and WOSS’s subjective intent.

At trial, the jury found that WOSS willfully infringed US Patent No. 7,044,896 (“the ’896 patent”).  Central to Judge Freeman’s decision to enhance damages was WOSS’ intent at the time of infringement.  At trial, WOSS’s founder, Mr. Ott, testified that he did not think WOSS’s band (left) infringed the ’896 patent (right):

Figure showing WOSS’s band               Figure displaying ’896 patent

But in finding that WOSS willfully infringed the ’896 patent, the jury disregarded Mr. Ott’s testimony and found willful infringement—a finding to which Judge Freeman deferred.  Judge Freeman also found substantial circumstantial evidence to support enhanced damages: Mr. Ott knew of the ’896 patent before selling the infringing band, and even admitted he studied the patent several times; he deliberately copied the design of the ’896 patent; WOSS’s non-infringement case was weak; WOSS had not stopped selling the infringing bands since 2011, even after the jury found infringement; and it did not redesign the bands. While they ultimately did not carry the day, Judge Freeman found a few facts weighed against enhanced damages: (1) WOSS found inspiration from many trainers in addition to TRX, and (2) WOSS’ thin profit margins meant it would likely be unable to survive enhanced damages.[3]

In light of these mitigating facts and the scarce direct evidence of subjective intent, Judge Freeman only doubled the damages award to $11,882,312.

Attorneys’ Fees.  Judge Freeman next granted TRX’s request for attorneys’ fees.  TRX argued that WOSS’s weak non-infringement case and WOSS’s litigation misconduct (e.g., filing motions without support and repeatedly rearguing issues) qualified the case as exceptional under 35 U.S.C. § 285.  In granting TRX’s request, Judge Freeman agreed that WOSS repeatedly filed duplicative motions and that its infringement case was weak.  But Judge Freeman also noted that WOSS did prevail on summary judgment on some of its claims and its claim construction positions were not frivolous.  In the end, Judge Freeman awarded attorneys’ fees only for WOSS’s duplicative motions.

Fitness Anywhere LLC v. Woss Enterprises LLC, Case No. 5:14-cv-01725-BLF (Dkt. 295, November 20, 2018).


Endnotes:

[1]  Judge Freeman also considered TRX’s motions for an injunction, pre- and post-judgment interest, and enhanced damages and attorneys’ fees for WOSS’s trademark infringement. Those motions are not addressed here.

[2]  “…(1) whether the infringer deliberately copied the ideas or design of another; (2) whether the infringer, when he knew of the other’s patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed; (3) the infringer’s behavior as a party to the litigation; (4) defendant’s size and financial condition; (5) closeness of the case; (6) duration of defendant’s misconduct; (7) remedial action by the defendant; (8) defendant’s motivation for harm; and (9) whether defendant attempted to conceal its misconduct.” Read Corp. v. Portec, Inc., 970 F.3d 816, 826–27 (Fed. Cir. 1992).

[3]  Judge Freeman noted that this fact cuts both ways because enhanced damages would likely not even impact the now-bankrupt company.