United States: Where An Infringement Judgment Is Partially Reversed, There Is No "Normal Rule" Permitting District Courts To Reconsider Damages Falling Within The Court’s Mandate

In Retractable Technologies, Inc. v. Becton Dickinson & Co., No. 13-1567 (Fed. Cir. July 7, 2014), the Federal Circuit affirmed the district court's denial of defendant's motion to modify the district court's previous damages award following a partially successful appeal.

In 2007, Retractable Technologies, Inc. ("Retractable") sued Becton Dickinson and Company ("Becton"), alleging that Becton's 1 mL and 3 mL syringes infringed certain claims of Retractable's patents.  At trial, Retractable—basing its theory on infringement beginning in 2000 and a hypothetical negotiation at that time—argued for a lump-sum payment of $72 million for a ten-year license, while Becton presented a lost profits theory that limited damages to approximately $5 million and, in the alternative, that a reasonable royalty would have been not more than $30 million.  The jury found that both accused products infringed. The jury's verdict form included interrogatories, one of which included asking the jury to "determine the amount of reasonable royalty damages that would fairly and adequately compensate RTI [Retractable] for infringement," to which the jury responded, "$5,000,000."  Slip op. at 3 (alteration in original) (citation omitted).  The district court entered judgment and a permanent injunction against Becton.  Becton appealed the infringement and validity decisions but did not appeal the damages determination.  In a prior appeal, the Federal Circuit reversed the finding of infringement on the 3 mL syringe and affirmed the judgment that the 1 mL syringe infringed.  The Court did not remand the case to the district court because there was no basis for a new trial on infringement or invalidity.

Following the Federal Circuit's infringement decision, Becton filed a motion for relief under Fed. R. Civ. P. 60(b), asking the district court to modify the damages award to reflect that the 1 mL syringe was the only infringing product.  The district court denied Becton's motion.  Because the damages issue was within the scope of the original judgment and was not raised in the prior appeal or remanded for reconsideration, the district court concluded that the mandate rule precluded it from modifying the damages award.  Becton appealed for a second time.

"While this court regularly issues remands when requested and appropriate, or on our own initiative if some but not all products are found on appeal not to infringe, there is no 'normal rule' giving district courts the authority to regularly revisit or recalculate damages that fall within our mandate." 
Slip op. at 6.

In the instant appeal, the Federal Circuit affirmed.  The Court first noted that Becton "puts the cart before the horse" since the argument that the damages award is inconsistent with the mandate "requires reconsideration of the damages award itself, which is possible only if the mandate rule allows revisiting the question."  Id. at 5.  The Court disagreed with Becton's interpretation of Federal Circuit precedent as requiring the district court to conduct further proceedings on damages to determine the effect of the reversal.  Revisiting its prior decisions, the Court explained that "[t]he cases do not stand for the proposition that the district court is required, let alone permitted, to revisit damages in the absence of a reversal or remand of a damages determination within a judgment of invalidity or infringement appealed to this court."  Id. at 6.  In fact, the Court concluded, "there is no 'normal rule' giving district courts the authority to regularly revisit or recalculate damages that fall within our mandate."  Id.

The Federal Circuit also rejected Becton's argument that it did not waive the damages issue by failing to raise it in the previous appeal.  According to the Court, Becton "could have and should have" raised the damages issue in the previous appeal.  Id.  The Court concluded that "[t]he damages award was within the scope of the appealed judgment and thus was incorporated into the mandate when Becton failed to raise the issue of a remand to consider parsing damages by product."  Id. at 8.

Finally, the Court rejected Becton's argument that an exception to the mandate rule existed in this circumstance.  Addressing this argument, the Federal Circuit explained that "courts have considered revisiting issues otherwise foreclosed in circumstances where there has been a substantial change in the evidence."  Id. at 9 (quoting Tronzo v. Biomet, Inc., 236 F.3d 1342, 1349 (Fed. Cir. 2001)).  However, the Court distinguished between the circumstances in Tronzo and the case at hand:  "Becton could have and should have raised the issue at the previous appeal.  Further, no subsequent trial has occurred and there has been no actual change in the evidence or the facts."  Id.  Finally, the Court noted, Becton had not presented a compelling reason to extend Tronzo.  Since Becton had the opportunity to raise the damages issue during the prior appeal but did not, the Court stated, "To permit this issue to be revisited anew would be to endorse an end-run around the mandate rule, which we are not about to do.  Id. at 11.

Accordingly, the Federal Circuit affirmed the district court because the mandate rule foreclosed the relief sought by Becton.

This article previously appeared in Last Month at the Federal Circuit, Aug, 2014.

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