ERFINDERGEMEINSCHAFT UROPEP GbR v. Eli Lilly and Company
2:15-cv-01202
E.D. Tex.Jul 18, 2017Background
- UroPep sued Lilly for inducing infringement of U.S. Patent No. 8,791,124 by promoting Cialis for BPH; jury found infringement and validity and awarded $20 million (implied 2.84% royalty) for sales through April 16, 2017.
- Trial evidence showed approximately $704.3M of Cialis BPH sales from Oct. 9, 2014 to April 16, 2017.
- UroPep moved for an ongoing royalty for sales between April 17, 2017 (day after jury verdict) and patent expiration July 9, 2017; sought 15% (argued 10% plus 1.5x willfulness premium).
- Lilly opposed, contending no ongoing royalty or, at most, continuation of the jury’s 2.84% implied rate.
- Court concluded UroPep entitled to an ongoing royalty for April 17–July 9, 2017 and set the rate at twice the jury’s implied rate (5.68%), directing parties to calculate the dollar amount and prejudgment interest to be added to an amended judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to an ongoing royalty for post-verdict sales | UroPep sought royalties in lieu of injunction and on §284 damages for post-verdict sales | Lilly argued prior judgment and procedural statements bar post-judgment royalty | Court: UroPep entitled to ongoing royalty for Apr.17–Jul.9; initial judgment did not foreclose amended judgment addressing ongoing royalties (applies §283/§284 principles) |
| Waiver / need to have requested injunction | UroPep sought injunction or accounting; did not press injunction at trial but reserved right to post-verdict royalties | Lilly: failure to seek injunction in pretrial order waived ongoing-royalty relief | Court: No waiver — joint pretrial language and tactical choice to avoid injunction supports relief under §283 in lieu of injunction |
| Whether jury’s implied royalty rate binds court for post-verdict period | UroPep: post-verdict hypothetical negotiation (per Amado) justifies higher rate given verdict certainty and increased bargaining power | Lilly: jury already assumed validity/infringement; pre-verdict rate should govern; any change unsupported | Court: Jury rate is starting point but not binding; court may adjust post-verdict rate under Amado framework where circumstances change; here court doubled jury rate to 5.68% based on increased expected profit margin post-verdict |
| Willfulness / enhancement of ongoing royalty | UroPep: post-verdict continued infringement is willful, justifying 1.5x enhancement | Lilly: post-verdict conduct not egregious; appeal and non-frivolous invalidity defense | Court: Rejected willfulness enhancement — Halo and Read analysis do not justify automatic enhancement; no egregious misconduct found |
Key Cases Cited
- Fresenius USA, Inc. v. Baxter Int’l, Inc., 582 F.3d 1288 (Fed. Cir. 2009) (pre-verdict damages do not fully compensate for post-verdict sales)
- Paice LLC v. Toyota Motor Corp., 504 F.3d 1293 (Fed. Cir. 2007) (ongoing royalty in lieu of injunction)
- Prism Techs. LLC v. Sprint Spectrum L.P., 849 F.3d 1360 (Fed. Cir. 2017) (ongoing royalty permitted when injunction inappropriate)
- Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10 (Fed. Cir. 2012) (district court must explain denial of prospective relief; jury award covers past harm only)
- Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197 (Fed. Cir. 2010) (district court has broad discretion to award post-injunction damages under §284)
- Amado v. Microsoft Corp., 517 F.3d 1353 (Fed. Cir. 2008) (post-verdict hypothetical negotiation may justify higher ongoing royalty due to changed bargaining positions)
- ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc., 694 F.3d 1312 (Fed. Cir. 2012) (applies Amado to ongoing royalty during injunction stay; pre-litigation licenses may not control post-verdict rate)
- Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992) (factors for assessing willful infringement)
- Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016) (enhanced damages are punitive and reserved for egregious misconduct)
- Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962) (trial court must defer to jury findings when exercising equitable powers)
- Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959) (right to jury trial limits equity proceedings)