Case 1:09-cv SC-MHD Document 477 Filed 12/18/13 Page 1 of 21

Case 1:09-cv-09790-SC-MHD Document 477 Filed 12/18/13 Page 1 of 21 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK BRIESE LICHTTENCHNIK VERTRIEBS GmbH, and HANS-WERNER BRIESE, -against- Plaintiffs, BRENT LANGTON, B2PRO, KEY LIGHTING, INC., and SERGIO ORTIZ, Defendants. No. 09 Civ. 9790 ORDER (1) DENYING DEFENDANTS' MOTION FOR A NEW TRIAL, (2) DENYING DEFENDANTS' RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW, (3) GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR ENHANCED DAMAGES AND ATTORNEY FEES, AND (4) GRANTING PLAINTIFFS' MOTION FOR A PERMANENT INJUNCTION I. INTRODUCTION This is a patent infringement action brought by Hans-Werner Briese and Briese Lichttenchnik Vertriebs GmbH (collectively "Plaintiffs") against B2Pro, Key Lighting, Inc., Brent Langton, and Sergio Ortiz (collectively, "Defendants") concerning U.S. Patent No. 5,841,146 (the "'146 patent"), an umbrella-shaped light reflector for use in photography and videography. The Court held a jury trial on this matter from October 2 through 9, 2013. The jury found all four defendants liable for patent infringement and awarded damages of $300,000. The jury also

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 2 of 21 found that each defendant's infringement was willful, and that B2Pro was a partnership between Langton and Ortiz.' Defendants now move for a new trial pursuant to Federal Rule of Civil Procedure 59. ECF No. 452. Defendants have also filed a renewed motion for judgment as a matter of law or, in the alternative, for a new trial pursuant to Rules 50 and 59. ECF No. 450. Also pending before the Court are two post-trial motions filed by Plaintiffs: a motion for attorney fees and enhanced damages and a motion for a permanent injunction. ECF Nos. 455, 458. All four motions are fully briefed 2 and appropriate for resolution without oral argument. As explained below, the Court DENIES Defendants' motion for a new trial and their renewed motion for judgment as a matter of law. The Court GRANTS in part and DENIES in part Plaintiffs' motion for enhanced damages and attorney fees and GRANTS Plaintiffs' motion for a permanent injunction. /// /// 1 Plaintiffs also sued Defendants for trade dress infringement, and Defendants counterclaimed for trade libel and conversion. The jury found for Defendants on Plaintiffs' trade dress claim, awarded Defendants only $1 in connection with their trade libel counterclaim, and found for Plaintiffs on the conversion counterclaim. 2 ECF Nos. 454 ("Mem. ISO New Trial"), 462 ("Opp'n to New Trial"), 468 ("Reply ISO New Trial"), 451 ("Mem. ISO JMOL"), 461 ("Opp'n to JMOL"), 459 ("Mem. ISO Damages"), 466 ("Opp'n to Damages"), 471 ("Reply ISO Damages"), 456 ("Mem. ISO Injxn"), 464 ("Opp'n to Injxn"). Defendants' reply in support of their renewed motion for judgment as a matter of law and Plaintiffs' reply in support of their motion for a permanent injunction and were filed under seal. 2

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 3 of 21 II. DISCUSSION A. Defendants' Motion for a New Trial Under Rule 59, a court may grant a new trial after a jury trial "for any reason for which a new trial has heretofore been granted in an action at law in federal court." Fed. R. Civ. P. 59(a)(1)(A). "The district court ordinarily should not grant a new trial unless it is convinced that the jury has reached a seriously erroneous result or that the verdict is a miscarriage of justice." Smith v. Lightning Bolt Prods., Inc., 861 F.2d 363, 370 (2d Cir. 1988). Defendants move for a new trial on three grounds: (1) the Court's jury instruction on direct infringement was erroneous; (2) the testimony by Plaintiffs' expert, Mark Krichever, exceeded the opinions in his expert report; and (3) the jury's willful infringement verdict is not supported by clear and convincing evidence. i. The Infringement Jury Instruction Defendants argue that they are entitled to a new trial because Jury Instruction 14 is both legally erroneous and prejudicial to Defendants. Mem. ISO New Trial at 4. Jury Instruction 14 states: In this case, Plaintiffs assert that Defendants have directly infringed the '146 Patent. Defendants are liable for directly infringing the Briese Patent if you find that Plaintiffs have proven that it is more likely than not that Defendants made, used, imported, offered to sell, or sold the invention defined in Claim 1 of the Briese Patent. Additionally, personal liability may be imposed upon corporate officers for participating in, inducing, and approving acts of patent infringement. Someone can directly infringe a patent without knowing of the patent or without knowing that what they are 3

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 4 of 21 doing is an infringement of the patent. They may also directly infringe a patent even though they believe in good faith that what they are doing is not an infringement of any patent. ECF No. 433 ("Jury Instructions"). Defendants argue that Plaintiffs only asserted a claim for direct infringement, and that the highlighted language "includes language from inducement of infringement and/or alter ego theories which are not at issue in this case." Mem. ISO New Trial at 1. As an initial matter, it is important to note that Defendants' argument does not implicate the liability of B2Pro or Key Lighting. Since these defendants are entities not corporate officers, the Court's instruction could not have affected the jury's consideration of their liability. Rather, the challenged language only implicates the individual defendants -- Langton and Ortiz. Defendants argue that because Plaintiffs only asserted a claim for direct infringement, Langton and Ortiz should not be held personally liable for "participating in, inducing, and approving" B2Pro or Key Lighting's acts of patent infringement. 3 Even if Defendants are correct that direct patent infringement does not encompass "participating in, inducing, and approving" -- and it is far from clear that they are -- Langton and Ortiz can still be held vicariously liable for the acts B2Pro. Under New York law, "[w]hen a tort is committed by [a partnership], the wrong is imputable to all of the partners jointly and severally." Pedersen v. Manitowoc Co., 25 N.Y.2d 3 It is also questionable whether the jury could have applied the challenged language to Langton and Ortiz with respect to B2Pro since, as all parties concede, B2Pro is not a corporation. 4

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 5 of 21 412, 419 (N.Y. 1969). Here, the jury found that B2Pro was liable for direct infringement, and that B2Pro was a partnership between Langton and Ortiz. Thus, even if Plaintiffs had declined to sue them directly, Langton and Ortiz's liability would not be in question. Defendants argue that patent law, not state law, determines whether someone committed direct infringement. Mem. ISO New Trial at 19. That may be so, but Ortiz and Langton cannot credibly contend that patent law somehow absolves them of liability for judgments rendered against their partnership. Since Langton and Ortiz are liable for the acts of B2Pro, the issue of whether or not they committed direct infringement is moot. Defendants also appear to suggest that the jury's partnership findings were erroneous. But the evidence on this point is compelling. Ortiz even testified that Langton was his partner. Tr. at 95. Accordingly, the Court finds that Jury Instruction 14 did not prejudice Defendants in any way. ii. Krichever's Testimony Defendants also argue that the testimony of Krichever, Plaintiffs' technical expert, warrants a new trial. Specifically, Defendants take issue with Krichever's demonstrative slides and his testimony regarding patent marking. Defendants contend that the Court should not have allowed Krichever to use demonstrative slides, because the slides were not disclosed as part of his expert report. But the slides do not contain new information. They merely illustrate points that 5

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 6 of 21 Krichever already made in his expert report. Moreover, the slides were not admitted into evidence, nor were they provided to the jury during its deliberations. The Court "possesses broad discretion to determine the mode by which evidence is presented to the jury," and that "discretion generally encompasses the authority to allow the use of demonstrative aides, including the display of charts or tables accurately summarizing the content of primary testimony." Castaldi v. Land Rover N. Am., Inc., 363 F. App'x 761, 762 (2d Cir. 2009). The Court did not abuse its discretion by allowing Krichever to show the jury diagrams that summarized and illustrated his findings. With respect to the patent marking issue, Krichever testified that Plaintiffs' reflector umbrella was marked with a patent number and that the number was missing one digit. Tr. at 311-12. Krichever was then asked if he could determine the full number of Plaintiffs' patent from the incomplete number listed on the patent mark. Id. at 312. Defendants objected to this question on the ground that it exceeded the scope of Krichever's expert report, and that Krichever was not qualified to render an opinion on the subject. Id. The objection was overruled. Defendants now argue that the Court's ruling was in error. The Court disagrees. Krichever merely testified as to his own experience locating the '146 patent on various databases; he did not render an expert opinion on the issue. Id. at 313-14. Moreover, on cross-examination Krichever conceded that he was not an expert on patent marking. Id. at 340. 6

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 7 of 21 Accordingly, the Court finds that Krichever's testimony does not warrant a new trial. iii. Willful Infringement "[T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). In addition to this objective inquiry, "a patentee must show that this risk was either known or so obvious that it should have been known to the accused infringer." Id. (quotations omitted). Defendants argue that, notwithstanding the jury's finding of willful infringement, Plaintiffs cannot satisfy the objective prong of the willful infringement test because Defendants asserted claim constructions for various terms in Claim 1 of the '146 Patent, under which there would be no infringement. Mem. ISO New Trial at 15-19. Defendants point out that Plaintiffs agreed to the proposed constructions and that the Court adopted them in its claim construction order. ECF No. 201. The fundamental problem with Defendants' argument is that the Court and the jury found that Defendants infringed the '146 patent using these very constructions. At summary judgment, the Court found that Defendants infringed all but one element of Claim 1 of the '146 patent, using the claim constructions now asserted by Defendants. ECF No. 306. Using the same claim constructions, the jury found that Defendants infringed the last remaining element of Claim 1. 7

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 8 of 21 Accordingly, the Court declines to disturb the jury's finding of willful infringement. For these reasons and the reasons set forth above, Defendants' motion for a new trial is DENIED. B. Langton and Ortiz's Renewed Motion for Judgment as a Matter of Law or, in the Alternative for a New Trial Langton and Ortiz have also moved for a judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(b) or, in the alternative, a new trial pursuant to Rule 59. The standard for a Rule 59 motion is set forth in Section II.A above. A Rule 50(b) motion for judgment as a matter of law may not be granted "unless the evidence, viewed in the light most favorable to the opposing party, is insufficient to permit a reasonable juror to find in her favor." Galdieri-Ambrosini v. Nat'l Realty & Dev. Corp., 136 F.3d 276, 289 (2d Cir. 1998). The court must conclude that (1) "there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise and conjecture," or (2) "there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded [persons] could not arrive at a verdict against [it]." Id. (quotation omitted). The crux of the instant motion is that Plaintiffs failed to meet their evidentiary burden as to Langton and Ortiz on their claim for direct infringement. Langton and Ortiz argue that B2Pro and Key Lighting do not rent assembled umbrella reflectors, but merely provide parts and technical assistance. 8

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 9 of 21 They reason that direct infringement must be of the whole invention. However, the record is replete with evidence that B2Pro used the complete infringing umbrellas reflectors, rented those complete umbrellas to its customers, and even helped its customers assemble the products. For example, Kate Zander testified that she rented complete umbrella reflectors from Langton and that someone from B2Pro assembled and set up those light umbrellas for her. Tr. at 248-49. Moreover, much of the evidence that B2Pro rented complete umbrellas comes from directly from Langton and Ortiz. For example, when asked what would happen if a customer wanted to rent a single component of the infringing device, Langton responded: "I would turn [the customer] away." Id. at 234. Langton and Ortiz insist that B2Pro's invoices show that it only rented component parts. Reply ISO JMOL at 4-5. However, those invoices reflect charges for every component of the infringing device, and show that B2Pro generally provided its customers with a "set-up helper." See, e.g., id. at 5 (2010 invoice). Defendants also argue that even if the evidence shows that B2Pro and Key Lighting rented assembled umbrellas, Plaintiffs failed to establish that Langton and Ortiz themselves engaged in direct infringement. The evidence suggests otherwise. For example, a New York Business Certificate signed by Langton indicates that he was personally conducting business under the name B2Pro. See Pls.' Ex. 20. Further, Langton and Ortiz repeatedly testified that they personally used or rented 9

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 10 of 21 assembled B2Pro umbrellas. See, e.g., Tr. at 161, 219, 597, 620, 628, 685, 690. Ortiz also testified that he personally worked with and "made every single part" of the infringing devices. See, e.g., id. at 115. 4 In any event, the evidence also shows that B2Pro was a partnership between Langton and Ortiz, and under New York law, partners can be held jointly and severally liable for the acts of the partnership. See Section II.A.i supra. In the case of B2Pro, there is simply no corporation or limited liability entity behind which Langton and Ortiz can hide. Langton and Ortiz suggest that they are protected by Key Lighting's corporate status. But even if Key Lighting could shield its own officers and employees from liability, that shield does not extend to B2Pro and its partners. Accordingly, Langton and Ortiz's renewed motion for a judgment as a matter of law is DENIED, as is their motion for a new trial. /// /// /// 4 Defendants also make much of Krichever's statement that he did not look into whether Langton or Ortiz personally engaged in direct infringement. Mem. ISO JMOL at 7-8. Langton and Ortiz interpret this as an admission that Plaintiffs have no evidence on this subject. It is not. Rather, it is merely an admission that Krichever focused on the infringing device rather than Langton and Ortiz's use of the infringing device. The Court declines to ignore the other evidence presented by Plaintiffs, as well as the statements of Langton and Ortiz, that connect the individual defendants to the infringing device. 10

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 11 of 21 C. Plaintiffs' Motion for Enhanced Damages i. Treble Damages Where, as here, a jury finds that a defendant's infringement was willful, the Court may award treble damages pursuant to 35 U.S.C. 284. Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992). However, "a finding of willful infringement does not mandate that damages be enhanced, much less mandate treble damages." Id. "The paramount determination in deciding to grant enhancement and the amount thereof is the egregiousness of the defendant's conduct based on all the facts and circumstances." Id. Specifically, the Court may consider: (1) [W]hether the infringer deliberately copied the ideas or design of another. (2) [W]hether 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) [T]he 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. (9) Whether defendant attempted to conceal its misconduct. Id. at 827 (citations omitted). 11

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 12 of 21 The Court finds that these Read factors favor the award of treble damages here. As to the first Read factor, the jury found that "Defendants were aware of Plaintiffs' patent," that they "acted despite an objectively high likelihood that their actions infringed a valid patent," and that "[t]his objectively high likelihood of infringement was either known or so obvious that it should have been known to Defendants." See Jury Instruction 18. The evidence shows that Defendants previously marketed Plaintiffs' patented device, and only began renting the infringing device after their business relationship with Plaintiff went sour. Moreover, Defendants' umbrella reflectors came in the same sizes as Plaintiffs, and Defendants presented no design documents or other credible evidence suggesting that they attempted to design around the '146 patent. The second Read factor also favors the award of treble damages. Defendants do not contest that they were aware of the '146 patent. Nor could they. While he was still selling Plaintiffs' patented products, Langton helped Plaintiffs successfully assert the '146 patent against a third party in another suit. See Tr. at 145-48. Defendants contend that they believed that the '146 patent was invalid and not infringed. However, the Court has already rejected Defendants' invalidity defense. ECF No. 297, 306. 5 Further, using Defendants' own 5 The U.S. Patent and Trademark Office ("PTO") recently granted Defendants' ex parte request for reexamination of the '146 patent, which was filed on September 24, 2013, only a few weeks before trial. This eleventh-hour request for reexamination does not change the Court's analysis. Defendants have not explained why they did not file their application earlier, and it appears that Defendants' request is based on the same prior art they 12

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 13 of 21 claim constructions, the Court and the jury found that Defendants' umbrella reflectors infringed on every element of claim one of the '146 patent. Moreover, Defendants did not present any evidence that they obtained legal advice on noninfringement before marketing their own umbrella reflectors. As to the third and ninth Read factors, Defendants' conduct during the course of this litigation further supports an award of treble damages. Prior to trial, Defendants were sanctioned multiple times by the magistrate for, inter alia, "baseless" objections to discovery requests, "deliberate effort[s]" to "conceal" the infringing devices, failure to search for and produce relevant documents, false and misleading testimony by Langton regarding key details of B2Pro's business, partially inaccurate deposition testimony about B2Pro's provision of assembling services to its clients, efforts to obstruct the depositions of third-party witnesses, and improper witness coaching. ECF Nos. 118, 162. Defendants also attempted to circumvent some of the Court's earlier discovery orders at trial by trying to introduce alleged B2Pro umbrella reflectors that were not produced during discovery. It also appears that Defendants may have mischaracterized certain evidence at trial. In connection with Plaintiffs' claim for trade dress infringement, Langton showed the jury a number of logos that he claimed were used by reputable lighting companies. However, he presented to this Court. In any event, the grant of an application for reexamination is hardly dispositive of the validity of a patent. The PTO grants 92 percent of all such applications. 13

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 14 of 21 later conceded that at least one of those logos actually belonged to a logo design company. The Court finds that the other Read factors do not mitigate the factors discussed above. Langton declares that an enhanced award would "significantly affect Key Lighting's ability to conduct... substantial business other than the rental of focusing umbrellas," and that the financial condition of the company was already substantially impacted by the events of Hurricane Sandy. ECF No. 467 ("Langton Decl.") TT 3-4. However, there is no indication how an enhanced award would impact the other three defendants. Moreover, the evidence indicates that Defendants brought in over $4 million in total revenue from July 2009 through July 2010. Defendants argue that this was a close case because the jury initially indicated that it was deadlocked, and the Court was required to give an Allen charge. However, the Court can only speculate as to whether the jury was deadlocked on patent liability or one of the many other issues presented by this case. As to the other factors, Defendants have been marketing the infringing umbrellas since around 2007, there is no evidence of remedial action by Defendants, and the motivation for harm remains unclear. Accordingly, the Court awards treble damages in the amount of $900,000. ii. Attorney's Fees "The court in exceptional cases may award reasonable attorney fees to the prevailing party." 35 U.S.C. 285. An exceptional case is one that involves "inequitable conduct 14

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 15 of 21 before the [PTO]; litigation misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful infringement." Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329 (Fed. Cir. 2003) (quotations omitted). The evidence that a case is exceptional must be clear and convincing. Digeo, Inc. v. Audible, Inc., 505 F.3d 1362, 1367 (Fed. Cir. 2007). A finding of willful infringement is not dispositive. Electro Scientific Indus., Inc. v. Gen. Scanning Inc., 247 F.3d 1341, 1353 (Fed. Cir. 2001). Even if a case is exceptional, a district court has the discretion to decline to award attorney fees. Id. The Court finds that this is not an exceptional case. While Defendants engaged in sanctionable conduct during discovery, Plaintiffs have already been awarded attorney fees in connection with that conduct. The Court also disagrees that Defendants' conduct at trial was egregious. Defense counsel vigorously defended the case. As Plaintiffs point out, the Court sustained many of Plaintiffs' objections. However, that does not mean that Defendants' engaged in bad faith conduct. Moreover, some of the positions advanced at trial by Defendants had merit. While the jury ultimately found Defendants liable for patent infringement, it awarded Plaintiffs only a fraction of their requested damages. Accordingly, Plaintiffs' request for attorney's fees is DENIED. /// /// 15

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 16 of 21 iii. Prejudgment and Post-judgment Interest The Court finds the award of both prejudgment and postjudgment interest appropriate. See Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 655 (1983) ("[P]rejudgment interest should ordinarily be awarded" in patent infringement actions."); 28 U.S.C. 1961(a) ("Interest shall be allowed on any money judgment in a civil case recovered in a district court."). The Court shall set the rate for prejudgment and post-judgment interest after it reviews supplemental briefing from the parties regarding the appropriate interest rate and the date from which prejudgment interest should be calculated. D. Plaintiffs' Motion for a Permanent Injunction Plaintiffs also seek a permanent injunction that would: (1) enjoin Defendants from making, using, renting, selling, and/or offering for sale the infringing devices, and (2) require the immediate surrender for destruction of all of Defendants' infringing devices and all molds and manufacturing equipment used by Defendants to deliberately infringe the '146 patent. The decision to grant or deny permanent injunctive relieve is "an act of equitable discretion by the district court." ebay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). Pursuant to well-established principles of equity, a patentee seeking a permanent injunction must demonstrate: (1) irreparable harm for which there is no adequate remedy at law, (2) that the permanent injunction is warranted in light of the balance of hardships between the plaintiff and defendant, and (3) that the 16

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 17 of 21 public interest would not be disserved by a permanent injunction. Id. i. Irreparable Harm After the Supreme Court's decision in ebay, there is no longer a presumption of irreparable harm upon a finding of patent validity and infringement. Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1149 (Fed. Cir. 2011). However, courts continue to consider "loss of market share, brand name recognition, reputation as an innovator, and goodwill" as irreparable injuries in the patent context. Inventio AG v. Otis Elevator Co., 06 CIV. 5377 CM, 2011 WL 3480946, at *2 (S.D.N.Y. Aug. 4, 2011). Moreover, a patentee may suffer irreparable harm where the infringer is a direct competitor and the patentee shows that it has been unwilling to license its patent. See Presidio Components, Inc. v. Am. Technical Ceramics Corp., 702 F.3d 1351, 1363 (Fed. Cir. 2012) ("Direct competition in the same market is certainly one factor suggesting strongly the potential for irreparable harm without enforcement of the right to exclude.") Such is the case here. The evidence indicates that Plaintiffs and Defendants were direct competitors. Defendants commenced marketing the infringing products only after Plaintiffs refused to sell them replacement parts for their patented products. Dr. Christine Meyer, Plaintiffs' damages expert, testified that had Defendants not rented the infringing devices, their customers would have solicited one of Plaintiffs' distributors in the United States. Tr. at 407-08. Further, 17

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 18 of 21 Langton testified that Plaintiffs attempted to steal his customers by sending their own customers notice of Defendants' infringement, suggesting that both parties shared a customer base. Id. at 622. The evidence also indicates that Plaintiffs had a practice of not licensing the '146 patent to their competitors. Thus, absent an injunction, Plaintiffs would not be able to enter into the kinds of business agreements they have historically pursued to maximize the economic value of the '146 patent. Defendants argue that Plaintiffs cannot establish irreparable harm because the '146 patent does not cover a feature that drives customer demand and, thus, there is no causal nexus between the infringement and Plaintiffs' irreparable harm. The Federal Circuit has held that "[s]ales lost to an infringing product cannot irreparably harm a patentee if consumers buy that product for reasons other than the patented feature." Apple, Inc. v. Samsung Electronics Co., Ltd., 678 F.3d 1314, 1324 (Fed. Cir. 2012). Defendants contend that their customers chose the B2Pro umbrella reflectors not because of any patented feature, but because their umbrellas are made out sturdy materials such as Kevlar and carbon fiber. However, other than Defendants' own boasts, there is little evidence to support this theory. Rather, the evidence shows that the key selling point and distinguishing feature of both Plaintiffs and Defendants' umbrella reflectors was that their focus could be adjusted while in operation -- a claim covered by 18

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 19 of 21 the '146 Patent. Thus, the Court finds that there is a causal nexus between the irreparable harm and infringement. Accordingly, the Court finds that Plaintiffs have established irreparable harm. ii. Balance of Hardships The Court also finds that the balance of hardships weighs in favor of Plaintiffs. In their opposition brief, Defendants represent that the infringing devices have recently been phased out by B2Pro, and that Defendants have begun marketing a new and improved umbrella reflector that does not infringe on the '146 patent. Opp'n to Injxn at 22. Defendants will not be harmed by a court order enjoining them from selling the infringing devices if they no longer plan on marketing those devices. iii. Public Interest Factor The public interest factor also favors Plaintiffs. Defendants argue that the public would be best served if the Court delayed the injunction to allow time for Defendants to implement a new, non-infringing substitute. Id. at 23. As it appears that Defendants have already implemented a noninfringing substitute, see id., the Court sees no reason to further delay the injunction. For these reasons and the reasons set forth above, Plaintiffs' motion for a permanent injunction is GRANTED. iv. Scope of the Injunction While the Court agrees that Defendants should be barred from making, using, renting, selling, and/or offering for sale the infringing devices, the other relief requested by Plaintiffs 19

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 20 of 21 goes too far, especially since molds and manufacturing equipment may be used for non-infringing purposes. If Defendants continue to infringe in violation of the injunction, Plaintiffs may seek relief from the Court. Accordingly, the Court declines to order the surrender and destruction of Defendants' infringing devices and molds and manufacturing equipment. III. CONCLUSION For the foregoing reasons, Defendants' motions for a new trial and judgment as a matter of law are DENIED. Plaintiffs' motion for enhanced damages is GRANTED in part and DENIED in part. The Court awards Plaintiffs enhanced damages in the amount of $900,000, but DENIES Plaintiffs' request for attorney's fees. The Court also GRANTS Plaintiffs' motion for a permanent injunction and enters the following injunction against Defendants: Defendants, their subsidiaries and related companies, their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with any or all of them who receive actual notice of this Order, are hereby permanently enjoined during the life of the '146 Patent, in the absence of a license, from making, using, renting, selling, or offering to sell the infringing B2Pro products, including any of the following products or colorable imitations thereof, in the United States and its territories: 1. 40 Focus Umbrella Reflectors; 2. 77 Focus Umbrella Reflectors; 3. 90 Focus Umbrella Reflectors; 4. 100 Focus Umbrella Reflectors; 5. 115 Focus Umbrella Reflectors; 6. 125 Focus Umbrella Reflectors; 20

Case 1:09-cv-09790-SC-M HD Document 477 Filed 12/18/13 Page 21 of 21 7. 140 Focus Umbrella Reflectors; 8. 180 Focus Umbrella Reflectors; 9. 220 Focus Umbrella Reflectors; 10. 300 Focus Umbrella Reflectors. The parties shall file supplemental briefs regarding the rate and amount of pre- and post-judgment interest within fourteen (14) days of the signature date of this Order. Those briefs shall not exceed seven (7) pages. IT IS SO ORDERED. December 18, 2013 UNITED STATES DISTRICT JUDGE 21