Case 5:16-cv-00179-RWS Document 291-19 Filed 08/28/18 Page 1 of 38 PageID #: 18730
`Case 5:16-cv-00179—RWS Document 291-19 Filed 08/28/18 Page 1 of 38 PageID #: 18730
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`EXHIBIT R
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`EXHIBIT R
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`Case 5:16-cv-00179-RWS Document 291-19 Filed 08/28/18 Page 2 of 38 PageID #: 18731
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` IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`Judge William J. Martínez
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`Civil Action No. 13-cv-0876-WJM-NYW
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`XY, LLC,
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`Plaintiff / Counterclaim Defendant,
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`v.
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`TRANS OVA GENETICS, LC,
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`Defendant / Counterclaim Plaintiff.
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`ORDER ON POST-TRIAL MOTIONS
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`Plaintiff and Counterclaim Defendant XY, LLC (“XY”) brought this case against
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`Defendant and Counterclaim Plaintiff Trans Ova Genetics, LC (“Trans Ova”) arising out
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`of disputes over a License Agreement which had permitted Trans Ova to use XY’s
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`patented technology. (ECF No. 301.) The Court held a three-week jury trial
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`commencing on January 25, 2016, and the jury rendered a verdict on February 12,
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`2016. (ECF Nos. 419, 461.)
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`The jury found that XY breached the License Agreement (the “Agreement”) and
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`the duty of good faith and fair dealing because it had not proven it had the right to
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`terminate the Agreement in November 2007, and awarded Trans Ova $528,000 in
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`damages for that breach. (ECF No. 461 at 1–2.) The jury also found that Trans Ova
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`had committed a material, uncured breach of the Agreement prior to April 16, 2009,
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`such that the Agreement terminated on that date, and awarded XY $1,481,000 in
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`damages for that breach. (Id.) The jury found that Trans Ova had infringed all claims
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`of the ten patents in suit, that Trans Ova’s infringement was willful, and that Trans Ova
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`had not proven that any of the patent claims was invalid or unenforceable. (Id. at 3–9.)
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`Consequently, the jury awarded XY $4,585,000 in patent infringement damages. (Id. at
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`9.) The jury also found that XY had unclean hands, barring claims for unjust
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`enrichment and injunctive relief. (Id.) Finally, the jury rejected Trans Ova’s recoupment
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`claim under the antitrust laws, finding that Trans Ova had not proven that the semen
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`sorting technology market was a relevant market or that XY had a specific intent to
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`monopolize that market. (Id. at 10–12.) The Court has yet to enter Final Judgment.
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`Before the Court are eight post-trial motions:
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`(1) Trans Ova’s Renewed Motion for Judgment as a Matter of Law Under Rule 50(b) or,
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`in the Alternative, Motion for a New Trial Under Rule 59(a) or, in the Alternative, Motion
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`to Alter or Amend a Judgment Under Rule 59(e) (“Breach Motion”) (ECF No. 473);
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`(2) Trans Ova’s Motion to Alter or Amend a Judgment Under Rule 59(e) (“Willful
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`Infringement Motion”) (ECF No. 477);
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`(3) Trans Ova’s Motion for a New Trial Under Rule 59(a) (“Relevant Market Motion”)
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`(ECF No. 479);
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`(4) Trans Ova’s Motion for a New Trial Under Rule 59(a) on the Issue of Invalidity
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`(“Invalidity Motion”) (ECF No. 480) (together with the Relevant Market Motion, “New
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`Trial Motions”);
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`(5) XY’s Motion to Declare this Case Exceptional Pursuant to 35 U.S.C. § 285 and to
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`Award Attorneys’ Fees (“Fee Motion”) (ECF No. 467);
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`(6) XY’s Motion for Award of Enhanced Damages for Patent Infringement Under
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`35 U.S.C. § 284 (“Damages Motion”) (ECF No. 468);
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`2
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`(7) XY’s Motion to Set an Ongoing Royalty Rate (“Royalty Motion”) (ECF No. 471); and
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`(8) XY’s Motion for Prejudgment Interest (“Interest Motion”) (ECF No. 472).
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`For the reasons set forth below, the Willful Infringement Motion is granted, the Royalty
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`Motion and the Interest Motion are granted in part, and the remaining motions are
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`denied.
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`I. TRANS OVA’S BREACH MOTION
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`Trans Ova’s Breach Motion seeks to reconcile the two breaches of contract
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`found in the jury’s Verdict with a ruling that XY’s breach rendered Trans Ova’s breach
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`legally inoperative. (ECF No. 473.) Trans Ova seeks judgment as a matter of law
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`under Federal Rule of Civil Procedure 50(b), or in the alternative, an amended
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`judgment or new trial under Rule 59. (Id.)
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`A.
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`Legal Standards
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`In evaluating a motion brought under Rule 50(b), the Court must examine all the
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`evidence admitted at trial, construe that evidence and the inferences from it in the light
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`most favorable to the non-moving party, and refrain from making credibility
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`determinations and weighing the evidence. See Tyler v. RE/MAX Mountain States, 232
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`F.3d 808, 812 (10th Cir. 2000). Judgment as a matter of law is appropriate “only if the
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`evidence points but one way and is susceptible to no reasonable inferences which may
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`support the opposing party’s position.” Finley v. United States, 82 F.3d 966, 968 (10th
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`Cir. 1996).
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`Alternatively, Defendant seeks a new trial under Rule 59(a)(1), which permits the
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`Court to order a new trial “for any of the reasons for which a new trial has heretofore
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`3
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`Case 5:16-cv-00179-RWS Document 291-19 Filed 08/28/18 Page 5 of 38 PageID #: 18734
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`been granted in an action at law in federal court.” Fed. R. Civ. P. 59(a)(1). Such a
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`motion can be granted based on any error so long as “the district court concludes the
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`‘claimed error substantially and adversely’ affected the party’s rights.” Henning v. Union
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`Pac. R.R. Co., 530 F.3d 1206, 1217 (10th Cir. 2008) (quoting Sanjuan v. IBP, Inc., 160
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`F.3d 1291, 1297 (10th Cir. 1998)).
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`Defendant’s next alternative request to amend the judgment is brought under
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`Rule 59(e). “Rule [59(e)] was adopted to make clear that the district court possesses
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`the power to rectify its own mistakes in the period immediately following the entry of
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`judgment.” White v. N.H. Dep’t of Emp’t Sec., 455 U.S. 445, 450 (1982) (internal
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`quotation marks omitted). Accordingly, the Court may amend the judgment in its
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`discretion where there has been an intervening change in the controlling law, new
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`evidence that was previously unavailable has come to light, or the Court sees a need to
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`correct clear error or prevent manifest injustice. Servants of Paraclete v. Does, 204
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`F.3d 1005, 1012 (10th Cir. 2000).
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`Where a jury’s verdict appears internally inconsistent, “[t]rial courts have a duty
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`to attempt to reconcile juries’ answers to special verdict questions in order to avoid the
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`need for retrials.” Palmer v. City of Monticello, 31 F.3d 1499, 1505 (10th Cir. 1994)
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`(citing Gallick v. Baltimore & Ohio R.R. Co., 372 U.S. 108, 119 (1963)). The obligation
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`to harmonize the jury’s findings if possible arises from the Seventh Amendment. See
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`Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 364 (1962). “If
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`there is any view of the case which makes the answers consistent, the case must be
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`resolved in that way.” Palmer, 31 F.3d at 1505. The Court may find fatal inconsistency
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`4
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`Case 5:16-cv-00179-RWS Document 291-19 Filed 08/28/18 Page 6 of 38 PageID #: 18735
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`only where the verdict is completely irreconcilable. Diamond Shamrock Corp. v. Zinke
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`& Trumbo, Ltd., 791 F.2d 1416, 1424–25 (10th Cir. 1986). “In determining whether
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`there is inconsistency in the jury’s findings, the findings are to be construed in the light
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`of the surrounding circumstances and in connection with the pleadings, instructions,
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`and issues submitted.” Garcia v. Salt Lake Cnty., 768 F.2d 303, 309 n.7 (10th Cir.
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`1985) (citing 9 C. Wright & A. Miller, Fed. Prac. & Proc. Civ. § 2510 (1971)); see also A.
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`Miller, Fed. Prac. & Proc. Civ. §§ 2504.1, 2510 (3d ed., updated Apr. 2015).
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`B.
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`Analysis
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`Trans Ova argues that the jury’s Verdict, which found breaches of contract by
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`both parties and assessed damages against each party, was inconsistent because
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`Trans Ova’s duties under the Agreement should have been deemed suspended after
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`XY’s material breach. (ECF No. 473.) Trans Ova contends that, therefore, the jury’s
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`finding that Trans Ova materially breached the Agreement is “legally inoperative,” and
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`that the Court should strike the jury’s award of contract damages to XY and hold that
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`the Agreement did not terminate, but remained in effect. (Id.) Consequently, Trans
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`Ova argues that the Court should strike the jury’s award of infringement damages to
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`XY, because Trans Ova could not have infringed while under a valid license, and that
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`Trans Ova’s contract damages should be increased due to the jury’s “erroneous
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`assumption” that the Agreement terminated in 2009. (Id. at 10–13.)
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`These arguments are all premised on the preliminary question of whether XY’s
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`breach was material. This is so because, as the jury was instructed, “a material breach
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`by one party excuses performance by the other party to the contract.” (Jury Instructions
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`5
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`(ECF Nos. 455, 456, 457) p. 30.) XY disputes whether its breach was material, and, as
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`both parties recognize, the Verdict Form did not require the jury to make that
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`determination.1 (See ECF No. 461 at 1, 2.)
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`Colorado courts have adopted the analysis in the Restatement (Second) of
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`Contracts in determining whether a breach of contract is material. DBA Enters., Inc. v.
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`Findlay, 923 P.2d 298, 301 (Colo. App. 1996) (citing Converse v. Zinke, 635 P.2d 882,
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`887 (Colo. 1981)). The Restatement provides the following factors to be considered in
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`determining materiality of a breach:
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`(a)
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`(b)
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`(c)
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`(d)
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`(e)
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`the extent to which the injured party will be deprived
`of the benefit which he reasonably expected;
`the extent to which the injured party can be
`adequately compensated for the part of that benefit of
`which he will be deprived;
`the extent to which the party failing to perform or to
`offer to perform will suffer forfeiture;
`the likelihood that the party failing to perform or to
`offer to perform will cure his failure, taking account of
`all the circumstances including any reasonable
`assurances;
`the extent to which the behavior of the party failing to
`perform or to offer to perform comports with
`standards of good faith and fair dealing.
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`Restatement (Second) of Contracts § 241 (1981). “Whether a breach is material is a
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`question of fact. A material term goes to the root of the matter or essence of the
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`1 XY also argues that, by failing to object to the absence of the word “material” in Verdict
`Form Question 5 regarding XY’s breach, Trans Ova has waived such objection and cannot now
`seek relief on this issue. (ECF No. 486 at 8–10.) The Court disagrees for two reasons. First,
`while Trans Ova did not explicitly object to the wording of Question 5, Trans Ova did raise the
`issue of a potential material breach by XY and consequent suspension of Trans Ova’s duties
`under the Agreement, both at the charging conference and after the Verdict was read. (See
`Trial Transcript (“Tr.”) at 3343, 3564.) Second, an allegedly inconsistent verdict may be
`challenged after trial without prior objection or Rule 50(a) Motion on the issue. See Garcia, 768
`F.2d at 309 n.7. Thus, this issue is properly before the Court on Trans Ova’s post-trial Breach
`Motion.
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`6
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`contract.” Coors v. Sec. Life of Denver Ins. Co., 112 P.3d 59, 64 (Colo. 2005) (citations
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`omitted).
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`Considering the evidence presented at trial about the Agreement at issue here,
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`and the jury’s determination that XY breached the Agreement and its duty of good faith
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`and fair dealing by attempting to terminate the Agreement, the Court finds that a
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`reasonable jury must have concluded that XY’s breach was necessarily material. By
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`improperly treating the Agreement as terminated, XY denied Trans Ova its legal
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`authorization to continue to practice its patents, which the evidence showed was the
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`essence of the Agreement from Trans Ova’s perspective. XY’s actions thus deprived
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`Trans Ova of the benefit it reasonably expected from the Agreement, and as the jury
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`found, thereby breached the duty of good faith and fair dealing. See Restatement
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`(Second) of Contracts § 241(a), (e). (See also ECF No. 461 at 2.) The Court
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`concludes that, under Colorado law, XY’s attempted termination of the Agreement
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`constitutes a material breach.
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`Trans Ova argues that, if XY’s breach was material, Trans Ova’s duties under
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`the Agreement were thereafter suspended, invalidating the jury’s finding that Trans Ova
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`breached the Agreement. However, Trans Ova assumes that XY’s breach must have
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`occurred first. The Verdict need not be read that way. In Question 1, the jury found
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`that XY had failed to prove that it had the right to terminate the Agreement in November
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`2007, and in Question 5, the jury found that XY’s attempt to terminate the Agreement
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`breached both the Agreement and the duty of good faith and fair dealing. (ECF No.
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`461 at 1–2.) In Question 2, the jury found that Trans Ova materially breached the
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`Agreement “at any time before April 16, 2009, and failed to cure the breach by that
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`7
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`date.” (Id. at 1.) A plain reading of the Verdict permits two readings: Trans Ova’s
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`breach may have occurred either before or after XY’s breach, as long as it occurred
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`prior to April 16, 2009.
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`The Court further notes that the jury was instructed as to the effect of a material
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`breach on the other party’s contractual duties. (Jury Instructions p. 30.) The Court
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`must presume that the jury followed its instructions. See Weeks v. Angelone, 528 U.S.
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`225, 234 (2000). Since the jury awarded XY damages for Trans Ova’s breach, the jury
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`must have concluded that such breach was not excused by any prior material breach by
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`XY. Accordingly, the Court concludes that the Verdict can be harmonized by finding
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`that Trans Ova’s material breach predated XY’s, but it was not cured prior to April 16,
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`2009. Cf. Palmer, 31 F.3d at 1505.
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`Trans Ova objects to this interpretation, arguing that “there is zero evidence
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`supporting any such hypothetical finding. On the contrary, all the evidence of record
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`points to XY as having breached the License first.” (ECF No. 490 at 6.) The Court
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`disagrees; the evidence adduced at trial supports this interpretation of the jury’s
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`findings. For example, XY presented evidence that Trans Ova breached the
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`Agreement by underpaying royalties for years prior to XY’s breach, due to Trans Ova’s
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`erroneous belief that the Agreement was modified after an oral agreement with Dr.
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`Mervyn Jacobson. (See Tr. at 1280–85.) XY also presented evidence that, prior to
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`November 2007, Trans Ova developed reverse sort protocols which constitued
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`improvements to XY’s patented technology, but did not disclose them or grant them
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`back to XY pursuant to the Agreement. (Id. at 571–76.) Moreover, the evidence at trial
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`showed that XY was not aware of any of these breaches of the Agreement until after it
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`8
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`began legal proceedings in 2012. As such, these breaches by Trans Ova did not
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`excuse XY’s breach in 2007, and were within the statute of limitations for XY’s breach
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`of contract claim. (See ECF No. 267 (holding that XY’s breach of contract claim is
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`barred to the extent it accrued before March 6, 2009); Jury Instructions p. 29
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`(instructing the jury as to the discovery rule for accrual).)
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`Trans Ova also argues that, if the Court interprets the verdict by finding that
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`Trans Ova breached the Agreement prior to November 2007 and the breach was
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`curable under the terms of the Agreement § 5.1.2, that breach could not have caused
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`the Agreement to terminate because the Agreement provides for notice and an
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`opportunity to cure. (ECF No. 490 at 7–8.) This argument improperly conflates the
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`Termination provision and Renewal provision of the Agreement. Section 5.1.2 of the
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`Agreement gives XY the right to terminate the Agreement upon written notice of a
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`breach and after a thirty-day cure period, without waiting for the natural end of the
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`Agreement on April 16, 2009; in contrast, § 2.4 of the Agreement provides that the
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`Agreement will automatically renew for an additional five-year period “[p]rovided that the
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`Licensee is not in material breach.” (See Trial Ex. 17.) The Court agrees that under
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`§ 5.1.2, XY would not have been authorized to terminate the Agreement based on
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`either of the curable breaches cited above without providing notice and an opportunity
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`to cure. But XY’s inability to terminate the Agreement early does not contractually
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`preclude Trans Ova’s uncured, material breaches from causing the Agreement to fail to
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`automatically renew under § 2.4. The Court therefore rejects Trans Ova’s argument
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`that the lack of prior notice necessarily means that the Agreement must have
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`automatically renewed.
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`9
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`The Court finds that the Verdict can be harmonized by interpreting the jury’s
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`findings as follows: Trans Ova materially breached the Agreement by, inter alia,
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`underpaying royalties, or failing to disclose and grant back to XY certain technology
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`improvements, or both, prior to November 2007; XY materially breached the Agreement
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`by improperly attempting to terminate it in November 2007; and both parties are entitled
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`to damages for those breaches of contract, as awarded in the Verdict. (See ECF No.
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`461 at 1–2.) Because the amount of Trans Ova’s damages award was smaller than
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`XY’s, the Court will treat Trans Ova’s damages as an offset to the damages awarded to
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`XY, and enter judgment for XY in the amount of $953,000.
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`As the Court has found that the jury properly determined that the Agreement
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`terminated on April 16, 2009, the Court rejects Trans Ova’s argument that it is entitled
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`to additional damages due to any subsequent breaches of the Agreement after that
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`date. (See ECF No. 473 at 12–13.)
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`In sum, the Court finds no clear error or fatal inconsistency in the Verdict that
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`warrants judgment as a matter of law under Rule 50(b) or post-trial relief under Rule 59.
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`Defendant’s Breach Motion is therefore denied in its entirety.
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`II. TRANS OVA’S WILLFUL INFRINGEMENT MOTION
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`Trans Ova’s Willful Infringement Motion seeks relief under Rule 59(e) based on
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`the jury’s finding, “by clear and convincing evidence[,] that Trans Ova’s infringement
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`was willful.” (ECF No. 461 at 3.) Rule 59(e) permits the Court to correct manifest or
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`clear legal error. Servants of Paraclete, 204 F.3d at 1012.
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`As a preliminary matter, XY contests whether Trans Ova may properly seek this
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`10
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`relief under Rule 59(e), because Trans Ova did not seek such relief in its motion under
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`Rule 50(a) during trial. (ECF No. 488 at 3–4.) The Court disagrees that the relief
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`sought should have been brought as a Rule 50 motion. As Trans Ova clarifies in its
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`Reply in support of the Willful Infringement Motion, Trans Ova’s argument is not a
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`challenge to the sufficiency of XY’s evidence at trial, but rather an argument that the
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`jury’s willful infringement finding was clearly erroneous as a matter of law. (ECF No.
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`495 at 1–2.) As discussed below, the analysis of willful infringement requires an
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`objective determination of the reasonableness of Trans Ova’s defenses, which could
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`not have been performed when Trans Ova made its Rule 50(a) Motion after the close of
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`XY’s case in chief. The Court therefore properly considers Trans Ova’s Willful
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`Infringement Motion under Rule 59(e).
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`Willful infringement of a patent requires a two-part showing: (1) “the infringer
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`acted despite an objectively high likelihood that its actions constitued infringement of a
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`valid patent,” and (2) that objectively high likelihood of infringement “was either known
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`or so obvious that it should have been known to the accused infringer.” In re Seagate
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`Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (referring to first prong as “a showing
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`of objective recklessness”). The first, “‘objective’ prong of Seagate tends not to be met
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`where an accused infringer relies on a reasonable defense to a charge of infringement.”
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`Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1319
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`(Fed. Cir. 2010); see also DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567
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`F.3d 1314, 1336–37 (Fed. Cir. 2009) (affirming district court’s entry of judgment as a
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`matter of law of no willfulness where defendant “presented a substantial question” of
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`noninfringement, despite jury’s finding of infringement).
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`11
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`In 2015, the Federal Circuit held that, while the factual questions of willful
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`infringement may properly be sent to the jury, the district court reviews the question of
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`objective recklessness de novo as a matter of law. Bard Peripheral Vascular, Inc. v.
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`W.L. Gore & Assocs., Inc., 776 F.3d 837, 844 (Fed. Cir. 2015) (“the judge remains the
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`final arbiter of whether the defense was reasonable”), cert. denied, 136 S. Ct. 189
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`(2015); contra Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1354 (Fed. Cir.
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`1998) (holding previously that “[w]hether infringement was willful is a question of fact,
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`and we will not reverse a jury determination on this issue unless it was unsupported by
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`substantial evidence”). Under Bard, on review of Trans Ova’s Willful Infringement
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`Motion, the Court must determine de novo whether the evidence at trial supports the
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`jury’s finding that Trans Ova’s invalidity defenses were objectively unreasonable, or
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`alternatively, whether they presented a “substantial question.” See DePuy Spine, 567
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`F.3d at 1336.
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`Trans Ova presents three arguments that it was not objectively reckless:
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`(1) Trans Ova acted in good faith in believing the Agreement was still in effect;
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`(2) Trans Ova reasonably relied on the advice of counsel as to the invalidity of the four
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`nozzle patents; and (3) Trans Ova’s evidence of invalidity as to all ten of the patents-in-
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`suit presented a substantial question of invalidity. (ECF No. 477 at 4–8.) Because the
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`Court is persuaded by Trans Ova’s third argument, it need not discuss the other two.
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`At trial, Trans Ova presented evidence of invalidity due to obviousness as to all
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`ten of the patents-in-suit, as well as anticipation evidence as to six of the ten patents.
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`The Court denied XY’s mid-trial Rule 50(a) Motion as to the majority of Trans Ova’s
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`12
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`Case 5:16-cv-00179-RWS Document 291-19 Filed 08/28/18 Page 14 of 38 PageID #: 18743
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`invalidity defenses, granting it only as to the anticipation of two of the patents. (ECF
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`No. 447 at 3.) In so ruling, the Court found that Trans Ova had presented sufficient
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`evidence for a reasonable jury to find in its favor on its claim that each of the patents-in-
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`suit was invalid as obvious. Trans Ova’s invalidity arguments, though ultimately found
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`unpersuasive by the jury, were supported by expert testimony from Dr. John Hasler and
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`Dr. J. Paul Robinson who opined as to each claim and each patent at issue.
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`XY argues that Trans Ova’s anticipation arguments were “hopelessly weak,” but
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`cites only the same evidence on which the Court relied to grant XY’s Rule 50(a) Motion
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`as to the ’687 and ’921 patents, without discussing Trans Ova’s evidence of anticipation
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`of the ’425, ’053, ’867, and ’860 patents that actually went to the jury. (See ECF No.
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`488 at 13.) XY also contends that Trans Ova’s obviousness defense was “objectively
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`unreasonable,” noting that “[e]xamples abound,” but cites only its argument made in its
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`Rule 50(a) Motion that Dr. Robinson failed to consider objective considerations of non-
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`obviousness—the same argument the Court rejected in denying XY’s Rule 50(a)
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`Motion. (Id. at 14.) XY also mentions that the Shrimpton patent was discussed during
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`prosecution of XY’s freezing patents; but, as the Court held in ruling on the Rule 50(a)
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`Motion, Trans Ova presented evidence that, while Shrimpton’s sex-sorting technology
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`was arguably inoperable, it would be obvious to combine the freezing component in
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`Shrimpton with the sex-sorting technology in the Seidel reference. (See id. at 13.)
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`Similarly, XY cites the Merton article, which was before the Patent Office on the in vitro
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`fertilization or “IVF” patents. (Id.) At trial, the parties presented evidence that the ’687
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`and ’921 patents were initially rejected by the patent examiner based on the Merton
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`article, which was only reversed based on a subsequent declaration by an XY
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`13
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`Case 5:16-cv-00179-RWS Document 291-19 Filed 08/28/18 Page 15 of 38 PageID #: 18744
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`employee, Dr. David Cran. (Tr. at 2281–85.) Dr. Hasler testified that Dr. Cran’s
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`declaration was biased due to his employment with XY, and the jury could have found
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`that these patents’ mixed history at least suggested a reasonable possibility of
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`invalidity. (Id. at 2285.) The Court finds none of these contentions persuasive in
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`demonstrating that Trans Ova was objectively reckless in relying on its invalidity
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`defense.
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`This finding is further supported by the proceedings brought with respect to the
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`’920 and ’425 patents before the Patent Trial and Appeal Board, which resulted in a
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`finding of invalidity as to the ’920 patent, and a hearing as to the possible invalidity of
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`the ’425 patent. (See ECF No. 411.) While this evidence was not before the jury, it
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`bolsters the Court’s present finding that Trans Ova’s invalidity defenses met the minimal
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`standard of objective reasonableness, at least as to some of XY’s patents. (Cf. ECF
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`No. 396 at 4.)
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`On review of the evidence presented at trial, the Court finds that Trans Ova’s
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`invalidity defense was not objectively unreasonable, and though the jury ultimately
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`rejected it, Trans Ova presented a substantial question of invalidity. Consequently,
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`Seagate’s objective recklessness prong has not been met. See Spine Solutions, 620
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`F.3d at 1319.
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`Ordinarily, the Court would be reticent to disturb a jury’s factual findings on a
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`post-trial motion. However, the Federal Circuit has made clear that the Court’s role in
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`reviewing willful infringement is to determine de novo whether the infringer was
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`objectively reckless in relying on its invalidity defense. See Bard, 776 F.3d at 844. The
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`Case 5:16-cv-00179-RWS Document 291-19 Filed 08/28/18 Page 16 of 38 PageID #: 18745
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`Court finds that Trans Ova’s invalidity defense was objectively reasonable, as it
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`presented a substantial question of invalidity, and therefore Trans Ova cannot have
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`willfully infringed under the Federal Circuit’s definition of that term. See id.
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`The Court therefore grants Trans Ova’s Willful Infringement Motion, and must
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`vacate the jury’s finding that Trans Ova’s infringement was willful. (See ECF No. 461
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`at 3.)
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`III. TRANS OVA’S NEW TRIAL MOTIONS
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`Trans Ova brings two New Trial Motions: (1) the Relevant Market Motion, which
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`challenges the jury’s finding that the sperm sorting technology market was not a
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`relevant market; and (2) the Invalidity Motion, which challenges the jury’s rejection of
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`Trans Ova’s invalidity defense as to all of the claims of each of the patents-in-suit.
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`(ECF Nos. 479, 480.) Trans Ova contends that these findings were against the weight
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`of the evidence at trial, and that therefore a new trial is warranted on each of these
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`issues.
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`“If ‘a new trial motion asserts that the jury verdict is not supported by the
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`evidence, the verdict must stand unless it is clearly, decidedly, or overwhelmingly
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`against the weight of the evidence.’” M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d
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`753, 762 (10th Cir. 2009) (quoting Anaeme v. Diagnostek, Inc., 164 F.3d 1275, 1284
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`(10th Cir. 1999)).
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`Each of Trans Ova’s New Trial Motions painstakingly recites the evidence Trans
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`Ova presented in its favor and the reasons why the contrary evidence presented by XY
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`was not credible, in order to support Trans Ova’s argument that no reasonable jury
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`Case 5:16-cv-00179-RWS Document 291-19 Filed 08/28/18 Page 17 of 38 PageID #: 18746
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`could have found as this jury did in its Verdict. The Court finds that both New Trial
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`Motions fail to meet the high burden under Rule 59(a) for a new trial, as the Verdict on
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`both of these issues was not overwhelmingly against the weight of the evidence.
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`In the Relevant Market Motion, Trans Ova principally argues that XY’s expert, Dr.
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`Barry Harris, was not credible when he testified that the sorting technology market is
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`not a separate relevant market, but is part of the overall market for both conventional
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`and sorted semen. (ECF No. 479 at 6–7.) Dr. Harris testified that cross-elasticity of
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`demand between conventional and sorted semen, as well as substitution rates and
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`pricing competition between the two, suggest that there is an overall semen market as
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`opposed to a separate market for sorted semen, and that the technology market is an
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`“upstream” component of the “downstream” product market. (See Tr. at 2808–10.)
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`Trans Ova disputes this testimony, arguing that it is not credible in the face of the
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`evidence that Inguran sells sorted semen at two to three times the price of conventional
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`semen, and that the technology market must necessarily have been a relevant market
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`because no competing semen sorting technology exists. (ECF No. 479 at 4–7.)
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`As to the Invalidity Motion, Trans Ova reiterates the testimony of its patent
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`experts, Dr. Hasler and Dr. Robinson, and argues that each of the patents-in-suit is
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`obvious or anticipated. (ECF No. 480.) Trans Ova then discusses the contrary
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`testimony of XY’s expert, Dr. James Wood, contending that he lacks relevant expertise
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`to opine on validity of the patents, and that his analysis was flawed because he misread
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`many of the prior art references. (Id. at 10–14.) Trans Ova does not explain why it
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`stipulated to the Court qualifying Dr. Wood as an expert in the areas of flow cytometry
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`technology, cellular biology, and the subject matter of the asserted patents. (See Tr. at
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`727.) Trans Ova’s arguments point to a classic battle of the experts with respect to
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`invalidity opinions, rather than an indication that the overwhelming weight of the
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`evidence leans but one way.
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`In both New Trial Motions, Trans Ova asks the Court to reweigh the evidence
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`and reevaluate Dr. Harris’s and Dr. Wood’s credibility. But the jury holds “the exclusive
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`function of appraising credibility, determining the weight to be given to the testimony,
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`drawing inferences from the facts established, resolving conflicts in the evidence, and
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`reaching ultimate conclusions of fact.” United Int’l Holdings, Inc. v. Wharf (Holdings)
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`Ltd., 210 F.3d 1207, 1227 (10th Cir. 2000) (internal quotation marks omitted). The jury
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`was presented with competing evidence from both parties on invalidity and the relevant
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`market, and Trans Ova has failed to show that the evidence that favored XY was
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`“clearly, decidedly, or overwhelmingly” outweighed by the evidence that favored Trans
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`Ova. M.D. Mark, 565 F.3d at 762.
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`The Court concludes that Trans Ova has failed to meet the high burden under
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`Rule 59(a) to warrant a new trial on the issues of relevant market and patent invalidity.
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`Accordingly, the Court denies both New Trial Motions.
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`IV. XY’S FEE MOTION
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`XY’s Fee Motion requests that the Court declare this case “exceptional” pursuant
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`to 35 U.S.C. § 285, and award XY attorneys’ fees for the patent portion of the case.
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`(ECF No. 467.)
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`Section 285 states that “[t]he court in exceptional cases may award reasonable
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`attorney fees to the prevailing party.” The Supreme Court has clarified that “an
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`Case 5:16-cv-00179-RWS Document 291-19 Filed 08/28/18 Page 19 of 38 PageID #: 18748
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`‘exceptional’ case is simply one that stands out from others with respect to the
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`substantive strength of a party’s litigating position (considering both the governing law
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`and the facts of the case) or the unreasonable manner in which the case was litigated.”
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`Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014). The
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`question of whether a case is exceptional is evaluated case-by-case, “considering the
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`totality of the circumstances,” and is within the trial court’s discretion. Id.
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`XY raises three arguments that this case is exceptional: (1