Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 1 of 15
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`
`
`
`
`ALMONDNET, INC.,
`
`
`Plaintiff,
`
`
`
`v.
`
`
`AMAZON.COM, INC., AMAZON.COM
`SERVICES LLC, and AMAZON WEB
`SERVICES, INC.,
`
`
`Defendants.
`
`
`
`
`Civil Action No. 6:21-cv-00898-ADA
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`PLAINTIFF ALMONDNET, INC.’S OPPOSED MOTION TO
`ENTER FINAL JUDGMENT
`
`
` 0
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 2 of 15
`
`TABLE OF CONTENTS
`
`I.
`
`THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST TO FULLY
`COMPENSATE ALMONDNET............................................................................................1
`
`II. THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST AT THE PRIME
`RATE COMPOUNDED QUARTERLY ................................................................................3
`
`III. THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST FROM THE DATE
`OF INFRINGEMENT ............................................................................................................8
`
`IV. CONCLUSION .......................................................................................................................9
`
`
`
`
`
`
` i
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 3 of 15
`
`TABLE OF AUTHORITIES
`
`Cases
`
`A.C. Aukerman Co. v. R.L. Chaides Const. Co.,
`960 F.2d 1020 (Fed. Cir. 1992) .................................................................................................. 2
`
`Alberti v. Klevenhagen,
`896 F.2d 927 (5th Cir. 1990) .................................................................................................. 3, 7
`
`Alberti v. Klevenhagen,
`903 F.2d 352 (5th Cir. 1990) ...................................................................................................... 3
`
`Bio-Rad Labs., Inc. v. Nicolet Instrument Corp.,
`807 F.2d 964 (Fed. Cir. 1986) .................................................................................................... 8
`
`Comcast IP Holdings I LLC v. Sprint Commc'ns Co., L.P.,
`850 F.3d 1302 (Fed. Cir. 2017) .................................................................................................. 8
`
`Complaint of M/V Vulcan,
`553 F.2d 489 (5th Cir. 1977) ...................................................................................................... 8
`
`Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co.,
`No. 2:15-CV-1202-WCB, 2017 WL 2190055 (E.D. Tex. May 18, 2017) ................................. 7
`
`Forman v. Korean Air Lines Co.,
`84 F.3d 446 (D.C. Cir. 1996) ...................................................................................................... 6
`
`Gen. Motors Corp. v. Devex Corp.,
`461 U.S. 648 (1983) ............................................................................................................ 1, 3, 8
`
`Gorenstein Enterprises, Inc. v. Quality Care-USA, Inc.,
`874 F.2d 431 (7th Cir. 1989) .............................................................................................. 3, 5, 7
`
`Hopwood v. State of Tex.,
`236 F.3d 256 (5th Cir. 2000) ...................................................................................................... 7
`
`Hopwood v. State of Tex.,
`999 F. Supp. 872 (W.D. Tex. 1998) ........................................................................................... 7
`
`Intellectual Ventures II LLC v. Great W. Cas. Co.,
`No. 6:18-CV-00299-JRG, 2020 WL 4815054 (E.D. Tex. Mar. 30, 2020) ................................. 3
`
`Invitrogen Corp. v. Biocrest Mfg., L.P.,
`No. A-01-CA-167-SS, 2006 WL 8435710 (W.D. Tex. Oct. 31, 2006) ...................................... 2
`
`Kaneka Corp. v. JBS Hair, Inc.,
`No. 3:10-CV-01430-P, 2013 WL 12123946 (N.D. Tex. Oct. 24, 2013) ................................ 3, 7
`
` ii
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 4 of 15
`
`Lummus Indus., Inc. v. D.M. & E. Corp.,
`862 F.2d 267 (Fed. Cir. 1988) .................................................................................................... 2
`
`NCS Multistage Inc. v. Nine Energy Service, Inc.,
`No. 6:20-cv-00277-ADA, 2023 WL 149071 (W.D. Tex. Jan. 9, 2023) ............................. 1, 3, 7
`
`Nickson Indus., Inc. v. Rol Mfg. Co.,
`847 F.2d 795 (Fed. Cir. 1988) .................................................................................................... 8
`
`Pavo Solutions LLC v. Kingston Technology Company, Inc.,
`2021 WL 1912392 (C.D. Cal. 2021) .......................................................................................... 6
`
`Probatter Sports, LLC v. Sports Tutor, Inc.,
`586 F. Supp. 3d 80 (D. Conn. 2022) ........................................................................................... 5
`
`SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prod., LLC,
`580 U.S. 328 (2017) .................................................................................................................... 2
`
`Solutran, Inc. v. U.S. Bancorp,
`No. 13CV02637SRNBRT, 2019 WL 405513 (D. Minn. Jan. 18, 2019) .................................... 6
`
`SSL Servs., LLC v. Citrix Sys., Inc.,
`769 F.3d 1073 (Fed. Cir. 2014) .............................................................................................. 1, 3
`
`Sunderland Marine Mut. Ins. Co. v. Weeks Marine Const. Co.,
`338 F.3d 1276 (11th Cir. 2003) .................................................................................................. 7
`
`Till v. SCS Credit Corp.,
`541 U.S. 465 (2004) .................................................................................................................... 4
`
`U.S. Philips Corp. v. Iwasaki Elec. Co., Ltd.,
`607 F. Supp. 2d 470 (S.D.N.Y. 2009) ........................................................................................ 6
`
`Uniroyal, Inc. v. RudkinWiley Corp.,
`939 F.2d 1540 (Fed. Cir. 1991) .................................................................................................. 5
`
`Verinata Health, Inc. v. Ariosa Diagnostics, Inc.,
`830 F.3d 1335 (Fed. Cir. 2016) .................................................................................................. 7
`
`Westerngeco LLC v. Ion Geophysical Corp.,
`953 F. Supp. 2d 731 (S.D. Tex. 2013) ........................................................................................ 4
`
`Statutes
`
`35 U.S.C. § 284 ............................................................................................................................... 1
`
`Rules
`
`Fed. R. Civ. P. 58 ............................................................................................................................ 1
`
` iii
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 5 of 15
`
`The jury’s damages award is not merely a finding that Defendants Amazon.com, Inc.,
`
`Amazon.com Services LLC, and Amazon Web Services, Inc. (collectively, “Defendants”) owe
`
`Plaintiff AlmondNet, Inc. (“AlmondNet”) $121.95 million. As set forth in the Court’s instructions
`
`to the jury, the damages award in the verdict must reflect what the Parties would have agreed to in
`
`a hypothetical negotiation taking place in August 2012. To fully restore AlmondNet to the position
`
`it would have been in if Defendants paid a reasonable royalty at the time of the hypothetical
`
`negotiation, fair compensation must include pre-judgment interest at the prime rate, compounded
`
`quarterly. Thus, pursuant to Fed. R. Civ. P. 58, AlmondNet requests the Court enter the
`
`accompanying Final Judgment in this case, adopting AlmondNet’s pre-judgment interest proposal.
`
`I.
`
`THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST TO FULLY
`COMPENSATE ALMONDNET
`
`After finding infringement, “the court shall award the claimant damages adequate to
`
`compensate for the infringement, ... together with interest and costs as fixed by the court.”
`
`35 U.S.C. § 284. Because prejudgment interest is typically “necessary to ensure that the patent
`
`owner is placed in as good a position as [it] would have been in had the infringer entered into a
`
`reasonable royalty agreement,” the Supreme Court has held that it “should ordinarily be awarded
`
`absent some justification for withholding such an award.” Gen. Motors Corp. v. Devex Corp.,
`
`461 U.S. 648, 655, 657 (1983). After all, “Congress’ overriding purpose” in enacting § 284 was to
`
`afford patent owners “complete compensation.” Id. at 655. Without prejudgment interest, the
`
`infringer gets “a windfall” and “an incentive to prolong litigation.” Id. at 655 n.10.
`
`
`
` “As this Court has recognized, ‘[t]he purpose of prejudgment interest is to place the
`
`patentee in as good a position as he would have been had the infringer paid a reasonable royalty
`
`rather than infringe.’” NCS Multistage Inc. v. Nine Energy Service, Inc., No. 6:20-cv-00277-ADA,
`
`2023 WL 149071, at *3 (W.D. Tex. Jan. 9, 2023); see also SSL Servs., LLC v. Citrix Sys., Inc.,
`
`769 F.3d 1073, 1094 (Fed. Cir. 2014). “Accordingly, prejudgment interest on a damages award is
`
`the rule, not the exception.” NCS Multistage, 2023 WL 149071, at *3.
`
` 1
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 6 of 15
`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 6 of 15
`
`PUBLIC VERSION
`
`Thereis novalidjustification for not awarding pre-judgmentinterest here. Defendants have
`
`benefited from using AlmondNet’s $121.95 million for eleven years, completely interest-free. To
`
`make AlmondNetwhole, this Court should award pre-judgmentinterest.
`
`In meet and confer discussions, Defendants have argued that AlmondNet’s delay in suing
`
`justifies denying pre-judgmentinterest. However, this argument is umproper because delay alone
`
`is insufficient to preclude the award of pre-judgmentinterest. See, e.g., Lummus Indus., Inc. v.
`
`D.M. & E. Corp., 862 F.2d 267, 275 (Fed. Cir. 1988) (“[A]bsent prejudice to the defendants, any
`
`delay by [plaintiff] does not support the denial of prejudgment interest.”). As noted by Lummus
`
`and this Court, arguments like those made by Defendants are akin to the laches defense. See id.;
`
`Invitrogen Corp. v. Biocrest Mfg., L.P., No. A-01-CA-167-SS, 2006 WL 8435710, at *9 (W.D.
`
`Tex. Oct. 31, 2006). At the time of those opinions, laches required a showing of wndue delay based
`
`on (a) proof that the plaintiff “delayed filing suit for an unreasonable and inexcusable length of
`
`time from the time the plaintiff knew or reasonably should have known” of Defendants’
`
`infringement, and (b) that the “delay operated to the prejudice or injury” of Defendants. See A.C.
`
`Aukerman Co. v. R.L. Chaides Const. Co., 960 F.2d 1020, 1032 (Fed. Cir. 1992), abrogated by
`
`SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prod., LLC, 580 U.S. 328 (2017).
`
`The evidence shows that AlmondNet placed Amazon on notice of infringement of the
`
`asserted °139 and ’639 patents around July 2019, and reasonably commenced suit on August 27,
`
`2021. See,¢.g.,
`
`MM «~(Defendants have presented no evidence that AlmondNet knew of Amazon’s
`
`infringementat the time of the hypothetical negotiation (August 2012) or even at the start of the
`
`damages period (August 27, 2015).
`
`Defendants have shown noprejudice or injury suffered due to this delay. They may argue
`
`that they could have mitigated damages by adopting non-infringing alternatives. However,
`
`AlmondNet’s infringement expert testified that Amazon identified no viable non-infringing
`
`alternatives. 6/10/24 Trial Tr. 277:20-278:15. There was no contrary evidence at trial—neither
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 7 of 15
`
`Amazon’s counsel nor any of its fact and expert witnesses even alleged that any non-infringing
`
`alternative purportedly exists. Thus, there has been no undue delay.
`
`To avoid giving Defendants a windfall for damages, pre-judgment interest should be
`
`awarded to provide complete compensation to AlmondNet. There is no justification for
`
`withholding such an award. See Gen. Motors, 461 U.S. at 655, 657.
`
`II.
`
`THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST AT THE PRIME
`RATE COMPOUNDED QUARTERLY
`
`“As this Court has recognized, ‘[t]he purpose of prejudgment interest is to place the
`
`patentee in as good a position as he would have been had the infringer paid a reasonable royalty
`
`rather than infringe.’” NCS Multistage, 2023 WL 149071, at *3, quoting SSL Servs., 769 F.3d at
`
`1094. The Fifth Circuit has held that “the appropriate rate of interest to be used in computing a
`
`delay in payment adjustment is the cost of borrowing money, the prime rate.” Alberti v.
`
`Klevenhagen, 896 F.2d 927, 938 (5th Cir. 1990) (emphasis added) (noting also that “[w]hat should
`
`be taken into account in choosing an interest rate is the fact that capital…carries a cost. And in
`
`economic terms that cost is the price of borrowed… capital.”), vacated in part on other grounds,
`
`903 F.2d 352 (5th Cir. 1990); see also Gorenstein Enterprises, Inc. v. Quality Care-USA, Inc., 874
`
`F.2d 431, 436 (7th Cir. 1989) (Posner, J.) (adopting the prime rate as the starting point).
`
`
`
`Quarterly compounding is appropriate, as recognized by this Court. See, e.g., NCS
`
`Multistage, 2023 WL 149071, at *3. Other district courts in Texas have also awarded quarterly
`
`compounding. See, e.g., Intellectual Ventures II LLC v. Great W. Cas. Co., No. 6:18-CV-00299-
`
`JRG, 2020 WL 4815054, at *2 (E.D. Tex. Mar. 30, 2020) (awarding “prejudgment interest,
`
`calculated at the prime rate, compounded quarterly, from the date of the infringement”); Kaneka
`
`Corp. v. JBS Hair, Inc., No. 3:10-CV-01430-P, 2013 WL 12123946, at *6 (N.D. Tex. Oct. 24,
`
`2013).
`
`To put AlmondNet in as good a position as it would have been in had Amazon paid a
`
`reasonable royalty, the pre-judgment interest rate should approximate the cost to AlmondNet of
`
`borrowing money during relevant period. As confirmed by Mr. Jim W. Bergman, AlmondNet’s
`
` 3
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 8 of 15
`
`damages expert, the prime rate is far closer to the rates that would have been available to
`
`AlmondNet than the rate on 52-week Treasury bills (hereinafter “the T-Bill rate”). See Ex. A
`
`(“Bergman Decl.”) ¶¶ 15-16. The uncontroverted evidence at trial shows that in 2013, AlmondNet
`
`believed it was on the verge of collapse and had exhausted its funds, and as a result was forced to
`
`agree to a license with Google that was far below fair value. See 6/10/24 Trial Tr. 94:2-10 (“Q. …
`
`Was there a point before these agreements where you thought it was all going to collapse? A. In
`
`2013. Q. What was it that happened in 2013? A. We [ran] out of funds.”). AlmondNet plowed the
`
`proceeds from the Google deal back into its operating companies and its finances improved in the
`
`short term. See 6/10/24 Trial Tr. at 97:4-98:8. However, from 2012 to 2021 AlmondNet, on
`
`average, still
`
`. In this time period, it
`
`
`
`. See
`
` Accordingly, the
`
`prime rate is a conservative estimate of what AlmondNet’s borrowing cost would have been; it is
`
`highly unlikely that lenders would have even given AlmondNet the prime rate, with its difficult
`
`financial condition. See Bergman Decl. ¶¶ 6, 15.
`
`The Supreme Court has stated that the prime rate “reflects the financial market’s estimate
`
`of the amount a commercial bank should charge a creditworthy commercial borrower to
`
`compensate for the opportunity costs of the loan, the risk of inflation, and the relatively slight risk
`
`of default.” Till v. SCS Credit Corp., 541 U.S. 465, 479 (2004). Courts have considered the prime
`
`rate, compounded quarterly, as “a conservative, middle-of-the road approach that takes into
`
`account normal market fluctuations.” Westerngeco LLC v. Ion Geophysical Corp., 953 F. Supp.
`
`2d 731, 759 (S.D. Tex. 2013).
`
`Indeed, as noted above, the prime rate assumes a “relatively slight risk of default.” Till,
`
`541 U.S. at 479. But as also noted above, AlmondNet
`
`
`
`through most of the pre-judgment interest period, and investors would have likely viewed
`
`AlmondNet as having a substantial risk of default during the relevant time period. See Bergman
`
`Decl. ¶ 6. The prime rate thus represents a highly optimistic measure of what AlmondNet could
`
`possibly have expected to pay if it had sought to borrow $121.95 million in 2012 or 2015; more
`
` 4
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 9 of 15
`
`realistically, AlmondNet would have needed to pay a far higher rate.1 The fact that AlmondNet
`
`did not in fact seek to borrow at all during this period is not relevant; the Federal Circuit does not
`
`require “a patentee [to] demonstrate that it borrowed at the prime rate in order to be entitled to
`
`prejudgment interest at that rate.” Uniroyal, Inc. v. RudkinWiley Corp., 939 F.2d 1540, 1545 (Fed.
`
`Cir. 1991) (affirming award of interest at the prime rate based in part on evidence of the patentee’s
`
`“poor financial condition”).2 AlmondNet’s evidence of its financial condition provides more than
`
`enough evidence for this Court to conservatively award AlmondNet the prime rate. See Bergman
`
`Decl. ¶ 15.
`
`Defendants argue that if any interest is awarded, it should be at the rate on T-Bills.
`
`However, the T-Bill rate is inconsistent with the record in this case, as it does not accurately reflect
`
`the much higher costs of borrowing that all companies, much less companies in financial distress
`
`like AlmondNet, would have faced due to the significant risk of default. See Probatter Sports, LLC
`
`v. Sports Tutor, Inc., 586 F. Supp. 3d 80, 122 (D. Conn. 2022) (finding that evidence of poor
`
`financial condition meant the plaintiff had to borrow money at rates much higher than the T-Bill
`
`rate, making the T-Bill rate inadequate for proper compensation); see also Gorenstein, 874 F.2d
`
`at 436 (Posner, J.) (cautioning “district judges... against the danger of setting prejudgment interest
`
`
`
` 1
`
` As explained by Mr. Jim Bergman, the prime rate provides an extremely conservative estimate
`of AlmondNet’s borrowing costs. See Bergman Decl. ¶¶ 5-16. Specifically, during the majority
`of the prejudgment interest period, AlmondNet’s credit rating “would be no higher than the
`highest non-investment debt rating of Moody’s, Standard and Poor’s, and Fitch,” so any debt
`issued by AlmondNet would have been seen as “below investment grade.” See Bergman Decl. ¶¶
`7, 11 (citing https://fred.stlouisfed.org/series/BAMLH0A0HYM2EY). The yield of below
`investment grade indices, such as the ICE BofA US High Yield Index Effective Yield, would
`have thus been a more accurate depiction of AlmondNet’s borrowing costs than the prime rate,
`and the below-investment-grade yield was on average several percentage points higher than the
`prime rate. See id. ¶ 7, 15-16. Accordingly, the prime rate is a conservative estimate of the rate
`necessary fully restore AlmondNet to the position it would have been in if Defendants paid a
`reasonable royalty at the time of the hypothetical negotiation. See id. ¶ 15.
`2 The Court in Uniroyal also considered whether the litigation was “of a protracted and
`comprehensive nature,” which this case certainty is. This case was filed on August 27, 2021.
`Additionally, Defendants raised extensive non-infringement and invalidity arguments, all of
`which the jury rejected. See 939 F.2d at 1541-43. Defendants have also filed numerous inter
`partes reviews. See Mirzaie Decl. ¶ 6.
`
` 5
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 10 of 15
`
`rates too low by neglecting the risk, often nontrivial, of default,” and further rejecting “the rate on
`
`52-week Treasury bills” as being “too low, because there is no default risk with Treasury bills”).
`
`As Mr. Bergman also explains, the T-Bill “is backed by the U.S. government and is considered to
`
`have zero default risk” and “do not provide an accurate estimation of AlmondNet’s effective
`
`borrowing costs.” Bergman Decl. ¶¶ 13-14.
`
`Moreover, the T-Bill rate would be especially unfair to AlmondNet in this case, as the rates
`
`on 52-week Treasury bills were artificially depressed to near zero due to expansive Federal
`
`Reserve monetary policy for lengthy periods of the pre-judgment interest window. See generally
`
`Bergman Decl. ¶ 13 (citing https://fred.stlouisfed.org/series/DGS1 (showing that the T-Bill rate
`
`was below 1% for approximately 7 years during the relevant timeframe, and below 3% for the
`
`entire period other than mid-2022 through present)). Accordingly, courts have recognized that the
`
`recent abnormal lows in T-Bill rates would “significantly undercompensate” plaintiffs if those
`
`rates were used to determine prejudgment interest. See Solutran, Inc. v. U.S. Bancorp, No.
`
`13CV02637SRNBRT, 2019 WL 405513, at *29 (D. Minn. Jan. 18, 2019) (“[Defendants’]
`
`proposed 1-year Treasury Bill rate would significantly undercompensate [plaintiff], as those rates
`
`hovered around zero until very recently.”); Pavo Solutions LLC v. Kingston Technology Company,
`
`Inc., 2021 WL 1912392, *2 (C.D. Cal. 2021) (awarding the prime rate, and rejecting the
`
`“historic[ally] low” T-Bill rate as failing to put plaintiff “in the position it would have been had
`
`Defendant entered into a reasonable royalty rate agreement”).
`
`In contrast, the prime rate is a market-driven approach, reflecting the true cost of money in
`
`the market for commercial borrowers and providing fairer compensation to AlmondNet. See, e.g.,
`
`Forman v. Korean Air Lines Co., 84 F.3d 446, 450 (D.C. Cir. 1996) (“[T]he prime rate is not
`
`merely as appropriate as the Treasury Bill rate, but more appropriate….”); U.S. Philips Corp. v.
`
`Iwasaki Elec. Co., Ltd., 607 F. Supp. 2d 470, 483 (S.D.N.Y. 2009) (noting that awarding interest
`
`at the prime rate, compounded quarterly, “better approximates a corporate borrower’s costs of
`
`funds” than the Treasury Bill rate, which represents the U.S. Government’s borrowing rate).
`
` 6
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 11 of 15
`
`Accordingly, the Fifth Circuit has endorsed the prime rate as the appropriate measure for
`
`calculating pre-judgment interest. Alberti, 896 F.2d at 938 (“[T]he appropriate rate of interest to
`
`be used in computing a delay in payment adjustment is the cost of borrowing money, the prime
`
`rate.”) (emphasis added).3 This approach aligns with the approach in other circuits. See, e.g.,
`
`Gorenstein, 874 F.2d at 436 (Posner, J.) (adopting the prime rate for prejudgment interest in part
`
`because, unlike the T-Bill rate, the prime rate accounts for some “default risk” on the part of the
`
`borrower); Sunderland Marine Mut. Ins. Co. v. Weeks Marine Const. Co., 338 F.3d 1276, 1280
`
`(11th Cir. 2003) (“The rate of pre-judgment interest that should be awarded is the prime rate during
`
`the relevant period.”).
`
`This Court has also awarded pre-judgment interest to patent infringement plaintiffs based
`
`on the prime rate. See, e.g., NCS Multistage, 2023 WL 149071, at *3. And other courts in Texas
`
`have likewise held that pre-judgment interest should be based on the prime rate. See, e.g.,
`
`Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co., No. 2:15-CV-1202-WCB, 2017 WL
`
`2190055, at *8 (E.D. Tex. May 18, 2017) (Bryson, J., sitting by designation) (collecting cases in
`
`support of the assertion that “the ‘standard practice’ in the Eastern District of Texas is to award
`
`prejudgment interest at the prime rate, compounded quarterly”); Kaneka, 2013 WL 12123946, at
`
`*6 (“[T]he Court follows the reasoning and logic of the Eastern District and awards pre-judgment
`
`interest at the U.S. prime rate, compounded quarterly.”); Hopwood v. State of Tex., 999 F. Supp.
`
`872, 922 (W.D. Tex. 1998), rev’d in part on other grounds, 236 F.3d 256 (5th Cir. 2000) (“The
`
`interest is calculated using the prime rate to compensate the plaintiffs for the delay in payment.”).
`
`Thus, this Court should utilize the prime rate compounded quarterly.
`
`
`
` 3
`
` See Verinata Health, Inc. v. Ariosa Diagnostics, Inc., 830 F.3d 1335, 1338 (Fed. Cir. 2016)
`(noting that the Federal Circuit applies its law to “issues unique to and intimately involved in
`federal patent law” and applies regional circuit law to “other substantive and procedural issues”).
`
` 7
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 12 of 15
`
`III. THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST FROM THE
`DATE OF INFRINGEMENT
`
`In this case, the jury awarded damages for the ’139 and ’639 patents based on a hypothetical
`
`negotiation date of August 2012. See Dkt. No. 274 at 33. Defendants have taken the position that
`
`the Court cannot award interest prior to the start of the damages period, August 27, 2015. See Dkt.
`
`No. 274 at 38. While the Fifth Circuit and the Federal Circuit have not addressed this issue directly,
`
`they have held that “[g]enerally, prejudgment interest should be awarded from the date of
`
`infringement to the date of judgment.” Nickson Indus., Inc. v. Rol Mfg. Co., 847 F.2d 795, 800
`
`(Fed. Cir. 1988). See also Bio-Rad Labs., Inc. v. Nicolet Instrument Corp., 807 F.2d 964, 967 (Fed.
`
`Cir. 1986) (“The normal procedure…is to award prejudgment interest from the date of
`
`infringement to the date of payment….”); Comcast IP Holdings I LLC v. Sprint Commc'ns Co.,
`
`L.P., 850 F.3d 1302, 1315 (Fed. Cir. 2017) (“prejudgment interest runs from the earliest date of
`
`infringement for any patent issued at the time of the hypothetical negotiation.”); Complaint of M/V
`
`Vulcan, 553 F.2d 489, 490 (5th Cir. 1977) (noting that in admiralty, “the award of prejudgment
`
`interest from the date of loss is the rule rather than the exception”).
`
`Awarding pre-judgment interest at the time of the date of infringement is more consistent
`
`with the principle of ensuring “the patent owner is placed in as good a position as [it] would have
`
`been in had the infringer entered into a reasonable royalty agreement.” Gen. Motors, 461 U.S. at
`
`655. To hold otherwise would essentially award Defendants a zero-interest three-year loan
`
`between 2012 and 2015, in addition to Defendants not having to pay damages for infringement
`
`during that time frame.
`
`Prejudgment interest should therefore be awarded from the date of first infringement and
`
`the hypothetical negotiation, in this case August 2012, compounded quarterly. However,
`
`recognizing the unsettled state of the law, AlmondNet’s damages expert Jim Bergman has
`
`calculated pre-judgment interest both from August 31, 2012, and August 27, 2015. Bergman Decl.
`
`¶¶ 18-19, Exs. 1-3 (August 31, 2012), 4-6 (August 27, 2015).
`
` 8
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 13 of 15
`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 13 of 15
`
`PUBLIC VERSION
`
`Mr. Bergman hascalculated an estimated daily rate for each day that has passed since June
`
`30, 2024 based on the primerate for interest starting August 31, 2012 or August 27, 2015. The
`
`amounts associated with these dates are:
`
`August 31, 2012:
`
`$47,960
`
`August 27, 2015:
`
`$43,537
`
`See Bergman Decl. § 19. His report further explains how this Court maycalculate the final amount
`
`of pre-judgmentinterest based on the daily rate. Jd.
`
`Alternatively, Mr. Bergman hasalso calculated pre-judgment interest both through June
`
`28, 2024 (the date of the parties’ joimt application for entry ofjudgment), and through August 15,
`
`2024 and September 15, 2024, to account for the uncertainty of the specific date on which final
`
`judgment will be entered. The amounts associated with these dates are:
`
`
`
`$64,876,708
`$66,948,167
`$68,286,826
`
`August 27, 2015
`August 27, 2015
`August 27, 2015
`
`June 28, 2024
`August 15, 2024
`September 15, 2024
`
`See Bergman Decl. § 18.
`
`AlmondNetrespectfully asks that the Court award the amount of pre-judgmentinterest
`
`listed that best corresponds to the date on which final judgmentis entered for interest starting at
`
`the time of the hypothetical negotiation.
`
`IV.
`
`CONCLUSION
`
`For the foregoing reasons, AlmondNetrespectfully requests that the Court enter Final
`
`Judgment attached hereto as Exhibit E, adopting AlmondNet’s proposal. Additionally, the Court
`
`should award the amount of pre-judgmentinterest that best corresponds to the date on which final
`
`judgment is entered, calculated at the primerate, starting from the time of the hypothetical
`
`negotiation and compounded quarterly.
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 14 of 15
`
`
`Date: July 2, 2024
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`/s/ Reza Mirzaie
`
`Reza Mirzaie
`Marc A. Fenster
`Benjamin T. Wang
`Adam Hoffman
`James A. Milkey
`Amy E. Hayden
`James S. Tsuei
`Jonathan Ma
`Daniel B. Kolko
`Jason M. Wietholter
`RUSS AUGUST & KABAT
`12424 Wilshire Boulevard 12th Floor
`Los Angeles, California 90025
`Tel: 310-826-7474
`Fax: 310-826-6991
`rmirzaie@raklaw.com
`mfenster@raklaw.com
`bwang@raklaw.com
`ahoffman@raklaw.com
`jmilkey@raklaw.com
`ahayden@raklaw.com
`jtsuei@raklaw.com
`jma@raklaw.com
`dkolko@raklaw.com
`jwietholter@raklaw.com
`
`Counsel for Plaintiff ALMONDNET, INC.
`
`
` 10
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00898-ADA Document 285 Filed 07/08/24 Page 15 of 15
`
`CERTIFICATE OF SERVICE
`
`
`
`Pursuant to the Federal Rules of Civil Procedure and Local Rule CV-5, I hereby
`
`certify that, on July 2, 2024 counsel of record who have appeared in this case are being served
`
`with a copy of the foregoing via email.
`
` /s/ Reza Mirzaie
`Reza Mirzaie
`
`
`
`
`
`
`
`
` 11
`
`PUBLIC VERSION
`
`