Case 6:21-cv-00898-ADA Document 312 Filed 08/29/24 Page 1 of 16
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`
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`
`
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`ALMONDNET, INC.,
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`
`Plaintiff,
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`
`
`v.
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`AMAZON.COM, INC., AMAZON.COM
`SERVICES LLC, and AMAZON WEB
`SERVICES, INC.,
`
`
`Defendants.
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`
`
`
`Civil Action No. 6:21-cv-00898-ADA
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`JURY TRIAL DEMANDED
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`
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`
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`REPLY IN SUPPORT OF PLAINTIFF ALMONDNET, INC.’S
`OPPOSED MOTION TO ENTER FINAL JUDGMENT
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`Case 6:21-cv-00898-ADA Document 312 Filed 08/29/24 Page 2 of 16
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`TABLE OF CONTENTS
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`I.
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`THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST TO FULLY
`COMPENSATE ALMONDNET............................................................................................2
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`II. THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST AT THE PRIME
`RATE ......................................................................................................................................5
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`III. THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST AT THE PRIME
`RATE COMPOUNDED QUARTERLY ................................................................................9
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`IV. THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST FROM THE DATE
`OF INFRINGEMENT ............................................................................................................9
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`V. CONCLUSION .....................................................................................................................10
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`Case 6:21-cv-00898-ADA Document 312 Filed 08/29/24 Page 3 of 16
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`TABLE OF AUTHORITIES
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`Cases
`
`Alberti v. Klevenhagen,
`896 F.2d 927 (5th Cir. 1990) ............................................................................................. passim
`
`Beatrice Foods Co. v. New England Printing & Lithographing Co.,
`923 F.2d 1576 (Fed. Cir. 1991) ................................................................................................ 10
`
`Bio-Rad Labs., Inc. v. Nicolet Instrument Corp.,
`807 F.2d 964 (Fed. Cir. 1986) .................................................................................................. 10
`
`Comcast IP Holdings I LLC v. Sprint Commc'ns Co., L.P.,
`850 F.3d 1302 (Fed. Cir. 2017) ................................................................................................ 10
`
`Complaint of M/V Vulcan,
`553 F.2d 489 (5th Cir. 1977) ...................................................................................................... 6
`
`Crystal Semiconductor Corp. v. TriTech Microelectronics Int'l, Inc.,
`246 F.3d 1336 (Fed. Cir. 2001) .................................................................................................. 3
`
`Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co.,
`No. 2:15-CV-1202-WCB, 2017 WL 2190055 (E.D. Tex. May 18, 2017) ................................. 6
`
`Exmark Mfg. Co. v. Briggs & Stratton Corp.,
`830 F. App’x 305 (Fed. Cir. 2020) ............................................................................................. 8
`
`Gen. Motors Corp. v. Devex Corp.,
`461 U.S. 648 (1983) .................................................................................................................... 2
`
`Gorenstein Enterprises, Inc. v. Quality Care-USA, Inc.,
`874 F.2d 431 (7th Cir. 1989) ...................................................................................................... 6
`
`Hopwood v. State of Tex.,
`999 F. Supp. 872 (W.D. Tex. 1998) ........................................................................................... 6
`
`Intellectual Ventures II LLC v. Great W. Cas. Co.,
`No. 6:18-CV-00299-JRG, 2020 WL 4815054 (E.D. Tex. Mar. 30, 2020) ................................. 9
`
`Kaneka Corp. v. JBS Hair, Inc.,
`No. 3:10-CV-01430-P, 2013 WL 12123946 (N.D. Tex. Oct. 24, 2013) ................................ 6, 9
`
`Kaneka Corp. v. SKC Kolon PI, Inc.,
`198 F. Supp. 3d 1089 (C.D. Cal. 2016) ...................................................................................... 4
`
`Kaufman v. Microsoft Corp.,
`34 F.4th 1360 (Fed. Cir. 2022) ........................................................................................ 1, 3, 4, 5
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`Kove IO, Inc. v. Amazon Web Services, Inc.,
`No. 1:18-cv-8175, Dkt. No. 917 (N.D. Ill. Jun. 13, 2024).......................................................... 9
`
`Laitram Corp. v. NEC Corp.,
`115 F.3d 947 (Fed. Cir. 1997) .................................................................................................... 7
`
`LaserDynamics, Inc. v. Quanta Comput., Inc.,
`694 F.3d 51 (Fed. Cir. 2012) .................................................................................................... 10
`
`Lummus Indus., Inc. v. D.M. & E. Corp.,
`862 F.2d 267 (Fed. Cir. 1988) .................................................................................................... 3
`
`Mondis Tech. Ltd v. LG Elecs., Inc.,
`No. CV 15-4431 (SRC), 2023 WL 3749992 (D.N.J. June 1, 2023) ........................................... 4
`
`Moonbug Entertainment Ltd. v. Babybus (Fujian) Network Tech. Co., Ltd.,
`No. 21-CV-06536-EMC, 2024 WL 3697030 (N.D. Cal. Aug. 6, 2024) .................................... 4
`
`MR Techs., GMBH v. Western Digital Techs., Inc.,
`No. 8:22-cv-1599-JVS (DFMx), Dkt. No. 589 (C.D. Cal. Aug. 14, 2024) ........................ 2, 7, 8
`
`NCS Multistage Inc. v. Nine Energy Serv., Inc.,
`No. 6:20-CV-00277-ADA, 2023 WL 149071 (W.D. Tex. Jan. 9, 2023) ............................... 6, 9
`
`Nickson Indus., Inc. v. Rol Mfg. Co.,
`847 F.2d 795 (Fed. Cir. 1988) .................................................................................................... 9
`
`Pavo Solutions LLC v. Kingston Tech. Co., Inc.,
`2021 WL 1912392 (C.D. Cal. 2021) .......................................................................................... 8
`
`Premium Plus Partners, L.P. v. Goldman, Sachs & Co.,
`648 F.3d 533 (7th Cir. 2011) ...................................................................................................... 5
`
`Roland Corp. v. inMusic Brands, Inc.,
`No. 17-22405-CIV, 2023 WL 2441356 (S.D. Fla. Jan. 20, 2023).............................................. 4
`
`SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prod., LLC,
`580 U.S. 328 (2017) .................................................................................................................... 3
`
`Solutran, Inc. v. U.S. Bancorp,
`No. 13-cv-2637-SRN-BRT, 2019 WL 405513 (D. Minn. Jan. 18, 2019) .................................. 8
`
`Uniroyal, Inc. v. RudkinWiley Corp.,
`939 F.2d 1540 (Fed. Cir. 1991) .............................................................................................. 7, 8
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`The Supreme Court holds that prejudgment interest should put AlmondNet in the same
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`position it would have been in had Amazon paid the lump sum reasonable royalty awarded by the
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`jury at the time of first infringement. To do this pre-judgment interest should be awarded at the
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`prime rate, compounded quarterly, dating back to the date of first infringement. The jury’s verdict
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`determined that a reasonable royalty––$121.95 million––should have been paid at the time of the
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`hypothetical negotiation. The law is clear: pre-judgment interest must be awarded on this award
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`absent circumstances justifying an exception, and Amazon fails to present any evidence of such
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`exception in this case.
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`Amazon must show that any delay was undue, resulting from litigation tactics, and that
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`such delay caused unfair prejudice to Amazon. See Kaufman v. Microsoft Corp., 34 F.4th 1360,
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`1374-75 (Fed. Cir. 2022) (reversing the denial of prejudgment interest even where the plaintiff sat
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`on knowledge of infringement for five years). Amazon fails to make either required showing.
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`First, there was no “delay” here at all as there is no evidence AlmondNet knew of Amazon’s
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`infringement prior to its notice to Amazon of infringement in 2019. Moreover, as held by Kaufman,
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`the mere passage of time does not demonstrate “undue delay.” Some further unreasonable or
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`inequitable conduct by the patent holder is required. Amazon does not identify any such conduct.
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`Even if there was delay, Amazon shows no unfair prejudice, and in particular the record disproves
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`Amazon’s claim that it would have taken a license if it had been sued earlier. After being notified
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`of infringement in 2019, Amazon continued infringing through 2024 without redesigning its
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`products or offering AlmondNet a reasonable license. Amazon argues that the amount AlmondNet
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`seeks is “massive,” but the amount is simply a function of the jury’s reasonable royalty finding
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`based on the scope of Amazon’s infringement and the date of the hypothetical negotiation. That is
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`not prejudice under Federal Circuit law.
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`The prime rate is necessary to compensate AlmondNet. Amazon fails to rebut expert
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`opinion regarding AlmondNet’s financial condition, proving it faced borrowing costs well-above
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`the prime rate. The Fifth Circuit, in Alberti v. Klevenhagen, 896 F.2d 927, 938 (5th Cir. 1990),
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`held that the prime rate provides an appropriate measure for delay in payment, and Amazon fails
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`to substantively challenge the rationale used for justifying the use of the prime rate. The T-Bill
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`rates Amazon asks for were artificially low and should be disfavored for that reason. See Ex. F,
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`MR Techs., GMBH v. Western Digital Techs., Inc., No. 8:22-cv-1599-JVS (DFMx), Dkt. No. 589
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`at 2 (C.D. Cal. Aug. 14, 2024) (Selna, J.). And in any case, AlmondNet certainly could not have
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`borrowed at T-Bill rates. Thus, this Court should award AlmondNet pre-judgment interest at the
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`prime rate, compounded quarterly, dating back to the date of first infringement.
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`I.
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`THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST TO FULLY
`COMPENSATE ALMONDNET
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`Pre-judgment interest is essential to ensure that AlmondNet is fully compensated for
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`Amazon’s long-running infringement. The guiding principle here is simple: to place the patent
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`holder in the financial position it would have been in had the infringer paid a reasonable royalty
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`from the beginning of its infringement. This core principle was firmly established by the Supreme
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`Court in General Motors, where the Court unequivocally held that pre-judgment interest “should
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`ordinarily be awarded” because it is “necessary” to provide “complete compensation” to patent
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`owners. Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 655 (1983) (affirming prejudgment
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`interest despite the defendant’s argument that the plaintiff delayed).
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`Amazon's opposition is an attempt to deny AlmondNet the full compensation to which it
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`is entitled. As it is a lump sum paying for both past and future infringement, the jury’s award of
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`$121.95 million likely reflects Mr. Bergman’s discounting of damages back to the date of first
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`infringement. But since Amazon did not actually pay this amount on the hypothetical negotiation
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`date, Amazon has enjoyed the benefit of AlmondNet’s $121.95 million without paying any
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`interest. During that time, Amazon undoubtedly reinvested those funds into its business, reaping
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`returns far exceeding any nominal interest at the T-Bill rate. Meanwhile, AlmondNet was deprived
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`of the opportunity to use those to reinvest in its own operations. Without pre-judgment interest,
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`Amazon effectively receives a windfall in the form of an interest-free loan at AlmondNet’s
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`expense.
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`Amazon fails to demonstrate any undue delay or prejudice resulting from AlmondNet’s
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`actions. Courts consistently hold that delay alone is insufficient to deny pre-judgment interest
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`unless the defendant can show both that the delay was undue and that it caused prejudice. See, e.g.,
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`Kaufman, 34 F.4th at 1374; Lummus Indus., Inc. v. D.M. & E. Corp., 862 F.2d 267, 275 (Fed. Cir.
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`1988).1 Amazon has not even come close to meeting this burden.
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`Here, Amazon fails to show that AlmondNet had knowledge of Amazon’s infringement
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`before 2019. There is no evidence that AlmondNet was aware of Amazon’s infringement when
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`Amazon’s 2012 accused product launched, and Amazon cites nothing to suggest otherwise.2 Even
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`if there were any facts showing that AlmondNet knew of Amazon’s infringement since 2012,
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`Amazon would still be unable to show the delay was undue. Mere delay is insufficient. See
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`Kaufman, 34 F.4th at 1374. Kaufman held that it was an abuse of discretion to deny prejudgment
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`interest even where the plaintiff sat on knowledge of infringement for an alleged five year delay,
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`where there was no evidence of something more than delay alone, such as the finding Crystal
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`Semiconductor that the delay was a “litigation tactic.” Id. (distinguishing Crystal Semiconductor
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`Corp. v. TriTech Microelectronics Int'l, Inc., 246 F.3d 1336, 1344, 1362 (Fed. Cir. 2001)). Here,
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`there is no evidence that AlmondNet knew of Amazon’s infringement before providing notice to
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`Amazon in 2019, much less that any alleged delay was a “litigation tactic.” See id. Amazon’s
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`unstated and baseless implication that AlmondNet knew of Amazon’s infringement in 2012 (or
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`anytime before 2019) is unsupported by evidence. See Opp. at 7 (“[I]f AlmondNet had notified
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`Amazon of infringement soon after Amazon’s 2012 DSP launch….”). And there is no evidence of
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`any “litigation tactic” similar to that in Crystal. See 246 F.3d at 1362.3
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`1 Courts have sometimes looked to laches caselaw to define undue delay and prejudice in this
`context. After SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prod., LLC, 580 U.S. 328
`(2017), delay alone is no defense to damages, while inequitable conduct remains a defense. The
`Federal Circuit has taken a parallel approach to pre-judgement interest, requiring some
`inequitable conduct on the part of the patent-holder.
`2 Amazon asserts that AlmondNet “waited seven years to notify Amazon of its patents.” Opp. at
`6. However, this mere argument of counsel presents no evidence that AlmondNet had knowledge
`of Amazon’s infringement at any time prior to 2019.
`3 The other cases cited by Amazon further demonstrate that delay alone, absent some other
`misconduct of litigation machinations, is not sufficient to show “undue delay.” In Mondis, the
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`The lack of undue delay alone is fatal to Amazon’s arguments. But Amazon also fails to
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`articulate any prejudice. For instance, Amazon presents no evidence that it “could have” and
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`“would have” altered its products to avoid infringement if notified sooner. See Kaufman, 34 F.4th
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`at 1375. At trial, AlmondNet’s infringement expert testified that Amazon identified no viable non-
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`infringing alternatives, and Amazon failed to provide any rebuttal evidence. See 6/10/24 Trial Tr.
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`277:20-278:15. Even now, Amazon fails to even allege any viable alternatives or meaningful
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`attempts to redesign its products to avoid infringement. If AlmondNet had notified Amazon earlier,
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`it wouldn’t have made a difference because no non-infringing alternatives were available to
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`Amazon.
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`Amazon’s claim that it “could have entered into a full-time license” with earlier notice is
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`also baseless, because the evidence shows that it would not have done so. See Opp. at 8. Amazon
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`did not offer a fair license to AlmondNet after being notified of its infringement in 2019, and
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`continues to fight this case in court rather than take a license. Additionally, Amazon’s belief that
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`AlmondNet would have licensed to it based on the
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` is speculative and
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`contrary to the jury’s apparent rejection of Amazon’s argument that the agreement was comparable
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`to the hypothetical negotiation. See Opp. at 8. Amazon cannot rely on an argument the jury has
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`already rejected as a basis to avoid prejudgment interest, and it cites no authority for such an
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`argument.
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`plaintiff accused the defendant of infringement five years prior to filing suit in 2014 and engaged
`in various suspect litigation tactics in the interim. Mondis Tech. Ltd v. LG Elecs., Inc., No. CV
`15-4431 (SRC), 2023 WL 3749992, at *5, *12 (D.N.J. June 1, 2023). In Roland, the plaintiff
`knew of the accused products in 2011, four years prior to complaining about their configuration
`to defendant. And there were fact suggesting possible inequitable misconduct, as in the interim
`the defendant operated under the belief that plaintiff had approved defendant’s product
`configurations in 2011. Roland Corp. v. inMusic Brands, Inc., No. 17-22405-CIV, 2023 WL
`2441356, at *1 (S.D. Fla. Jan. 20, 2023). The Court in Kaneka did apparently deny prejudgment
`interest on one patent based on delay alone, but ultimately the court awarded prejudgment
`interest to the plaintiff on another patent anyway (at the prime rate). See Kaneka Corp. v. SKC
`Kolon PI, Inc., 198 F. Supp. 3d 1089, 1124 (C.D. Cal. 2016). Moreover, subsequent cases
`addressing Kaneka expressly declined to apply its holding in the absence of some misconduct by
`the patent holder. See, e.g., Moonbug Entertainment Ltd. v. Babybus (Fujian) Network Tech.
`Co., Ltd., No. 21-CV-06536-EMC, 2024 WL 3697030, at *10 (N.D. Cal. Aug. 6, 2024)
`(declining to follow Kaneka where there is no evidence of self-serving conduct).
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`Amazon’s “book of wisdom” argument is equally flawed. See Opp. at 8-9. It rests on the
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`unsupported assumption that the jury’s verdict would have been different without certain
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`documents created more recently. See id. This is speculative at best. Even if AlmondNet had sued
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`earlier, the date of first infringement would have been the same, and a lump sum award covering
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`infringement through the expiration of the patents in suit would still have had to account for future
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`sales and profits resulting from Amazon’s infringement, especially absent any non-infringing
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`alternative. The jury would have been presented with different projections, which may have been
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`even more favorable to AlmondNet. Amazon fails to cite a single case suggesting that the
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`availability of book of wisdom evidence constitutes unfair prejudice and AlmondNet is not aware
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`of any.
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`Amazon’s complaint that the interest requested is “massive,” misunderstands how interest
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`works. Opp. at 9. More interest is not an additional penalty––it’s the fair price for the benefit of
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`holding onto someone else’s money for over a decade. Premium Plus Partners, L.P. v. Goldman,
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`Sachs & Co., 648 F.3d 533, 539 (7th Cir. 2011) (indicating that interest “more than 50% of the
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`principal” merely “reflects the length of time that [the defendant] has had the money,” and “the
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`full time value of money is no windfall”). Additionally, even if AlmondNet had sued earlier, given
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`that the jury awarded lump sum damages through patent expiration and the lack of any design-
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`around evidence, damages and interest would not necessarily be lower for Amazon.
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`In sum, there is no prejudice to Amazon and no basis for denying pre-judgment interest.
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`See Kaufman v. Microsoft Corp., 34 F.4th 1360, 1375 (Fed. Cir. 2022).
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`II.
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`THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST AT THE PRIME
`RATE
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`The Fifth Circuit has made it clear: “the appropriate rate of interest to be used in computing
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`a delay in payment adjustment is the cost of borrowing money, the prime rate.” See Alberti, 896
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`F.2d at 938 (emphasis added). This fundamental principle applies here, as it recognizes that capital
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`comes with a cost, and in economic terms, that is the price of borrowed capital. See id. Despite
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`Amazon’s attempts to sidestep this clear precedent, Alberti is directly on point and provides the
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`guiding principle this Court should follow.
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`Amazon suggests that Alberti doesn’t apply because it “did not address prejudgment
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`interest.” Opp. at 11 n.2. However, this is not the case at all. Alberti announced that the prime rate
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`should be the rate of interest in delay in payment cases generally––and in doing so relied on sound
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`prejudgment interest principles from Seventh Circuit and older Fifth Circuit cases. See Alberti,
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`896 F.2d at 929, 938 (citing Gorenstein Enterprises, Inc. v. Quality Care-USA, Inc., 874 F.2d 431
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`(7th Cir. 1989) and Complaint of M/V Vulcan, 553 F.2d 489 (5th Cir. 1977)). Alberti, Gorenstein,
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`and M/V Vulcan all underscore that this general principle is widely applicable, and Amazon offers
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`no convincing rationale for why patent cases should be an exception. See also NCS Multistage Inc.
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`v. Nine Energy Serv., Inc., No. 6:20-CV-00277-ADA, 2023 WL 149071, at *3 (W.D. Tex. Jan. 9,
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`2023); Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co., No. 2:15-CV-1202-WCB, 2017 WL
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`2190055, at *8 (E.D. Tex. May 18, 2017); Kaneka Corp. v. JBS Hair, Inc., No. 3:10-CV-01430-
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`P, 2013 WL 12123946, at *6 (N.D. Tex. Oct. 24, 2013); Hopwood v. State of Tex., 999 F. Supp.
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`872, 922 (W.D. Tex. 1998).4 Judge Posner cautioned courts “against the danger of setting
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`prejudgment interest rates too low by neglecting the risk, often nontrivial, of default,” and further
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`rejecting “the rate on 52-week Treasury bills” as being “too low, because there is no default risk
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`with Treasury bills.” Gorenstein, 874 F.2d at 436. Amazon cited to no contrary economic logic for
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`this Court to act otherwise.
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`The undisputed facts regarding AlmondNet’s borrowing costs further support awarding
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`AlmondNet pre-judgment interest at the prime rate. AlmondNet’s damages expert, Mr. Bergman,
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`confirmed that the prime rate is far more representative of what borrowing costs would have
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`been for AlmondNet during the relevant period than the T-Bill rate. See Ex. A (“Bergman
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`Decl.”) ¶¶ 15-16. Amazon failed to refute this evidence. Yet Amazon misleadingly claims that
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`4 While Amazon cites to various cases, including Jiaxing, VLSI, and Cornell, to support adoption
`of the T-Bill rates (Opp. at 5, 11 n.3), the Fifth Circuit case Alberti carries the most weight as
`well as this Court’s more recent decision in NCS Multistage, which all support the adoption of
`the prime rate. See NCS Multistage, 2023 WL 149071, at *3. Given that the prime rate is a
`market-driven approach, reflecting the true cost of money in the market for commercial
`borrowers, it would provide fairer compensation to AlmondNet, which Amazon does not dispute.
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`AlmondNet “presents no evidence that it should be entitled to a higher rate” despite this
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`unchallenged evidence. See Opp. at 11. AlmondNet is not only justified in seeking the prime rate
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`but could have requested a higher rate commensurate with its undisputed substantial risk of
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`default. See Bergman Decl. ¶ 6. AlmondNet conservatively asks for the prime rate.
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`Amazon’s assertion that AlmondNet needs to present actual evidence of borrowing after
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`2012 is contrary to law. See Opp. at 12. The Federal Circuit does not require “a patentee [to]
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`demonstrate that it borrowed at the prime rate in order to be entitled to prejudgment interest at that
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`rate.” Uniroyal, Inc. v. RudkinWiley Corp., 939 F.2d 1540, 1545 (Fed. Cir. 1991). Amazon cites
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`to no authority contradicting this clear precedent. The prime rate can be awarded even where there
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`is no direct evidence of borrowing. See Alberti, 896 F.2d at 929 (setting the prime rate as the
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`standard in delay in payment cases); Ex. F, MR Techs., Dkt. No. 589 at 2 (“It is irrelevant whether
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`[plaintiff] had actual borrowing needs during [the] period for which interest has been calculated.”).
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`In any event, as in Uniroyal, AlmondNet has demonstrated undisputed evidence of “poor financial
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`condition” and that this case was also “of a protracted and comprehensive nature,” such that the
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`prime rate is appropriate. See Mot. at 5.
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`Amazon also mischaracterizes Laitram by suggesting that AlmondNet must show a causal
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`connection between borrowing and an economic loss resulting from Amazon’s infringement. See
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`Opp. at 12-13. Laitram does not impose such a requirement. Rather, it simply recognizes that
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`evidence of a such a connection is a factor that a court may consider. See Laitram Corp. v. NEC
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`Corp., 115 F.3d 947, 955 (Fed. Cir. 1997). Amazon’s incorrect interpretation of Laitram further
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`cannot be reconciled with Uniroyal, which eliminates rigid requirements for qualifying for the
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`prime rate. See Uniroyal, 939 F.2d at 1545.
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`AlmondNet has already provided significant evidence of its high borrowing costs,
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`including Mr. Bergman’s unrebutted economic analysis explaining why AlmondNet’s borrowing
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`costs would have been higher than the prime rate. These facts substantially distinguish the various
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`cases cited by Amazon where no such rigorous economic analysis of borrowing costs was
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`provided. See Opp. at 12-13. This evidence, in conjunction with the principles set forth in, for
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`example Alberti and Uniroyal, justify use of the prime rate.
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`Amazon’s attempt to argue for the use of the artificially depressed T-Bill rate also fails.
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`Expansive Federal Reserve monetary policy led to abnormally low rates that do not reflect true
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`market conditions. See Ex. F, MR Techs, Dkt. No. 589 at 2 (“That virtually all interest rates were
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`at record lows in the early part of the 2020s does not counsel use of those artificially low rates
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`which the Federal Reserve Board initiated to counter the massive negative economic effects of the
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`COVID-19 pandemic.”). Amazon’s suggestion that AlmondNet’s recovery should be capped at
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`the rate an individual might receive from a savings account is also flawed. Opp. at 14. It disregards
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`clear legal principles that “the appropriate rate of interest to be used in computing a delay in
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`payment adjustment is the cost of borrowing money, the prime rate” not the savings rate. See
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`Alberti, 896 F.2d at 938 (emphasis added). The proper metric is not what AlmondNet might have
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`earned in a savings account, but rather the cost of borrowing money in the open market.
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`Amazon offers no economic justification otherwise. Courts across the country have
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`recognized that artificially low T-Bill rates undercompensate plaintiffs, particularly when these
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`rates are detached from the economic reality of borrowing costs. See Solutran, Inc. v. U.S.
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`Bancorp, No. 13-cv-2637-SRN-BRT, 2019 WL 405513, at *29 (D. Minn. Jan. 18, 2019); Pavo
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`Solutions LLC v. Kingston Tech. Co., Inc., 2021 WL 1912392, at *2 (C.D. Cal. 2021). The Exmark
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`decision cited by Amazon only confirms that the prime rate is appropriate in light of “historically
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`low, near-zero” Treasury rates. See Exmark Mfg. Co. v. Briggs & Stratton Corp., 830 F. App’x
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`305, 314 (Fed. Cir. 2020).5
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`Amazon’s arguments in favor of the T-Bill rate are unsupported by evidence. They have
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`provided no basis for believing that the T-Bill rate reflects AlmondNet’s actual borrowing costs
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`5 While Exmark limited the prime rate to the post-suit period under the facts of that case, it does
`not stand for the principle that doing so is appropriate in all cases, especially in the Fifth Circuit
`for all the reasons provided throughout this brief. See Exmark, 830 F. App’x at 314. Furthermore,
`in Exmark, the defendant prevailed on some claims and the plaintiff was already awarded
`enhanced damages. See id. at n.2. There are no such facts here.
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`Case 6:21-cv-00898-ADA Document 312 Filed 08/29/24 Page 13 of 16
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`(or indeed the borrowing costs applicable to any entity other than the United States government)
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`during the relevant period. They have provided no expert analysis as to AlmondNet’s borrowing
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`costs. The prime rate, therefore, remains the appropriate measure of pre-judgment interest in this
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`case to fully compensate AlmondNet for the financial harm caused by Amazon’s infringement.
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`III. THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST AT THE PRIME
`RATE COMPOUNDED QUARTERLY
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`Amazon argues that compounding should be annual, however this is contrary to authority.
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`See Opp. at 4. Quarterly compounding is appropriate, as recognized by this Court and others. See,
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`e.g., NCS Multistage, 2023 WL 149071, at *3; Intellectual Ventures II LLC v. Great W. Cas. Co.,
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`No. 6:18-CV-00299-JRG, 2020 WL 4815054, at *2 (E.D. Tex. Mar. 30, 2020); Kaneka Corp. v.
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`JBS Hair, Inc., No. 3:10-CV-01430-P, 2013 WL 12123946, at *6 (N.D. Tex. Oct. 24, 2013).
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`Amazon agreed in other litigation that quarterly compounding is appropriate, so its
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`inconsistent position should be rejected. See, e.g., Kove IO, Inc. v. Amazon Web Services, Inc., No.
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`1:18-cv-8175, Dkt. No. 917 at 4 (N.D. Ill. Jun. 13, 2024). In Kove, Amazon stated that “[i]f the
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`Court awards prejudgment interest, it should be compounded quarterly.” See id. Furthermore it
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`explained that “[i]n determining the frequency of compounding in patent cases, courts consider
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`how often the infringer would’ve made royalty payments under the hypothetical licenses” and
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`“royalty agreements in [the technology] business usually provide for payments within a reasonable
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`period after the close of the quarter.” Id. at 5. Thus, compounding should be quarterly.
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`IV.
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`THE COURT SHOULD AWARD PRE-JUDGMENT INTEREST FROM THE
`DATE OF INFRINGEMENT
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`Amazon’s position that prejudgment interest should only accrue from the filing date of the
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`complaint is contrary to Federal Circuit precedent upholding the principle of placing the patent
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`holder in the financial position it would have been in had the infringer paid a reasonable royalty
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`from the beginning of infringement. The clear language of Nickson, Bio-Rad, and Comcast, all
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`support awarding pre-judgment interest from the date of infringement. See e.g., Nickson Indus.,
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`Inc. v. Rol Mfg. Co., 847 F.2d 795, 800 (Fed. Cir. 1988); Bio-Rad Labs., Inc. v. Nicolet Instrument
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`Corp., 807 F.2d 964, 967 (Fed. Cir. 1986); Comcast IP Holdings I LLC v. Sprint Commc'ns Co.,
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`L.P., 850 F.3d 1302, 1315 (Fed. Cir. 2017). That would be August 2012.6 Awarding interest form
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`the date of first infringement is entirely consistent with the statutory language and is the approach
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`which makes the most logical sense. If the date of the hypothetical negotiation is the date
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`AlmondNet would have been paid the $122 million, it is not logical for AlmondNet to be deprived
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`of interest until a later date, essentially awarding Defendants a zero-interest loan in the interim.
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`Given that fairness principles dominate the inquiry into the award of prejudgment interest, it would
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`be inequitable to award Defendants a zero-interest loan, especially as Mr. Bergman’s estimate of
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`damages at trial was already discounted back to the date of first infringement.
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`
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`Prejudgment interest should therefore be awarded from the date of first infringement––the
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`date of the hypothetical negotiation in August 2012––compounded quarterly at the rates calculated
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`by Mr. Bergman. Mr. Bergman has also provided calculations from August 27, 2015. See Mot. at
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`8-9; Bergman Decl. ¶¶ 18-19, Exs. 1-3 (August 31, 2012), 4-6 (August 27, 2015).
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`V.
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`CONCLUSION
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`AlmondNet respectfully requests that this Court grant its motion to enter final judgment
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`with pre-judgment interest calculated at the prime rate, compounded quarterly, from the date of
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`the hypothetical negotiation in August 2012, or, at the latest, from August 2015.
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`
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`6 Amazon’s citations to Beatrice Foods and LaserDynamics are not inconsistent with
`AlmondNet’s position. Opp. at 9. Nothing in those cases prohibit the calculation of prejudgment
`interest from the date of first infringement. See generally Beatrice Foods Co. v. New England
`Printing & Lithographing Co., 923 F.2d 1576, 1580-81 (Fed. Cir. 1991) (holding merely that
`prejudgment interest cannot be applied to the punitive or enhanced portion of a damage award);
`LaserDynamics, Inc. v. Quanta Comput., Inc., 694 F.3d 51, 67 (Fed. Cir. 2012). While Amazon
`cites to district c