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Balancing Considerations, Judge Rakoff Grants “Modest” Enhancement of Damages

On June 3, 2019, Judge Jed S. Rakoff (S.D.N.Y.) granted in part Plaintiff SIMO Holdings, Inc. (“SIMO”)’s application for increased damages under 35 U.S.C. § 284.  The ruling followed a series of favorable decisions and verdicts for SIMO, including: summary judgment as to infringement on certain claims of U.S. Patent 9,736,689 (“the ’689 Patent”); a jury award to SIMO for compensatory damages in the amount of $2,183,562.40; and a jury finding that Defendants Hong Kong uCloudlink Network Technology Limited and uCloudlink (America), Ltd. (collectively, “uCloudlink”) had willfully infringed.

As for the enhancement of the damages award, the Court concluded that a “modest increase” was appropriate under the circumstances, grounding its analysis in two considerations. 

The Court began with the jury finding that uCloudlink willfully infringed the ’689 Patent, i.e., “uCloudlink actually knew of SIMO’s Patent and intentionally chose to infringe it.”  This, according to the Court, makes out the type of behavior that may justify a punitive sanction.  On this score, the Court was not persuaded by Defendants’ argument that, because the Court had previously found that it had lacked “actual notice” of the ’689 Patent for a period of time, it “must not have known about the patent at all.”  The Court reminded that “actual notice” is a “term of art” that refers “counterintuitively, not to whether the alleged infringer actually had notice, but whether the patent holder took specific actions to inform the infringer of the patent.”

The Court then focused on the “scale of misconduct” which it found to be “unclear.”  More particularly, the Court was not convinced that the record necessarily established that uCloudlink copied SIMO’s invention.

Taken in total, although the Court found enhanced damages warranted, it rejected SIMO’s proposed increase of 50 percent, settling on a more modest enhancement of 30 percent.

The case is SIMO Holdings, Inc. v. Hong Kong uCloudlink Network Tech, Ltd., No. 18-cv-5427 (S.D.N.Y. June 3, 2019).