A Blog About Intellectual Property Litigation and the District of Delaware

Still thinking about my plums! It's the season baby!
Still thinking about my plums! It's the season baby! Svitlana, Unsplash

Its easy to forget about prejudgment interest. You only need to address after the trial is over when you're putting together the final judgment, but the seeds of victory or defeat are oft planted in the fertile loam of pretrial submissions and expert reports.

Case in point, Judge Williams' decision this week in Board of Regents, the Univ. of Texas Sys. v. Boston Sci. Corp., C.A. No. 18-392-GBW (D. Del. June 5, 2024) (Mem. Op.). At trial, the plaintiff prevailed on all counts and the Jury awarded a verdict of $42,000,000.

Here's the form:


You'll notice the verdict says nothing about whether the royalty is to be awarded as a lump sum or a running royalty. This became important in post-trial briefing because prejudgment interest on a lump sum beginning from the date of first infringement would have been almost $11 million, whilst prejudgment interest on a running royalty reflecting when infringing units were sold would be a scant $7.5 million.

Plaintiff argued that the award should be treated as a lump sum in the absence of any contrary indication from the verdict form or relevant jury instruction. Defendant countered that both experts had treated damages in terms of per-unit royalties, and that a running royalty best fit the facts of the case.

Judge Williams held that the award should be treated as a running royalty, and ordered the lower interest figure:

The trial record reveals that both Plaintiffs' and Defendant's damages experts utilized per unit royalties tied to the actual sales of SynergyTM to calculate damages . . . As Defendant notes, "no expert provided any testimony about a lump-sum award at trial".

. . .

Given the clear trial record, the Court finds that awarding pre-judgment interest on royalty payments offers the most accurate result and avoids overcompensating Plaintiffs by awarding them interest they would not have yet received. Accordingly, the Court will award Plaintiffs prejudgment interest on a running royalty rate, which would yield $7,436,328 in interest.

Id. at 35-36 (internal citations omitted).

There's not a great deal of precedent on this particular issue in Delaware, so it's helpful to have a good cite on hand. Given the great discretion afforded the Court in fashioning an interest award, however, the best course is probably to address the issue plainly in the verdict form, instructions, and pretrial order.

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