Hobson’s Dilemma for a Prevailing Plaintiff in a Recent Patent Verdict Award: Agree to a 50% Remittur or a New Damages Trial

In a recent opinion in Tomita Technologies USA, LLC, et. al. v. Nintendo Co., Ltd., et. al., 1-11-cv-04256 (NYSD August 14, 2013, Order) (Rakoff, J.), the court offered the plaintiff a choice between a 50% remittur or a new damages trial. At the conclusion of the trial, the jury awarded $30.2 million in damages. The court required the plaintiff to choose between a deduction in damages by 50% to $15.1 million or a new trial on damages. The court reasoned, “[A]lthough the entire market value rule does not apply on the facts of this case, the concerns that motivate the doctrine nonetheless speak to whether the Jury’s damages award was appropriate. Thus, while there is no smaller patent-practicing unit than the [accused game system] as a whole, the [patent-in-suit’s] technology was used only in two features . . . and thus was in some sense ancillary to the core functionality of the [accused product] as a gaming system. In addition, the evidence presented at trial showed that consumer reception for the patent-related features was mixed. Based on these factors and the fact that the [accused system] is not itself profitable, the Court finds that it surpasses reasonable belief that [defendant] would, in a hypothetical negotiation, agree to a ‘reasonable royalty’ payment anywhere near as large as that awarded by the jury.”

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