The judge hearing Lutron Electronics’ appeal of its loss to GeigTech East Bay (part of J. Geiger shades) in a patent infringement case has delivered her decision and it is sure to please neither side. Earlier this year a jury declared Lutron a willful infringer of a GeigTech patent and awarded it an eye-popping $34.6 million. Lutron appealed asking for a new trial, which was denied, but the Judge cut the award to $3.8 million, agreeing that it was “grossly excessive.”
So what happens now? Read on to see…
See more on this ruling of Lutron’s appeal of Geigtech’s trial win
There have been a total of three lawsuits running between GeigTech East Bay LLC and Lutron Electronics Co. Inc. The first was filed in 2018, with a second filed in 2019, and the third filed in 2020. Each of these cases revolved around GeigTech’s allegation that Lutron infringed on patents it held for its “exposed roller shades without any visible screws, wires, or other unsightly hardware.” All actions have all been resolved at this point. [Note: GeigTech is a different (but related) company than J. Geiger Shades which is owned by Savant and was not part of this lawsuit.]
Jury Award is Substantially More Than GeigTech Requested
I first told you about GeigTech’s big win over Lutron back in April. Taking place in the United States District Court in the Southern District of New York before the Honorable Judge Colleen McMahon, a Manhattan jury decided completely in favor of GeigTech and found that Lutron was guilty of willful infringement of GeigTech’s shading bracket patent. It went on to award the company a $34.6 million judgment – nearly ten times the amount they were requesting.
You can see more details on the background of this issue in my story from April.
A Separate ‘Trade Dress’ Suit was Decided at a Bench Trial
A separate trade dress action was brought for a bench trial (no jury, the judge decides) to deal with matters known as “trade dress” claims, according to a report by Law360. In that case, Judge McMahon said that GeigTech was unable to prove that Lutron infringed its trade dress.
Note: Usually in trade dress issues, a company is deliberately designing their products to exactly copy the design of an innovator’s product in order to trick consumers into thinking they are buying the original. The judge saw no evidence to suggest Lutron was trying to make consumers think it was selling J. Geiger shades.
Lutron Appealed Seeking a New Trial; Said Award was ‘Grossly Excessive’
After both of these actions, Lutron appealed for a new trial, saying the award was “grossly excessive” and that the evidence was insufficient to show they infringed on the patents at issue. At the same time, GeigTech, based on the jury’s finding that the infringement was “willful” requested the court award it enhanced damages (usually triple the amount), attorney fees, and a permanent injunction.
Lutron opted to poach [GeigTech’s] patented designs and intellectual property to try and remain competitive in a segment of the market that [GeigTech] cornered.
Jury Finding, GeigTech East Bay LLC v. Lutron Electronics Co. Inc.
Lutron Lost Its Bid for a New Trial, But Received a Reduced Penalty
The report noted that the judge ruled this week that there was sufficient evidence to support the jury’s finding that Lutron willfully infringed on the GeigTech patent. Lutron’s request for a new trial was denied.
However, Judge McMahon agreed with Lutron that the jury’s award of $34.6 million in damages was in fact “grossly excessive.”
“In this case, the jury completely surpassed the ‘upper limit’ of damages,” Judge McMahon noted. She went on to add that it “amounted to a royalty of nearly 10 times any amount requested by GeigTech or supported by the evidence of its expert.”
GeigTech Told the Judge the Award was About Right, But It Had Requested Only $3.8 Million
GeigTech had gone on to tell the court that it felt the jury’s award was about right. But undercutting that notion is the fact that the company had argued at trial for a maximum award of $3,843,986…”Not a penny more, not a penny less.” (Quoting the company’s attorneys at trial.)
The judge told the company that there is just not anything in the record from the trial to justify the additional $31 million award. Judge McMahon said clearly the company’s highest ask of $3,843,986 is the highest amount of award that could be considered “not excessive.”
Both Sides Recommended a Widely Varying Remittitur
Both sides debated what a reasonable remittitur should be. [Remittitur is a court process where a jury award is reduced.] Lutron argued the proper remittitur should be no higher than $777,860. GeigTech came back with two options: 1) $24 million based on lost profits; or 2) $10.3 million based on a 40% royalty rate applied to Lutron’s infringing sales of $25.9 million.
The judge rejected all of these proposals. In the case of GeigTech, she noted that it did not raise the issue of compensation for lost profits at trial, so that argument is out. And at the same time, even its own damages expert proposed a 14.5% royalty rate, the calculation of which yields a payment of $3,755,500 or almost the same as the $3,843,986 they did raise at trial.
Plaintiff Has Two Options: Accept $3.8 Million or Agree to a New Damages Trial
So the court gave GeigTech two options, agree to a $3.8 million judgment amount and be done with it…or have a new trial strictly to decide damages. The company has 14 days to make its decision.
I’m not sure having a new trial on the damages would be such a good idea. Any time you go to a trial, the outcome is completely unpredictable – it could be better…but it also could definitely be worse.
Other Issues Decided in This Case
- Lutron had filed a defamation counterclaim, saying that GeigTech defamed it by saying it had “poached GeigTech’s patent.” But the jury found that Lutron had indeed poached GeigTech’s patents. (See the quote from the jury above.) The counterclaim was dismissed.
- Both sides asked the judge to award it attorney fees. The judge denied both requests.
- Note that the judge denied Lutron’s appeal for a new trial, but left the door open – at GeigTech’s option – to have a new trial on damages only.
- Finally, the judge granted GeigTech’s motion for a permanent injunction against Lutron. She says it established that it would suffer irreparable harm without such protection.
So there you have it, a mix of wins and losses for both sides. One could argue it represents the perfect compromise. We’ll wait and see if GeigTech opts for a new trial on the damages…but I would be surprised if it went with that option.
See more about GeigTech and J Geiger Shading at jgeigershading.com.
Learn more about Lutron by visiting lutron.com.
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