CEO Patent Remark Does His Company No Favors

MARSHALL, Texas (CN) - A federal judge upped the ongoing royalty rate for payments InnoLux owes to Mondis for patent-infringing computer monitors because an executive for the infringing company was recently quoted as saying that "the issue of patent infringement is being taken too seriously sometimes."

In a 22-page ruling Friday, U.S. District Judge T. John Ward said the statement from InnoLux CEO Tuan Hsing-chien represented "an affront to the United States patent system."

After determining that Taiwan-based Chimei Innolux and InnoLux had infringed on claims for five of seven patents, and had done so willfully with respect to three of the patents, a jury awarded British-based Mondis Technology $15 million in June 2011.

U.S. District Judge T. John Ward upheld the jury's award and said Innolux had infringed on all of the claims, but the judge disagreed on the finding of willfulness.

Finding that that the jury lacked information about Innolux's 2011 first- and second-quarter sales, Ward sua sponte severed Mondis' motion for ongoing royalties and supplemental damages.

The infringing products consisted of televisions and computer monitors, to which the judge applied a royalty rate of 0.75 percent and 0.5 percent, respectively, coming up with an award of $1.9 million for the 2011 first- and second-quarter sales.

After Mondis moved for supplemental damages, Ward enhanced the royalty rate for ongoing infringement. The judge said he was convinced subsequent infringement would be willful since the company's CEO gave a telling interview to the China Post after the jury's verdict in June.

"In addition, because the paramount determination is the egregiousness of InnoLux's conduct, the court considers InnoLux's corporate attitude, which is reflected by its CEO's statement to a Chinese newspaper after the verdict in this case, which reads in part: 'The issue of patent infringement is being taken too seriously sometimes,'" Ward wrote. "The court finds that this statement by InnoLux's CEO shows InnoLux's lack of respect for this court and the jury's verdict. It is also an affront to the United States patent system - a system of constitutional origin. The court, therefore, finds that this also warrants a strong enhancement because it further reflects the egregiousness of InnoLux's conduct."

Ward ruled that Innolux would pay ongoing royalties of 1.5 percent for computer monitors, but kept the television rate at .75, writing in a footnote that "it appears the parties are indifferent with respect to the televisions."

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