District Court Denies Prejudgment Interest Accrued During COVID-19 Delay

by Eric Caligiuri
The IP Law Blog

In Pierce Manufacturing, Inc., et. al v. E-One, Inc. et. al, 8-18-cv-00617 (MDFL Feb. 16, 2022) (Thomas P. Barber) the Court denied in part plaintiffs’ motion for pre-judgment interest that would have accrued during a stay due to COVID-19. In the case, Defendants were found liable for infringing certain claims in Plaintiffs’ asserted patent and the jury awarded Plaintiffs damages of $1,287,854 in lost profits and $170,500 in reasonable royalties. The parties did not dispute that an award of prejudgment and post-judgment interest was appropriate along with the damages award. Instead, the dispute was to the accrual time, rate, and calculation of prejudgment interest.

Defendants argued that any prejudgment interest calculation should exclude the period of time that the trial was continued due to the COVID-19 pandemic. The case was originally schedule for trial on March 23, 2020.  Ten days before trial, Plaintiffs moved to continue the trial date because of a travel ban due to the COVID-19 situation effecting its witnesses.  Defendants opposed Plaintiffs’ motion, citing their expended investments in preparation for trial and the fact that trial was less than two weeks away.  At that time, the Court noted it was still operating and trials were taking place. Nevertheless, the Court still granted Plaintiffs’ motion for a continuance, and the rescheduled jury trial commenced the following year on June 7, 2021.

In considering the issue, the Court first noted it is awarded wide discretion in awarding prejudgment interest. The Court cited authority holding, “it may be appropriate to limit prejudgment interest, or perhaps deny it altogether, where the patent owner has been responsible for undue delay in prosecuting the lawsuit. There may be other circumstances in which it may be appropriate not to award prejudgment interest.” Thus, in awarding prejudgment interest, the Court must be mindful that “[p]rejudgment interest has no punitive, but only compensatory, purposes.”

In other words, the purpose of prejudgment interest is to place a plaintiff “in the situation [it] would have occupied if the wrong had not been committed.”  The Court also noted it is granted wide discretion to limit prejudgment interest when the party seeking prejudgment interest is the one that requested a stay or continuance that resulted in a delay of the trial. Therefore, the Court reasoned that Plaintiffs are not entitled to prejudgment interest for the period of the continuance Plaintiffs’ requested.

Accordingly, the Court held the award of prejudgment interest shall accrue from July 15, 2017 (the date of first alleged infringement) through March 23, 2020 (the original trial date) and from June 7, 2021 (the date the reschedule trial began) through July 28, 2021 (the date of Judgment), excluding the period from March 23, 2020, to June 7, 2021.