Very Interesting

Oh, how the mighty have fallen. Once, the Ford Motor Company was one of the richest and most powerful commercial enterprises in the world. Now, attorneys argue, in court, that it may be unable to pay the damages awarded by a jury which found Ford guilty of patent infringement. (Jacob Krippelz, Sr. v. Ford Motor Company.)

A year ago, the jury awarded Krippelz $23 Million in damages for infringement of his patent on a “puddle lamp” which is built into the side view mirrors of certain Ford automobiles.

Krippelz moved for an award of prejudgment interest, which Ford, not surprisingly, opposed. Ford argued that Krippelz unduly delayed prosecuting the suit by (1) failing to file a motion for a preliminary injunction; (2) filing for a re-examination of his patent; and (3) failing to file a motion for summary judgment early in the litigation. The Court held that “Ford points to no authority requiring a plaintiff to file for preliminary injunction or for summary judgment in order to recover prejudgment interest. Neither does Ford point to any authority suggesting that a re-examination or stay of litigation results in the forfeiture of prejudgment interest by the plaintiff.”

Having won an award of prejudgment interest, Krippelz argued – this is the truly pathetic part – that “there is a significant risk of default by the defendant” because “in 2005 Ford’s credit rating was downgraded from ‘investment grade’ to ‘speculative grade,’ and because lenders to Ford are now subject to ‘high credit risk’” and, therefore, a prejudgment interest rate of prime plus one percent was warranted. The Court agreed, holding “[t]he plaintiff is an unsecured, uninsured creditor, and the risk of default must be considered in deciding what a compensatory rate of interest would be.”

Krippelz then requested that the interest be compounded, which Ford opposed. Ford countered that the interest should be simple, arguing that “delays caused by Krippelz warrant an award of simple, rather than compounding interest.” The Court, however, noted “as discussed supra, Krippelz caused no unreasonable delay in the proceedings” and awarded compound interest.

Krippelz, sensing that he was on a roll, requested that the interest be compounded quarterly. Ford argued that it should be compounded annually. Ford lost.

Failing to see the handwriting on the wall, Ford argued that interest should not accrue during the three year stay during which the patent in suit was being re-examined. The Court again held that the stay was “neither unreasonable nor unjustified” and denied Ford’s request.

Following up on this unbroken string of defeats, Ford argued that interest should only be awarded on the after-tax value of the damages award. The Court, apparently weary of Ford’s incessant arguing, held that this would be “too speculative and difficult to calculate” and denied the request.

Never giving up, Ford then argued that the interest should be compounded at the end of each quarter, not the beginning as calculated by Krippelz’ expert. The Court gave this one to Ford.

THE LESSON TO BE LEARNED: When the Court tells you that your argument is a loser, don’t keep repeating it.

P.S. The Court then went on to award Krippelz costs and doubled damages for willful infringement.

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