Tidy Cats found to infringe an Oil-Dri patent, but the jury was not too enthused about damages.
This week a jury awarded Chicago-based Oil-Dri damages of $3 million after a 7-day patent infringement trial against Nestle Purina, makers of Tidy Cats cat litter. The jury ruled for Oil-Dri on the issue of validity and infringement of its patent-in-suit, but accepted defendant Purina’s position on damages, giving somewhat of a win to both sides.
Oil-Dri had sued Nestle Purina for infringement of its U.S. Patent No. 5,975,019, which describes cat litter formulations. Oil-Dri, represented at trial by Michael P. Mazza LLC and The Collins Law Firm PC, argued that with its patent, a cat litter could be made with much less sodium bentonite, resulting in substantial cost savings as compared to prior formulations that were mostly or entirely sodium bentonite.
Purina’s counsel, Morgan Lewis & Bockius LLP, argued at trial that the asserted claims require predetermined mean particle sizes for the non-swelling clay and swelling clay (sodium bentonite). But they argued that Purina does not predetermine mean particle sizes since the manufacturing processes only limit the maximum particle size. Purina also argued that its massive investments in marketing, consumer research, and R&D meant that it would be successful in the market regardless of the patented technology.
Oil-Dri’s damages expert explained that Purina saw cost savings of several millions of dollars per year using the technology. The expert concluded that comparable licenses suggested royalties of 1-4% of sales, and that a reasonable royalty rate of 3% would result in total damages of $73 million. Purina’s damages expert, on the other hand, concluded that the comparable licenses suggested lump sum royalties of $3 million to $8 million. Purina, the expert argued, would have expected billions of dollars in sales even without a license to the patent, due to its position in the market and its own investments.
In its verdict, the jury found the patent was valid, and Purina infringed all but one of the asserted claims. But it awarded a royalty of just $3 million, the low end of what Purina suggested it should pay. It seems that either the jury was skeptical of the novelty of the patent or was skeptical of the value of the patent/technology to Purina. Or a little bit of both.
In the end, however, Oil-Dri’s attorneys successfully overcame pretty good non-infringement arguments by Purina, while Purina’s attorneys successfully overcame a pretty good case for big, big damages.
Seeing that Purina was confronted with the possibility of a $73 million award (which Oil-Dri asked to be trebled), they would be unlikely to appeal the verdict. And presumably Oil-Dri, having won an award of damages, won’t be appealing either.
The case was Oil-Dri Corporation of America v. Nestle Purina Petcare Company, Case No. 1-15-cv-01067 in the U.S. District Court, Northern District of Illinois.