Wednesday, July 13, 2011

Failure to Disclose Infringing Sales Warrants $600,000 in Sanctions and Additional Damages

The court found defendant in contempt for failing to disclose sales made to one customer before trial and imposed $500,000 in sanctions. "[Defendant] argues that these sales were irrelevant because these letter agreements contractually bound [its customer] from importing these bus converters into the United States. The Court rejects [defendant's] self-serving analysis on the relevancy of the sales data and letter agreements. First, a contractual obligation does not relieve a party of its discovery obligation, at least not until the party moves, and the Court grants, protection from its discovery obligation. . . . [T]o accept [defendant's] argument and analysis would be to condone a party's attempt to unilaterally contract out of its discovery obligations. Such a result would cripple and severely undermine this Court's integrity."

SynQor, Inc. v. Artesyn Technologies, Inc., et. al., 2-07-cv-00497 (TXED July 11, 2011, Order) (Ward, J.)

The court found defendant in contempt for failing to disclose certain products in discovery until after trial and imposed $100,000 in sanctions. "[Defendant's] only explanation for this oversight is that 'one single manager blew it in his identification of Lineage custom products that might contain accused bus converter.' The Court finds [defendant's] explanation fails to address why it was reasonable to rely on one single manager's memory to fulfill its discovery obligations. . . . [T]he Court finds [defendant's] decision to rest its discovery obligations on one manager's memory was a willful choice to violate its obligation to conduct an adequate investigation and provide a full and complete disclosure. Additionally, the Court further finds that the willfulness of [defendant's] discovery violation becomes even more apparent when considering the magnitude of the sales that were inadvertently overlooked."

SynQor, Inc. v. Artesyn Technologies, Inc., et. al., 2-07-cv-00497 (TXED July 11, 2011, Order) (Ward, J.)

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