CPU sockets and accompanying accessories, memory sockets
Hon Hai, also known by its trade name Foxconn, is the world’s largest contract electronics manufacturer and specializes in the manufacture and sale of computer, component, and consumer electronic products. Lotes is an electronics manufacturer that specializes in connectors, thermal modules, antenna tuners, and other peripherals for electronic devices.
In 2006 the parties entered into an agreement to resolve a number of disputes. As part of the agreement, Hon Hai and Foxconn granted Lotes a license to certain U.S. and foreign patents, while Lotes agreed to pay royalties on certain CPU and memory socket connectors.
In 2010 Hon Hai and Foxconn engaged an outside firm to conduct a royalty audit in relation to the license agreement. The audit revealed a royalty underpayment of several million New Taiwan Dollars and a dispute arose between the parties regarding the scope of the license.
In the current action, Lotes filed suit against Hon Hai and Foxconn seeking declaratory judgement of non-infringement regarding certain Hon Hai patents, in addition to declaratory judgement regarding the scope of the license agreement and breach of contract. Hon Hai and Foxconn responded with counterclaims for patent infringement and breach of contract.
Ocean Tomo, on behalf of Hon Hai and Foxconn, calculated three measures of damages caused by Lotes: reasonable royalty damages for patent infringement, unpaid royalty damages under the license agreement, and breach of contract damages incurred defending against patent validity challenges initiated by Lotes. In addition, Ocean Tomo rebutted damages opinions put forth by Lotes’ damages expert.