Sunbeam Products, Inc. v. Wing Shing Products (BVI) Ltd.

The Situation

In March 2001, within the proceedings governing Sunbeam's bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of New York, Wing Shing Products (BVI) Ltd. filed suit alleging Sunbeam infringed its design patent relating to certain Mr. Coffee coffeemakers. Wing Shing claimed potential infringement damages as a creditor in the bankruptcy proceedings. NERA was retained by counsel for Sunbeam to calculate the damages caused by the alleged infringement.

NERA's Role

The case was tried in January 2002. A NERA economist testified that Wing Shing was not entitled to lost profit damages and proposed a reasonable royalty ranging from $32,000 to no more than $175,000 based on the amount it would likely cost Sunbeam to design around the patent at issue. The opposing expert testified that Wing Shing should be entitled to lost profits plus reasonable royalties totaling more than $10 million.

The Result

On June 3, 2003, Judge Arthur J. Gonzalez concluded that the patent was valid, owned by Wing Shing, and infringed by Sunbeam. He embraced NERA's reasoning for determining damages and found (1) Wing Shing was not entitled to lost profit damages; and (2) NERA’s testimony was "helpful in constructing this hypothetical negotiation." Wing Shing was awarded reasonable royalties totaling no more than $175,000, plus interest.