ePlus Awarded Disgorgement Damages for Violated Injunction Order Relating to Procurement Software

August 30, 2013

A judge in the U.S. District Court for the Eastern District of Virginia awarded ePlus Inc. damages of more than $17 million after finding that Lawson Software Inc. violated a May 23, 2011 permanent injunction order. The order prohibited Lawson from licensing or servicing procurement software products that infringed an ePlus patent.

Analysis Group was retained by Goodwin Procter LLP on behalf of ePlus to provide expert economic analyses relating to the amount to be paid by Lawson for violating the injunction. A case team including Managing Principal Keith R. Ugone, Vice President Minh P. Doan, and Associate Thomas P. McGahee performed an independent assessment of Lawson's gains from failing to comply with the injunction. The case team also assisted counsel in rebutting the analyses proffered by Lawson's rebuttal damages expert, including rebutting a reasonable royalty analysis and analyses of the claimed profit margin to be used for disgorgement purposes. Dr. Ugone prepared expert reports on these issues and testified in deposition and at the contempt hearing.

Following the hearing, Judge Robert E. Payne found Lawson to be in contempt of the injunction and ordered disgorgement of the profit Lawson had earned in violation of the injunction. The memorandum opinion noted that "[t]he Court finds Dr. Ugone's incremental profit calculations to be an appropriate approximation of Lawson's gains." Adopting both Dr. Ugone's incremental profit and apportionment analyses, the court awarded ePlus $17 million in incremental profit Lawson had earned in violation of the injunction. Dr. Ugone also provided testimony regarding the amount of a daily fine that could be used to coerce Lawson's compliance with the injunction. Judge Payne concluded that a daily fine within the range presented by Dr. Ugone should be applied as a coercive remedy if Lawson could not demonstrate compliance with the injunction going forward.