       NOTE: This disposition is nonprecedential.


  United States Court of Appeals
      for the Federal Circuit
                ______________________

CALICO BRAND, INC. AND HONSON MARKETING
               GROUP, INC.,
           Plaintiffs-Appellants,

                           v.

            AMERITEK IMPORTS, INC.,
                  Defendant,

                          AND

  ACME INTERNATIONAL ENTERPRISES, INC.,
          Defendant-Cross Appellant.
            ______________________

                   2008-1324, -1341
                ______________________

   Appeal from the United States District Court for the
Central District of California in No. 05-CV-0205, Judge
Patrick J. Walsh.
                 ______________________

                Decided: July 18, 2013
                ______________________

    R. JOSEPH TROJAN, Trojan Law Offices, of Beverly
Hills, California, argued for plaintiffs-appellants. With
him on the brief was DYLAN C. DANG.
2              CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.

    TRACY ZURZOLO QUINN, Reed Smith, LLP, of Philadel-
phia, Pennsylvania, argued for defendant-cross appellant.
With her on the brief were CARL H. PIERCE, MATTHEW P.
FREDERICK, KHURRAM N. GORE; and JAMES C. MARTIN and
KEVIN S. KATONA, of Pittsburgh, Pennsylvania.
                ______________________

     Before DYK, PROST, and REYNA, Circuit Judges.
REYNA, Circuit Judge.
    This appeal arises from a patent infringement suit
brought by Calico Brand, Inc. and Honson Marketing
Group, Inc. (collectively, “Calico”) against Ameritek
Imports, Inc. (“Ameritek”) and Acme International Enter-
prises, Inc. (“Acme”). A jury found that Ameritek and
Acme willfully infringed Calico’s claims for patented
safety mechanisms on a utility lighter and that Calico
was entitled to lost profits as compensation for the in-
fringement. The district court ruled on post-trial motions,
granting judgment as a matter of law (“JMOL”) 1 that
Acme’s infringement was not willful and denying Acme’s
request for a new trial on damages issues.
    Calico contends that the United States District Court
for the Central District of California (“district court”)
erred when it set aside the jury verdict that the infringe-
ment was willful. Acme cross-appeals on the issue of
damages, arguing that the jury’s award of lost profits
should have been overturned.       We affirm the district



      1     Federal Rule of Civil Procedure 50 was
amended in 1991 to substitute the uniform term “judg-
ment as a matter of law” in place of “judgment notwith-
standing the verdict” and “directed verdict.” The district
court employed the outdated term, but we understand the
post-trial rulings as responsive to the parties’ renewed
motions for judgment as a matter of law or, alternatively,
for a new trial.
4               CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.
44-45; ’569 Patent col. 5 ll. 46-51. Claim 1 of the ’992
Patent recites:
    1. A utility lighter comprising: a lighter housing, a
        lighting rod projecting from the lighter hous-
        ing, a fuel tank, located within the lighter
        housing, a valve, being spring loaded so as to
        be urged into the closed position, for releasing
        fuel, a gas tube connected to the valve and ex-
        tending through the lighting rod, and a con-
        ventional piezoelectric unit for generating a
        spark;
            a trigger, slidably mounted in the
            lighter housing, having an exterior
            surface capable of being engaged by a
            user for slidably activating the piezoe-
            lectric unit, said trigger also having an
            interior portion positioned substantial-
            ly within said lighter;
            a locking mechanism comprising a
            locking lever, a locking spring, and a
            stopper tab;
            said locking lever extending from said
            interior portion of said trigger and
            having a top surface with a first eleva-
            tion and a second elevation;
            said locking spring capable of urging
            the locking lever into a position so
            that the locking lever is biased against
            the stopper tab to prevent said trigger
            from sliding a sufficient distance to
            engage said piezoelectric unit;
            a safety button, which is slidably
            mounted on said housing and capable
            of moving in a substantially parallel
            but opposite direction to said trigger;
CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.           5
            said safety button having a contact
            surface, a fuel release segment and a
            unlocking segment;
            said contact surface capable of manip-
            ulation by a user so that said fuel re-
            lease segment opens said valve to
            release fuel while the unlocking seg-
            ment substantially and simultaneous-
            ly moves from a position in which it is
            in contact with said first elevation of
            said locking lever to a position in
            which the fuel release segment is in
            contact with the second elevation of
            said locking lever to a position in
            which the fuel release segment is in
            contact with the second elevation of
            said locking lever whereby said lock-
            ing lever is caused to move out of in-
            terference with the stopper tab
            permitting said activation of said pie-
            zoelectric unit by said trigger to ignite
            the fuel being released from said
            valve.
’992 Patent, col. 6 ll. 30-65.
    The written description acknowledges that utility
lighters have become “prevalent in modern times” and are
a well-known means of producing a flame. See ’992 Pa-
tent col. 1 ll. 11-17; ’617 Patent, col. 1 ll. 36-41; ’569
Patent, col. 1 ll. 41-46. The patents address a need in the
prior art “to equip utility lighters with safety features”
that prevent against accidents in the event the lighters
are put in the hands of an inexperienced person, especial-
ly young children. ’569 Patent col. 1 ll. 56-59. Previous
inventions attempted to address safety-related concerns,
but the unique structural improvements in the Calico
patents “make[] it very difficult, if not impossible, for
young children to operate the [utility lighter].” ’992
Patent col. 2 ll. 27-31; ’617 Patent col. 2 ll. 51-54; ’569
6               CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.
Patent col. 2 ll. 59-60. To that end, the “primary object of
the invention is to provide a safety mechanism for utility
lighters.” ’992 Patent col. 3 ll. 11-12; ’617 Patent col. 3 ll.
52-54; ’569 col. 3 ll. 58-59. The preferred embodiments, as
illustrated in Figures 6 and 7, are representative of an
application of the claims:




    The figures, like the description of individual compo-
nents, offer mechanical teachings such as automatic
locking that prevents accidental use, and prevents young
children from pressing the trigger and operating the
lighter. See ’992 Patent col. 3 l. 65 to col. 4 l. 1; ’617
Patent col. 5 l. 66 to col. 6 l. 3; ’569 Patent col. 6 ll. 4-9.
                   B. Procedural History
   We begin by reviewing pre-trial events that are rele-
vant to this appeal. Before filing its Complaint, Calico
CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.             7
contacted both Ameritek and Acme in 2004 and gave
notice of alleged infringement. At that time, Ameritek
was an importer of consumer products from China, which
it sold to distributors and/or retailers. Ameritek sold
imported utility lighters to Acme, who in turn, distributed
the utility lighters to retailers.
    On October 22, 2004, counsel for Calico wrote to Acme
and demanded that Acme cease and desist from distrib-
uting infringing lighters. J.A. 94−95. Calico also de-
manded that Acme disclose import, inventory, and sales
records for the Signature Series utility lighters. Id. at 95.
Calico stated that it would not hesitate to file a patent
infringement suit and seek treble damages and attorneys’
fees if Acme failed to respond. Id. Acme’s President, Emil
Giliotti, called William Tu at Ameritek to discuss Calico’s
cease and desist letter. Acme memorialized the conversa-
tion in a letter dated November 2, 2004 in which Acme
sought reassurance that Ameritek would indemnify any
damages awarded against Acme and also requested that
Ameritek immediately set forth a non-infringement
position. Ameritek ultimately failed to articulate a non-
infringement position, causing Acme to return its invento-
ry of accused lighters to Ameritek and demand a refund.
J.A. 122−23. The letter clarifies that the return of the
inventory was connected to Calico’s infringement allega-
tions: “[s]hould Ameritek reach an agreement with Calico
that enables Ameritek to sell the gas lighters, then Acme
will repurchase the inventory in question from Ameritek
as long as it is able to sell it to its customers.” J.A. 122.
Three days after the November 2, 2004 letter, while
waiting on Ameritek’s response, Acme allegedly sold
74,556 units of product that Calico contends were infring-
ing lighters.
    Calico filed suit against Ameritek and Acme in Janu-
ary 2005, alleging willful infringement of claim 1 of all
three patents. During discovery, Ameritek conceded that
the imported lighters met every limitation of the asserted
claims. J.A. 143 (response to Calico’s Requests for Admis-
sion). With infringement established, Calico moved for
8               CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.
summary judgment on the validity of the patents in suit
and defendants cross-moved to invalidate the patents.
The district court considered defendants’ invalidity chal-
lenges, and found that the patents were neither anticipat-
ed nor obvious as a matter of law. See J.A. 96−113. At
trial, the jury was instructed to consider only whether
defendants’ infringement was willful and to determine an
appropriate amount of damages to compensate for the
infringement.
    The jury returned a verdict finding willful infringe-
ment and that Calico was entitled to lost profits from
Ameritek in the amount of $719,395 and from Acme in
the amount of $178,035. The jury also determined that
Ameritek should pay a reasonable royalty in the amount
of $113,471 and that Acme should pay a reasonable
royalty in the amount of $23,250.
    Both parties filed post-trial motions. The district
court overturned the jury’s finding of willful infringement
for both defendants, concluding as a matter of law that
there was no substantial evidence that defendants knew
of the patents in making sales before October 22, 2004,
and that they were objectively reckless in their conduct.
J.A. 8−9. The district court agreed with the jury that
Calico was entitled to lost profits, and entered final judg-
ment consistent with the jury’s lost profits award. J.A.
1−2. The final judgment states that the award is joint
and several, meaning that if either Ameritek or Acme was
unable to satisfy their obligations, the co-defendant would
be liable for the remaining balance. Id.
    After defendants filed a notice of appeal with this
court, Ameritek filed for bankruptcy. Appellant Br. 6. At
the outset of the bankruptcy proceedings, this appeal was
stayed pursuant to 11 U.S.C. § 362. Id. Following the
bankruptcy proceedings, Ameritek was dismissed from
this appeal. Thus, Acme is the only remaining defend-
ant/cross-appellant and the issues before us only relate to
Acme. We have jurisdiction pursuant to 28 U.S.C. §§
1291 and 1295(a)(1).
CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.              9

                        II. DISCUSSION
    This court reviews the grant or denial of a motion for
JMOL or for a new trial under the law of the regional
circuit of the district court, which in this case is the Ninth
Circuit. Callicrate v. Wadsworth Mfg., Inc., 427 F.3d
1361, 1366 (Fed. Cir. 2005). The Ninth Circuit reviews a
district court’s order granting or denying a motion for
JMOL without deference. See Janes v. Wal-Mart Stores
Inc., 279 F.3d 883, 886 (9th Cir. 2002); Vollrath Co. v.
Sammi Corp., 9 F.3d 1455, 1460 (9th Cir. 1993). A JMOL
is proper if the evidence, construed in the light most
favorable to the nonmoving party, permits only one rea-
sonable conclusion, and that conclusion is contrary to the
jury’s verdict. Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir.
2002); McLean v. Runyon, 222 F.3d 1150, 1153 (9th Cir.
2000). The resolution of a motion for a new trial is re-
viewed for abuse of discretion. Presidio Components, Inc.
v. Am. Technical Ceramics Corp., 702 F.3d 1351, 1358
(Fed. Cir. 2012) (applying Ninth Circuit law); Hangarter
v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1005
(9th Cir. 2004).
    Each party presents only one issue on appeal. Calico
challenges the district court’s willfulness determination.
Acme challenges the district court’s award of damages in
the form of lost profits. We take each issue in turn.
                 A. Willful Infringement
    In order to make the requisite showing for willful in-
fringement, Calico must show by clear and convincing
evidence that Acme “acted despite an objectively high
likelihood that its actions constituted infringement of a
valid patent.” In re Seagate Tech., 497 F.3d 1360, 1371
(Fed. Cir. 2007). It must also demonstrate that this
objectively-defined risk . . . was either known or so obvi-
ous that it should have been known to the accused in-
fringer.”     Power Integrations, Inc. v. Fairchild
Semiconductor Int’l., Inc., 711 F.3d 1348, 1357 (Fed. Cir.
2013) (quoting Seagate, 497 F.3d at 1371). We review the
legal question of whether the infringing conduct was
10              CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.
objectively reckless without deference, and we review for
substantial evidence the factual question of whether the
risk presented to Acme was either known or so obvious
that it should have been known. Bard Peripheral Vascu-
lar, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1006–
07 (Fed. Cir. 2012).
    In this case, the district court analysis centered on the
second prong of the Seagate standard. The court reversed
the jury’s finding of willful infringement because it be-
lieved there was no indication that Acme infringed de-
spite knowledge of an objectively-defined risk that its
actions constituted infringement of Calico’s patents. The
court analyzed uncontroverted evidence presented at trial
and concluded that there was no showing that Acme had
knowledge of Calico’s patents at the time it was selling
the infringing Ameritek lighters before October 22, 2004.
Rather, the district court found that, when informed of
Calico’s patents, Acme switched to selling readily-
available non-infringing lighters and returned the inven-
tory of infringing lighters to Ameritek. J.A. 9. Weighing
the totality of the evidence, the district court determined
that “[p]erhaps Acme should have done more to ensure
that Ameritek was not selling [it] infringing goods,” but
that this failure constituted, at most, negligent conduct.
Id.
     Calico first addresses the facts and circumstances dis-
cussed by the district court in its post-trial opinion, argu-
ing that the utility lighters Acme purchased from
Ameritek were sold as “cheap knock-offs” of its products
and Acme willfully infringed by not investigating the
differences between the patented products and the ac-
cused lighters. Contrary to Calico’s contention that Acme
neither knew nor cared whether the purchased Ameritek
lighters were infringing, the record shows that when
Acme learned of its potential liability for infringement, it
immediately demanded assurances from Ameritek that
the products did not infringe and stated it would return
its inventory of accused products to Ameritek, which it
eventually did. J.A. 120−21; J.A. 186 (testimony stating
CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.           11
that Acme planned to return inventory because it did not
want to buy infringing products). Based on this spartan
record, the district court was correct to conclude that the
jury’s finding that Acme’s conduct was willful was not
supported by substantial evidence.
    Calico makes a second argument to this court—
requesting that we reinstate the jury’s verdict based on a
November 2004 report (“Lot Tracking document”). Calico
represents that the Lot Tracking document shows that
Acme sold four lots of products (74,556 lighters) to its
customer, Linens N Things, days after Acme’s President
learned of the patents in suit, and that a decision to
continue selling the accused products after receiving
notice of the infringement allegations demonstrates
Acme’s reckless disregard for the patents. Even if we
assume that the jury awarded damages for those 74,556
lighters, the record does not establish willful infringement
with respect to those sales.
    The district court did not discuss the Lot Tracking
document in the post-trial ruling, but this omission is
consistent with our review of the record, which indicates
that the Lot Tracking document was not relied on at trial
in connection with allegations of willful infringement.
Indeed, Calico does not point to any citation in the record
suggesting that the jury considered the Lot Tracking
document as evidence of willful infringement.
   We agree with Acme that the Lot Tracking document
does not establish willful infringement. 2 Because the




      2    During trial, the Lot Tracking document was
discussed only for purposes of substantiating Calico’s
damages demand. See J.A. 236 (relying on the Lot Track-
ing document for calculation of accused sales from 2003
through 2004). Calico chose to focus its willful infringe-
ment allegations on Acme’s failure to investigate whether
the products it buys from third parties are infringing and
12              CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.
document does not establish basic facts—such as whether
the products sold were infringing lighters or non-
infringing alternatives—it is facially insufficient to prove
willful disregard for Calico’s patent rights.      As Acme
points out, the Lot Tracking document was admitted
outside the presence of the jury for the purpose of estab-
lishing damages. After counsel stipulated to its admis-
sion, Calico did not solicit relevant testimony about as to
its contents. Mr. Giliotti—the lone witness testifying
about the Lot Tracking document—was asked what the
Lot Tracking document represented, and he testified that
he did not know other than it was prepared by his finan-
cial people. J.A. 181−82. Mr. Giliotti could not testify
whether the Lot Tracking document reflected “sales or
purchases of utility lighters.” J.A. 182. Mr. Giliotti was
not asked, and therefore provided no testimony, whether
the November 2004 Lot Tracking shipment purportedly
destined for Linens N Things, was of infringing lighters or
alternative non-infringing lighters.
    Because it does not establish sales of infringing light-
ers, the Lot Tracking document does not establish that
Acme willfully infringed by selling Ameritek lighters after
being notified of Calico’s patents. On its face, the Lot
Tracking document is bereft of identifying information
that demonstrates what goods, if any, were actually sold.
J.A. 124. It similarly fails to indicate that the products
were sourced from Ameritek. Details such as product
identity and source are particularly relevant here because
Acme established that during the period it sold infringing
lighters, it was simultaneously selling non-infringing
lighters not obtained from Ameritek. J.A. 184. Without
more, the record does not constitute clear and convincing
evidence of willful infringement. We affirm the district
court’s determination that the jury’s willful infringement
finding was not supported by substantial evidence.


to seek indemnification from its suppliers.        E.g., J.A.
233−35.
CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.            13

                        B. Lost Profits
     We next address the district court’s legal analysis re-
garding the award of lost profits as compensation for
Acme’s infringement. The availability of lost profits is a
question of law we review de novo. Siemens Med. Solu-
tions USA, Inc. v. Saint-Gobain Ceramics & Plastics, Inc.,
637 F.3d 1269, 1287 (Fed. Cir. 2011). To recover lost
profits, a patent owner “must show causation in fact,
establishing that but for the infringement, he would have
made additional profits.” Id. (internal quotation marks
omitted) (quoting Wechsler v. Macke Int’l Trade, Inc., 486
F. 3d 1286, 1293 (Fed. Cir. 2007)); see also Rite-Hite Corp.
v. Kelley Co., Inc., 56 F.3d 1538, 1544 (Fed. Cir. 1995) (en
banc) (stating the applicable standard of review). In
general, a patent owner must prove causation in fact by
showing (1) a demand for the patented product, (2) an
absence of acceptable non-infringing substitutes, (3) the
manufacturing and marketing capability to exploit the
demand, and (4) the amount of profit the patent owner
would have made (“the Panduit factors”). Rite-Hite, 56
F.3d at 1544 (“Panduit Corp. v. Stahlin Bros. Fibre
Works, Inc., 575 F.2d 1152, (6th Cir.1978), articulated a
four-factor test that has since been accepted as a useful,
but non-exclusive, way for a patentee to prove entitlement
to lost profits damages.”).
    The district court ruled on Calico’s theory of lost prof-
its twice. First, in a summary judgment decision, the
district court agreed with Calico that there was a triable
issue as to lost profits as a measure of damages. Yet, in
reaching this conclusion, the district court acknowledged
that the patented safety mechanism was not driving
Calico’s performance in the marketplace:
    The parties agree that there are other noninfring-
    ing utility lighter products in the marketplace.
    Neither party has put forth evidence showing that
    consumers distinguish between the various utility
    lighters based on product features. Thus, Plain-
    tiffs are not claiming that their patented safety
14              CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.
     mechanism has drawn customers to purchase
     their specific products.
J.A. 114.
     Second, after the jury awarded lost profits, the district
court considered Acme’s motion for JMOL or, alternative-
ly, for a new trial. It considered the four Panduit factors,
concluding that the evidence demonstrated that Calico
lost sales due to defendants’ infringement. For the rea-
sons discussed herein, we conclude that the district court
improperly permitted the jury to consider lost profit
damages, and that it erred in denying Acme’s motion for
JMOL.
                  1. Customer Demand
    Focusing on the first Panduit factor, Acme argues
that the district court erred in finding lost profits to be an
available form of damages because the child safety fea-
tures claimed in the patents in suit are divorced from
consumer demand. Acme points to evidence indicating
that the only distinguishing feature influencing consum-
ers to buy the infringing lighters over the Calico lighters
was price. Appellee Br. 31 (citing J.A. 166).
    Calico responds that the evidence supports the con-
clusion that “but for” the infringement, Calico would have
maintained its market share of 28.4% and would not have
experienced a 7% decrease in sales during the period of
infringement.
    In each of the district court’s rulings, it overlooked
well-established precedent requiring “a causal relation
between the infringement and its lost profits.” Ericsson,
Inc. v. Harris Corp., 352 F.3d 1369, 1377 (Fed. Cir. 2003)
(quoting BIC Leisure, Inc. v. Windsurfing Int’l, Inc., 1
F.3d 1214, 1218 (Fed. Cir. 1993)). In Rite-Hite, we ex-
plained that lost profits must be tied to the intrinsic value
of the patented feature. See 56 F.3d at 1548−50. We have
also held that demand for the entire apparatus is, in most
circumstances, not interchangeable with demand for a
patented component of the larger apparatus. Uniloc USA,
CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.           15
Inc. v. Microsoft Corp., 632 F.3d 1292, 1320 (Fed. Cir.
2011); Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301,
1337−38 (Fed. Cir. 2009).
    Here, the district court credited testimony regarding
accounting records for sales of Calico utility lighters as
sufficient evidence of customer demand. J.A. 11. We
disagree that evidence of gross sales data is sufficient
under the Rite-Hite framework to establish consumer
demand based on the patented safety mechanism.
     Indeed, the lack of demand for the patented safety
mechanism is reflected in the summary judgment ruling,
where the district court acknowledges that Calico made
no attempt to argue that the safety mechanism drives
demand for its specific product. J.A. 114. The patents in
suit are directed to a safety mechanism with a trigger, a
locking lever, and a safety button, but Calico never ex-
plored the commercial benefits of these features and
elicited no testimony to distinguish between the value of
the patented and unpatented features.          Specifically,
Calico’s Vice President of Sales and Marketing conceded
that Calico had no documentation showing that consum-
ers preferred the Calico safety mechanism to an alterna-
tive mechanism found in competitors’ products. J.A.
169−70. While the record lacks evidence that the patent-
ed feature drove customer demand, evidence was present-
ed that the most salient driver of customer demand
seemed to be the utility lighter’s price. J.A. 166. The
district court’s conclusion on the first Panduit factor was
error. We next turn to the second Panduit factor.
       2. Acceptable Non-infringing Alternatives
    The district court did not make specific findings con-
cerning the second Panduit factor—a requirement of no
acceptable non-infringing alternatives. Instead, it gener-
ally referred to a line of cases holding that “a patent
owner may satisfy the second Panduit element by substi-
tuting proof of its market share for proof of the absence of
acceptable substitutes.” J.A. 11 (citing BIC Leisure, 1
F.3d at 1219).
16              CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.
     Acme argues that, as legal matter, lost profits are not
available because non-infringing utility lighters were
available throughout the period in which the infringing
lighters were on the market. Acme points out that under
the BIC Leisure line of cases, the patentee still bears the
burden of establishing a causal connection between the
infringement and the lost profits. Given the presence of
non-infringing alternatives, Acme argues that Calico
failed to establish that it would have made the sales that
Acme made “but for” the infringement.
    We hold that Calico failed to demonstrate a reasona-
ble probability that, in the absence of the infringing
Ameritek lighters, Acme and/or its customers would have
purchased Calico lighters rather than the non-infringing
alternatives. See Rite-Hite, 56 F.3d at 1545. Under these
facts, Calico’s failure to establish that its lost sales were a
direct result of Acme’s sales of infringing lighters, and not
due to the sales of non-infringing lighters, precludes the
recovery of lost profits. See Shockley v. Arcan, Inc., 248
F.3d 1349, 1362−64 (Fed. Cir. 2001); Oiness v. Walgreen
Co., 88 F.3d 1025, 1029 (Fed. Cir. 1996) (internal citations
omitted).
    There is no dispute that at all relevant times, Acme
and Calico competed in the same market for utility light-
ers. But Calico and Acme were not the sole competitors in
the market. At minimum, Easton Products, Beacon
Products, BIC, and New York utility lighters also compet-
ed in the same market. J.A. 168. Given the crowded
nature of this market, there is no reasonable basis to
support an assumption that Calico would have made
additional sales “but for” the presence of Ameritek light-
ers. The record evidence shows that there were 20 to 30
brands of utility lighters comparable to the Ameritek
product. J.A. 189
    Indeed, the district court acknowledged in its sum-
mary judgment ruling that Acme was able to switch to an
alternative product and maintain its sales volume. J.A.
115. At trial, Mr. Giliotti offered unrebutted testimony
CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.           17
that Acme had an established practice of purchasing
utility lighters from a California manufacturer that were
interchangeable with the Calico lighters. J.A. 184; see
also J.A. 189 (testifying that there were a variety of other
suppliers whose utility lighters did not differ from the
Ameritek product in terms of price, functionality, or
consumer preference). A seamless substitution of the
asserted product with a non-infringing, alternative prod-
uct that is sourced from a third party supplier, is evidence
of acceptable non-infringing alternatives under the second
Panduit factor.
    We reverse the district court’s conclusion that under a
market share theory Calico would have captured profits
“but for” Acme’s infringement.
             3. Acme’s Remaining Liability
    In entering judgment, the district court held that Ac-
me and Ameritek were jointly and severally liable for
damages. On appeal, neither party challenges the district
court’s decision to impose joint and several liability.
Acme agreed at oral argument that if we concluded as a
matter of law that lost profits are not an available reme-
dy, then a reasonable royalty of three cents per unit
should be applied. Oral Argument at 18:06−18:44, No.
2008-1324, available at http://www.cafc.uscourts.gov/oral-
argument-recordings/2008-1324/all. Therefore, we vacate
the lost profits award and reinstate the reasonable royal-
ty award in the amount of $113,471. We have considered
the parties’ remaining arguments and conclude that they
are without merit.
                       III. CONCLUSION
     For the foregoing reasons, we affirm the district
court’s legal conclusion that the infringement was not
willful. We reverse the district court’s legal conclusion
that damages were available in the form of lost profits.
We vacate the award of lost profits and remand for entry
of judgment reflecting the jury’s award of damages in the
form of a reasonable royalty.
18               CALICO BRAND, INC.   v. AMERITEK IMPORTS, INC.
     AFFIRMED-IN-PART, REVERSED-IN-PART,
       VACATED-IN-PART, AND REMANDED
                           COSTS
     No costs.
