Sonomed Technology, Inc. (Sonomed) (defendant) manufactures and distributes ophthalmic devices. In 1984, Bausch & Lomb, Inc. (B&L) (plaintiff), a distributor of ophthalmic devices, entered an agreement with Sonomed (1984 Agreement), by which B&L would purchase and exclusively distribute Sonomed’s ophthalmic devices worldwide for three years. Pursuant to the 1984 Agreement, B&L paid $500,000 to Sonomed in exchange for its exclusive distribution rights. In 1986, the parties rescinded the 1984 Agreement and entered a new agreement (the 1986 Agreement), which extended B&L’s exclusive distribution rights for a total of five years while narrowing its territorial scope. Sometime before 1987, Sonomed violated the 1986 Agreement by selling its ophthalmic products in B&L’s territory. In 1987, Sonomed informed B&L that it would no longer fulfill any product orders. On November 30, 1987, B&L sued Sonomed for breach of contract and the district court found Sonomed liable. A jury awarded B&L $555,000.00 in damages, which included B&L’s $500,000.00 payment for its exclusive distribution rights. Sonomed appealed and challenged the $500,000.00 award to B&L.