Patent Damages
4Sep/140

Allowing “Do-Overs” for damages experts

Posted by Chris Marchese

District courts have been wrestling with how to handle damages experts who are fully excluded by Daubert motion.  Courts have essentially three options:  (1) give no further bites at the apple and exclude the expert from trial; (2) give the expert one, and only one, more chance at an admissible theory of damages (one more bite at the apple); or (3) allow the expert to submit a supplemental or replacement report but put no express limitations on the number of times the expert can bite the apple.  The additional apple bites are sometimes referred to as “do-overs.”  This is a pejorative term in that is conjures a first failure, and then another chance to get it right.  Regardless, the term is apt for an expert whose report has been deemed unreliable and inadmissible and who is permitted to submit a supplemental or replacement report.

4Aug/140

Judge Davis would make a good damages expert (CSIRO v Cisco)

Posted by Justin Barnes

On July 23, 2014, Judge Davis of the Eastern District of Texas issued findings of fact and conclusions of law regarding damages figures in CSIRO v Cisco, Case No. 6:11-cv-00343-LED.  Infringement and validity were stipulated, and the parties agreed to a bench trial on damages, which lasted four days.  CSIRO’s ‘069 patent related to IEEE 802.11 wireless standards (excluding 802.11b).

There was an allegation that CSIRO had made a RAND commitment to the IEEE regarding one of the 802.11 standards (802.11a), but Judge Davis put very little emphasis on this point, as CSIRO had volunteered to license the ‘069 patent anyway (even for 802.11 standards where there were no RAND commitments) and the number of accused products involving 802.11a was less than 0.1% of the total accused products.

1Aug/140

NDCA addresses damages based on entire chip; royalty rate; estimates of importation

Posted by Chris Marchese

On June 20, 2014, Judge Gonzalez Rogers of the Northern District of California issued an opinion on defendant Freescale’s motion to exclude certain testimony of plaintiff’s damages expert, Catharine M. Lawton.  MediaTek, Inc. v. Freescale Semiconductor, Inc., Case No. 11-cv-5341 YGR.  Freescale moved on three issues:  “(1) [Lawton’s] apportionment analysis; (2) her royalty rate estimate for certain patents-in-suit; and (3) her opinion on the U.S. share of Kindle e-reader sales.”  Slip op. at 1.  The court denied the motion on each issue. 

29Jul/140

CDCA denies motion to exclude third party license, citing Apple v. Motorola

Posted by Chris Marchese

On June 11, 2014, Judge Bernal of the Central District of California issued an opinion on motions in limine, including denying Texchem’s request to exclude opinions by e.PAK’s damages expert, Lawrence Simon, concerning a third partY license.  The case is Texchem Advanced Products Inc. v. e.PAK Int’l Inc., Case No. EDCV 12-1341 JGB (SPx).  Texchem argued that the license agreement was not comparable to the hypothetical negotiation.  The court denied the motion.  The court cited the Federal Circuit’s recent opinion in Apple Inc. v. Motorola, Inc., 2014 WL 1646435 (Fed. Cir. Apr. 25, 2014).  We quote the court’s brief analysis in full:

2Jul/140

CDCA excludes reasonable royalty testimony due to unreliable license analysis

Posted by Chris Marchese

On April 21, 2014, Judge Guilford of the Central District of California issued an opinion on Daubert motions.  The case is Universal Electronics, Inc. v. Universal Remote Control, Inc., Case No. SA-CV 12-00329 AG (JPRx).  The parties had filed several motions to exclude evidence on a wide array of issues.  One motion of interest relates to plaintiff’s damages expert’s opinions on reasonable royalty.  The expert, Frank Bernatowicz, had reached a “baseline” royalty rate of 3% using allegedly comparable licenses as a benchmark.  Defendant moved to exclude the royalty opinions contending that Bernatowicz’s license analysis was flawed.  The court agreed and excluded Bernatowicz’s testimony on reasonable royalty damages.

30Jun/140

EDTX excludes expert who attempted to apportion the royalty base by claim elements; allows do-over

Posted by Chris Marchese

On June 21, 2014, Judge Davis of the Eastern District of Texas issued an opinion on a Daubert motion.  The case is Thinkoptics, Inc. v. Nintendo of America, Inc., Case No. 6:11-CV-455.  Thinkoptics moved to exclude the testimony of Nintento’s damages expert, Professor Daniel J. Slottje.  The court granted the motion, but also allowed a do-over. 

26Jun/140

NDCA does not require “further” apportionment of smallest saleable unit

Posted by Justin Barnes

On June 20, 2014, Judge Rogers of the Northern District of California issued a Daubert opinion in MediaTek Inc. v. Freescale Semiconductor, Inc., Case No. 11-cv-5341 YGR, addressing numerous grounds raised by the Defendant.  The discussion on royalty rate and market share were very short and not particularly noteworthy, but the royalty base discussion addressed an issue that is of considerable importance and relevance to other cases.   

4Jun/140

MDPA approves smallest salable unit as base; allows lump sum agreements as evidence of running royalty

Posted by Chris Marchese

On May 27, 2014, Judge Caldwell of the Middle District of Pennsylvania issued an opinion on a motion for reconsideration of an earlier Daubert opinion.  The case is Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC, Civil No. 1:09-CV-1685.  The court addressed defendants’ motion to exclude opinions by plaintiff’s damages expert, Julie L. Davis, on two issues:  (1) whether Ms. Davis’ use of the smallest salable patent-practicing unit (“SSU”) as the royalty base violated the entire market value rule (“EMVR”); and (2) whether Ms. Davis’ use of lump sum agreements as evidence of a running royalty rate should be allowed.  The court ruled in plaintiff’s favor on both issues.

3Jun/140

CDCA denies motion to compel production of settlement agreements

Posted by Chris Marchese

On May 29, 2014, Magistrate Judge Mumm of the Central District of California issued a discovery order in In re Katz Interactive Call Processing Litigation, Case No. 07-ML-1816 RGK (FFMx), addressing defendant Echostar’s motion to compel production of settlement agreements by plaintiff.  The issue is a narrow one, but points out the importance of crafting damages-related discovery requests sufficiently broad to capture all kinds of agreements.  The court reviewed the document requests at issue and concluded they were intended to cover license agreements.  The court reasoned that the requests only addressed settlement agreements to the extent they included a license.  The settlement agreements at issue were related to expired patents, and the court concluded they “are not sufficiently related to license agreements to be fairly within the contemplation of the discovery requests.”  Slip op. at 2. The court thus denied Echostar’s motion.

 

28May/140

EDTX excludes opinions on non-comparable licenses

Posted by Justin Barnes

On May 9, 2014, Judge Davis of the Eastern District of Texas issued a Daubertopinion in Tracbeam, L.L.C. v. Google, Inc., Case No. 6:13-cv-00093-LED, addressing numerous motions to exclude from both parties.  The Court denied the vast majority of the motions, but granted-in-part motions brought by both sides as to reliance on “comparable” license agreements.