Patent Damages
30Mar/17Off

DDE cites need for numerical calculation for apportionment, and cites non-technology factors and use patterns as contributing to value

Posted by Chris Marchese

The District of Delaware, Judge Andrews presiding, in Comcast IP Holdings I LLC v. Sprint Communications Co., Civil Action No. 12-205-RGA (D. Del. Sept. 29, 2014), issued a brief order concerning apportionment.  Judge Andrews was faced with a motion in limine seeking to exclude profits and and/or revenues relating to the accused products as violating the entire market value rule (EMVR).  The court decided that the briefing was not “enough for a good decision, and asked for further submissions including a proffer of the Comcast expert’s testimony.”  Slip op. at 1.  A proffer was thus requested.

24Mar/17Off

CAFC issues detailed opinion on apportionment and lost profits; apportionment not required when Panduit test is met

Posted by Chris Marchese

The Federal Circuit, in Mentor Graphics Corp. v. Eve-USA, Inc. (also including Synopsys, Inc. as a defendant), Nos. 2015-1470, 2015-1554, 2015-1556 (Fed. Cir. March 16, 2017) (Judge Moore authoring), issued an opinion addressing apportionment and lost profits damages.  The case addressed an open question that has gone both ways in district courts:  whether lost profits requires further apportionment on top of the Panduit test.  In other words, if a patentee is able to prove-up lost profits under Panduit, must the patentee apportion those lost profits to determine the incremental value of the patented feature vis-à-vis any unpatented features?  The court answered the question in the negative, but reserved judgment on whether the same outcome would attach in all lost profits cases, particularly where the patentee relied on a theory other than Panduit to prove lost profits.  Because the case is replete with meaningful language, the following summary consists mainly of direct quotes.

23Mar/17Off

DDE holds that pleading compliance with the marking statute is not required

Posted by Chris Marchese

The District of Delaware in Mobile Telecommunications Tech., LLC v. Ruckus Wireless, Inc., Case No. 16-md-02722-LPS-CJB (Judge Stark), addressed a motion to dismiss under Rule 12(b)(6).  Defendants moved to dismiss on the ground that plaintiff’s complaint failed to plead compliance with the marking statute, 35 U.S.C. Section 287.  More specifically, the defendant argued that plaintiff’s complaint should be dismissed with respect to one of the patents because it failed to plead compliance with Section 287 and the patent had expired before the complaint was filed.

Filed under: Marking Continue reading
14Mar/17Off

CAFC issues detailed opinion on comparable licenses, addresses cost savings approach

Posted by Chris Marchese

The Federal Circuit, in Prism Tech. LLC v. Sprint Spectrum L.P., Nos. 2016-1456, 2016-1457 (Fed. Cir. March 6, 2017) (Judge Taranto authoring), issued an opinion addressing comparable license agreements and the cost savings approach for reasonable royalties.  We summarize the opinion here.  The section on comparable license agreements is lengthy and worth reading in full.

6Feb/17Off

NDCA allows evidence of capped royalty/book of wisdom and monetarily unquantified noninfringing alternatives

Posted by Chris Marchese

The Northern District of California, in France Telecom S.A. v. Marvell Semiconductor Inc., (Judge William H. Orrick) (August 28, 2014), addressed motions in limine concerning a variety of issues, including damages issues.  We address a couple damages issues here.

10Jan/17Off

Southern District of Florida Awards Ongoing Royalty and Pre-Judgment Interest

The Southern District of Florida, in Arctic Cat Inc. v. Bombardier Recreational Products, Inc., Case No. 14-cv-62369 (Judge Bloom) (Jan. 3, 2017), awarded Plaintiff an ongoing royalty and pre-judgment interest.

In an earlier order, the Court determined that Plaintiff was entitled to an ongoing royalty based on Defendant’s concession that it is continuing to sell the infringing personal watercrafts and that the jury’s royalty rate of $102.54 per unit set the “floor” for the ongoing royalty rate.  The Court ordered the parties to negotiate an ongoing royalty rate, but mediation was unsuccessful.

30Dec/16Off

EDTX denies exclusion of settlement license and “real estate” apportionment

Posted by Chris Marchese

The Eastern District of Texas, in ZiiLabs, Inc. v. Samsung Electronics Co., (Judge Roy S. Payne) (December 4, 2015), granted in part and denied in part defendant’s motion to exclude various opinions from plaintiff’s damages expert, Robert Mills.

Grounds:

  • Defendant sought to exclude expert’s reliance on litigation settlement license covering 100 patents as not economically comparable and not the most reliable license in the record.
  • Defendants sought to exclude expert’s reliance on licensing negotiations that never resulted in executed licenses, and were not technically comparable.
  • Defendant sought to exclude apportionment based on surface area of accused element on the chip.
  • Defendants sought to exclude expert’s testimony on several economic theories

Outcome: Defendant’s motion was granted-in-part as to all references to unconsummated license agreements and denied as to the remainder

Analysis:

  • Litigation settlement license (Denied)

The court declined to exclude the Plaintiff’s expert’s (damages expert) opinion based on a license between the Samsung and a third party (MicroUnity) that covered 100 U.S. and foreign patents, and arose out of a litigation settlement. Slip op. at 3. The expert calculated his effective royalty rate based on the value of 10 of the patents in the license, justifying this by stating that in certain patent groups, 10% of the patents account for 81% to 93% of the value of the portfolio. Id. at 3–4. The expert also selected a license period based on the expiration dates of most of the patents, and a second license period based on the expiration of the last patent in the portfolio. Id. at 4. The court allowed these opinions because they were testable and supported by publications, or, in the case of the licensing periods could be challenged on cross-examination. Id. at 5.

The court rejected defendant’s arguments that the MicroUnity license was not economically or technically comparable. Regarding economic comparability, the court stated that, while LaserDyanmics, Inc. v. Quanta Comput., Inc., discouraged relying on litigation settlements, if there were no more reliable licenses in the record, they could be used. 694 F.3d 51, 77 (Fed. Cir. 2012); Slip op. at 5. The court found the license agreement proposed by defendants was not “more reliable” because it was also a settlement agreement, and thus declined to exclude the expert’s testimony on the MicroUnity agreement. Slip op. at 6–7.  Regarding technical comparability, the court found the damages expert’s reliance on the technical expert’s opinion was proper and sufficient to establish technical comparability. Id. at 7.

  • Unconsummated license negotiations (Granted)

The court granted Samsung’s motion with regard to four licensing negotiations between Apple and Samsung that were never executed. Slip op. at 8. The court agreed that Plaintiff had not shown how the negotiations were factually analogous to the hypothetical negotiation, because Apple and Samsung were direct competitors, whereas Plaintiff and Defendant were not. Id. at 8–9.

  • Surface area apportionment (Denied)

The expert analyzed the surface area that the Graphics Processing Unit (GPU) covered of the System-on-Chip (Soc), stating that the area of an SoC will be budgeted to various components based on the value of the component. Id. at 9–10. He used this value to qualitatively analyze the profit that should be credited to the invention, and then used it to adjust the royalty rate for the asserted patent upward. Id. at 10. He did not appear to use the surface area analysis as the royalty base. Id. at 10.  The court declined to exclude the expert’s opinion because he explained his method, and the defendant could challenge it on cross-examination. Id.

  • Various economic theories (Denied)

The expert also used 3 economic theories in his hypothetical negotiation analysis: 1) “settlement discounts” based on litigation uncertainty; 2) that a significant majority of the value of a patent portfolio is concentrated in a small subset of the patents in the portfolio; and 3) a survey discussion of running and lump-sum royalties. Id. at 11. The court allowed each of these because the expert tied the discussion of each theory to the facts and evidence of the case. See id. at 11.

 

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Fields to the side (on the right):

 

Date:     12/04/2015

Court: E.D. Tex.

Judge:  Roy S. Payne

Area of Law:  Patent Law, reasonable royalty, apportionment, hypothetical negotiation, real estate apportionment, surface area apportionment

Expert’s name: Robert Mills

Area of Expertise, Technology or Science: Economics Expert, Damages Expert

 

23Dec/16Off

DDE denies request to strike lost profits opinion re non-patented items; addresses test data admissibility

Posted by Chris Marchese

The District of Delaware, in Masimo Corp. v. Philips Elec. North Am. Corp., (Judge Leonard P. Stark) (October 31, 2016), addressed motions to strike opinions of several experts related to damages.  The experts in question were Michael Keeley (Finance), Joseph Dyro (Technical), Nitin Shah (Technical), Vijai Madisetti (Finance), and Michael Wagner (Finance).  The court granted in part and denied in part the motions.  The key motions are addressed below.

7Dec/16Off

Federal Circuit Opinion Asetek Danmark a/s v. CMI USA Inc. Cites Patent Damages Treatise

Posted by Chris Marchese

In a December 2nd opinion by the Federal Circuit, the court cited Patent Damages Law and Practice as a “leading commentary.” The comprehensive treatise was co-authored by Chris Marchese, one of the bloggers on this site, and has been cited in numerous district courts as well.

6Oct/16Off

EDTX denies exclusion of settlement license and “real estate” apportionment

Posted by Chris Marchese

The Eastern District of Texas, in ZiiLabs, Inc. v. Samsung Electronics Co., (Judge Roy S. Payne) (December 4, 2015), granted in part and denied in part defendant’s motion to exclude various opinions from plaintiff’s damages expert, Robert Mills.