Patent Damages

C.D. Cal. excludes do-over damages opinions for failure to apportion and allows second do-over if case proceeds to damages phase

The Central District of California, in Enovsys LLC v. AT&T Mobility LLC, et al., Case No. 11-5210 SS (Judge Suzanne H. Segal) (August 10, 2015), granted Defendant AT&T’s motion to exclude the supplemental opinions of Plaintiff Enovsys’ damages expert.  The Court also bifurcated the trial into liability and damages phases, and allowed for a second supplemental damages opinion in the event the case proceeded to the damages phase.

In June 2015, the Court granted AT&T’s Motion in Limine to Exclude Enovsys’ damages expert, Russell Parr because Mr. Parr’s “did not sufficiently tie damages to the ‘limited features’ of the patented invention.”  (slip op. at 3).  The Court allowed Enovsys a do-over.  AT&T took the position that the do-over report suffered from the same defect as the original report – the damages calculations were not tied to the value of the patented invention. 


C.D. Ill. says letter conveying “suspicion of infringement” sufficient to provide actual notice under § 287(a)

The Central District of Illinois, in Philippi-Hagenbuch, Inc. et al. v. Western Tech. Serv. Int’l, Inc. et al., Case No. 12-1099 (Judge James E. Shadid) (September 30, 2015), partially granted Plaintiff Philippi’s cross-motion for partial summary judgment on the proper damages period finding that Philippi’s May 2004 letter to Defendant Western was sufficient to provide actual notice under § 287(a).

Philippi and Western are competitors.  They both manufacture off-highway truck bodies and water tanks used in mining.  (slip op. at 1).  Philippi sued Western for infringing two of its patents related to water tanks on March 30, 2012.  The ’091 patent issued on April 15, 2003 and the ’507 patent issued on June 15, 2010.  Western took the position that Philippi was not entitled to damages prior to March 30, 2012 because Philippi did not provide actual or constructive notice earlier than the complaint.  Philippi took the position that its May 20, 2004 letter to Western was actual notice of both patents because the letter identified the ’091 patent and the application that matured into the ’507 patent.


N.D. Cal. says products imported into the US required to be marked for pre-suit damages

The Northern District of California, in Corning Optical Commc’ns Wireless LTD. v. SOLiD, Inc., et al., Case No. 5:14-cv-03750 (Judge Paul S. Grewal) (September 28, 2015), denied plaintiff’s motion for reconsideration of the Court’s order granting summary judgment in favor of defendants that “there is no genuine dispute that Section 287(a) applies to Corning’s claims” because Corning imported patented articles into the US. (slip op. at 2).  The Court also found the location of the sales of the patented products was the US under Section 271(a).


NDCA allows “real estate” approach (lines of code) for apportionment

Posted by Chris Marchese

The Northern District of California, in Finjan, Inc. v. Blue Coat Systems, Inc., Case No. 13-cv-03999-BLF (Judge Beth Labson Freeman) (July 14, 2015), ruled on a host of Daubert motions, including by both plaintiff and defendant to exclude the other side’s damages expert.  The court addressed several apportionment techniques, allowing some and rejecting others.

“Real estate approach” based on lines of software code (royalty base)

In what may be a first in a patent case, the court squarely addressed an apportionment technique relating to the royalty base that this author calls the “real estate approach,” finding it not inherently unreliable.  This technique has different flavors, e.g., the footprint of circuitry on an integrated circuit or the lines of software code.  Here, the question was how much respective “real estate” was occupied by the lines of code making up the accused feature versus the total lines of code in the accused product.  The court held that use by defendant’s expert, Julie Davis, of a percentage of source code directed to the accused feature was not unreliable and could be presented to the jury.  (Note, this issue has arisen in the trade secret context:  UniRAM Tech., Inc. v. Taiwan Semiconductor Mfg. Co., No. C 04-1268 VRW (N.D. Cal. April 17, 2008) (allowing defendant’s expert’s apportionment that the accused misappropriated trade secret constituted 25% of the chip).  It was also addressed in passing by the Federal Circuit in Lucent—see quoted language below.)


NDTX affirms damages verdict; cites most favored licensee clause; limited infringement did not warrant a lower award

Posted by Chris Marchese

The Northern District of Texas, in Jean Melchior v. Hilite International, Inc., Case No. 3:11-CV-3094-M (Judge Barbara M. Lynn) (July 15, 2015), ruled on post-trial motions, including denying defendants motion for a new trial on damages.  The court held that the damages award was not excessive or against the great weight of the evidence.

Hilite’s arguments were effectively two-fold:  (1) that Melchior’s expert, Dr. Poindexter, had relied too heavily on Georgia-Pacific factor 1 and in particular on a license agreement between Melchior and Borg Warner; and (2) that Dr. Poindexter’s testimony failed to account for limited use of the patented invention in the infringing devices, in which the devices are only in the patented position for a fraction of a second. 


NDCA bars negative NPE terminology; allows product revenue and settlement agreements

Posted by Chris Marchese

The Northern District of California, in Finjan, Inc. v. Blue Coat Sys., Inc., Case No. 13-CV-03999-BLF (Judge Beth Labson Freeman) (July 8, 2015), ruled on a number of motions in limine.  A few issues of interest were addressed in the order.


Federal Circuit reverses lost profits on overseas activities

Posted by Justin Barnes

On July 2, 2015, in WesternGeco L.L.C. v ION Geophysical Corp., Case 13-1527, the Federal Circuit reversed almost $100 million in lost profits due to the “infringing” activity being outside of the United States and therefore not an infringement at all.  Specifically, the defendant ION exported components that were combined by ION’s customers into a larger system, overseas, for performing marine geophysical surveys for the Oil & Gas industry.  The plaintiff, WesternGeco, argued that it lost profits from 10 lost surveys that utilized these systems.  The “lost surveys” all occurred outside of the United States.


DDE excludes revenues & profits due to failed apportionment, allows do-over

Posted by Chris Marchese

The District of Delaware, in Comcast IP Holding I LLC v. Sprint Comms. Co. LP, Civil Action No. 12-205-RGA (Judge Richard G. Andrews) (Sept. 29, 2014), granted Sprint’s motion in limine to exclude Comcast from introducing at trial profits and/or revenues related to the accused products.  Sprint argued that this evidence was not allowed due to the entire market value rule (EMVR).  Comcast contended that its expert did use EMVR but instead had apportioned.  After obtaining a proffer of the Comcast expert’s testimony, Judge Andrews ruled for Sprint.  He did note, however, that this exclusion still left Comcast with a basis to seek damages, which he believed would be in the same amount requested without the exclusion.


Nevada court imposes 3X post-judgment royalty in lieu of injunction

Posted by Chris Marchese

The District of Nevada, in Server Technology, Inc. v. American Power Conversion Corp., 3:06-CV-00698-LRH-VPC (Judge Larry R. Hicks) (March 31, 2015), denied plaintiff’s request for injunction but granted a post-judgment royalty of 15%, which was 3X the jury’s 5% royalty.  The section of the opinion is brief and is quoted nearly in full here:


Utah court allows evidence of minimum royalty payments by third parties

Posted by Chris Marchese

The District of Utah, in Waterton Polymer Products USA, LLC v. Edizone, LLC, Case No. 2:12-CV-17 TX (Judge Ted Stewart) (Nov. 6, 2014), denied the accused infringer’s motion in limine to preclude patentee’s introduction of evidence regarding minimum royalty payments by third party licensees of the patentee.

Each of the disputed license agreements were directed to the patent-in-suit and included a percentage-based running royalty and a minimum royalty amount.  The accused infringer argued that the minimum royalties were not relevant because the license agreements specifically envisioned active sales and marketing by the licensees, whereas the accused infringer alleged it endeavored not to make sales in the U.S. and made only one such sale.