Patent Damages
1Dec/10Off

Judge Rader allows public access to trial testimony because of “increased interest” in patent damages methodologies

Many readers are probably aware that Judge Rader has been sitting by designation in district courts to hear patent cases and that he has issued a number of important and instructive rulings on damages in these cases.  One of them is IP Innovation L.L.C. v. Red Hat, Inc., which has been pending in the Eastern District of Texas.  In a prior opinion in that case issued on March 10, 2010 (click here), Judge Rader discussed the trial court as gatekeeper and the entire market value rule.  His opinion also states that established licenses for the patent-in-suit are generally the best measure of the starting point in determining a reasonable royalty.

On September 20, 2010, Judge Rader issued an opinion in that same case (click here) in which he refused to seal portions of the trial transcript relating to third-party license agreements.  The opinion is interesting for the rationale that Judge Rader employed in refusing to seal the record, and it suggests that reading that record would be worthwhile for those who prepare damages cases for trial (emphasis added):

This court finds that the public should have access to the contested portions of the trial transcript and the admitted trial exhibits. In recent years, the U.S. Court of Appeals for the Federal Circuit has expressed increased interest in patent damages methodologies and the probative value of prior license agreements. See, e.g., ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 868-73 (Fed. Cir. 2010); Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1323-39 (Fed. Cir. 2009). The trial testimony in this case highlighted the parties’ differing damages methodologies and treatments of prior license agreements to the patents-in-suit. Public access to such testimony provides the public with a more complete understanding of the damages methodology in this patent infringement case. This court’s rulings on damages issues and its discussions with the damages experts regarding the license agreements may also be relevant to future litigants in preparing their damages cases.

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