Patent Damages
4Sep/14Off

Allowing "Do-Overs" for damages experts

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.

Courts that apply the single do-over approach (#2 above) will instruct the party offering the excluded expert that it has one more opportunity to come up with a reliable and relevant damages case that can be submitted to the jury.  The court will set an abbreviated timetable for the expert to submit a new report and for the expert’s deposition.  The court may preclude the expert from relying on any information that was not part of the original report.  If the expert’s second damages theory is still inadmissible, these courts have stated that the expert will be precluded from testifying at trial, leaving only the other’s party’s damages expert to testify.

        The following opinions are examples of court applying the single do-over approach:

Digital Reg of Texas, LLC v. Adobe Systems, Inc., No. C 12-1971 CW (N.D. Cal. Aug. 19, 2014) (Order on Motions in Limine Docket Nos. 587 and 592) (slip op. at 10, footnotes and citations omitted):

Because upon a finding of infringement, Digital Reg is entitled to “in no event less than a reasonable royalty for the use made by the invention by the infringer,” the Court will permit Mr. Parr to submit a revised damages report5 curing only the problems identified in this order, to be filed no later than the close of business on August 21, 2014. He may not include any additional information on any points, and may not rely on additional settlement agreements. Mr. Parr must be made available for a deposition of up to two hours no later than the close of business on August 28, 2014. If Mr. Parr’s report is again deficient, the Court will preclude him from testifying and only Adobe’s damages expert will be permitted to testify.

Dynetix Design Solutions, Inc. v. Synopsys, Inc., Case No. C 11-05973 PSG (N.D. Cal. Aug. 22, 2013) (Doc. 564).

        The following are examples of cases in which a do-over was allowed, but the court did not expressly limit to a single iteration:

ROY-G-BIV Corp. v. ABB, LTD., Case No. 6:11-cv-622-LED-ZJH (E.D. Tex. Aug. 1, 2014) (Doc. 457):

For the reasons stated herein, Defendants’ Motion to Exclude the Opinions of Mr. James J. Nawrocki Relating to Damages is DENIED as to Defendants’ objections based on improper use of SSPPU and reliance on the XMC software, but GRANTED as to Defendants’ objections to the 70% apportionment and final royalty conclusion of $4,000. If ROY-G-BIV intends to rely on Mr. Nawrocki’s reasonable royalty analysis at trial, Mr. Nawrocki must amend his report in light of this Order and provide it to Defendants by August 8, 2014 at 5:00 p.m. If the report is amended by that time, Defendants may depose Mr. Nawrocki by August 13, 2014 at 5:00 p.m. Defendants are further granted leave to serve a responsive supplemental expert report by August 18, 2014 at 5:00 p.m. ROY-G-BIV may depose Defendants’ expert regarding any such supplement by August 21, 2014 at 5:00 p.m. Defendants may file a motion to exclude the revised opinions of Mr. Nawrocki by August 14, 2014. ROY-G-BIV may respond to such a motion by August 18, 2014.

Thinkoptics, Inc. v. Nintendo of America, Inc., Case No. 6:11-CV-455 (E.D. Tex. June 21, 2014) (Davis, J.).

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