Patent Damages

EDTX refuses to exclude expert’s conversion of lump sum into per unit royalty

The Eastern District of Texas, in Affinity Labs of Texas, LLC v. Ford Motor Co., Civil Action No. 1-12-CV-580 (Judge Ron Clark) (Aug. 22, 2013) (Doc. No. 200), denied a motion to exclude testimony from damages expert Julie Davis in which she had converted lump sum royalties into per unit royalties.  The opinion is brief, and we quote the relevant portion in full:

Affinity next argues that Ms. Davis’s testimony regarding her conversion of a lump-sum license agreement into per-unit royalties was improper and requires exclusion. “[L]ump sum payments … should not support running royalty rates without testimony explaining how they apply to the facts of the case.” Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 30 (Fed. Cir. 2012). Ms. Davis provided a chart as part of her expert report detailing her conversion of the Apple lump-sum royalty to per-unit royalty. [Doc. # 141-5]. As to the Panasonic license, upon which Affinity itself relies, Ms. Davis did not rely upon it specifically to calculate a value, but rather generally states that it would lead to a “very modest running royalty rate.” Affinityalso argues that Ms. Davis’s analysis of Ford’s licenses with 911 Notify, LLC and Tendler Cellular of Texas, LLC is flawed. The calculation of a reasonable royalty is not an exact science, and just because one approach may be better does not make other approaches inadmissible. Apple Inc. v. Motorola, Inc., --- F.3d ---, 2014 WL 1646435, *19 (Fed. Cir. Apr. 25, 2014). The issues that Affinity raises regarding Ms. Davis’s calculations are a matter of weight for the jury to determine, rather than a matter of exclusion.

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