Patent Damages
6May/15Off

DDE addresses various Daubert issues including EMVR and apportionment

The District of Delaware, in Helios Software, LLC v. Awareness Tech., Inc., Civil Action No. 11:1259LPS (Judge Stark) (April 13, 2015), addressed a variety of motions to exclude damages testimony.  Plaintiff and defendant each moved to dismiss its counterpart’s damages expert on various grounds.  The most interesting issues are addressed below.

Plaintiff moved to exclude defendant’s damages expert Jeremiah Grant.  The first issue for discussion is plaintiff’s motion to preclude Mr. Grant from testifying as to a capped lump sum of damages at a “nuisance factor.” The court denied this motion:  “Yet Mr. Grant's view that Awareness might perceive no value from licensing the patents-in-suit does not mean that he believes them to be not infringed; he appears instead to be of the permissible opinion that the patents are essentially worthless due to the ease of design-arounds.”  Slip op. at 6-7.  Second, the court did exclude testimony on a different issue:  Mr. Grant’s calculation of an “implied” royalty rate improperly calculated based on the plaintiff’s overall revenues.

Defendant moved to exclude plaintiff’s expert, Scott Weingust.  First, a question arose concerning apportionment of the smallest salable patent practicing unit (SSPPU).  Though decided after the VirnetX opinion, in which the Federal Circuit held in the fall of 2014 that even the SSPPU must be apportioned if EMVR cannot be proven, the DDE did not cite that case.  Despite this omission, the court arrived at the same conclusion:  “Because it is uncontested that the accused products comprise both patented and unpatented features, Mr. Weingust needed to apportion profits and damages between the patented and unpatented features of the accused product to render a reliable damages analysis. The only exception to the apportionment requirement is evidence demonstrating that the entire market value of the accused product is properly and legally attributable to the patented feature.”  Slip op. at 11.

The court also determined that the Mr. Weingust had failed to adequately show compliance with EMVR.  Mr. Weingust argued that the features covered by the patents-in-suit created a submarket for the accused products and that therefore the patented features formed the basis for consumer demand.  In rejecting this analysis, the court cited the lack of market analysis or other evidence showing that the patented features drove demand for the accused products.  The court noted that Mr. Weingust used “the same general approach” that he had used in a prior case (2014 WL 4796111, at *7) in which the DDE had excluded his opinions.  The court concluded that Mr. Weingust had failed to satisfy either apportionment or the EMVR and excluded his testimony.

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