Patent Damages
6Feb/17Off

NDCA allows evidence of capped royalty/book of wisdom and monetarily unquantified noninfringing alternatives

The Northern District of California, in France Telecom S.A. v. Marvell Semiconductor Inc., (Judge William H. Orrick) (August 28, 2014), addressed motions in limine concerning a variety of issues, including damages issues.  We address a couple damages issues here.

#1:  “Capped” running royalties based on actual use, i.e., the “book of wisdom.”  France Telecom moved to preclude Marvell’s damages expert from offering evidence that the damages should be “capped” or that the reasonable royalty was a specific lump sum amount that the expert had computed.  The court denied the motion, citing Georgia-Pacific factor #11—“the extent to which the infringer used the invention and any evidence probative of the value of that use.”  Also citing Lucent, 580 F.3d at 1333-34, the court concluded that this was just one relevant factor in the reasonable royalty inquiry and that France Telecom would have the chance to attack the opinion at trial and emphasize other factors.

#2:  Evidence of noninfringing alternatives (NIAs) where the cost of the NIAs were not quantified.  France Telecom moved to preclude Marvell’s damages expert, Julie Davis, from offering evidence of purported NIAs because she had failed to assign a specific monetary impact to the NIAs.  Citing a discussion with the technical expert, she opined that the NIAs “could have been implemented at little cost and engineering time for [Marvell].”  Slip op. at 3.  The court concluded that Ms. Davis could offer testimony consistent with the position and that France Telecom could challenge on cross-exam the basis for her opinion and her lack of specificity.  Similarly, France Telecom sought to exclude the technical expert’s opinions on NIAs, contending that the expert did not personally test and measure the relative values of the technologies and that his opinions were based solely on unsubstantiated personal opinions.  Again, the court denied this motion, holding that there is no requirement in the FRE that the expert personally test and measure to offer the opinion.  And, again, the court observed that France Telecom could challenge this testimony on cross.

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