DDE cites need for numerical calculation for apportionment, and cites non-technology factors and use patterns as contributing to value
The District of Delaware, Judge Andrews presiding, in Comcast IP Holdings I LLC v. Sprint Communications Co., Civil Action No. 12-205-RGA (D. Del. Sept. 29, 2014), issued a brief order concerning apportionment. Judge Andrews was faced with a motion in limine seeking to exclude profits and and/or revenues relating to the accused products as violating the entire market value rule (EMVR). The court decided that the briefing was not “enough for a good decision, and asked for further submissions including a proffer of the Comcast expert’s testimony.” Slip op. at 1. A proffer was thus requested.
Having received the additional proffer, the court concluded that Comcast’s expert had not properly apportioned. First, the court noted that, had Comcast’s expert started with the accused product revenues and/or profits and apportioned from there, it would have been inclined to allow those numbers into evidence, because “an expert needs a logical starting place for analysis.” Slip op. at 1-2. Second, the court reasoned that, here, Comcast’s expert had not “made the sort of apportionment that the law requires.” Id. at 2. Instead, noted the court, there were only three paragraphs in the proffer that identified three functionalities of the accused products, only one of which implicated the asserted patents. Importantly, the court observed that “[n]on-technology factors contribute to the value of the products,” and that “[u]se patterns contribute to the value.” Id. These factors were apparently on top of the three functionalities, and the court implied that the apportionment would need to account for them. Finally, the court cited the expert’s concession in her deposition that “she did not do a ‘numerical calculation’ to arrive at a percentage to apply to the profits. … Apportionment does not seem possible without a numerical calculation.” The court therefore concluded that Comcast’s expert had failed to comply with the requirement cited from VirnetX, that the party “carefully tie proof of damages to the claimed invention’s footprint in the market place.” Id. (quoting VirnetX).
Two additional points: (1) the court noted that Comcast’s expert had another basis to seek damages in the same amount sought through the provisionally excluded theory; and (2) the court granted Comcast an additional day to submit a proffer with “some detail as to how much of the revenues and/or profits it apportioned to the patented technology, and what the basis for the apportionment is.” Slip op. at 2.