Patent Damages
15Aug/16Off

NDCA excludes expert testimony for failure to apportion (including addressing claim scope argument)

Posted by Chris Marchese

The Northern District of California, in Nortek Air Solutions, LLC v. Energy Lab Corp., No. 14-cv-02919-BLE (July 15, 2016) (Judge Beth Labson Freeman), granted Energy Labs’ Daubert motion to exclude testimony of Nortek’s damages expert, Dr. Stephen Prowse, regarding reasonable royalty damages.  The motion included three reasons; we address the first one here:  “Dr. Prowse’s royalty analysis fails to apportion the value of the allegedly patented features from the unpatented features in the accused products ….”  Slip op. at 8.  The accused products were air handling systems.

In response to the motion, Nortek argued that Dr. Prowse had properly relied on the value of the accused air handling system as a whole rather than a smaller component for several reasons:  (1) “because the asserted claims are directed to the entire air handling unit rather than any individual features,” and (2) because “the air handling unit is the smallest saleable unit and thus an appropriate royalty base.”  Id.

31May/16Off

District of Delaware allows 13% apportionment methodology

The District of Delaware, in ART+COM InnovationPool GMBH v. Google Inc., (Judge Dyk) (May 16, 2016), denied Defendant’s motion for reconsideration, allowing Plaintiff’s apportionment theory to proceed to the jury.

Plaintiff’s expert, James Nawrocki, calculated per-session damages. Defendant argued that Mr. Nawrocki’s theory included improper categories of revenue in the royalty base and an unsupportable 13% apportionment. (slip op. at 5). With regard to the categories of revenue, Defendant argued that Mr. Nawrocki should not have started with the revenue from the entire Geo Product group. The Court said:

20Apr/16Off

EDTX denies Daubert motions involving apportionment, entire market value rule, license agreements, and patent valuations

Posted by Chris Marchese

The Eastern District of Texas, in Core Wireless Licensing SARL v. LG Electronics, Inc. et al, Case No. 2-14-cv-00911 (Judge Payne) (March 19, 2016), addressed motions filed by both parties seeking to exclude the other party’s damages expert’s opinions and testimony. LG, the alleged infringer, filed a motion to exclude the opinions of Core’s damages expert, Dr. Stephen Magee, on Daubert and untimeliness grounds. Similarly, Core, the patent owner, sought to exclude the opinions of LG’s damages expert, Dr. Thomas Vander Veen, on the same grounds. The court concluded that both experts’ opinions were reliable under FRE 702, and thus denied both parties’ Daubert motions. The court also concluded that the parties’ late disclosures were harmless and denied the parties’ motions to exclude the adverse party’s supplemental report for untimeliness.

4Apr/16Off

EDTX denies Daubert motion re plaintiff’s apportionment and analytical approaches

Posted by Chris Marchese

The Eastern District of Texas, in Metaswitch Networks Ltd. v. Genband US LLC, Case No. 2:14-cv-00744 (Judge Payne) (March 5, 2016), addressed defendant Genband's Daubert motion seeking to strike plaintiff's expert Mr. Sims’ opinions relating to apportionment, royalty base calculation, and the application of the "analytical approach."  The court concluded that Mr. Sims' opinions were reliable under FRE 702 and thus, denied Genband's Daubert motion.

 

15Mar/16Off

EDTX issues Daubert ruling on FRAND damages including “top down” approach

Posted by Chris Marchese

The Eastern District of Texas, in Metaswitch Networks Ltd. V. Genband US LLC, Case No. 2:14-cv-00744 (Judge Payne) (March 7, 2015), addressed a number of issues in a FRAND case involving an IETF standard.  Specifically, defendant moved under Daubert to exclude certain opinions of plaintiff’s damages expert Matthew R. Lynde.  The court granted in part and denied in part the motion.

23Oct/15Off

C.D. Cal. excludes do-over damages opinions for failure to apportion and allows second do-over if case proceeds to damages phase

The Central District of California, in Enovsys LLC v. AT&T Mobility LLC, et al., Case No. 11-5210 SS (Judge Suzanne H. Segal) (August 10, 2015), granted Defendant AT&T’s motion to exclude the supplemental opinions of Plaintiff Enovsys’ damages expert.  The Court also bifurcated the trial into liability and damages phases, and allowed for a second supplemental damages opinion in the event the case proceeded to the damages phase.

In June 2015, the Court granted AT&T’s Motion in Limine to Exclude Enovsys’ damages expert, Russell Parr because Mr. Parr’s “did not sufficiently tie damages to the ‘limited features’ of the patented invention.”  (slip op. at 3).  The Court allowed Enovsys a do-over.  AT&T took the position that the do-over report suffered from the same defect as the original report – the damages calculations were not tied to the value of the patented invention. 

8Sep/15Off

NDCA allows "real estate" approach (lines of code) for apportionment

Posted by Chris Marchese

The Northern District of California, in Finjan, Inc. v. Blue Coat Systems, Inc., Case No. 13-cv-03999-BLF (Judge Beth Labson Freeman) (July 14, 2015), ruled on a host of Daubert motions, including by both plaintiff and defendant to exclude the other side’s damages expert.  The court addressed several apportionment techniques, allowing some and rejecting others.

“Real estate approach” based on lines of software code (royalty base)

In what may be a first in a patent case, the court squarely addressed an apportionment technique relating to the royalty base that this author calls the “real estate approach,” finding it not inherently unreliable.  This technique has different flavors, e.g., the footprint of circuitry on an integrated circuit or the lines of software code.  Here, the question was how much respective “real estate” was occupied by the lines of code making up the accused feature versus the total lines of code in the accused product.  The court held that use by defendant’s expert, Julie Davis, of a percentage of source code directed to the accused feature was not unreliable and could be presented to the jury.  (Note, this issue has arisen in the trade secret context:  UniRAM Tech., Inc. v. Taiwan Semiconductor Mfg. Co., No. C 04-1268 VRW (N.D. Cal. April 17, 2008) (allowing defendant’s expert’s apportionment that the accused misappropriated trade secret constituted 25% of the chip).  It was also addressed in passing by the Federal Circuit in Lucent—see quoted language below.)

3Jul/15Off

DDE excludes revenues & profits due to failed apportionment, allows do-over

Posted by Chris Marchese

The District of Delaware, in Comcast IP Holding I LLC v. Sprint Comms. Co. LP, Civil Action No. 12-205-RGA (Judge Richard G. Andrews) (Sept. 29, 2014), granted Sprint’s motion in limine to exclude Comcast from introducing at trial profits and/or revenues related to the accused products.  Sprint argued that this evidence was not allowed due to the entire market value rule (EMVR).  Comcast contended that its expert did use EMVR but instead had apportioned.  After obtaining a proffer of the Comcast expert’s testimony, Judge Andrews ruled for Sprint.  He did note, however, that this exclusion still left Comcast with a basis to seek damages, which he believed would be in the same amount requested without the exclusion.

6May/15Off

DDE addresses various Daubert issues including EMVR and apportionment

Posted by Chris Marchese

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.

16Dec/14Off

NDCA excludes damages opinion on a multitude of grounds

Posted by Justin Barnes

The NDCA, in Digital Reg of Texas v. Adobe, Civil Action No. 12-1971 CW (Judge Claudia Wilken) (August 19, 2014), granted a motion to exclude testimony from Digital Reg’s damages expert Robert Parr on a number of grounds.

The patents-in-suit related to digital rights management.  Mr. Parr, in deriving his royalty rate, looked at software piracy rates across the software industry and from Symantec (who had settled out), but not Adobe itself.  Moreover, Mr. Parr did not seek to adjust the industry data or Symantec data to account for differences that might be applicable to Adobe.  Digital Reg stated that the information it desired was not produced by Adobe, and Adobe responded that it did not track that specific statistic.  The Court analyzed all of the various things Mr. Parr could have done, but did not do, and held “the inputs of Mr. Parr’s damages calculation are inherently unreliable.”