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:
EDTX denies Daubert motions involving apportionment, entire market value rule, license agreements, and patent valuations
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.
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.
On April 21, 2014, Judge Guilford of the Central District of California issued an opinion on Daubert motions. The case is Universal Electronics, Inc. v. Universal Remote Control, Inc., Case No. SA-CV 12-00329 AG (JPRx). The parties had filed several motions to exclude evidence on a wide array of issues. One motion of interest relates to plaintiff’s damages expert’s opinions on reasonable royalty. The expert, Frank Bernatowicz, had reached a “baseline” royalty rate of 3% using allegedly comparable licenses as a benchmark. Defendant moved to exclude the royalty opinions contending that Bernatowicz’s license analysis was flawed. The court agreed and excluded Bernatowicz’s testimony on reasonable royalty damages.
On June 21, 2014, Judge Davis of the Eastern District of Texas issued an opinion on a Daubert motion. The case is Thinkoptics, Inc. v. Nintendo of America, Inc., Case No. 6:11-CV-455. Thinkoptics moved to exclude the testimony of Nintento’s damages expert, Professor Daniel J. Slottje. The court granted the motion, but also allowed a do-over.
On June 20, 2014, Judge Rogers of the Northern District of California issued a Daubert opinion in MediaTek Inc. v. Freescale Semiconductor, Inc., Case No. 11-cv-5341 YGR, addressing numerous grounds raised by the Defendant. The discussion on royalty rate and market share were very short and not particularly noteworthy, but the royalty base discussion addressed an issue that is of considerable importance and relevance to other cases.
MDPA approves smallest salable unit as base; allows lump sum agreements as evidence of running royalty
On May 27, 2014, Judge Caldwell of the Middle District of Pennsylvania issued an opinion on a motion for reconsideration of an earlier Daubert opinion. The case is Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC, Civil No. 1:09-CV-1685. The court addressed defendants’ motion to exclude opinions by plaintiff’s damages expert, Julie L. Davis, on two issues: (1) whether Ms. Davis’ use of the smallest salable patent-practicing unit (“SSU”) as the royalty base violated the entire market value rule (“EMVR”); and (2) whether Ms. Davis’ use of lump sum agreements as evidence of a running royalty rate should be allowed. The court ruled in plaintiff’s favor on both issues.
On May 9, 2014, Judge Davis of the Eastern District of Texas issued a Daubertopinion in Tracbeam, L.L.C. v. Google, Inc., Case No. 6:13-cv-00093-LED, addressing numerous motions to exclude from both parties. The Court denied the vast majority of the motions, but granted-in-part motions brought by both sides as to reliance on “comparable” license agreements.
On April 21, 2014, Judge Guilford of the Central District of California issued aDaubertopinion in Universal Electronics, Inc. v. Universal Remote Control, Inc., Case No. SACV 12-00329 AG (JPRx), addressing numerous motions to exclude. The issue of primary interest concerns plaintiff’s expert’s setting of a 3% “baseline royalty rate” based on four license agreements the court found not sufficiently comparable. The expert is Frank Bernatowicz.
On March 26, 2014, Judge St. Eve of the Northern District of Illinois issued a lengthy, detailed damages opinion in Sloan Valve Co. v. Zurn Industries, Inc., Case No. 10-cv-00204, in which defendant Zurn moved to exclude testimony of plaintiff’s damages expert, Richard Bero. The court addressed several interesting damages issues, including entire market value rule, apportionment, inclusion of unpatented items in the royalty base, and price erosion. The court granted Zurn’s motion.