Patent Damages

CDCA excludes opinions on non-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.


NDIll addresses EMVR, apportionment, unpatented items in royalty base, and price erosion

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.


WDWI rejects demand for the patented feature in lost profits

On April 4, 2014, Judge Conley of the Western District of Wisconsin issued an opinion in Douglas Dynamics, LLC v. Buyers Products Co., Case No. 09-cv-261-wmc, in which the court addressed a number of pretrial motions in limine, some of which related to damages.  One of those motions is interesting. 


DDE denies SJ of no damages where plaintiff’s expert had been excluded

On April 21, 2014, Judge Stark of the District of Delaware issued an opinion in Intellectual Ventures I LLC v. Xilinx, Inc., Civil Action No. 10-1065-LPS, in which the court denied in part and granted in part Xilinx’s motion for summary judgment of no damages.  (The court also granted Xilinx’s summary judgment motion of no willful infringement.)


NDCA denies summary judgment and Daubert motions on lost profits and reasonable royalty; allows patentee’s entire market value and comparable license theories

On July 18, 2013, Judge Seeborg of the Northern District of California issued an opinion in Interwoven, Inc. v. Vertical Computer Sys., Case No. CV 10-04645 RS (Doc. 191), in which the court denied Interwoven’s motion for summary judgment concerning lost profits and reasonable royalties, and denied Interwoven’s motion to exclude Vertical’s damages expert, Joseph Gemini.


NDCA denies motion to strike reports for inadequate apportionment in lost profits and reasonable royalty; allows testimony on disputed licenses and offer to license

On February 21, 2014, Judge Alsup of the Northern District of California issued an opinion in Plantronics, Inc. v. Aliph, Inc., Case No. C 09-01714 WHA, in which the court denied motions to strike defendant’s damages experts on lost profits (Matthew R. Lynde) and reasonable royalty (Brian Napper).  The case was a competitor suit involving bluetooth headsets.  The opinion has several interesting issues, but the most significant is the treatment of apportionment and lost profits.  Judge Alsup, in effect, held that the Panduit test only requires proof of demand for the patented product, and thus the plaintiff need not prove demand for the patented feature, thus avoiding the entire market value rule.


EDTX admits plaintiff’s EMVR testimony

On November 14, 2013, Judge Schneider of the Eastern District of Texas issued an opinion in L.C. Eldridge Sales Co. v. Azen Mfg. PTE, Ltd., Case No. 6:11-CV-599 (Doc. No. 290), in which the court ruled on several issues including a motion to exclude opinions of plaintiff’s damages expert, Todd W. Schoettelkotte.  The opinion is brief on this point, but is worth noting for the fact that an expert was allowed to testify on EMVR.  The relevant portion states:


EDTX allows cost savings approach for royalties, based on cost of entire location network

On November 25, 2013, Judge Davis of the Eastern District of Texas issued an opinion in TracBeam L.L.C. v. AT&T Inc., Case No. 6:11-CV-96 (Doc. No. 551), in which the court ruled on several issues including a motion to exclude opinions of TracBeam’s damages expert, Robert Mills.  According to the court, the parties agreed that an appropriate royalty rate would be based on AT&T’s cost savings from using the patented technology compared to the best available non-infringing alternative.  The issue centered around how to compute the cost savings.  Mr. Mills opined that the cost savings to AT&T was the cost of building a new location network infrastructure at a price of $742M.  AT&T claimed that Mr. Mills wrongly used the cost of AT&T’s entire location network rather than the cost savings based on the value of the patented methods.  AT&T argued that the value of the invention could be assessed by taking “the difference in cost between the redundant system and the existing system.”  Slip op. at 8.


WDPA relies on Lucent to allow royalty base of entire product revenue where rate is sufficiently small

On November 13, 2013, Judge Caldwell of the Western District of Pennsylvania issued an order in Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC, Civil No. 1:09-CV-1685, addressing motions in limine. Defendant First Quality (FQ) sought to prevent Kimberly-Clark’s expert, Julie L. Davis, from offering opinions or otherwise testifying on damages. FQ attacked two parts of Ms. Davis’ opinions: (1) her computation of reasonable royalty using the entire revenue of the accused diapers as the base; and (2) her use of allegedly comparable licenses. The court denied both motions. The decision on issue (1) is interesting because the court cited the well-known language from Lucent where the court indicated that the base “can always be the value of the entire commercial embodiment, as long as the magnitude of the rate is within an acceptable range (as determined by the evidence).” Lucent, 580 F.3d at 1338-39.


CDCA excludes survey opinion

On October 23, 2013, Judge Kronstadt in the Central District of California issued an opinion in NetAirus Technologies, LLC v. Apple, Inc., No. LA CV10-03257 JAK, addressing a Daubert motion filed by Apple to exclude the surveys, expert reports, and opinions of the plaintiff’s survey experts (Howard Marylander and James Berger) and references to the same evidence by the plaintiff’s damages expert (Joseph Gemini).  The Court granted-in-part Apple’s motion.