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.
The District of Delaware, in M2M Sols. LLC v. Enfora, Inc., Case No. 12-32-RGA (Judge Andrews) (March 9, 2016), considered, in part, plaintiff's Daubert motion and defendants' summary judgment motion (MSJ) on damages issues. The court granted plaintiff's Daubert motion, and granted in-part and denied in part defendants' MSJ.
On January 18, 2013 Judge Posner in the Northern District of Illinois issued a lengthy opinion in Brandeis Univ. v. Keebler Co., Case No. 1:12-cv-01508 (Doc. No. 474), covering both claim construction and a whole host of Daubert challenges. One of those challenges related to plaintiff’s damages expert, whose testimony related to how difficult it would be to implement a non-infringing alternative, and thus the benefits of the patented invention relating to damages. Judge Posner held, however, that the damages expert was not an expert on consumer demand (i.e. whether customers would prefer the patented cookies or some alternative), and moreover that the damages expert had not relied on anyone who was an expert in that field either. While such an expert was employed by the plaintiff, the damages expert had not relied on the “industrial baker” expert, but rather a biochemist. Accordingly, Judge Posner held that the damages expert could not testify to the absence of non-infringing alternatives, or costs thereof.
Judge Bryson sitting by designation in EDTX denies summary judgment motion and motion to exclude defendants’ expert’s testimony on noninfringing alternatives for reasonable royalty
On August 10, 2012, in TQP Development, LLC v. Merrill Lynch & Co., Inc., Case No. 2:08-CV-471-WCB (E.D. Tex.), Judge William C. Bryson of the Federal Circuit, sitting by designation, considered plaintiff’s motion for partial summary judgment and motion to exclude opinions by the defendants’ damages expert on noninfringing alternatives. The twist here is that the noninfringing alternatives were being offered on the issue of reasonable royalty damages; this was not a lost profits case. Judge Bryson denied both motions and ruled that defendants’ expert could testify regarding the noninfringing alternatives, which the defendants’ expert contended would impact any hypothetical negotiation. The technology at issue was cipher algorithms.
On July 27, 2012, in Sargent Mf’g Co. v. Cal-Royal Prods., Inc. , Civil Action No. 3:08-cv-408 (VLB) (D. Conn.), the court considered defendant’s motions in limine (MILs) concerning lost profits and reasonable royalties. The lost profits issue involved the non-infringing alternatives prong of the Panduit four-part test. The reasonable royalty issues were EMVR and comparable licenses. (The court also provides a reasonably in-depth analysis of a willfulness MIL, which is worthy reading for those interested.)
In yet another damages opinion in a case where “the damages aspect [ ] has been controversial,” Judge Alsup in the NDCA denied Oracle’s motion to exclude Defendant Google’s damages experts. Oracle argued that Google’s damages experts had offered improper technical opinions (such as on the viability of non-infringing alternatives), but the Court found that the damages experts were merely relying on underlying technical information from engineers, which Google planned to offer at trial. Oracle also argued that many of the opinions offered were without evidentiary support or “spoon-fed” by Google engineers, but the Court largely disagreed and held that these issues went to credibility – rather than admissibility – in any event. The Court did grant, however, one Oracle position – that non-infringing alternatives could not be used to decrease damages in the copyright context, as non-infringing alternatives, while potentially relevant to disgorgement, are not relevant to wrongful profits.