The Eastern District of Texas, in ZiiLabs, Inc. v. Samsung Electronics Co., (Judge Roy S. Payne) (December 4, 2015), granted in part and denied in part defendant’s motion to exclude various opinions from plaintiff’s damages expert, Robert Mills.
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.
District of Delaware allows damages experts to rely on distributor agreements, cross licenses and collaboration agreements as relevant comparable agreements
The District of Delaware, in Amgen Inc. et al. v. Sanofi, et al., 14-1317 (Judge Robinson) (February 18, 2016), considered the parties’ respective Daubert motions relating to the damages experts. Both experts agreed that there were no comparable bare license agreements. (slip op. at 5). In an effort to base their opinions on “some modicum of real world data,” Plaintiff’s expert relied on distributor fees as comparable, while Defendant’s expert relied on cross-license agreements and collaboration agreements as comparable. (Id.) The Court determined that both experts “adequately explained in their reports the relevance of their respective data vis a vis the various Georgia-Pacific factors.” (Id.) The Court, however, excluded from Defendant’s expert’s report an acquisition agreement and a settlement agreement because they were “business arrangements . . . too far afield from a bare patent license to be relevant comparables.” (Id.)
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.
On March 31, 2014, Judge Fischer of the Western District of Pennsylvania issued a 72-page opinion in Carnegie Mellon Univ. v. Marvell Tech. Group, Ltd., Case No. CV 09-290. The opinion covered a number of post-verdict damages issues, including pre-judgment and post-judgment interest, supplemental damages (for sales between the end of discovery and through trial), enhanced damages, and ongoing royalties. Of particular note are the enhanced damages and ongoing royalties issues.
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.
On May 20, Judge Whyte in the Northern District of California issued his second FRAND-related opinion of the month, this time in Realtek Semiconductor Corp. v. LSI Corp., Case No. 5:12-cv-03451. According to the Court
This dispute concerns whether a holder of patents essential to an industry standard ("standard-essential patents") may commence an action before the U.S. International Trade Commission ("ITC") pursuant to Section 337 of the Tariff Act of 1930 ("Section 337 action") seeking an exclusion order and injunctive relief against a party practicing that standard without violating its obligation to license the standard-essential patents on reasonable and non-discriminatory ("RAND") terms.
Realtek had moved for summary judgment that LSI and Agere had breached their FRAND obligations by failing to offer a license on reasonable terms prior to seeking an exclusion order from the ITC. Realtek also moved for an order barring LSI and Agere from enforcing or seeking to enforce an exclusion order. The patents at issue related to 802.11 wireless standards, and Agere had agreed to license its 802.11-related patents on FRAND terms.
On May 9, Judge Whyte in the Northern District of California issued an order in SK Hynix Inc. v. Rambus Inc., the latest opinion in an ongoing patent saga that has lasted a decade. Of interest to patent damages in Judge Whyte’s order was his setting of a FRAND rate as a sanction against Rambus for spoliation. Put differently, the sanction Judge Whyte determined was most appropriate for the spoliation was to strike any damages above and beyond a “reasonable and non-discriminatory royalty.” The rationale for this was to ensure that SK Hynix would not be “put at a competitive disadvantage in the marketplace.”
On April 25, 2013, Judge Robart of the Western District of Washington issued a 200+ page findings of fact and conclusions of law in Microsoft Corp. v. Motorola Mobility, Inc., Case No. 2:10-cv-01823 (Doc. No. 681), addressing a multitude of issues, but of particular interest, FRAND (fair, reasonable, and non-discriminatory) rates for patents relating to two well-known industry standards. The standards at issue were the IEEE wireless local area network (“WLAN”) standard, 802.11, and the ITU advanced video coding standard, H.264.