DDE excludes settlement agreements; allows licenses as a “check”; addresses apportionment of accused products & services
The District of Delaware, in ART+Com Innovation GMBH v. Google Inc., Case No. 14-217-RGA (Judge Richard G. Andrews) (April 28, 2016), considered several motions related to royalty calculations. In a previous blog post, we addressed the motion for reconsideration of the 13% apportionment issue addressed below. This post covers the earlier order addressing that issue plus others.
Plaintiff ART+Com Innovation (“ACI”) challenged the reliance of Google’s expert Reed on seven licenses as a "check" on his reasonable royalty analysis. Five of these licenses were settlement agreements. The court excluded these (except as to their lump-sum nature) because they were products of litigation and not economically comparable. The other two licenses were the product of licensing negotiations. ACI disputed that these licenses were technologically comparable. The court allowed these licenses because Reed acknowledged the differences, and his analysis was consonant with using the licenses as a "check" against his reasonable royalty calculations. The jury could then weigh the evidence for itself.
The Northern District of California, in Finjan, Inc. v. Blue Coat Sys., Inc., Case No. 13-CV-03999-BLF (Judge Beth Labson Freeman) (July 8, 2015), ruled on a number of motions in limine. A few issues of interest were addressed in the order.
On January 29, two opinions from two jurisdictions denied motions to exclude reference to settlement agreements. In the NDCA, in Open Text S.A. v Box, Inc., Case No. 13-cv-04910-JD,Judge Donato denied a motion by plaintiff to exclude defendant’s expert’s opinions regarding four settlement agreements the defendant’s expert opined were comparable. In a nutshell, plaintiff argued that the agreements were depressed in value because they were settlements, but the Court disagreed, and held it was subject matter for cross-examination: “The differences between the Box licenses and the hypothetical negotiation that Open Text points to (like the timing of the licenses, or the fact that the patent office had issued a non-final rejection of the licensed claims in one of the licenses) would be easily understandable to a jury.”
On August 30, 2012, the Federal Circuit in LaserDynamics, Inc. v. Quanta Computer, Inc., Case Nos. 2011-1440, -1470 (Fed. Cir.) ruled on two important issues related to damages law – the entire market value rule and use of settlement agreements as comparable licenses for a reasonable royalty analysis.