Patent Damages
15Feb/18Off

CAFC grants new trial – Royalty base can be total sales, but the royalty rate must be properly apportioned

The United States Court of Appeals for the Federal Circuit, in Exmark Manuf. Co. Inc. v. Briggs & Stratton Power Prods. Grp, LLC, 879 F.3d 1332 (Fed. Cir. Jan. 2018) on appeal from the District of Nebraska, before Judges Wallach, Chen, and Stoll, with Judge Stoll writing the opinion, issued an order regarding apportionment, vacating the jury’s $24,280,330 compensatory damages verdict, which had been doubled upon a finding of enhanced damages for willful infringement.  The court held “that the district court erred in denying a new trial on damages” and “abused its discretion by limiting the evidence relevant to damages to prior art that had been commercialized.”  The court held that it was not wrong for the expert to use the royalty base as the sales price of the entire mower, but the opinion was fatally flawed because it did not properly tie the royalty rate to the facts of the case, “plucking the 5% rate out of nowhere.”

14Feb/18Off

DMass requires production of communication with licensees

The District of Massachusetts, Judge Casper presiding, in Koninklijke Philips N.V. v. Wangs Alliance Corp., Civil Action 14-12298-DJC (D. Mass. Jan. 2, 2018) granted Wang Alliance Corp.’s (“WAC”) motion to compel production of certain documents related to prior licensees.[1]

WAC requested “all of [Koninklijke Phillips N.V.’s (Philips)] discussions with actual and prospective licensees relating to invalidty and/or infringement of the patents-in-suit.”  Philips argued it was “unduly burdensome to require [it] to produce correspondence from its licensees.”  The court granted WAC’s motion to compel, holding that “Philip’s contention that it would be unduly burdensome … is unavailing.”  The court noted that [o]ther courts have required patent holders to produce correspondence with licensees, given that such correspondence is relevant not only for invalidty and infringement but also damages,” citing High Point SARL v. Sprint Nextel Corp., No. 09-cv-2269-CM-DJW, 2011 WL 3241432, at *5 (D. Kan. July 29, 2011) (collecting cases).


[1] WAC’s motion also requested from Philips additional documents related to prior art (denied) and invalidity charts (allowed).

14Feb/18Off

Damages opinion related to FRAND excluded due to lack of supporting evidence

The Eastern District of Texas, Tyler Division, Magistrate Judge K. Nicole Mitchell presiding, in Network-1 Techs., Inc. v. Alcatel-Lucent USA, Inc.,[1] Civil Action 6:11-cv-492-RWS-KNM (E.D.TX Sept. 21, 2017) granted-in-part Plaintiff’s motion to exclude certain opinions of Defendant Hewlett-Packard Company’s (“HP”) F/RAND licensing expert M. Ray Perryman.  The patent-at-issue relates to remotely powering access equipment over an Ethernet network, an act which is essential for practicing certain IEEE standards.  Under Rule 702 of the Federal Rules of Evidence, as well as the Daubert standard, the Court analyzed Plaintiff’s motion to exclude HP’s expert’s opinions on 1) royalty stacking; 2) applying definitions from an IEEE document to its patent policy; 3) patent hold-up; and 4) influence of the threat of an injunction on past licenses.  Due to a lack of supporting evidence, the Court excluded Perryman’s opinions, with the exception that Perryman would be allowed to apply the definitions from an IEEE document to Plaintiff’s patent policy.

4Dec/17Off

Blue Gentian, LLC v. Tristar Prods., Inc. (1:13-cv-1758 NLH/AMD) D.N.J (J. Noel L. Hillman)

The District of New Jersey, Judge Noel Hillman presiding, in Blue Gentian, LLC v. Tristar Prods., Inc.,[1] Civil Action 1:13-cv-1758 NLH/AMD (D.N.J. Nov. 14, 2017), issued an order concerning the relevance of a settlement agreement in determining a reasonable royalty.  Judge Hillman affirmed the Magistrate Judge’s ruling that the settlement agreement was relevant to the calculation of a reasonable royalty and must be produced. 

18Oct/17Off

D Minn addresses inexorable flow, non-infringing alternatives, EMVR, apportionment

The District of Minnesota, Judge Ericksen presiding, in Select Comfort Corp. v. Tempur Sealy Int’l, Inc., Civil Action 14-cv-245 JNE/TNL (D. Minn. June 23, 2017), issued an order concerning lost profits and reasonable royalty related to a patented air mattress valve. Judge Ericksen excluded Select Comfort’s expert’s testimony on lost profits and reasonable royalty but allowed Tempur Sealy’s expert’s testimony on noninfringing alternatives.  Judge Ericksen also granted Tempur Sealy’s motion for summary judgment on lost profits, but denied summary judgment on reasonable royalty.

18Oct/17Off

EDTX excludes evidence of party’s actual behavior at hypothetical negotiation

The Eastern District of Texas, Sherman Division, in Evicam Int’l, Inc. v. Enforcement Video, LLC d/b/a Watchguard Video, Civil Action 4:16-CV-105, Judge Mazzant ruled on a motion in limine related to the hypothetical negotiation (along with other issues).  Evicam moved to “exclude any argument, evidence, or testimony regarding how WatchGuard would have behaved at a hypothetical negotiation.”  Slip Op. at 1.  The court noted that a “reasonable royalty can be calculated from an established royalty, profit projections, or a hypothetical negotiation based on the factors in Georgia-Pacific.”  Id. (citing Wordtech Sys. V. Integrated Networks, 609 F.3d 1308, 1319 (Fed. Cir. 2010)).

18Oct/17Off

CAFC denies rehearing en banc in Mentor Graphics lost profits case

The Federal Circuit, in Mentor Graphics Corp. v. EVE-USA, Inc. (also including Synopsys, Inc. as a defendant), Nos. 2015-1470, 2015-1554, 2015-1556 (Fed. Cir. September 1, 2017) (per curiam), denied EVE-USA’s petition for a rehearing en banc on issues of apportionment and lost profits damages.  Judge Stoll, with whom Judges Newman, Moore (who issued the underlying opinion), O’Malley, Neyna, and Wallach joined, denied the rehearing.  Judge Dyk, with whom Judge Hughes joined, dissented from the denial.  2017 WL 3806141 at *1.

30Mar/17Off

DDE cites need for numerical calculation for apportionment, and cites non-technology factors and use patterns as contributing to value

The District of Delaware, Judge Andrews presiding, in Comcast IP Holdings I LLC v. Sprint Communications Co., Civil Action No. 12-205-RGA (D. Del. Sept. 29, 2014), issued a brief order concerning apportionment.  Judge Andrews was faced with a motion in limine seeking to exclude profits and and/or revenues relating to the accused products as violating the entire market value rule (EMVR).  The court decided that the briefing was not “enough for a good decision, and asked for further submissions including a proffer of the Comcast expert’s testimony.”  Slip op. at 1.  A proffer was thus requested.

24Mar/17Off

CAFC issues detailed opinion on apportionment and lost profits; apportionment not required when Panduit test is met

The Federal Circuit, in Mentor Graphics Corp. v. Eve-USA, Inc. (also including Synopsys, Inc. as a defendant), Nos. 2015-1470, 2015-1554, 2015-1556 (Fed. Cir. March 16, 2017) (Judge Moore authoring), issued an opinion addressing apportionment and lost profits damages.  The case addressed an open question that has gone both ways in district courts:  whether lost profits requires further apportionment on top of the Panduit test.  In other words, if a patentee is able to prove-up lost profits under Panduit, must the patentee apportion those lost profits to determine the incremental value of the patented feature vis-à-vis any unpatented features?  The court answered the question in the negative, but reserved judgment on whether the same outcome would attach in all lost profits cases, particularly where the patentee relied on a theory other than Panduit to prove lost profits.  Because the case is replete with meaningful language, the following summary consists mainly of direct quotes.

23Mar/17Off

DDE holds that pleading compliance with the marking statute is not required

The District of Delaware in Mobile Telecommunications Tech., LLC v. Ruckus Wireless, Inc., Case No. 16-md-02722-LPS-CJB (Judge Stark), addressed a motion to dismiss under Rule 12(b)(6).  Defendants moved to dismiss on the ground that plaintiff’s complaint failed to plead compliance with the marking statute, 35 U.S.C. Section 287.  More specifically, the defendant argued that plaintiff’s complaint should be dismissed with respect to one of the patents because it failed to plead compliance with Section 287 and the patent had expired before the complaint was filed.

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