Patent Damages

S.D. Fla. Excludes evidence of pre-litigation negotiations and allows evidence of prior litigations and hypothetical negotiations

The Southern District of Florida, Judge Kevin Michael Moore presiding, in Prisua Engineering Corp v. Samsung Electronics Co., Ltd., Civil Action 16-cv-21761-KMM (S.D. Fla. Feb. 13, 2017), issued a pre-trial order regarding reasonable royalty rate evidence: (i) excluding evidence of a licensing fee to the extent it was obtained from pre-litigation negotiations; (ii)  excluding evidence of Samsung’s net worth; and (iii) allowing evidence of Samsung’s prior litigation as a basis for calculating a reasonable royalty.  The Court also denied the parties’ Daubert motions:  holding (i) Priusa’s expert’s consideration of pre-suit licensing negotiations was proper; (ii) Priusa’s challenge to “post-hypothetical evidence” went to weight not admissibility; and (iii) Samsung’s expert’s consideration of lump-sum licensing agreements was proper even though Prisua was not seeking a lump sum.


NDCA finds evidence of related company's potential lost profits relevant to hypo negotiation

On April 2, 2013, the NDCA issued an opinion in Accessories Marketing, Inc. v. TEK Corporation, Case No. C 11-4773 PSG (Doc. No. 183), addressing TEK’s MIL concerning damages.  One of the issues concerned the impact of lost sales by a related company on the hypothetical negotiation.


CAFC vacates unsupported reasonable royalty award in Whitserve v. CPi

On August 7, 2012, the Federal Circuit in WhitServe, LLC v. Computer Packages, Inc., Case No. 2011-1206, 1261 (Fed. Cir.), the court vacated the jury’s damages award and remanded for a new trial on damages.  The case addresses many damages issues—reasonable royalty base, reasonable royalty rate, lump sum versus running royalty, the 25% rule, ongoing royalties, prejudment interest, and supplemental damages—but none of the rulings is surprising or ground breaking.  The case is instructive, however, on how much care must be taken in presenting a coherent damages case.  Plaintiff, WhitServe, and its damages expert, Shapiro, made mistakes at trial, and WhitServe’s desperate attempt on appeal to preserve the verdict (approximately $8M) simply could not overcome these mistakes.


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.


Oracle v. Google: NDCA Rejects Conclusions by Court-Appointed Damages Expert Because They Failed to Account for the Value of the IP in Suit

On April 10, 2012, in Oracle America, Inc. v. Google Inc., No. C-10-03561 WHA (NDCA), Judge Alsup issued an order on Daubert motions against the report and testimony of Court-appointed Rule 706 expert Dr. James Kearl.  As an initial matter, the opinion states that Kearl was appointed under Rule 706 to assist the jury in evaluating damages issues because (a) the damages aspect of the case is extremely complex, (b) the parties have extremely divergent views on damages, and (c) the sums at issue are vast.


NDCA Denies Plaintiff Oracle’s Motion for Interlocutory Appeal from $1.3B Copyright Verdict That Was Based on the Novel Theory (in Copyright Cases) of Hypothetical Licensing

In the largest copyright infringement verdict in history—a total of $1.3B for Oracle against SAP—a jury awarded reasonable royalty damages to Oracle based on a theory of hypothetical licensing.  The court then granted SAP’s post trial motion for new trial because the it found the award of hypothetical license damages grossly excessive.

Responding to the grant of a new trial on damages, Oracle filed a motion for interlocutory appeal and identified three questions that it believed were appropriate for interlocutory review.  The court repeated these questions in its order denying Oracle’s motion: