Patent Damages

District of Connecticut Declines to Exclude Survey, Finding Alleged Deficiencies Go To Weight, Not Admissibility

The District of Connecticut, in Gerber Scientific International, Inc. v. Roland DGA Corp., et al., Case No. 3:06cv2024 (Judge Covello) (June 27, 2016), denied Defendant’s Summary Judgment of No Lost Profits.  Plaintiff’s damages expert presented a lost profits theory relying solely on a survey.  Defendant contended that the survey was “unreliable, untrustworthy, and prejudicial.”  (Slip op. at 1).  The Court noted that there is a split in authority over the proper consequence for unreliable or untrustworthy survey evidence.  “While some courts . . . believe such flaws are proper grounds for exclusion, others view methodological errors as affecting only the weight of the evidence.” Schering Corp. v. Pfizer, 189 F.3d 218, 225-26 (2d Cir. 1999).

While the Court agreed that “indications of unreliability and/or untrustworthiness may result in the exclusion of a survey,” the Court held that “the deficiencies alleged by [Defendant] in this case are not clearly egregious or sufficiently prejudicial to warrant exclusion at this time.”  (Slip op. at 1).


Western District of Michigan allows accelerated market entry theory to proceed to trial

The Western District of Michigan, in Magna Elec., Inc. v. TRW Auto. Holdings Corp., et al., 1:12-cv-654 (Judge Maloney) (December 31, 2015), denied Defendants’ motion for summary judgment, allowing Plaintiff’s accelerated market entry theory and its claim for future damages to proceed to the jury.

Plaintiff sought damages from Defendants’ sales of certain products from 2013 to 2023.  At least a portion of the damages Plaintiff sought were post-expiration of the patent.  Relying on Kimble v. Marvel Entm’t, LLC, 135 S. Ct. 2401 (2015), Defendants argued that Plaintiff’s claim for post-expiration damages, in the form of lost profits, was barred.


Federal Circuit reverses lost profits on overseas activities

On July 2, 2015, in WesternGeco L.L.C. v ION Geophysical Corp., Case 13-1527, the Federal Circuit reversed almost $100 million in lost profits due to the “infringing” activity being outside of the United States and therefore not an infringement at all.  Specifically, the defendant ION exported components that were combined by ION’s customers into a larger system, overseas, for performing marine geophysical surveys for the Oil & Gas industry.  The plaintiff, WesternGeco, argued that it lost profits from 10 lost surveys that utilized these systems.  The “lost surveys” all occurred outside of the United States.


WDWI rejects demand for the patented feature in lost profits

On April 4, 2014, Judge Conley of the Western District of Wisconsin issued an opinion in Douglas Dynamics, LLC v. Buyers Products Co., Case No. 09-cv-261-wmc, in which the court addressed a number of pretrial motions in limine, some of which related to damages.  One of those motions is interesting. 


District of Connecticut blocks late addition of subsidiary, kills Lost Profits

On March 29, 2014, Judge Robert N. Chatigny in the District of Connecticut issued an opinion denying motion for leave to add plaintiff Protegrity’s subsidiary as a co-plaintiff, effectively killing Protegrity’s lost profit claims.  Specifically, the Court found that there was no good cause for adding Protegrity USA, Inc. (PUSA) long after the deadline in the scheduling order.  The Court found that:


NDCA denies summary judgment and Daubert motions on lost profits and reasonable royalty; allows patentee’s entire market value and comparable license theories

On July 18, 2013, Judge Seeborg of the Northern District of California issued an opinion in Interwoven, Inc. v. Vertical Computer Sys., Case No. CV 10-04645 RS (Doc. 191), in which the court denied Interwoven’s motion for summary judgment concerning lost profits and reasonable royalties, and denied Interwoven’s motion to exclude Vertical’s damages expert, Joseph Gemini.


NDCA denies motion to strike reports for inadequate apportionment in lost profits and reasonable royalty; allows testimony on disputed licenses and offer to license

On February 21, 2014, Judge Alsup of the Northern District of California issued an opinion in Plantronics, Inc. v. Aliph, Inc., Case No. C 09-01714 WHA, in which the court denied motions to strike defendant’s damages experts on lost profits (Matthew R. Lynde) and reasonable royalty (Brian Napper).  The case was a competitor suit involving bluetooth headsets.  The opinion has several interesting issues, but the most significant is the treatment of apportionment and lost profits.  Judge Alsup, in effect, held that the Panduit test only requires proof of demand for the patented product, and thus the plaintiff need not prove demand for the patented feature, thus avoiding the entire market value rule.


NDCA denies summary judgment based in part on statutory presumption of damages

On February 3, 2014, Judge Seeborg of the Northern District of California issued an opinion in Interwoven, Inc. v. Vertical Computer Systems, Case No. CV 10-04645 RS, in which the court addressed Interwoven’s motion for summary judgment on the issue of damages.  The court granted the motion in part, as to lost profits, but denied the motion for summary judgment based in part on the “statutory presumption of damages upon a finding of infringement ….”  [Slip op. at 10.]  Although the court observed that the evidence submitted by Vertical provided “some thin basis on which a reasonable royalty might be calculated” [id.] the court allowed Vertical to go forward on a reasonable royalty theory based also on its conclusion that the district court must award in an amount no less than a reasonable royalty.


NDGA rejects two-supplier market theory for lost profits

On January 6, 2014, Judge Duffey of the Northern District of Georgia issued an opinion in Hubbard/Downing, Inc. v. Kevin Heath Enters., Case No. 1:10-cv-1131-WSD (Doc. No. 97), in which the court addressed damages issues stemming from a contempt ruling.  In earlier action, plaintiff accused defendants’ products (neck brace devices for high performance racing vehicles) of infringing plaintiff’s patent. The parties entered into a settlement agreement that required a Consent Order.  Subsequently, plaintiff discovered new neck brace products marketed by defendants, and brought an action for contempt.  The court ruled that the new product “is no more than colorably different than the [prior device that was found to infringe],” and that defendants “knowingly violated the [settlement] agreement and the Consent Order ….”  [Slip op. at 8.] 


NDCA precludes lost profits where damage was to plaintiff’s related entity, not plaintiff itself

On November 18, 2013, Judge Spero of the Northern District of California issued an order in Volterra Semiconductor Corp. v. Primarion, Inc., Civil No. 3:08-cv-05129, addressing the parties’ competing Daubert and summary judgment motions.  Of the many issues raised, one was of particular note, a lengthy discussion on the ability of a plaintiff to seek damages for injury to a related entity.  The plaintiff, Volterra Semiconductor, claimed damages “as a result of price erosion caused by Defendants’ infringement on certain sales by its subsidiary, Volterra Asia.”  Put differently, because Volterra Asia had to drop its prices because of the alleged infringement, Volterra Semiconductor obtained less profits than it otherwise would have but for the infringement.