Patent Economics

Image: TRX training equipment Judge Freeman denied defendant WOSS’ Motion in Limine to exclude plaintiff TRX’s damages expert.  WOSS moved to exclude TRX’s expert with respect to both lost profits and reasonable royalty damages. WOSS argued that TRX’s lost profit calculations were improperly based on the price of TRX’s entire product rather than just the patented components.  WOSS further argued that TRX’s lost profit calculation made the unsubstantiated assumption that TRX’s products practice the claimed invention. Judge Freeman denied WOSS’ motion with respect to lost profits on both points.  First, she ruled that TRX was not required to apportion in their lost profits analysis because the analysis was based on the Panduit factors.  Judge Freeman cited Brocade Communications Systems, Inc. v. A10 Networks, Inc., 2013 WL 10601009, *2-3 (N.D. Cal. 2013) in support of this position.  Second, Judge Freeman pointed out that TRX need not sell patented artic...

Judge Tunheim denied Arctic Cat’s motion to exclude Bombardier’s damages testimony.  Arctic Cat raised a number of issues in their motion including both Bombardier’s inclusion of repair parts, accessories, and warranties in lost profits and Bombardier’s apportionment methodology. Arctic Cat first argued that Bombardier’s expert improperly included parts, accessories, and warranties in his lost profits calculation without showing a functional relationship with the accused products.  Judge Tunheim agreed that Bombardier’s expert did not show a functional relationship but denied Arctic Cat’s motion on this point.  He explained that Federal Circuit precedent suggests lost profits are available on spare parts.  The order cites two cases including King Instruments Corp. v. Perego, 65 F.3d 941, 953 (Fed. Cir. 1995) and Carborundum Co. v. Molten Metal Equip. Innovations, Inc., 72 F.3d 872, 882 (Fed. Cir. 1995). Arctic Cat further challenged Bombardier’s reasonable roya...

Judge Otero denied Kaneka's motion in limine to preclude portions of Defendants' rebuttal damages report.  Defendants' damages expert calculated a base for each defendant by comparing their cost of manufacturing under the patented method with their cost of manufacturing using an earlier unpatented method.  Their expert further opined that a reasonable royalty rate should be no more than 3% for each defendant. Plaintiff Kaneka argued that Defendants' report improperly apportioned the royalty base using a cost-savings methodology.  Kaneka further argued that apportionment was improper in this case because the patented features create the basis for customer demand. Judge Otero ruled that Defendants' apportionment methodology was sufficiently reliable to pass muster under Rule 702.  The order cites a similar ruling in a companion litigation. Judge Otero further ruled that apportionment was not improper in this case.  Judge Otero explained that Kaneka did no...

Judge Gilstrap granted-in-part Motorola's Daubert motion to exclude portions of Saint Lawrence's expert report.  The Court ruled in favor of Motorola on one issue out of several that they raised.  The relevant issue relates to an upward "duration" and "early access" adjustment that Saint Lawrence made to its royalty rate.  The court explained that the adjustment was either improper or was not supported in the evidence. Saint Lawrence argued that a reasonable royalty license would provide earlier and longer access to the technology when compared with comparable licenses.  Judge Gilstrap ruled that Saint Lawrence's expert did not explain why the increase was appropriate in light of the fact that a running royalty, by its nature, adjusts the total royalty obligation to reflect the duration of an agreement.  He also pointed to portions of Saint Lawrence's expert report that contradict the view that a defendant would value early access. -- Saint Law...

Judge Leonard P. Stark denied defendants' motion for summary judgement of no damages.  Symantec argued that Intellectual Ventures did not provide a basis to quantify the damages base and instead assumed that all customers use the products they purchase.  Intellectual Ventures defended their analysis by pointing out it would be financially unwise to purchase a product and then not use it.  Judge Stark ruled that Intellectual Ventures identified sufficient evidence from which a jury could equate a purchase with actual use.  The opinion points out that a patentee is not required to demonstrate a one-to-one correspondence between units sold and directly infringing customers. -- Intellectual Ventures I LLC et al v. Symantec Corporation, 1-13-cv-00440 (DED), Doc 335. Source: DocketNavigator.com

Magistrate Judge K. Nicole Mitchell denied defendants' motion to stay pending their petitions for inter partes review.  The order points out that the PTAB has yet to institute an IPR with respect to the asserted patents.  It notes that,  in the Eastern District of Texas, pre-institution stays are typically denied or postponed until the PTAB acts on the petition for review. -- Wireless Protocol Innovations, Inc. v. TCL Corporation et al, 6-15-cv-00918 (TXED), Doc 124. Source: DocketNavigator.com