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ARTICLES
Judge Posner (IL) Requests a Preliminary Damages Assessment
In an order after a preliminary conference, Judge Posner expresses his concern that damages will be nontrivial, and gives the parties two weeks to submit briefs addressing the issue. This is a sensible question in many cases, and we at VLF Consulting are in fact seeing increasing interest by our clients in early stage damages assessments. As ever, contact us for assistance. Here, Judge Posner states: “I am concerned whether the plaintiffs if successful in establishing liability will be entitled to nontrivial damages awards. Suppose the defendants infringed the asserted patents … On those assumptions, would the plaintiffs have any claim for damages, whether compensatory or punitive, or restitution? I would like the parties to address this question in briefs filed simultaneously by close of business on April 2.” Brandeis University et al v. Nestle USA, Inc., 1-12-cv-01513 (N.D. IL, March 16, 2012, Order) (Posner)Oracle Expert’s 3rd Swing in Oracle v. Google: Largely a Miss
After two strikes from the court, Oracle’s expert Dr. Cockburn takes another swing at damages in their case against Google. Once again, the Court is not fond of many of the arguments. Per the prior direction of the court, Cockburn starts his damages analysis with Sun’s 2006 licensing offer to Google of $100 million, then adds $557 million to account for Sun’s lost convoyed sales (that it projected to make through the Google partnership), and adds $28 million by removing a revenue sharing cap, to arrive at $684 million. This he apportions between the IP in suit and the IP not in suit using two apportionment methodologies: 1. Group-and-value approach. Here, Cockburn apportions the pool of value between patents in suit, copyrights in suit, and patents not in suit using a qualitative ranking by Oracle engineers, a published study regarding the distribution of patent values, and another expert’s conjoint analysis. • Ranking of patents. Starting with a list of 569 Sun patents likely relevant to a license, Oracle engineers categorized and rated each one, to arrive at 22 of most value. Cockburn then identifies the lower bound as each patent having equal value, and an upper bound where three asserted patents (in ... Read MoreFailure to Meet EMVR on Higher Priced Item Limits Royalty to That of Lower Priced Item
This California district court set some limits on the plaintiff’s damages expert testimony, ruling that plaintiff had not shown that the patented feature was the basis of demand for a pricier group of patented remote controls, and thus the expert could not use a higher royalty for those units. Interestingly, the Court first noted that the EMVR did not apply because (1) Claim 1 of the patent-in-suit described a “remote control device,” not merely the patented feature (a thumb switch), and (2) the thumb switch is a prominent feature, so “a reasonable juror could conclude that the thumb-switch is the primary driver of consumer demand for the device.” Thus, the Court allows the use of the remote control as the royalty base. Yet then the Court rules that the plaintiff failed to meet its burden that the thumb-switch drove customer demand for the higher-priced remotes, citing Lucent. The Court notes that the higher prices seem to be driven by other added features, and as a result, plaintiff’s expert could not testify that the royalty per unit could exceed that of the lowest priced unit. At first blush, it seems a bit confusing that the Court rules that the EMVR does not apply, then ... Read MorePA Court: EMVR Does Not Apply Where Ancillary Device is Part of the Patented Product
A Pennsylvania district court ruled that the EMVR criteria need not be applied where the ancillary device is a part of the patented product and appears in the patent claims. The court considered arguments by defendant Varian that linear accelerators should not be included in the royalty base under the EMVR. By way of background, the EMVR requires that three conditions be met in order to include an entire apparatus as the royalty base: The infringing components must be the basis for customer demand for the entire machine including the parts beyond the claimed invention (or the infringing aspects substantially created the value of the component parts); The individual infringing and non-infringing components must be sold together so that they constitute a functional unit or are parts of a complete machine or single assembly of parts; and The individual infringing and non-infringing components must be analogous to a single functioning unit. Here, the patent relates to plaintiff’s “RPM System” that is used with linear accelerators. Defendant argues that the EMVR applies because linear accelerators are not a part of the patented invention. Defendant also argues that the linear accelerators are prior art, and that this “artful drafting” cannot serve as a basis to expand the ... Read More
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