Daubert Challenge to Damage Expert Denied Where Contested Matters Were for Cross-Examination and Not Proper for Exclusion

November 19, 2014

In this patent infringement action, Apple challenged the opinions of the plaintiff's damage expert on several bases, including the determination of a royalty rate based on the price of third-party applications.

First, Apple contended that the expert's, Mr. Bratic's, "analysis is deficient and unreliable because MTEL's technical expert categorically stated that he never evaluated any third party apps." The district court rejected this challenge as the technical expert, Dr. Nettleton, asserted that he did, in fact, have conversations with Mr. Bratic over the course of "two, possibly three, phone calls in fact." The district court also stated that "Apple's complaint that Mr. Bratic is merely 'parroting conclusions' also fails, as even Apple acknowledges that Mr. Bratic 'must ... rely on a technical expert to support his opinion concerning the functionality of the selected third-party apps' since he is not himself a technical expert." Although the district court was sensitive to the "credibility concerns" raised by Apple, it stated that cross-examination was "the ideal vehicle with which to address such concerns."

Second, Apple contended that "Mr. Bratic acknowledges that comparable third-party apps are available for free download, but simply discards such apps as not relevant to his analysis." The district court disagreed find that "Mr. Bratic did address 'free' apps, and also set forth a reasoned analysis regarding why the apparent 'free' price tag did not accurately represent the value derived from those applications. Apple does not - and the Court observes that it likely cannot - dispute the fact that revenue and value can be derived from applications that can be downloaded free of charge. Apple is free to cross examine Mr. Bratic on this point, but the Court finds no merit to Apple's request to exclude Mr. Bratic's testimony on this basis."

Apple's third contention was that Mr. Bratic's analysis "fails to properly apportion the purchase price of the apps he considered." Again, the district court disagreed. "But Mr. Bratic's analysis uses applications that MTEL alleges derive their value from patented features that are also found in Apple's software. In this way, Mr. Bratic's analysis is based on the factual contention that those applications primarily derive their value from a single disparate feature (emoji functionality, templated calendar, etc.). It is unclear to the Court how Apple would propose that further apportionment could be made off an application that Mr. Bratic and Dr. Nettleton contend derives its value from a single patented feature. The Court finds that Mr. Bratic has appropriately apportioned the value given the factual contentions underpinning of Mr. Bratic's and Dr. Nettleton's conclusions."

Here too, the district court found that cross-examination would be sufficient. "Apple obviously disagrees with those factual contentions, but has pointed to nothing in Mr. Bratic's testimony that cannot be addressed by vigorous cross-examination. Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002)."

Mobile Telecommunications Technologies, LLC v. Sprint Nextel Corp., Case No. 2:12-cv-832-JRG-RSP (E.D. Tex. Nov. 7, 2014)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.