Plaintiff Better Mouse Company's ("Better Mouse") filed a motion to strike portions of the rebuttal expert report and exclude testimony of Richard Eichmann. Better Mouse asserted that the district court should exclude Mr. Eichmann's testimony stating that he determined the value of U.S. Patent No. 7,532,200 (the Asserted Patent or '200 patent) using forward citation analysis. Better Mouse argued that Mr. Eichmann's forward citation analysis is flawed because (1) "he failed to count citations to counterpart patents and applications, which share an identical or very similar disclosure"; and (2) "he failed to account for patent families, which are linked either directly or indirectly by a priority document and thus may also disclose the same idea as the related 'Comparable Patent.'"
Better Mouse asserted that "[t]he Court should strike Mr. Eichmann's forward citation count because it ignores citations to related patents that disclose the same technology, thereby grossly undercounting the number of relevant forward citations." Plaintiff argued that the district court should follow Oracle, where the Northern District of California held "that failing to include citation counts to patents (in that case, predecessors to a reissue patent) that have 'the same specification and drawings' was a fatal flaw in [an] expert's forward citation count." (Dkt. No. 226 at 4 (citing Oracle Am., Inc. v. Google, Inc., No. C 10-03561 WHA, 2012 WL 877125 (N.D. Cal. Mar. 15, 2012).)"
SteelSeries responded with two points. First, SteelSeries stated that "[t]he use of forward citation analysis as an indicator of patent value has wide acceptance in the economic literature spanning over twenty five years." Second, SteelSeries disagreed that Oracle applied, arguing that Mr. Eichmann conducted his analysis in a manner that is consistent with the academic literature. ("[A]cademic literature focuses on forward citation of individual patents, not patents and counterparts or patent families or other related patents, and thus, citations to a patent are compared to the citations to those patents in its peer group.").)
The district court found "that Mr. Eichmann's testimony clears Daubert because it is sufficiently relevant and reliable. SteelSeries has shown that Mr. Eichmann's testimony is relevant because he has tied the 2009 Immersion License (the 2009 License) to the '200 patent using technological analysis from Plaintiff's infringement expert Dr. Samuel Russ. Dr. Russ states that the '200 patent is technologically comparable to four patents in the 2009 License, and he established their comparability to the '200 patent on four independent grounds."
The district court also found that "[t]o the extent Plaintiff claims that forward citation analysis is never relevant for patent valuation, the Court rejects that claim. No binding authority states that forward citation analysis is per se not relevant to the facts of any case. Instead, the Federal Circuit has said that 'damages models are fact-dependent,' Commonwealth Sci. & Indus. Research Org. v. Cisco Sys., Inc., 2015-1066, 2015 WL 7783669, slip. op., at 11 (Fed. Cir. Dec. 3, 2015), and that it is the duty of the party offering a model to sufficiently tie the model to the facts of the case in which the model is being applied, Summit 6, 802 F.3d at 1296. Here, SteelSeries has submitted publications which show that citation numbers correlate with patent value in several fields. That at least provides some indication that the basic premises necessary for a forward citation analysis to apply are present in this case. But cf. VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1332 (Fed. Cir. 2014) ('Anyone seeking to invoke the theorem as applicable to a particular situation must establish that fit, because the 50/50 profit-split result is proven by the theorem only on those premises. Weinstein did not do so. This was an essential failing to invoking the Solution.')."
Finally, the district court concluded that the methodology was reasonably reliable: Mr. Eichmann described how he implemented his forward citation analysis. He states that he estimated the value of the four patents in the 2009 License relative to the remaining 278 patents in the 2009 License by finding, in the 2009 License, "other patents that were comparable to the [four patents in the 2009 License]  on the basis of similarity of technology and age." He "then compared the number of times that these comparable patents were cited to the number of times that the [four patents in the 2009 License] were being cited to get an indication of their value."
Accordingly, the district court denied the Daubert motion.
Better Mouse Company, LLC v. Steelseries APS et al., Case No. 2:14-cv-198-RSP (E.D. Tex. Jan. 4, 2016)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.