In this patent infringement action between Guardant and Foundation Medicine (“Foundation”), Foundation moved to exclude the testimony of Guardant’s damage expert, Dr. Becker, on reasonable royalty damages. In his opinion, Dr. Becker applied on an apportionment factor of 50% in that he asserted the patents contributed at least 50% of the value of the Foundation accused products. To support this opinion, Dr. Becker relied on a discussion with Dr. Cooper, Guardant’s infringement expert.
Foundation argued that the portions of Dr. Becker’s and Dr. Cooper’s testimony regarding reasonable royalty damages should be excluded because they failed to properly apportion damages to only the patented features of the accused products. The district court explained that “the central dispute here is whether the 50% apportionment value chosen by Dr. Becker (Guardant’s damages expert) is sufficiently supported by the content of his discussion with Dr. Cooper (Guardant’s infringement expert)—a discussion that provided the exclusive basis for Dr. Becker’s apportionment figure.” Foundation argued that there was no proper support as Dr. Cooper’s opinions regarding the 50% apportionment value are without “explanation or methodology[.]”
Guardant advanced two arguments as to why Dr. Cooper properly articulated how he determined that this 50% value was warranted. First, Guardant asserted that in his expert report, Dr. Cooper “clearly set forth his opinions . . . that the Guardant Patents-in-Suit are foundational and essential to the significant commercial success of . . . FMI’s Accused Products” and that these opinions were what Dr. Becker in turn relied upon in utilizing the 50% figure. The district court disagreed stating that “nowhere in this portion of Dr. Cooper’s report does Dr. Cooper purport to tie the relative value of the patented features to FMI’s accused products, which is meant to be the focus of the apportionment analysis. Instead, Dr. Cooper generally discusses the field of ‘liquid biopsies’ and the role of the asserted patents within that field.”
The district court further explained that “even were this section of Dr. Cooper’s report to have made reference to the accused products, and even if Dr. Cooper is correct when he says that the patented technology is “foundational” to the accused products, this report still would not pass muster under Daubert. That is because nowhere in this section does Dr. Cooper provide any factual foundation to support the specific 50% figure that he provided to Dr. Becker. In its briefing, Guardant appears to suggest that this is not problematic, because after hearing that the patents were “foundational” to the accused products, Dr. Becker “applied the most conservative apportionment possible of 50%.” But merely labelling a value “conservative” is no substitute for a showing that there is an evidentiary foundation for the particular percentage selected—i.e., for describing the methodology used to reach that number. See Koninklijke Philips Elecs. N.V. v. Zoll Lifecor Corp., Civil No. 12-1369, 2017 WL 3140798, at *4 (W.D. Pa. July 25, 2017) (excluding expert opinion that provided “no objective support for his 50% apportionment rate” and precluding testimony from that same expert that the patented features were a “significant driver” and “majority of” the value of the accused products) (internal quotation marks omitted).”
Second, Guardant asserted that another portion of Dr. Cooper’s reply report supported the apportionment in which he stated that he told Dr. Becker that “the Asserted Patents are essential to the commercial acceptability and success of FMI’s Accused Products as they cover in essence the whole process of the detection of rare mutations in [cell-free]DNA.” The district court disagreed with this as well, concluding “b]ut obviously, as Dr. Becker notes, there are other non-patented aspects of FMI’s accused products that also contribute to the products’ success, “such as machine learning aspects that help improve the accuracy of the assay over time[.]” And the key is that in Dr. Cooper’s reply report, he does not really explain why the patented features amount to approximately 50% of what makes the products successful. Indeed, when asked at his deposition whether Dr. Cooper ever told him “what [Dr. Cooper’s] methodology was for evaluating the extent to which the patented elements contributed to the realizable profit of the product[,]” Dr. Becker replied “No.”
Accordingly, because no concrete tie to the specific 50% value was explained, Dr. Becker’s and Dr. Cooper’s opinions lacked a sufficiently reliable methodology and were excluded by the district court.
Guardant Health, Inc. v. Foundation Medicine, Inc., Case No. 17-1616-LPS-CJB (D. Del. April 2020)
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.