Articles Posted in Damages

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In the patent infringement action brought by Carnegie Mellon University (“Carnegie Mellon” or “CMU”) against Marvell Technology Group, LTD. (“Marvell’), the jury returned a verdict in favor of Carnegie Mellon in the amount of $1.17 billion, finding that Marvell had infringed two patents owned by Carnegie Mellon. The jury also found that Marvell’s infringement of the patents was willful, paving the way for the potential for enhanced damages as well as an award of attorneys’ fees. Marvell has vowed to challenge the damage award before the district court and, if necessary, the Federal Circuit.

A few days before the jury returned its verdict, Carnegie Mellon filed a motion to preclude Marvell from relying on an advice of counsel defense to defend against the charge of willful infringement. Carnegie Mellon filed a motion to strike the testimony of one of Marvell’s witnesses and also to preclude Marvell from relying on an advice of counsel defense.
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During jury selection in this patent infringement action, Marvell Technology Group, LTD (“Marvell”) filed an emergency motion to strike a portion of Carnegie Mellon’s (‘CMU”) damages. In the case, CMU asserted that Marvell infringed two of its patents directed to sequence detection in high density magnetic recording devices, specifically to high density magnetic recording sequence detectors. During trial, CMU intends to prove that Marvell produces read channel chips that perform the patented method when used and ultimately sold through an extensive sales cycle. The sales cycle involves alleged infringement when Marvell’s chips are used in the United States to secure a design win when a customer decides to use Marvell’s design for chips the customer will purchase.

Marvell’s emergency motion addressed potential damages as to accused chips sold by Marvell outside of the United States. This issue previously arose in Marvell’s motion for partial summary judgment, which the district court denied. Marvell asserted that the district court should revisit its prior ruling given additional information and arguments at this stage of the case. CMU objected and asserted that Marvell’s motion was procedurally improper.
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Brandywine Communications Technologies, LLC (“Brandywine”) filed a patent infringement action against Cisco Systems, Inc. (“Cisco”). During the initial case management conference, the parties were given additional time to supplement their initial disclosures and were told to do so “on pain of preclusion.” Cisco contended that the damage disclosures remained inadequate and the district court was called on to address the issue of to what extent Fed.R.Civ.P. 26(a) requires a plaintiff in a patent cases to disclose and specify damages at the outset of the litigation even though some of the necessary information is only in the hands of the accused infringer.

Rule 26(a)(1)(A)(iii) provides: “A party must, without awaiting a discovery request, provide to the other parties a computation of each category of damages claimed by the disclosing party — who must also make available for inspection and copying as under Rule 34 the documents or other evidentiary material, unless privileged or protected from disclosure, on which each computation is based, including materials bearing on the nature and extent of injuries suffered.”
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With a trial pending in late November in this patent infringement action, Marvell Technology Group, LTD (“Marvell”) moved to strike Carnegie Mellon University’s (“CMU”) expert report on damages. Specifically, Marvell asserted that the expert’s reference to overall price, profit or margin of the chips accused of infringement in the litigation was irrelevant and highly prejudicial in light of the Federal Circuit’s recent decision in LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51 (Fed. Cir. 2012). CMU opposed the motion asserting that LaserDynamics did not impact the damage expert because the expert’s royalty calculation was not based on the entire market value, which was at issue in LaserDynamics.

The patents-in-suit are directed to sequence detection in high density magnetic recording devices, specifically high density magnetic recording sequence detectors. CMU asserted that Marvell infringed the patents-in-suit throughout its “sales cycle,” which involves testing of both computer programs and manufactured chips. As explained by the district court, if a sales cycle is successful, it culminates with a “design win” and Marvell makes mass sales of chips that then allegedly perform the patented methods. CMU sought a reasonable royalty for Marvell’s alleged infringement throughout the entire process.
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Plaintiff Promega Corporation (“Promega”) filed an action against Life Technologies Corporation, Applied Biosystems, LLC and Invitrogen IP Holdings, Inc. for infringing and inducing infringement of five patents pertaining to copying of sequences of a DNA strand. In a previous licensing agreement, Life Technologies and Applied Biosystems were permitted to sell the Promega patented products within certain fields. Promega asserted that the defendants were making and selling the products into unpermitted fields, such as clinical diagnostics, clinical research and research markets. The jury agreed with Promega and awarded more than $50 million in damages.

Promega filed a motion to enhance damages, for attorneys and costs and a permanent injunction. The defendants filed a motion asserting that they were entitled to judgment in their favor based on their equitable defenses and also because Promega failed to prove its affirmative case.
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Defendants filed a motion to exclude the expert testimony of plaintiff’s expert on damages, including both lost profits and a reasonable royalty. The district court began its analysis by noting the Daubert standards for expert reports and then addressed the question of the reasonable royalty methodology used by plaintiff’s expert. The district court then noted it was troubled by the expert’s application of the hypothetical negotiation.

Explaining that the hypothetical negotiation began as only one factor under Georgia Pacific but as now evolved to be an umbrella over all the factors, the district court stated that neither party appeared to challenge the appropriateness or applicability of the hypothetical negotiation approach generally. The district court then reiterated the principles of a hypothetical negotiation as set forth by the Federal Circuit: “The methodology encompasses fantasy and flexibility ; fantasy because it requires a court to imagine what warring parties would have agreed to as willing negotiators; flexibility because it speaks of negotiations as of the time infringement began, yet permits and often requires a court to look to events and facts that occurred thereafter and that could not have been known to or predicted by the hypothesized negotiators. Fromson v. Western Litho-Plate & Supply Co., 853 F.2d 1568, 1575 (Fed. Cir. 1988).”
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Plaintiff retained an expert to opine on damages arising from the defendants’ alleged infringement of the asserted patents. The defendants moved to exclude the expert report on two grounds: (1) the expert failed to properly apportion the value of the patented features; and (2) the expert misapplied the market value rule. The expert had attributed 30% of the value of the accused products to the asserted bus interface department.

The district court began its analysis by stating the applicable law: “An expert witness may provide opinion testimony if ‘(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issues; (b) the testimony is based on sufficient fact or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.” Fed. R. Evid. 702. A trial court is “charged with a ‘gatekeeping role,’ the objective of which is to ensure that expert testimony admitted into evidence is both reliable and relevant.’ Sundance, Inc. v. DeMonte Fabricating Ltd., 550 f.3D 1356, 1360 (Fed. Cir. 2008).”
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In the ongoing battle between Apple and Motorola, Motorola moved to strike portions of Apple’s supplemental expert report on damages. The district court had previously granted Apple’s request to supplement its damages expert report to address information that was disclosed between the filing of Apple’s initial damage report and the close of discovery. The royalty estimate disclosed in the expert report was based on the costs of designing around the patent-in-suit.
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As the battle over Android heads into trial, the district court appointed an expert on damages because the damages presented were complex and widely divergent. After the court-appointed expert submitted its report, Google moved to exclude portions of the expert report on patent damages.

After reviewing the standards for expert reports and the district court’s gate keeping role, the district court addressed Google’s motion to exclude the court-appointed expert’s opinion that the value of the intellectual property in suit would have been the value of the entire Java mobile IP portfolio. As explained by the district court, the court-appointed expert calculated the reasonable royalty by beginning “with the 2006 negotiations between the parties. He then considers the relationship between the value of the IP in suit (two patents and API copyrights) and Sun’s entire Java mobile edition intellectual property portfolio in 2006, which would have included licenses to many patents and copyrights in addition to the IP in suit (Kearl Rpt. ¶¶ 97-105). Before conducting an apportionment analysis, Dr. Kearl opines that, as a matter of economics, there are good reasons to not apportion and explains why the value of the IP in suit is equal to the value for the entire portfolio.”
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In this patent infringement action pending in the Eastern District of Texas between SimpleAir and a number of defendants, including Apple, the defendants filed a motion in limine to preclude SimpleAir from referencing the revenue or profits associated with Defendants’ products or Defendants’ overall economic status, profitability, or relative financial strength. In ruling on the motion in limine, the district court granted the motion in part and denied the motion in part.

The defendants apparently filed the motion in limine to prevent the plaintiff from trying to influence the jury on liability and damages by merely referencing defendants’ financial strength and profitability. The district court granted the motion in part, ordering that SimpleAir would be prohibited from discussing the total revenue or profits of defendants’ products. The district court did permit, however, SimpleAir to discuss the incremental change in revenue, but only to the limited scope the expert addressed it in his expert report.
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