Explaining its ruling to exclude plaintiff’s damages experts, this court concludes that they were “attempting to play mathematical games” and failed to apportion the royalty base as directed by the Entire Market Value Rule and this court’s directives.
After a jury awarded Versata $138.6 million, the court ruled one of the two patents to be non-infringed and set a new trial, while warning that plaintiff’s expert testimony was deficient in light of the Federal Circuit’s recent decisions on the Entire Market Value Rule. Plaintiffs then brought in two additional damages experts (Neeraj Gupta and Roy Weinstein) to augment Christopher Bakewell’s royalty opinion. Defendants then claimed that the experts structured their calculations in such a way that they effectively applied a 13% royalty rate to the entirety of SAP’s revenue. The court notes that the same number of seats appeared in both the numerator and denominator, so they cancelled each other out, meaning that the opinion is indeed essentially a 13% royalty. The judge rules that Versata “is attempting to play mathematical games” and attempts to apply the EMVR in violation of the court’s prior rulings.
Plaintiff’s experts also apportioned the contribution of the patented invention to Versata’s product, but the judge rejects this because it was not shown to be relevant to defendant’s product. For all of these reasons, the court finds that “their reasonable royalty analysis relied on speculation and guesswork, and was divorced from the factual and economic realities of this case.”
As they say, don’t mess with Texas.
Versata Software, Inc., et. al. v. SAP America, Inc., et. al., 2-07-cv-00153 (E.D. TX)