After two strikes from the court, Oracle’s expert Dr. Cockburn takes another swing at damages in their case against Google. Once again, the Court is not fond of many of the arguments. Per the prior direction of the court, Cockburn starts his damages analysis with Sun’s 2006 licensing offer to Google of $100 million, then adds $557 million to account for Sun’s lost convoyed sales (that it projected to make through the Google partnership), and adds $28 million by removing a revenue sharing cap, to arrive at $684 million. This he apportions between the IP in suit and the IP not in suit using two apportionment methodologies:
- 1. Group-and-value approach. Here, Cockburn apportions the pool of value between patents in suit, copyrights in suit, and patents not in suit using a qualitative ranking by Oracle engineers, a published study regarding the distribution of patent values, and another expert’s conjoint analysis.
- • Ranking of patents. Starting with a list of 569 Sun patents likely relevant to a license, Oracle engineers categorized and rated each one, to arrive at 22 of most value. Cockburn then identifies the lower bound as each patent having equal value, and an upper bound where three asserted patents (in the 22) were the most valuable. The judge rejects this upper bound as lacking support, and will only allow the assumption that each of the 22 patents has equal value.
- • Patent value studies. Based upon a published study that quantifies how a handful of patents accounts for a large portion of all patent value, Cockburn then concludes that the top 22 patents were worth 77% of the 2006 patent portfolio’s overall value, and so the six patents in suit were worth 10% to 33% of the portfolio’s value. The judge allows this analysis (but, again, allows only the lower bound).
- • How about further apportioning value by claims infringed? The court had previously rejected certain Cockburn analyses as failing to apportion value on a claim-by-claim basis, but now the court retreats on that, noting that “under current USPTO guidelines, there is a presumption that each issued patent contains only one independent and distinct invention … and it is reasonable to require—in the hypothetical negotiation—that the infringer license the entire patent.”
- 2. Independent-Significance Approach. In this alternative approach, Cockburn concludes that at least 25% of the 2006 licensing bundle would have been attributed to the patents in suit. This is based on “his experience” as well as documents and opinions mostly related to the importance of the technologies within Android. But the judge rejects this approach entirely, holding (again) that apportioning the 2006 offer, which was for Java, must be done with respect to other technologies offered in that bundle. Trying to apportion the value of Android, on the other hand, is apples and oranges.
Cockburn had also relied upon an econometric analysis he had conducted based upon Ebay smartphone bids to determine Android’s increased market share by having the infringing features. The court rejects this analysis too.
Despite the court’s rejection of much of the damages opinions, it seems to have left enough of a basis for a presentation at the upcoming trial.
Oracle America, Inc. v. Google Inc., c10-03561 WHA (N.D. CA, March 13, 2012, Order) (Alsup)