As federal courts have raised the bar on what may be considered a “comparable” license for setting a reasonable royalty rate, the use of third-party (“market”) licenses seems to be an uphill battle. The Orlando district court permitted a damages expert’s opinion that used market licenses as a starting point for his royalty rate. Here’s the why and how.
In Harris v. Ruckus, Defendant’s expert Richard J. Ostiller relied upon two third-party licenses that he apparently identified using keyword searches from RoyaltyStat and RoyaltySource. After identifying the royalty ranges, he then used the midpoint as his starting point for a royalty rate. Predictably, Plaintiff asserts that there is insufficient data to conclude that the technologies and circumstances of the two agreements are comparable to the instant case.
However, the court faults Plaintiff for inadequately supporting their contention that the agreements are “radically different.” The court seems satisfied that Defendants at least addressed the comparability issue: Ostiller ultimately concluded that “the wireless networking and connectivity technologies embodied in the DPAC technology licensed by QuaTech are analogous to certain of the technologies embodied in the [Patents-in-Suit].” Further, Defendant’s technical expert confirmed that the technology in both agreements was comparable to the technology involved in the Patents-in-Suit.
The court notes that the two agreements “are not perfectly analogous, and they need not be” and points out that other courts have allowed the use of materials identified from databases such as Royalty Stat and Royalty Source.
Harris Corporation v. Ruckus Wireless, Inc., 6-11-cv-00618 (M.D. FL, January 16, 2013, Opinion)(Honeywell)