It’s not every day that a patent damages expert opines that Defendants should pay a 100% royalty. It sure didn’t work here. In this E.D. Wisconsin case of Nordock v. Systems, Plaintiff’s expert opined that “my opinion of a reasonable royalty on sales of dock levelers would be 100% of Nordock’s lost sales as calculated above.” Judge Randa notes that “a reasonable royalty requires willing parties and a balancing of their interests. Smith’s reliance on the 100% royalty figure does not reflect Nordock being a willing party or that he engaged in any balancing of the parties’ interests. His opinion as to the ‘reasonable royalty’ is unreliable and excluded under Daubert and Rule 702.”
To be sure, it’s not clear if Smith’s 100% royalty rate applied to sales revenue, or simply amounted to 100% of his lost profits calculation. If the former, well, a 100% royalty rate on sales would raise some eyebrows, so it had better be extremely well supported. If the latter, then such an opinion would look like he is merely bootstrapping a lost profits opinion into his royalty opinion, which would raise red flags as well.
Nordock Inc. v. Systems Inc., 2-11-cv-00118 (E.D. WI, March 13, 2013, Order) (Randa)