In this district court case, the Court ruled on summary judgment that Plaintiff ATEN was not entitled to lost profits damages. Plaintiff’s expert acknowledged that there were competitors in the relevant market other than plaintiff and defendant, however, he stated that he was unable to identify market share data that would allow for a market share lost profits approach. Lacking such market share data, he calculated that plaintiff would capture 100% of the infringing sales. The judge rejects this, concluding that “ATEN cannot meet the reasonable probability standard for establishing lost profits.”
This ruling is a bit interesting for a couple reasons. First, courts have long taken the approach that doubts shall be resolved against the infringer. The infringer and their expert could make rebuttal arguments with their own market share estimates to correct the numbers. Second, failing to account for some smaller competitors doesn’t mean that lost profits shouldn’t be available; it merely means that they were overestimated. So defendants could use deposition or their expert to show how to correct the calculus and leave it to the jury.
But the ruling does note that defendants suggested (probably exaggerating) that even up to 50% of the market might consist of other competitors. If the judge believed that suggestion, it could explain why the judge threw out the baby with the bath water.
ATEN International Co. v. Uniclass Technology et al., CV 15-04424-AG (C.D. CA, April 24, 2017, Order) (Guilford)