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.”
The expert mapped all of defendant’s products into the corresponding plaintiff products, with his understanding that the two were the “dominant suppliers” in the market. The court finds that the expert “equates his nomenclature of ‘dominant suppliers’ with a ‘two-supplier’ market without independent support…” and that he “conducts no independent analysis in this regard and does not quantify what ‘dominant suppliers’ means. The court rules that the expert’s approach “does not embody the use of sound economic principles because it does not properly account for the other competitors in the ‘but for’ market.” Further, the expert’s mapping methodology “is not the answer” because it still “does not overcome the existence of other competitors in the … market.”
Courts have also taken the approach that doubts shall be resolved against the infringer, so it seems conceivable that a court may simply leave an issue like this for the opposing expert to correct the calculus. Defendants seemed to focus on the vagueness of the “dominant” characterization, since it could still leave room for sizeable competitors in the market. The court seemed to agree.
ATEN International Co. v. Uniclass Technology et al., CV 15-04424-AG (C.D. CA, April 24, 2017, Order) (Guilford)