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ARTICLES
TX Court: EMVR Apportionment Need Not Be Based Upon Actual Price of the Component
The Fractus v. Samsung case poses an interesting question: Where Fractus seeks a reasonable royalty on patented antennas, which it had actually sold in the past to Samsung, should the royalty base simply be that actual price, or can other techniques be used to account for the value of the antenna within the cell phone? Fractus had sold antennas to Samsung for $1.44 each, yet now argues that 10% of Samsung’s phone price ($140) is attributable to the antenna, i.e. $14. Judge Davis allowed the 10% apportionment, ruling that plaintiff presented ample evidence to support it. The parties apparently agreed that the patented antennas were not the basis for customer demand for Samsung’s infringing phones, and as such, an apportionment of the phone value was called for under the Entire Market Value Rule to isolate the value of the patented antenna. Fractus’s damages expert claimed that 10% of the average market value of the Samsung phones is attributable to the internal antenna, citing technical information, documents from Samsung and third-parties describing the relative importance of small, multiband internal cell phone antennas, and customer and service provider data regarding the relative importance of internal cell phone antennas. Samsung, on the other hand, ... Read MoreA Closer Look at the Daubert Ruling by Posner (CAFC, by Des.) in Apple v. Motorola
Judge Posner, a 7th Circuit Court of Appeals judge sitting here by designation, released a bold Daubert ruling that illustrates how judges are demanding more rigorous quantification of damages. It contains strong commentary on two expert opinions and is worthy of some serious thought coming from a prominent appeals court judge. Addressing the patents in suit one-by-one, he starts by noting the huge discrepancy between plaintiff’s and defendant’s claimed damages on Apple’s ‘002 patent (toolbar notification window showing such information as battery strength). Motorola’s damages expert Michael Wagner proposed a $100,000 reasonable royalty, while Apple’s expert Brian Napper proposed a $14 million royalty, a difference of 140x. Judge Posner notes that “[t]he size of the disparity is a warning sign. Either one of the experts is way off base, or the estimation of a reasonable royalty is guesswork remote from the application of expert knowledge to a manageable issue within the scope of that knowledge.” Wagner’s royalty was based on the cost his client Motorola would incur to design around the patent. Yet Judge Posner describes Wagner’s opinion as surprisingly inadequate, because he fails to use the same approach here as he would have used outside litigation; outside of litigation, Wagner would ... Read MoreOn Eve of Trial, Posner Dismisses Apple-Motorola Case Amid a Damages Mess
With trial to start Monday, Judge Posner dismissed the case with prejudice “because neither party can establish a right to relief.” The judge had just this week asked the parties to brief him as to the court’s ability to offer any relief if he granted summary judgment barring both injunctive and monetary relief in light of motions from both parties that the opposing party is unable to prove damages in light of his recent Daubert rulings (see 6/3/12 Order). Commentators have suggested that Posner was frustrated by the parties’ extremely disparate damages positions. Indeed, in his recent Daubert ruling (5/22/12), Posner noted such disparities. More on this in later entries, but here’s an example: with one patent, Motorola’s damages expert Michael Wagner proposed a $100,000 reasonable royalty for one invention, while Apple’s expert Brian Napper proposed a $14 million royalty, a difference of 140x. Judge Posner noted that “the size of the disparity is a warning sign. Either one of the experts is way off base, or the estimation of a reasonable royalty is guesswork remote from the application of expert knowledge to a manageable issue within the scope of that knowledge.” The judge characterized Wagner’s work on this patent as ... Read MoreE.D. Texas Allows EMVR Apportionment Methodology That Defendants Claim is Arbitrary
Judge Payne of E.D. Texas ruled to allow damages expert testimony despite defendants’ objections that the expert merely pointed to the technical expert’s position on apportioning the value of the invention. Although defendants claimed the apportionment was unverified and arbitrary, the court noted at least some basis in customer surveys and internal reports. Here, the parties agreed that the patented feature was not the basis for customer demand, and so because the Entire Market Value Rule was not met, plaintiffs should apportion the value of the accused product between the patented and the unpatented features. Plaintiff’s expert, James Nawrocki, “attributes 30% of the value of the accused products to the asserted bus interface patents. Defendants argue that this opinion should be excluded because Mr. Nawrocki merely adopts the opinion of PACT’s technical expert, Dr. Tredennick, that “robust system I/O” accounts for 30% of the value of the accused products, without verifying the value or tying it more closely to the value of the patented features. Defendants also criticize Mr. Nawrocki’s interpretation of the evidence as being arbitrary and unreliable. In response, PACT describes the analysis and evidence supporting Mr. Nawrocki’s opinion. PACT contends that the 30% figure is derived from ... Read More
VLF Consulting, Inc.
