u.s. patent damages after uniloc

U.S. Patent Damages After Uniloc:P bl f P f P iProblems of Proof, Persuasion and Procedure

Robert J. GoldmanFordham IP Institute 2012

ROPES & GRAY LLPThis information should not be construed as legal advice or a legal opinion on any specific facts or circumstances. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your own situation and any specific legal questions you may have.

Quick Review: The BasicsQ

• 35 U.S.C. § 284:35 U.S.C. § 284:– “…damages [1] adequate to compensate for the

infringement, [2] but in no event less than a bl l f h d f h i ireasonable royalty for the use made of the invention

by the infringer, [3] together with interest and costs as fixed by the court.”

• Supreme Court (Aro (1964)):– “The question to be asked in determining damages isThe question to be asked in determining damages is

‘… had the Infringer not infringed, what would [the] Patent Holder-Licensee have made?’”

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• Lost profits is the preferred measure of damagesLost profits is the preferred measure of damages– Test is “reasonable, objective foreseeability”

(Rite-Hite (1995))– Can be based on entire market value

of infringing sales, convoyed sales, price erosion, etc.

• Lost profits from lost sales– Panduit four-factor test,

“but for” market share (State Indus (1989))but-for market share (State Indus. (1989))



• Reasonable royalty:Reasonable royalty:– The “floor” below which damages may not fall– “The royalty may be based upon an established y y y p

royalty, if there is one, or if not, upon the supposed result of hypothetical negotiations between the plaintiff and defendant ” (Rite-Hite (1995))plaintiff and defendant. (Rite Hite (1995))

– Hypothetical negotiation is done• When the infringement began e e ge e bega• Assuming validity and infringement


Pivotal Federal Circuit Decisions

• Focus shifts to “sound economic andFocus shifts to sound economic and factual predicates.”

– Crystal v. Tritech (2001)

– Riles v. Shell Exploration (2002)

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Recent Federal Circuit Cases

• Lucent v Gateway (2009)Lucent v. Gateway (2009)• ResQNet.com v. Lansa (2010)• Wordtech v. INSC (2010)

Uniloc v Microsoft (2011)• Uniloc v. Microsoft (2011)


The Current Rules of the Road

• Touchstone is “economic evidence”Touchstone is economic evidence of invention’s “footprint in the marketplace.”

• New “no-nos.”New no nos.• Fed. Cir. has emphasized trial court’s

gatekeeper function and suggested the filing ofgatekeeper function and suggested the filing of motions in limine to challenge insufficient theories.

• But . . . we have little positive guidance about what is sufficient.


What is economic evidence?

• Evidence from an economist?Evidence from an economist?– Oracle v. Google (No. C 10-03561 WHA)

(N.D. Ca. 2011-2012)( )• (Docket nos. 230, 685, 785)

– Eolas v. Adobe (E.D. Tex. 2012) (no published opinion) (motion in limine denied re Nash Bargaining Solution)


What is “economic evidence”?

• What can you measure or count?What can you measure or count?• Isolating the patented/infringing components

Cornell Univ v HP (N D N Y 2009)– Cornell Univ. v. HP (N.D.N.Y. 2009)– Lucent v. Microsoft (C.D. Cal 2011)

• What is the commercial significance• What is the commercial significance of the patented invention?– Contemporaneous pre-suit documentsContemporaneous, pre suit documents– Evidence created for trial (surveys, econometrics)

• Comparable licenses

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Comparable licenses

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The issues at trial diff tare different

• Economic evidence is the predicate butEconomic evidence is the predicate, but the issues that get tried are:

– How much did the patent owner lose?

What is fair? What did others pay for– What is fair? What did others pay for using the invention?


What makes the plaintiff whole?p


What did others pay?p y


Daubert motions

• Daubert motions i4i v. Microsoft (2009):are a coarse filter

• In close cases, Daubertf d i i f

• “As the Supreme Court explained in Daubert, ‘[v]igorous cross-examination, presentation of

favors admission of testimony and cross-examination

contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but

• Risk of improperly excluding evidence: new trial

means of attacking shaky but admissible evidence.’ Microsoft had these opportunities, and ably availed itself of them. Microsoft new trial ava ed se o e . c osopresented expert testimony and attacked the benchmark, survey, and calculation's reasonableness on

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cross-examination.”

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Daubert motions

• Illustrative decisions:Illustrative decisions:– IP Innovation v. Red Hat (E.D. Tex. 2010)

Inventio AG v Otis Elevator (S D N Y 2011)– Inventio AG v. Otis Elevator (S.D.N.Y. 2011)– Lighting Ballas Control v. Philips Elec.

(N D Tex 2011)(N.D. Tex. 2011)– Boston Scientific v. Cordis (D. Del. 2011)– Dataquill v High Tech Computer (S D Ca 2011)– Dataquill v. High Tech Computer (S.D.Ca. 2011)


JMOL Motions

• Illustrative decisions:Illustrative decisions:– Lucent v. Microsoft (S.D. Ca. 2011)

Mirror Worlds v Apple (E D Tex 2011)– Mirror Worlds v. Apple (E.D. Tex. 2011)– Energy Transportation Group v. Sonic

Innovations (D Del 2011)Innovations (D. Del. 2011)– Sanofi-Aventis v. Glenmark Pharm. (D.N.J. 2011)


Other Procedural Optionsp

• Court-appointed expert (Rule 706, F.R.E)Court appointed expert (Rule 706, F.R.E)– Oracle v. Google (N.D. Ca. 2011)

• Required early disclosure of damages theoriesof damages theories– Requires judicial intervention

R i ti illi t li t– Requires parties willing to listen to the Court and to each other


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