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Three Difficult Patent Infringement Damages

Questions

June 8, 2013Presented By

Michael A. Jacobs

2

How Does One Prove a Patent’s “Footprint”?

• “To be admissible, expert testimony opining on a reasonable royalty rate must carefully tie proof of damages to the claimed invention’s footprint in the market place.”

• Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011) (quoting ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010))

• “If it can be shown that the patented feature drives the demand for an entire multi-component product, a patentee may be awarded damages as a percentage of revenues or profits attributable to the entire product.”

• LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 67-70 (Fed. Cir. 2012)

3

Is the footprint….like this?

4

Or Like…This?

5

When Must an Invention “Drive” Customer Demand?

6

When Must an Invention “Drive” Customer Demand?

• “The Federal Circuit very recently opined that the Panduit factors ‘place no qualitative requirement on the level of demand necessary to show lost profits,’ see Versata Software, Inc. v. SAP America, Inc., [No. 2012-1029, 2013 U.S. App. LEXIS 8838, at *25 (Fed. Cir. May 1, 2013)], thus suggesting that apportionment – at least as consumer demand stands as a way of showing apportionment – is unnecessary under Panduit.”

• Brocade Communs. Sys. v. A10 Networks, Inc., No. C10-3428, 2013 U.S. Dist. LEXIS 69335, at *15-16 n.12 (N.D. Cal. May 15, 2013)

• “You must allocate the lost profits based upon the customer demand for the patented feature of the infringing [product] [method]. That is, you must determine which profits derive from the patented invention that [alleged infringer] sells, and not from other features of the infringing [product] [method].” Northern District of California Model Jury Instruction 5.2.

7

Are Some Valid and Infringed Patents In-Valuable?

8

Are Some Valid and Infringed Patents In-Valuable?

• Q: Just to follow up on the types of market evidence that you would prefer to survey evidence, can you give us an example?

A: Yes, I’ve always had the sense that if I could, for example, put a company’s chief financial officer or other company witness on the stand, he or she could give me an idea of the value of every feature on their product. I mean somebody has got to be able to do that, right? That’s their business.

And they’ve got to decide which features they put on their products and which they don’t to compete in the marketplace. But I don’t seem to get that CFO or company person testifying with that degree of specificity — that is, the dollar value of every feature which must be in somebody’s file.

Interview with Chief Judge Rader, IP360, Oct. 18, 2012

• AVM Technologies v. Intel Corp., 1:10-cv-00610-RGA (D. Del. Jan. 4, 2013) (rejecting microprocessor as royalty base even though smallest saleable unit; rejecting comparison to portfolio licenses; indicating intent to strike expert report)