Judge Andrews recently issued a memorandum order ruling on the Defendants’ motion to exclude testimony of Plaintiffs’ damages expert in MiiCs & Partners, Inc., et al. v. Funai Electric Co., Ltd., et al., C.A. No. 14-804-RGA, Memo. Or. (D. Del. Dec. 7, 2017). The Defendants lodged several challenges to the Plaintiffs’ expert’s opinion. First, Judge Andrews found that, for one patent-in-suit, the expert’s use of a “5% to 10% cost-savings benefit” provided by the Plaintiffs’ technical expert “demonstrates that he properly apportioned damages and profits between the patented and unpatented features.” Id. at 4-5. For a second patent-in-suit, however, Judge Andrews found “no basis for concluding that he apportioned between the patented and unpatented features” because the “only place where [the expert] appears to consider the profit attributable to the inventions, as distinguished from unpatented features, is in his discussion of Georgia-Pacific Factor 13 . . . [which] lacks any meaningful analysis or attempt to quantify the portion of realizable profit that should be attributed to the patented feature of the smallest salable unit.” Id. at 6.
Moreover, the Defendants argued, and Judge Andrews agreed, that an unaccepted offer to license a portfolio of over 360 patents was not a reliable starting point for the hypothetical negotiation as to one patent-in-suit because it was only an offer, it was not a comparable number of patents, its timing suggested that it was litigation-influenced, and it involved different parties. Id. at 7-8.
Finally, Judge Andrews rejected the use of a “composite royalty rate,” which the Defendants characterized as “appl[ying] a royalty base that includes units accused under any asserted patent to a royalty rate with contributions from every asserted patent.” Id. at 10. This approach, Judge Andrews found, “assigns to each accused product the same per-unit royalty regardless of how many patents that product is accused of infringing.” Id. at 11. Judge Andrews also rejected several other arguments for excluding other portions of the proffered expert testimony.
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