Patent Damages Hot Topics

Transcription

1 Patent Damages Hot Topics Chief Judge Gilstrap Judge Love Jeff Bragalone Max Ciccarelli Jeannie Heffernan Glenn Thames Alan Ratliff, Moderator

2 Patent Damages Decisions US & FC 2018

3 Patent Damages 2018 WesternGeco v. Ion (US 2018) (seismic survey DigiFINs) Allowing lost profits on lost sales OUS based on domesdc infringement. Stay tuned. Finjan v. BlueCoat (FC2018) (malware) [T]he fact that Finjan has established a royalty base based on the smallest, idendfiable technical component does not insulate them from the essendal requirement that the uldmate reasonable royalty award must be based on the incremental value that the patented inven9on adds to the end product.[i]f the smallest salable unit contains non- infringing features, addidonal appordonment is sdll required. Finjan s expert s appordonment between infringing and non- infringing features based on an architectural diagram qualified as substandal evidence for purposes of appordonment even though there was conflicdng tesdmony on equal weighdng.

4 Patent Damages 2018 (cont.) Exmark v. Briggs & Stra=on (FC 2018) (lawn mower baffle) Using the accused lawn mower sales as the royalty base is pardcularly appropriate in this case because the asserted claim is directed to the lawn mower as a whole is consistent with the realides of a hypothedcal negodadon and accurately reflects the real- world bargaining that occurs, pardcularly in licensing. using the accused mower as a royalty base and appor9oning through the royalty rate is an acceptable methodology, but it is not enough to simply assert that a pardcular royalty rate is reasonable in light of the evidence without tying the proposed rate to that evidence. Power Integra@ons v. Fairchild (FC 2018) (switching regulators) ApporDonment should reflect only the value of the patented feature, and [w]hen he product contains other valuable features, the patentee must prove that those other features do not cause consumers to purchase the product.

5 Appor2onment Retrospec2ve Where we have come from, where are we now?

6 Modern Apportionment Retrospective Ericsson v. D- Link (FC 2014) ApporDonment is the governing rule for muld- component products...[and a] reasonable royalty award must be based on the incremental value that the patented invendon adds to the end product. If endre value of the accused device is not axributable to the patented feature, courts must insist on a more realisdc stardng point for the royalty calculadons by juries ozen, the smallest saleable unit and, at Dmes, even less. VirnetX (2014) Where the smallest salable unit is, in fact, a muld- component product containing several non- infringing features with no reladon to the patented feature the patentee must do more to esdmate what pordon of the value of that product is axributable to the patented technology. [W]e are cognizant of the difficulty that patentees may face in assigning value to a feature that may not have ever been individually sold. [I]t is well understood that this process may involve some degree of approximadon and uncertainty.

7 Modern Apportionment Retrospective (cont.) Summit 6 (FC 2015) Affirming an appordonment based on the endre device price as a stardng point, with appordonment based on the infringing component s cost and usage x profit margin Also, there may be more than one reliable method for esdmadng a reasonable royalty. A party may use the royalty rate from sufficiently comparable licenses, value the infringed features based upon comparable features in the marketplace, or value the infringed features by comparing the accused product to non- infringing alternadves...[m]ay also use the analydcal method. CSIRO (FC 2015) the [SSPPU] principle states that a damages model cannot reliably appordon from a royalty base without that base being the [SSPPU]. But requiring a SSPPU for all damages models is untenable. Sufficiently comparable licenses may be used if the analysis account[s] for differences in the technologies and economic circumstances of contracdng pardes. If the patents are SEPs, must appordon out unpatented features and value of standardizadon

8 Bargaining Models Where do we stand in or out?

9 Bargaining Models: Nash Approach IdenDfy expected profits without agreement IdenDfy surplus created by agreement Split surplus to achieve Nash Equilibrium AssumpDons Nash Equilibrium typically results in a 50/50 split Best outcome for each party AXracDve stardng point for plaindff Can adjust split for reladve bargaining power of pardes

10 Bargaining Models: Rubinstein Approach: Two players AlternaDng offers Unlimited offers AssumpDons No assumpdon of equal bargaining power (i.e., no 50/50 assumpdon) Can be tailored to pardcular circumstances of case Party-, technology-, industry-, and Dme- period- specific informadon

11 Bargaining Models Case Law: Before VirnetX Robocast, Inc. v. Microso1 Corp., 2014 WL (D. Del. Jan. 29, 2014) (NBS rejected) Summit 6 LLC v. Research in Mo;on Corp., 2013 WL (N.D. Tex. June 26, 2013) (NBS allowed where Ded to facts of case) Suffolk Techs. LLC v. AOL Inc., 2013 WL (E.D. Va. Apr. 12, 2013) (NBS rejected) Gen- Probe Inc. v. Becton Dickinson & Co., 2012 WL (S.D. Cal. Nov. 26, 2012) (NBS allowed where Ded to facts of case) Mforma;on Techs., Inc. v. Research in Mo;on Ltd., 2012 WL (N.D. Cal. Mar. 29, 2012) (NBS allowed where used as check on Georgia- Pacific analysis) Oracle Am., Inc. v. Google Inc., 798 F. Supp. 2d 1111 (N.D. Cal. 2011) (NBS rejected) Sanofi- Aven;s Deutschland GmbH v. Glenmark Pharm. Inc., USA, 2011 WL (D.N.J. Feb. 3, 2011) (NBS allowed where Ded to facts of case) Amakua Dev. LLC v. Warner, 2007 WL (N.D. Ill. July 10, 2007) (NBS allowed where theory s reliability was not sufficiently challenged)

12 Bargaining Models Case Law: VirnetX and After VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308 (Fed. Cir. 2014) (NBS rejected) [W]e agree with the courts that have rejected invoca;ons of the Nash theorem without sufficiently establishing that the premises of the theorem actually apply to the facts of the case at hand. The use here was just such an inappropriate rule of thumb. Id. at Content Guard Holdings, Inc. v. Amazon.com, 2015 WL (E.D. Tex. Aug. 6, 2015) (Gilstrap, J.) (RBM allowed where model s premises were Ded to facts of case) Limelight Networks v. XO Commc ns, 2018 WL (E.D. Va. Feb. 2, 2018) (RBM rejected) Omega Patents, LLC v. CalAmp Corp., 2015 WL (M.D. Fla. Dec. 23, 2015) (RBM (MBM) rejected) Good Tech. Corp. v. Mobileiron, Inc., 2015 WL (N.D. Cal. Jul. 5, 2015) (NBS rejected) Numa;cs, Inc. v. Balluff, Inc., 66 F. Supp. 3d 934 (E.D. Mich. 2014) (NBS rejected)

13 QUESTIONS?