Tuesday, June 28, 2011

Entire Market Value Rule Excluded Where Evidence Showed Only That Patented Feature Was A Basis for Demand, Not The Basis For Demand

The court granted defendant's motion in limine to exclude plaintiff's damages expert from using the entire market value rule to establish a reasonable royalty because Plaintiff did not offer credible evidence that customer demand for defendant's elevator system was based on the patented feature. "While one can assume that those who wanted the feature found it desirable and were willing to pay for it (with [one exception]), there is no way of knowing (short of interviewing the customers, which was never done) whether this feature alone drove the decision to purchase from [defendant]. . . . Finally, [plaintiff's expert] appears to have used the wrong standard. He opines that the patent feature was a 'substantial basis for demand' at the seven accused installations. But the test. . . is whether the patent component was of such paramount importance that it substantially created the value of the component parts -- thereby making it 'the basis for customer demand.'"

Schindler Elevator Corporation, et. al. v. Otis Elevator Company, 1-06-cv-05377 (NYSD June 23, 2011, Order) (McMahon, J.)

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