The court granted defendant's motion to strike portions of plaintiff's damages expert's report addressing "the Nash bargaining solution." "The Nash bargaining solution is a mathematical model that purports to define the most mutually beneficial outcome of a two-party bargaining scenario. After identifying the profits each party could expect without a deal and the surplus created by their cooperation, the Nash model allocates the value of the deal in two steps: each party first receives the same profits it could expect without a deal, and then the remaining surplus is divided evenly between them. The Nash bargaining solution relies on 'a few general assumptions' that 'idealize the bargaining problem.' . . . [Plaintiff's expert] glossed over the axioms underlying the Nash solution without citing any evidence to show that those assumptions were warranted in the present case. . . . The Nash bargaining solution has never been approved by a judge to calculate reasonable royalties in litigation, at least in the face of objection. . . . The Nash bargaining solution would invite a miscarriage of justice by clothing a fifty-percent assumption in an impenetrable façade of mathematics. . . . No expert testimony based on the Nash bargaining solution will be admitted."
Oracle America, Inc. v. Google Inc., 3-10-cv-03561 (CAND July 22, 2011, Order) (Alsup, J.)