Royalty Rate May Not Be Extrapolated From Revenue Sharing Agreement

The court granted in part defendant's motion to exclude the revised opinions of plaintiff's damages expert where the expert derived a royalty rate from defendant's revenue-sharing agreement with a third party. "[Defendant] is correct that the [revenue-sharing] agreement cannot be considered under [Georgia-Pacific] factor 12. The agreement is not a license agreement for a patent or patents. . . . [Plaintiff's expert] may consider the [revenue-sharing] agreement and the revenue or profits obtained under it as evidence of the value of [defendant's] alleged use of the patented technology under Georgia-Pacific factor 11. However, [he] may not extrapolate a royalty rate from the [revenue-sharing] agreement and use that derived royalty rate as support for the reasonableness of his 0.60% royalty rate."

DataQuill Limited v. High Tech Computer Corp., 3-08-cv-00543 (CASD April 16, 2012, Order) (Gonzalez, J.)