Friday, April 20, 2012

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.)

No comments: