Microsoft Corporation v. Motorola Inc., et. al., 2-10-cv-01823 (WAWD October 22, 2012, Order) (Robart, J.).
Thursday, October 25, 2012
“Ex Ante, Multilateral Negotiation” Methodology for Determining RAND Terms Not Inherently Unreliable Despite Lack of Peer Review and Publication
The court denied defendants' motion to exclude plaintiff's three RAND experts who used an ex ante, multilateral negotiation analysis instead of a bilateral analysis. "[T]he court can find no instance where a prior court has been called upon to make a determination of a reasonable royalty rate for a block of standard essential patents held out by the patent holder for licensing on RAND terms. . . . [Plaintiff's] proposed framework seeks to address this concern by contemplating a negotiation (for determining a RAND rate) at a time just prior to adoption of the standard, thereby eliminating excess value added to the patents through the adoption of the standard. Indeed, this ex ante interpretation of a RAND royalty rate has been endorsed by numerous publications and the Federal Trade Commission. . . . [A]s [plaintiff's] counsel admitted at oral argument, an ex ante negotiation may not fully, or at all, address [defendants'] ex post promise that it license its standard essential patents on RAND terms. Such discrepancies between the methodology and the circumstances of the present case can be addressed at trial through cross examination."