Failure to Apportion Royalty Base to Infringing Features Warrants Exclusion of Expert Report and Testimony

The court granted defendant's motion to exclude the report and testimony of plaintiff's damages expert for failing to apportion defendant's revenue to the two features causing the alleged infringement. "Of course, the smallest salable infringing unit must be the starting point for the royalty base, but the Federal Circuit has not held 'that no further apportionment is ever necessary once the smallest salable unit is determined.'. . . [A]llowing [plaintiff's] expert to use as the royalty base the entire value of [four other features] -- all of which can be used independently without infringing -- while not using the value of [the two] features that actually cause the alleged infringement -- would be a mistake of the same kind as allowing [plaintiff's] expert to use the entire value of [defendant]. . . . As [plaintiff's] own expert . . . has admitted, without [those two allegedly infringing features], the four features used as the royalty base do not infringe."

Rembrandt Social Media, LP v. Facebook, Inc., et. al., 1-13-cv-00158 (VAED December 3, 2013, Order) (Ellis, J.)