Failure to Establish Comparability of Prior Settlement Agreements Warrants Exclusion of Reasonable Royalty Opinion

The court granted defendant's motion in limine to exclude the opinions of plaintiff's reasonable royalty expert because the expert based his opinion on an arbitrary baseline rate. "[Plaintiff's expert] does not even attempt to compare the [patent-in-suit] to the agreements that he asserts establish a baseline royalty rate for that patent. . . . Nor did [he] account for how the litigation context of his 'baseline' licenses was affected by the litigation from which they arose. . . . [He] simply assumes that the litigation licenses represent 'the lowest royalty rate or the ‘floor’ for compensation for the accused infringer’s authorized use of [plaintiff's] patent rights that [plaintiff] is willing to accept even without the assumption that the patent rights are valid and infringed . . . .' This ignores that a litigation defendant may pay simply to 'avoid[] the risk and expense of litigation.' While settlement licenses may be considered, the patentee has the burden to prove the comparability of the licenses."

Universal Electronics Inc. v. Universal Remote Control Inc., 8-12-cv-00329 (CACD April 21, 2014, Order) (Guilford, J.)