Expert’s Failure to Address Prior Option to License Patents-in-Suit Renders Entire Opinion Unreliable

The court granted defendant's motion to exclude all opinions of plaintiff's damages expert because of his failure to account for defendant's contractual right to license the patents-in-suit for around $2 million. "[Plaintiff's expert] explained that he found the [parties'] agreements to be irrelevant because [defendant] did not actually license the patents-in-suit. . . . His failure even to consider the [parties'] agreements based on his 'sense of fairness' renders his opinion unreliable. . . . Although [the parties'] agreements do not necessarily 'demonstrate[] the upper limit' of [plaintiff's] recovery, '[t]hey clearly ha[ve] a substantial bearing on the reasonable compensation to which [the patentee] was entitled for infringing use of the invention.'. . . . Of crucial importance here is the fact that [defendant] had an offer from [plaintiff] for a license to the patents-in-suit for a maximum of about $2 million. . . . [Plaintiff's expert's] failure even to account for the reality that at one point [plaintiff] was willing to license all of [defendant's] alleged infringement - and obviate this litigation - for a cap of about $2 million, and the absence of any reasonable explanation for why this reality is irrelevant, renders his analysis unreliable."

Intellectual Ventures I LLC et al v. Xilinx Inc., 1-10-cv-01065 (DED April 14, 2014, Order) (Stark, J.)