ThinkOptics, Inc. v. Nintendo of America, Inc., et al, 6-11-cv-00455 (TXED June 21, 2014, Order) (Davis, J.)
Tuesday, June 24, 2014
Damages Expert Cannot Exclude Claimed Elements From Royalty Base
The court granted plaintiff's motion to exclude the testimony of defendant's damages expert because of his royalty base analysis. "[The expert] notes that during prosecution, all elements of [plaintiff's] asserted invention except for three image-processing steps were found obvious in view of the prior art. Thus, [the expert] deems the three image-processing steps to be the 'inventive aspect' of the asserted patents. The Wii Remote’s direct pointing device ('DPD') is accused of practicing the three image-processing steps in combination with a Bluetooth microcontroller. However, [since] the Bluetooth microcontroller existed in the prior art [at the time of invention], [the expert] concludes, the proper royalty base is the DPD alone, and does not include the accused Bluetooth microcontroller or any other portion of an accused device. . . . [Defendant] argues the royalty base should only include products accused of infringing the 'inventive' aspects of the asserted patents. Thus, it maintains that [its expert's] report properly excludes revenue associated with components alleged to infringe claimed elements that the patentee did not invent. [Defendant's] position is unsupported. While it is sometimes necessary to apportion the smallest salable patent practicing unit to remove the value of unclaimed elements, [defendant] has not cited any precedent permitting the complete removal of the value of claimed elements. . . . [Defendant's expert's] royalty base must include the value of all claimed elements."