Damages Expert’s Testimony Excluded for Failure to Apportion the Value of Hardware Components Necessary to Practice Patented Invention

The court granted defendants' motion in limine to exclude the testimony of plaintiff's damages expert regarding apportionment. "[Plaintiff's expert] determined what hardware components of the accused products were necessary to practice the patent, identifying this as the [smallest salable patent-practicing unit]. Then, he determined the cost of those necessary components as compared to the total cost of the accused product to determine what percentage of the total cost of the accused product was attributable to the SSPPU. [He] applied that percentage to the average sales price of the accused product to create an apportioned royalty base. . . . Although [the expert] did apportion out those hardware components not required to practice the patented feature, he did not properly apportion any value to the necessary hardware components. . . . [Plaintiff] could not plausibly argue that the processor does not have any other function besides practicing the patented feature, but that is exactly what [the expert's] apportionment signifies. His failure to identify the value of those necessary hardware components renders his opinion flawed. . . . Moreover, [the expert's] value determination based on comparing the costs of the necessary hardware components to practice the patented technology and the total cost of the accused product also fails to properly consider the value of the patented feature."

Intelligent Verification Systems, LLC v. Microsoft Corporation, et al, 2-12-cv-00525 (VAED March 31, 2015, Order) (Leonard, M.J.)