Failure to Address Market Elasticity Supports Summary Judgment of No Lost Profits

The court granted defendant's motion for summary judgment that plaintiff was not entitled to lost profits damages because plaintiff did not address market elasticity. "In constructing a hypothetical 'but for' market for the purposes of a lost profits analysis, '[a]ll markets must respect the law of demand,' which counsels that 'consumers almost always purchase fewer units of a product at a higher price than at a lower price, possibly substituting other products.' The undisputed record shows that during the relevant period [plaintiff's] product prices were between 194% to 819% higher than [defendant's]. [Plaintiff's expert] nevertheless assumes that [plaintiff's] products are perfect substitutes for [defendant's] products, thereby allowing all [defendant's] sales to be attributed to [plaintiff]. Critically, he did no serious investigation . . . to evaluate the validity of his assumption. . . . [T]he Federal Circuit held that where the price disparity between the infringer’s products and the patentee’s products was only 73 percent, the disparity was enough to dispel the notion that the patentee would have been able to capture all of the infringer’s sales. . . . [T]he price disparity between [the parties'] products is far greater, and customer testimony is clear that price sensitivity was a key concern in choosing a product."

Good Technology Corporation et al v. MobileIron, Inc., 5-12-cv-05826 (CAND June 23, 2015, Order) (Grewal, M.J.)