Finjan, Inc. v. Sophos, Inc., 3-14-cv-01197 (CAND August 15, 2016, Order) (Orrick, USDJ)
Wednesday, August 17, 2016
Expert’s Reasonable Royalty Testimony Excluded for Double Counting Revenue Attributable to Accused Features
The court granted defendant's motion to exclude the testimony of plaintiff's damages expert regarding a reasonable royalty base as unreliable. "[Defendant] moves to exclude [the expert's] testimony on the grounds that she improperly inflated the royalty base by double or triple counting revenue attributable to certain features of the accused products. . . . [The expert's] method of counting the revenue attributable to certain features multiple times, when those features are covered by multiple patents, is not a reasonable method of counting the value added by the patented features. If only 6/12 total features of a particular product are infringed by any of the accused patents, and we assume that each feature has an equal value, then the total value added of all of the combined patents cannot exceed 50 percent of the total product value. However, several of [her] value-add calculations assume that the combined value added of the alleged patents would exceed the total product value. . . . [W]hat is not possible, as a matter of law and logic, is that the [two] patents’ combined add more value to the threat engine feature than its total value. This is what [the expert's] report assumes by apportioning the value of the threat engine feature to both [patents]. . . . This flaw may be cured by amending [the expert's] total damages calculation to reflect a royalty base that does not exceed the total possible value added of the combined asserted patents."