Expert’s Flawed Royalty Rate Analysis Requires New Trial on $75 Million Verdict

Following a jury verdict of $75 million, the court granted defendant's motion for new damages trial because the application of plaintiff's survey expert's results by plaintiff's damages expert was unreliable. "⁠[Plaintiff's damages expert] directly translated the roughly 28% of survey respondents who allegedly would not have bought [defendant's] phone without the infringing feature to [defendant's] profit in an effort to determine the potential 'at-risk' profit. . . . [The expert] did not consider the numerous patented features on the accused phones, many of which a consumer would consider essential, assuming [another expert's] survey results were extrapolated. . . . [He] did not account for how his theory would result in the erosion of all of [defendant's] profit. Realistically, there are many features on a phone that would likely yield survey results similar to those obtained for the [patent-in-suit], e.g., ability to make a call, text messaging, Wi-Fi connection. To conclude that any one of these features -- simply because it is considered essential to a consumer -- could account for as much as a quarter of [defendant's] total profit is unreliable and does not consider the facts of the case, particularly the nature of smartphones and the number of patents that cover smartphone features."

Ericsson Inc. et al v. TCL Communication Technology Holdings Limited et al, 2-15-cv-00011 (TXED March 7, 2018, Order) (Payne, MJ)