Reasonable Royalty Methodologies Deemed Unreliable

Reasonable royalty experts are frequently challenged for applying unreliable methodologies. Successful challenges are less common. Since 2008, U.S. district courts have issued 198 orders on motions in limine and motions to strike reasonable royalty expert reports for applying unreliable methodologies. The courts completely denied 88, partially denied and partially granted 66, and completely granted 32.

To view the 32 granted orders, click here. To view all 198 orders, click here and remove the “Result of motion” filter shown at the top of the page. To limit the search result to a specific judge or court, add a filter shown on the left side of the page.

Expert’s Rejection of Georgia-Pacific Factors in Favor of "Market Approach" for Calculating Reasonable Royalty Does Not Warrant Exclusion of Testimony

The court denied defendants' motion to exclude the testimony of plaintiff's damages expert and rejected their argument that the expert's "market approach" methodology was unreliable. "According to Defendants, [the expert's] 'Market Approach' is not approved by the Federal Circuit. Rather, at best, the 'Market Approach' is a broad application of the first two Georgia-Pacific factors . . . [Plaintiff's expert] admits to not using the Georgia-Pacific factors in his analysis. In fact, [he] referred to the factors during his deposition as 'outmoded' (i.e., outdated, old-fashioned). . . . [T]he Federal Circuit has indicated that it does not require that witnesses use any or all of the Georgia–Pacific factors when testifying about damages in patent cases. . . . Defendants’ disagreement with [the expert's] use of the 'Market Approach' is better addressed on cross-examination and via their own damages expert."

Stoneeagle Services, Inc. v. Pay-Plus Solutions, Inc. et al, 8-13-cv-02240 (FLMD June 19, 2015, Order) (Covington, J.)

PTAB Decisions Denying Institution of IPR and CBM Review Not Excluded From Evidence

The court denied defendants' motion in limine to preclude plaintiff from presenting evidence of the PTAB's denial of defendants' petitions for inter partes and CBM review. "Defendants argue that [the PTAB's decisions denying institution of IPR and CBM review of a patent-in-suit] is irrelevant and highly prejudicial to the jury’s determination. . . .[U]nlike the situation in Interdigital Comm., Inc. v. Nokia, Corp., 690 F.3d 1318 (Fed. Cir. 2012), the petition for Inter Partes Review of the [patent-in-suit]] was instituted by [a defendant] and the PTAB expressly concluded in its decision 'Petitioner fails to demonstrate a reasonable likelihood of prevailing in showing the un-patentability of any of the challenged claims.'. . . The Court can and will instruct the jury on the appropriate law to apply to this case and can, if requested, further instruct the jury that different standards apply to these various proceedings (i.e., the PTAB’s decision denying Defendants’ petition for Inter Partes Review . . . and the PTAB’s decision denying Covered Business Method Patent Review with respect to [a patent-in-suit])."

Stoneeagle Services, Inc. v. Pay-Plus Solutions, Inc. et al, 8-13-cv-02240 (FLMD June 19, 2015, Order) (Covington, J.)

No Reduction of $5.9 Million Attorney Fee Award for Two Mock Trials

The court awarded defendant $5.9 million in attorney fees under 35 U.S.C. § 285 and partially rejected plaintiff's argument that fees for mock trials were unreasonable. "As for moot trial teams, such practice is entirely reasonable and typical. The Court, however, questions whether [plaintiff] should have to pay for three mock arguments. . . . [Plaintiff] does not provide this court with evidence to compare, but the Court can only assume that [plaintiff] did not conduct any mock arguments with outside professionals who might have brought 'the fresh perspective to the issue' as [defendant] did. . . . [C]onducting a mock oral argument and a follow-up one to address feedback from the first argument is entirely reasonable in a case of this complexity. It will, however, deduct . . . fees related to the third mock argument as unnecessary."

Bayer CropScience AG, et al v. Dow Agrosciences LLC, 1-12-cv-00256 (DED June 18, 2015, Order) (Bumb, J.)

Delay in Filing IPR Weighs Against Litigation Stay

The court denied without prejudice defendants' motion to stay pending their petition for inter partes review and found that the potential undue prejudice to plaintiff weighed against a stay where defendants filed their petition just before the deadline. "Moving Defendants' delay in petitioning for IPR could create at least some tactical disadvantage for [plaintiff] and a stay may unduly prejudice Plaintiff. While Plaintiffs status as a non-practicing entity reduces the prejudice it would suffer from a stay, there remains a potential for undue prejudice. The timing of Moving Defendants' filing suggests they may be seeking a tactical advantage, given they were aware of the prior art asserted in their IPR petition many months before filing the petition just three days before the statutory deadline."

Pragmatus Mobile LLC v. Amazon.com Inc., 1-14-cv-00436 (DED June 17, 2015, Order) (Stark, J.)

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The court denied without prejudice defendant's motion to stay pending its petition for inter partes review and found the potential for undue prejudice to plaintiff weighed against a stay. "Defendant's delay in petitioning for IPR could create at least some tactical disadvantage for [plaintiff] and a stay may unduly prejudice Plaintiff. While Plaintiff's status as a non-practicing entity reduces the prejudice it would suffer from a stay, there remains a potential for undue prejudice."

Copy Protection, LLC v. Netflix, Inc., 1-14-cv-00365 (DED June 17, 2015, Order) (Stark, J.)

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The court denied defendants' motions to stay pending a petition for inter partes review because the undue prejudice to plaintiff, lack of potential simplification of issues, and stage of the case weighed against a stay. "[T]he length of the inter partes review alone does not establish prejudice. Here, however, the delay is compounded by the fact that the [patent-in-suit] already had reexamination for eight years. . . . The timing of the stay request also indicates a tactical disadvantage. [Plaintiff] takes issue with [defendant] having waited almost a year after the filing of the case before requesting IPR. . . . It is unclear . . . why it took . . . 8 months after [plaintiff] disclosed its asserted claims and preliminary infringement contentions to file the IPR petition. . . . [Defendant's] nearly one-year-long delay was unreasonable. . . . [Plaintiff] maintains that the issues will not be simplified because [one defendant], who is not a party to the IPR petition, will not be bound by the PTO’s determinations of patent validity. The Court concurs with the Northern District of California that '[t]his is a real concern.'"

LakeSouth Holdings LLC v. Ace Evert Inc., 3-14-cv-01348 (TXND June 17, 2015, Order) (Godbey, J.)

Institution of IPR For One of Two Asserted Patents No Basis for Stay

The court denied defendants' motion for a continued stay pending inter partes review after the PTAB instituted review of only one patent-in-suit. "The [granted] petition only addresses three out of the eleven asserted claims in the case, therefore there is no reason to allow the remaining claims to 'languish' unresolved during the IPR process. Further, the claim terms in the [patent under review] will not significantly assist the Court in interpreting the [other patent-in-suit]. . . . Even with the delay of waiting for the PTAB’s institution decision, this case can still go to trial by the end of the year, resolving all of Plaintiff’s claims well before the PTAB makes a final determination on the [patent under review]. Especially since Defendants are not even parties to the IPR petitions, and are not estopped from bringing the same arguments, the Court finds that fairness weighs in favor of Plaintiff to resolve its claims in this forum."

The Tire Hanger Corporation v. My Car Guy Concierge Services Inc. d/b/a Hoist Hanger et al, 5-14-cv-00549 (CACD June 16, 2015, Order) (Wright, J.)

Computer Voice Control Patent Claims Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for judgment on the pleadings that four claims of plaintiff's patent for voice control of a computer were invalid for lack of patentable subject matter and found the claims were directed to an abstract idea. "The [patent-in-suit] describes a method and apparatus that 'uses oral input, natural language based rules, associative search and tabular data structures to provide an easily learned means for controlling a digital computer.' . . . [Plaintiff] also emphasizes that the patent is directed to using the human voice to control a computer using natural language. . . . The present patent is like that in [Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 714 (Fed. Cir. 2014)] in that it is directed to an abstraction; its disclosure of the use of a human voice to control a computer has no tangible or concrete form. Like Ultramercial, the claims contain some limitations, such as the use of a microphone and word recognition software, but these are not novel inventions. . . . The [patent-in-suit] does not simply perform a pre-existing business practice on the internet, but neither does it solve a business problem created by internet commerce."

Potter Voice Technologies LLC, v. Apple, Inc., et al, 4-13-cv-01710 (CAND June 11, 2015, Order) (Wilken, J.)