Last month, the Federal Circuit issued two decisions that emphasize the importance of the rules of civil procedure and the benefit that consumer surveys can provide in a patent damages analysis.
Failure to supplement interrogatory answer bars use of allegedly prior art
In the first damages trial, damages were based on a reasonable royalty analysis using the Georgia Pacific factors. The plaintiff’s damages expert applied the entire market value rule to conclude that the entire value of laptops containing optical drives that the method was the proper royalty base. Using this approach and the expert’s opinion that a royalty of 2 percent on the value of each laptop was the proper royalty rate, the jury returned a damages award of $52 million.
The defendants then filed post-trial motions, including one asking for a new damages trial because the plaintiffs did not establish that the patented feature drove the demand for the entire laptop, and thus there was no support for using the entire market value rule. The district court granted that motion and gave the defendants the option of a damages retrial or a damages remittitur to $6.2 million. The defendants opted for a new damages trial. In the damages retrial, the plaintiff shifted its damages theory and asserted that damages should be measured as a 6 percent royalty on the value of the optical disc drives (not the laptop). By this approach, plaintiff sought $10.2 million. The jury ultimately awarded $8.5 million.
Having set forth this rule, the court then provides some suggestion about the evidence needed to support the use of the entire market value rule.
According to the court, the following would not be enough to support the entire market value rule: