Daubert Motion: Patent Damages Hot Topics

Recent Comparable Royalty Agreement Daubert Challenges

Mondis Technology, Ltd. v. LG Electronics, Inc.

2011 WL 24173672 (E.D. TX, 2011)

ISSUE: Federal Circuit case law provides examples where the royalty determined at trial is three times (or more) higher than the established or “standard” industry royalty rates that are negotiated pre-suit. See, e.g., SmithKline Diagnostics, Inc. v. Helena Labs. Corp., 926 F.2d 1161, 1168 (Fed.Cir.1991) (affirming a district court's determination of a 25% royalty when standard royalties for the defendant with similar products had rates of 3% and 5%); Bio–Rad Labs., Inc. v. Nicolet Instrument Corp., 739 F.2d 604, 617 (Fed.Cir.1984) (affirming a jury's royalty rate of approximately one-third when the “industry royalty rate runs from three to ten percent of sales” because “[t]hough established royalty rates are normally applicable ... they do not necessarily establish a ceiling for the royalty that may be assessed after an infringement trial”) (abrogated on claim construction grounds due to Markman v. Westview Instruments, 52 F.3d 967 (Fed .Cir.1995)); Deere & Co. v. Int'l Harvester Co., 710 F.2d 1551, 1554, 1558 (Fed.Cir.1983)  (upholding a 15% reasonable royalty even though before the infringement suit began, the patentee offered a license to the infringer, under the patent-in-suit, at a rate of 1%). The Court also observes that for the approximately 13 comparablelicenses to the patents-in-suit, the parties to the licenses were sophisticated and understood that future litigation was possible, and that may have created uncertainty or “skew[ed] the results.”  ResQNet.com, 594 F.3d at 872.

 

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