Remember when the federal district court essentially gave the plaintiff’s expert a “roadmap” for calculating patent and copyright infringement damages under the entire market value rule in the much-watched (and multibillion dollar) litigation between Oracle and Google? (See BVWire #108-3.) Well, despite this “strong warning” to start with the unsuccessful but “real world” negotiations between the parties and then apportion any reasonable royalty among the 29 asserted claims in the case, the Oracle expert “made a stab” at apportionment in his second attempt, the court found, but then he applied a flawed methodology, including:

• The Oracle expert used the complete “universe” of patented know-how and technology that existed in 2008-2010—or more than five years after the parties’ hypothetical negotiations would have taken place, resulting in “apples to oranges” conclusions.
  
  
• Rather than make a “claim-by-claim” analysis of damages, the expert made a “patent-by-patent” analysis, treating each patent as “an indivisible whole,” the court said. “It is a mystery why Oracle and [its expert] chose to disregard this aspect of the [prior] order.”
  
  
• The expert also erred by relying on past licenses involving Nokia, Qualcomm, and Apple, because he failed to establish their comparability. In relying on prior settlements of the patented technology, he also confused two litigations and used one involving dissimilar claims.

Despite also warning the plaintiff that this second attempt would be its “last bite of the apple,” the court granted Oracle’s expert a third try to calculate damages, “so long as his methodology conforms to prior rulings.” Oracle agreed to do so, but last February, Google filed a motion to strike its expert’s third damages report as well as a “conjoint analysis report” by its supplemental expert. The parties should have fully briefed the issues as of last Friday, March 9, 2012. Stay tuned…

In the meantime, read the complete digest of Oracle America, Inc. v. Google Inc., 2012 U.S. Dist. LEXIS 2500 (Jan. 9, 2012) in the next Business Valuation Update; the court’s opinion will be posted soon at BVLaw.