Remember when the Federal Circuit reversed a record-setting $358 million award in Lucent v. Gateway, because the plaintiff’s damages expert failed to prove that its patented calendar feature furnished a substantial basis for consumer demand of Outlook? Well, on remand to district court, Microsoft (Gateways’ successor) immediately challenged the plaintiff’s new damages expert under Daubert. On the day of the hearing, however, the Federal Circuit issued Uniloc v. Microsoft, which abolished the 25% “rule of thumb” and required plaintiffs “in every case” to apportion damages between the patented/unpatented features of the accused product, and the Lucent court postponed the hearing to permit both sides to re-brief the issue.
When the hearing resumed, Lucent’s expert submitted an “apportionment analysis” that discounted Outlook’s base revenue by the percentage of consumers who used the patented feature, resulting in $73.8 million in damages. This still used the entire market value of Outlook, the court held, and sent the parties back for a third try. This time, Lucent’s expert submitted three different approaches—but the court disallowed all but one, a Georgia-Pacific analysis, which would still be subject to continuing objections under the entire market value rule. Read the complete digest of Lucent Technologies, Inc. v. Microsoft Corp., 2011 WL 2728317 (S.D. Calif.)(July 13, 2011) in the current BVUpdate; the court’s opinion is already posted at BVLaw,
Keep current on the rule. Since Uniloc, we’ve covered nearly half a dozen new cases that interpret expert damages evidence under the courts’ more stringent application of the entire market value rule. This Thursday, October 6, don’t miss Craig Jacobson (Citrin Cooperman) and Stephen Lieb (Frommer Lawrence & Haug) in “Patent Damages: The Entire Market Value Rule.” This installment of BVR’s Online Symposium on Litigation & Economic Damages will discuss how the increasing dominance of intellectual property as a value-driver has placed a new burden on patent damages in general and entire market value analysis in particular.
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