July 31st, 2013 by Keith Hock
In previous blog posts (here and here) I wrote about the exclusion of damages experts in several cases. This post briefly summarizes two relatively recent decisions upholding damages related testimony from plaintiffs’ expert witnesses.
Synqor, Inc. v. Artysyn Technologies, Inc., et al. – The Federal Circuit upheld a $95.3 million lost profits and reasonable royalty damage award that was based on the jury’s adoption of the plaintiff’s expert’s damages model. Both elements of the damage award were based on “but for” prices that Synqor claimed it would have been able to charge absent the infringement (in essence, arguing that the infringement caused price erosion). The “but-for” prices were two to three times higher than the prices charged by the defendants for their infringing products. Given the testimony that was offered at trial regarding sales that were made at the higher price levels, the Federal Circuit found that, “both the lost-profits and reasonable royalty damages are supported by substantial evidence and not excessive or based only on speculation and guesswork.”
SSL Services, LLC v. Citrix Systems, Inc., et al. – The District Court denied the defendants’ post-verdict motions seeking to overturn a $10 million lump-sum damages award (the damage claim put forward by the plaintiff’s expert). The royalty rate that the plaintiff’s expert used to arrive at the lump sum damage amount was derived from prior agreements between a predecessor company to the plaintiff and the defendant. The defendants argued that these agreements should not have been allowed as evidence in the case “because they are not sufficiently comparable to the non-exclusive domestic patent license that would result from the hypothetical negotiation of a Georgia-Pacificanalysis.” While agreeing that there were differences, the District Court also pointed to testimony from the plaintiff’s expert regarding similarities and the relevance of the agreements to other Georgia-Pacific factors. The court also noted that the defendants’ damages expert admitted that, “as far as we know, that’s as close as – to comparable as we’re going to get.”
These rulings seem to highlight the importance of making sure that damage claims are sufficiently grounded in the facts and circumstances of the case. In these cases, it appears that the damage experts understood the factual testimony (e.g., what prices were charged in the market) that would be offered at trial and were able to testify about the work that they had performed to demonstrate that the bases (e.g., why a license agreement is relevant) for their opinions were reasonable. Because these experts’ opinions were based on what the courts determined was sufficient testimonial evidence, their opinions were upheld.
What is the trend from your perspective – are damages experts more or less likely to be excluded today than in the past? Are your experts taking steps to address issues that have been raised in other cases and increase their odds of successfully fending off challenges to their testimony? Please share your thoughts in the comments section below.