Source: http://patent-damages.com/category/reasonable-royalty-license-agreements/page/2/
Timestamp: 2019-04-23 14:34:06+00:00

Document:
On April 21, 2014, Judge Guilford of the Central District of California issued aDaubertopinion in Universal Electronics, Inc. v. Universal Remote Control, Inc., Case No. SACV 12-00329 AG (JPRx), addressing numerous motions to exclude. The issue of primary interest concerns plaintiff’s expert’s setting of a 3% “baseline royalty rate” based on four license agreements the court found not sufficiently comparable. The expert is Frank Bernatowicz.
On May 28, 2013, Judge Posner, sitting by designation in the Northern District of Illinois, issued an opinion in Promega Corp. v. Applied Biosystems, LLC, et al., Case No. 13-cv-2333 (Doc. No. 378), addressing Daubert motions to exclude opinions by plaintiff’s and defendant’s experts, including damages experts for both sides. The patentee in the case was Life Technologies, and the accused infringer was Promega. Promega’s motion to exclude royalty rate testimony by Life Tech’s expert (Jed Greene) will be addressed here. Judge Posner granted the motion to exclude Greene’s testimony because “[u]sing the midpoint of a range of royalty rates in disparate licenses for unknown different inventions as the estimate of a reasonable royalty for a license for Promega products outside the field of use of the 2006 patent is arbitrary.” Slip op. at 3 (citing Federal Circuit’s opinions in Wordtech and Lucent). Judge Posner observed that “Greene testified simply that he considered the totality of the circumstances. But generalized impressions are no substitute for a method of computing, and evidence justifying, a reasonable royalty rate.” Id.
The District of Delaware in Sciele Pharma, Inc. v. Lupin, LTD, Civil No. 09-37 (RBK/JS) (Redacted Version) (D. Del. January 31, 2013), ruled on plaintiff’s motion seeking production of certain license agreements and related negotiation documents. The portion of the opinion concerning production of negotiation documents is most interesting. The court granted the motion as to negotiation documents, but indicated that production in such cases should be based on a case-by-case approach.
Having determined that the defendant was required to produce some license agreements, it was compelled to address plaintiff’s request for the underlying documents, including “negotiations, forecasts and analysis.” The court noted that there are cases going both ways on settlement negotiation documents, citing: Tyco Healthcare Group LP v. E-Z-EM, Inc., No. 2:07-cv-262 (tjw), 2010 wl 774878, at *2 (E.D. Tex. March 2, 2010) (ordering production); High Point SARL v. Sprint Nextel Corp., C.A. No. 09-2269-CM-DJW, 2012 WL 1533213 (D. Kan. April 30, 2012) (denying production even though license agreements ordered to be produced). The court recognized the split was not surprising given the broad discretion afforded courts in deciding discovery issues.
The court declined to adopt a blanket rule on the discoverability of negotiation documents, instead opting for a “case-by-case approach … to determine whether the requested documents were discoverable.” The court cited Charles E. Hill & Assoc., Inc. v. ABT Elecs., Inc., 854 F. Supp. 2d 427, 429 (E.D. Tex. 2012), in support of this approach. However, the Delaware court also agreed with Charles E. Hill that “as a general rule license negotiations are less probative and more prejudicial than the licenses themselves,” and that “negotiation documents ‘primarily add heat and not light to an already difficult judicial chore.’” Slip op. at 10 (quoting Charles E. Hill).

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