Avocent Redmond Corp. v. Rose Electronics, No. C06-1711RSL, 2013 WL 1855738(W.D. Wash. April 29, 2013); Avocent Redmond Corp. v. Rose Electronics, No. C06-1711RSL, 2013 WL 1855847 (W.D. Wash. April 29, 2013).
The Avocent court considered a variety of challenges to Plaintiff’s damages evidence, including late disclosure of damages-related fact testimony and a motion for reconsideration of a failed Daubert challenge. Plaintiff survived the challenges with most of its damages case intact. The takeaway: Pay close attention to Rule 26(a) disclosure obligations and the law relating to the calculation of damages, in particular the rules relating to use of the EMVR.
The court considered the Belkin Defendant’s motions in limine (2013 WL 1855738 at *1) and motion to reconsider the court’s orders on prior Daubert motions (2013 WL 1855847 at *1).
The Belkin Defendants moved in limine to exclude additional testimony of Plaintiff’s former CFO and President regarding (1) the profitability of Plaintiff’s patented products, and (2) Plaintiff’s investment in R&D on the grounds that the testimony was not timely disclosed pursuant to Rule 26(a). 2013 WL 1855738 at *3.
The court denied the motion as it related to the profitability of Plaintiff’s patented products on the grounds Plaintiff’s damages claim was based on lost profits. Plus, the court said prior disclosure that the witness would testify regarding lost profits damages should have led to questioning about profits. Id.
The court granted the motion as it related to Plaintiff’s investment in R&D in that nothing in Plaintiff’s prior disclosures would have tipped Belkin off to the need to question the witness on such expenditures. Id. Timely Rule 26(a) disclosures would have alerted Belkin to the testimony, but there was no indication the witness intended to testify on this topic. Therefore, Belkin was denied an opportunity to conduct discovery on the issue. Id.
Belkin also sought to have the court reconsider portions of its earlier ruling regarding Plaintiff’s damages exert, Dr. Kerr. 2013 WL 1855847 at *1. Denying the motion for reconsideration, the court ruled that:
- Any legal shortcomings in Dr. Kerr’s report based on the EMVR should have been apparent at the time Belkin filed its initial motion and were thus waived if not raised. Id. at *1. Nonetheless, the court considered Belkin’s substantive challenges to Dr. Kerr’s motion and concluded Dr. Kerr’s opinion that the royalty rate would have been based on the sales of the entire product was based on sufficient facts and evidence to allow it to be presented to the jury. Id. at *2.
- The license agreement upon which Dr. Kerr relied related to the patents in suit and the type of products that are the subject of the hypothetical negotiation. Id. Dr. Kerr considered the license as discussed in the court’s earlier order and as permitted by Georgia-Pacific. Id.
- Dr. Kerr adequately disclosed his opinion that the value of a settlement license is likely to reflect a deep discount from the true value of a successfully litigated patent. Id. at *3.
- Dr. Kerr sufficiently showed that, “but for” the infringement, Plaintiff would have made additional sales. Id.