Case Cite

Wi-Lan Inc. v. Alcatel-Lucent USA Inc., Nos. 6:10-CV-521, 6:13-CV-252, slip op. (E.D. Tex. June 28, 2013).

IPDQ Commentary

Granting in part a Daubert motion, the Wi-Lan court found defects in the damages expert’s report. But, the court allowed the expert to amend his report, subject to an abbreviated schedule. Consider citing this case in the event your expert’s report generates an adverse Daubert ruling.

Case Summary

Defendants filed a Daubert motion to exclude the report and testimony of Plaintiff’s damages expert, John Jarosz. Id. at 1. Plaintiff intended to call Jarosz to testify to a lump-sum royalty based on a hypothetical negotiation. Id. at 2.

The court granted the motion in part, based on the following analysis:

  • EMVR – Jarosz did not tie his calculation of damages to the smallest salable patent-practicing unit as required by LaserDynamics. Jarosz used revenues from the entire accused product without offering evidence that the patented feature drove demand for the entire multi-component product. Id. at 6. Also, Jarosz recognized only slight modifications were required to implement the accused functionality. Thus, Jarosz violated the EMVR. Id. at 6.
  • Most of the comparable license agreements Jarosz analyzed were worldwide portfolio licenses that included many more patents than the patents-in-suit. Id. at 7. Jarosz, however, did not calculate apportionment to reflect differences between the worldwide portfolio license and a license to the patents-in-suit for U.S. sales of the accused products. Id. Jarosz’s statement that he took all evidence into consideration was a “poor substitute” for the required analysis parsing an alleged infringer’s profits for patented versus unpatented features. Id.

Based on the foregoing, the court concluded Jarosz would have to amend his report and recalculate his reasonable royalty if he was going to testify at trial. Id.

Because pre-suit damages (based on whether Defendant had actual notice) were also in dispute, the court advised Jarosz to provide an alternate calculation of those damages as well. Id. at 8.

The court gave a tightly compressed schedule for the completion of the amended report, the taking of a further deposition of Jarosz, and the filing of a supplemental responding report. Id.