Friday, October 7, 2011

Damages Methodology Using "New User Engagement Statistics" to Calculate "Incremental Revenue" Attributable to Infringement Not Inherently Unreliable

The court denied defendant's motion to strike plaintiff's damages expert's report as "lacking in sound economic and factual predicates." "[Defendant] asserts that [the expert] 'adopts his own interpretation of [defendant's] "new user engagement" statistics—which have nothing to do with [defendant's] revenues—and uses these percentages to calculate the purported "incremental revenue" of $73,187,900 to $102,463,060 that [defendant] supposedly will garner from its alleged infringement of the [patent-in-suit]. . . . While it is certainly the case that 'a court should disregard expert opinion if it is mere speculation, not supported by facts' . . . [the expert's] testimony rests upon a sufficient factual basis to support his conclusion. As [plaintiff] asserts, [the expert] bases his opinion upon his experience as applied to the facts of the case. [The expert] has over forty (40) years of experience in the area of the licensing of patents, trademarks and technologies. In those forty (40) years, [the expert] estimates that he has 'has been involved in the negotiation of more than 400 licenses, as licensor or as licensee.' Accordingly, [Plaintiff's expert] possesses the requisite knowledge, skill, experience, training and education to determine the relevant range for likely revenue sharing between a willing licensor and licensee and apply it to the facts of this case. . . . [He] does not rely upon general market studies, but rather his forty years of experience in dealing with the negotiation of more than four hundred licenses."

VS Technologies v. Twitter, Inc.,
2-11-cv-00043 (VAED October 5, 2011, Order) (Morgan, J.)

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