Wednesday, September 4, 2013

Article by Platt & Chen on Use of Nash Bargaining Solutions and Conjoint Analysis in IP Damages Litigation

I came across an interesting article by Christian Platt & Bob Chen of Paul Hastings (San Diego office), titled "Recent Trends and Approaches in Calculating Patent Damages: Nash Bargaining Solution and Conjoint Surveys," in Bloomberg BNA's Patent, Trademark & Copyright Daily (Aug. 30, 2013).  Here's a link, but it's behind a paywall.  

The authors begin with a brief overview of patent damages law in the U.S., then lay out the basics of the Nash bargaining solution model and its reception thus far in U.S. courts.  (For a recent decision denying a post-trial motion challenging expert testimony on damages that was based in part on the Nash bargaining concept, see VirnetX Inc. v. Apple Inc., __ F. Supp. 2d ___, ___, 2013 WL 692652 (E.D. Tex. Feb. 26, 2013).  "Nash" is John Nash, recipient of the 1994 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.)  The authors state that courts have been more likely to accept testimony based on the Nash bargaining model when the expert ties it to the specific facts of the case, and when it is used in addition to the more traditional Georgia-Pacific factors. 

As for conjoint analysis, the authors explain that this tool was developed to "measur[e] consumer preferences for specific product features" by "break[ing] a product down into bundles of attributes, and then test[ing] various combinations . . . to determine customer preferences."  In some cases, conjoint analysis has been used to try to estimate the relative importance of a patented feature in a multicomponent product.  The authors note that for conjoint analysis to be accepted in court, an expert "must be able to provide a principled basis" for why he or she focused on certain product features and not others.  For a recent case denying a motion to exclude testimony based on conjoint analysis, see TV Interactive Data Corp. v. Sony Corp., __ F. Supp. 2d __, __, 2013 WL 942473(N.D. Cal. Mar. 11, 2013).

So far I'm not aware of efforts to introduce either of these techniques into other countries' patent damages litigation, but if any readers have further information I'd be interested in hearing from you.

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