Blogging break

I have decided to take a hiatus from blogging until the end of the year.  I expect to resume on or after January 2, 2022.  I hope my readers stay healthy and have an enjoyable holiday season.

Another Decision Excluding All Evidence on Damages

The case is NexStep, Inc. v. Comcast Cable Communications, LLC, Civil Action No. 19-1031-RGA (D. Del. Nov. 17, 2021).  I first read about it in an article by Ryan Davis on Law360, titled Fed. Cir. Case Sunk Bid for $600M Damages in Comcast Trial and published on November 19.  Basically, Judge Andrews reads the Federal Circuit's August 2021 decision in MLC Intellectual Property, LLC v. Micron Technology, Inc. (for previous discussion of which, see here, here, and here) as authorizing the exclusion of opinion testimony on damages where a party fails to "meet the disclosure requirements of [Federal Rule of Civil Procedure] Rule 26(a)" (p.6).  More precisely, the court had previously granted Comcast's motion to exclude testimony by the plaintiff's proposed expert witness that an appropriate royalty rate for the patents in suit would be 40%, based on the cost savings resulting from the use of the patents (pp. 2, 5).  (It's not clear from the November 17 decision what the proposed base would have been.)  Then on the Friday before trial, NexStep proposed that its CEO be allowed to testify that a 30% royalty rate would be appropriate (p.2).  According to Judge Andrews

It is not as though NexStep provided alternative damages theories, and the exclusion of one leaves another one to be litigated. NexStep simply has cobbled together a new theory using some parts of the old theory and some parts that were previously ignored by both sides.

The Pennypack factors counseled in favor of my decision to exclude NexStep’s damages theory under Rule 37(c)(1). There was no bad faith on NexStep’s part, but the inclusion of such evidence would have been prejudicial to Comcast and Comcast would have been unlikely to be able to cure that prejudice. Comcast had been preparing to respond to an expert’s opinion on NexStep’s royalty rate, not factual testimony. Allowing the new theory would have meant that Comcast could not have obtained targeted discovery around the factual basis of the theory (p.6).

According to Mr. Davis, the court had previously rejected NexStep's argument that courts are obligated to award some royalty for the infringement of a valid and infringed patent, even in the absence of damages evidence.  I believe the court was right to reject that argument, based on (among other things) the Federal Circuit's decision in TecSec, Inc. v. Adobe Inc., 978 F.3d 1278 (Fed. Cir. 2020), previously mentioned on this blog here.  I will probably add some discussion of NexStep to my draft article titled Nominal Damages-and Nominal Damages Workarounds-in Intellectual Property Law, which I am planning to send out to the journals in the spring.

From Around the Blogs

1.  On the Kluwer Patent Blog, Christina Schulze published a post titled French PI overpemetrexed confirmed, but new view on provisional damages.  The author notes a recent decision of the Paris Court of Appeal that affirmed a preliminary injunction for Eli Lilly’s pemetrexed through mid-2021, but also held that the defendant did not have to pay provisional damages of €4 million.  (For previous mention on this blog of the decision awarding the €4 million, see here.)  According to the author, the appellate court stated “that potential damages should be dealt with in the proceedings on the merits” and “criticised Eli Lilly’s economic arguments for being insufficiently comprehensive.”   The post does not link to the decision itself, but I’m sure it will be published somewhere before long, and at that point I may have more to say about it.  Still hoping to work on that long-simmering project on wrongful patent assertion, possibly starting next summer. 

2. On the Kluwer Patent Blog, Brian Cordery published AIPPI Panel Session 10:  Anti-Suit & anti-anti-suit injunctions.  The post recounts a recent panel session of the 2021 AIPPI Congress.  According to the author, Nokia’s Clemens-August Heusch argued that “no court should have jurisdiction” to set global FRAND terms “unless agreed by both parties” and that there should be “clearer rules on jurisdiction to avoid” antisuit and anti-antisuit injunctions,” while Kevin Duan noted that “there have actually been” few  cases in which antisuit injunctions have been enforced.

3.   On Law360, Rich Franciosa and Michael Herrigel published The Comparability Challenges Patent Damages Experts Face.  The authors present the findings of a study they conducted analyzing Daubert challenges in patent infringement cases in  U.S. district courts from January 1, 2015 through September 30, 2021.  Their findings focus on challenges, both regarding technical and economic comparability, to experts’ uses of purportedly comparable licenses.