1. Recent Developments in Economic Damages in Intellectual Property litigation Fernando Torres, MSc Chief EconomistIPmetrics LLC
2. Rules of Thumb and other ‘Shortcuts’ struck down 25% ‘Rule’ Profit Apportionment Entire Market ‘Rule’ Hypothetical Negotiation Proximate Cause
3. Apportionment ofDefendant’s Profits Infringement all Profit Vacated Damages of $10 Million Case: Mattel vs MGA Court: 9th Appeals Court Expert must ask for sufficient revenue detail discovery at the outset!
4. Link Between IP infringement and Lost Revenue Infringement => Sales Vacated Revenue Calculation of $512 Million Case: Interplan Architects v. Thomas Court: USDC S Tx Expert must provide non-speculative evidence of causation (eg.- multivariate)
5. The 25% Rule of Thumb isLEGALLY INADEQUATE! It may be widely used, but it is arbitrary, unreliable, and irrelevant Vacated Damages of $565Million Case: Uniloc v. Microsoft Court: CA Federal Circuit Expert must tie a reasonable royalty base to the facts of the case.
6. Apply with Care:Entire Market Rule Asserted invention must be the basis for Consumer Demand Vacated Damages of $565 Million Cases: Uniloc v Microsoft & SAP v. Versata Courts: CAFC & USDC EDTX Expert must be able to explain the connection between patent and economics of accused product
7. Hypothetical License – Reasonable Royalty Hypothetical negotiation must be realistic, FMV Copyright Damages of $1.3 Bil. Case: Oracle vs SAP TomorrowNow Court: 9th Cir. / USDC - N CA Expert must ask for consider actual use and licenses in deriving Royalty Rate / Amounts