Monday, February 15, 2016

Is The Relative Emphasis in Marketing Materials of the Accused Technology a Reliable Basis for Apportioning Damages?


Omega Patents has sued CalAmp for infringement of a number of patents relating to vehicle control systems.  CalAmp offered expert opinion explaining the amount of certain damages that should be at risk.  Specifically, CalAmp's expert began his damages calculation by first determining profits for sales of the accused devices.  But the accused devices included a number of features, only some of which are alleged to infringe the patents.  So the expert attempted to allocate the amount of this profit that was attributable to the patented features.  The Court described this allocation methodology:
Here, Dr. McDuff analyzed two of CalAmp's marketing brochures to conduct a word count of certain key words and phrases.  He describes the methodology as follows:  "Next, I apportion to the contribution of the accused functionality as alleged to be commercialized within [the accused products].  I utilize the relative marketing emphasis of various phrases relating to the contributions of the accused data bus and vehicle tracker functionalities."  Explained more simply, Dr. McDuff counted the total words in certain sections of the marketing brochures and then selected certain words which related to the accused patents.  He then counted the number of chosen words and calculated the proportion of these words to all words to assign a value to solely the patented features in the Accused Devices.
Needless to say, Omega objected to this novel approach. And the Court did not allow it:
Neither Dr. McDuff nor CalAmp has been able to point the Court to this type of methodology being accepted by or even utilized by other courts or experts in this field.  Dr. McDuff himself acknowledged that there was no way to calculate an error rate using this methodology.  
The Court went on to exclude this testimony as unreliable.

The decision also provides interesting analysis on attempts to use expert reports and testimony to alter or adjust claim construction positions after Markman determinations.  For example, CalAmp's invalidity opinion analyzed fifteen references as supporting its invalidity positions.  But the report also included the following:
In addition to the references discussed above, I also considered a number of additional prior art references that also disclosed the elements claimed by Omega's patents.  For reasons of brevity, they were not included in the detailed discussion which follows.  However, it is my opinion that these references also disclose all of the elements of each asserted claim of the Omega patents, and could be used alone, in combination with themselves, or in combination with references disclosed above to show additional reasons why the asserted Omega patents are not valid in view of the prior art.
Omega asked to exclude these additional opinions.  The Court obliged:
The Court finds the violation of Rule 26, as it pertains to the ten prior art references identified in Mr. Andrews' report, to have resulted in substantial prejudice to Omega such that the only proper remedy at this late date is the exclusion of Exhibits 24 through 33 along with the testimony relating to how the prior art references relate to Mr. Andrews' opinions.
Motion to Exclude Expert Testimony, Granted in Part and Denied in Part.  Motion to Exclude Damages Testimony, Granted.

Omega Patents, LLC v. Calamp Corp., Case No. 6:13-CV-1950 (M.D. Fla. Dec. 23, 2015) (J. Byron)


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