Damages Apportionment in Patent Litigation: What You Must Know and Do in 2019
In 2018, the Federal Circuit issues a number of decisions concerning the use of apportionment in assessing reasonable royalty damages in cases, including in Finjan, Inc. v. Blue Coat Systems, Inc., Exmark Mfg. Co. v. Briggs & Stratton Power Products Group, and Power Integrations, Inc, v. Fairchild Semiconductor International, Inc.. In these decisions, the Court reasserted the principle that reasonable royalty damages should reflect the contributions of the patented technology without providing compensation for value derived from other contributors of value. At the same time, these decisions provided ambiguous, and potentially conflicting, guidance concerning the manner in which litigants are to analyze and demonstrate such value – particularly concerning the royalty bases that may be considered in conducting such analyses.
As the damages apportionment landscape continuously evolves, companies and their counsel must keep themselves abreast of the recent rulings and developments to better position themselves in a patent litigation.
In this LIVE Webcast, a seasoned panel of thought leaders and professionals brought together by The Knowledge Group will provide and present an in-depth analysis of the fundamentals as well as recent developments surrounding the Apportionment of Damages in Patent Litigation. Speakers will also offer helpful insights and tips for parties in a patent litigation.
Key topics include:
- Damages Apportionment in Patent Cases
- Apportionment Requirements Set by the Federal Circuit
- Implications of 2018 Federal Circuit Decisions Concerning Apportionment
- Treatment of Apportionment Issues in Different Jurisdictions
- Practical Tips for Patent Owners – Lessons from Recent Litigations
Michael J. Chapman, Senior Managing Director
Ankura Consulting Group, LLC
- Apportionment in reasonable royalty damages seeks to ensure such damages reflect the incremental value contributed by the patented technology
- “Apportionment” in reasonable royalty damages calculations can involve adjustments to the royalty base, royalty rate, and the hypothetical negotiation. All parts of the apportioned damages calculation are interdependent should be consistent with one another to ensure a reasonable result.
- Royalty base apportionment tends to involve a choice between SSPPU or the entire value of the accused product – the rules governing this choice continue to evolve
- Royalty rate apportionment tends to involve comparable licenses or incomplete isolation of the contribution of the patented technology in the estimation of the baseline royalty rate.
- The hypothetical negotiation serves as a reality check on the estimated incremental value of the patented technology and enabled the final apportionment of incremental value between the patent holder and the infringer.
Joel Wacek, Principal
Hoffman Alvary & Company LLC
- Brief Overview of 2018 Federal Circuit Decisions on Apportionment of Reasonable Royalties
- Finjan v. Blue Coat: Emphasis on need to apportion royalties to the value of the specific patented technologies, as opposed to larger technical components in the accused product;
- Exmark v. Briggs & Stratton: Guidance on how the scope of the asserted claims can influence whether apportionment is done through the royalty base versus the royalty rate;
- Power Integrations v. Fairchild: Additional explanation (and potential expansion?) of the requirements for applying the Entire Market Value Rule; and
- Sprint v. Time Warner: Further guidance on the different types of apportionment methods that may be used, such as prior licenses.
- Takeaways and Best Practices from Recent Decisions
Ronald E. Cahill, Chair, Intellectual Property Department; Executive Committee
Nutter McClennen & Fish LLP
- Stories from the front lines, how do apportionment arguments play out in court:
- Daubert challenges on apportionment grounds, what are trial court judges excluding based on the case law discussed above;
- Putting on a damages expert at trial, what works and why;
- Challenging at the Federal Circuit, what motivates panels to support or strike damages.
- What comes next? The battle lines are not always clear, is help coming?
Who Should Attend:
- Patent Attorneys
- Patent Litigators
- Intellectual Property Attorneys
- In-House Counsel
- IP Consultants and Experts
- Patent Owners
- Patent Licensing Attorneys
- Other Related/Interested Professionals
Dr. Michael Chapman is a Senior Managing Director at Ankura based in Washington, DC. Michael has more than 20 years of experience providing economic, financial, and strategic consulting services to commercial firms, law firms, and governments. He has served as an economic expert to and conducted economic analyses in a wide range of industries, including pharmaceuticals, medical equipment, semiconductors, financial services, insurance, manufacturing, steel, agricultural products, and consumer goods.
Dr. Chapman has authored a number of articles and book chapters on intellectual property damages issues, including ““Using Settlement Licenses in Reasonable Royalty Determinations” (2009) and “The Hypothetical Negotiation and Reasonable Royalty Damages: The Tail Wagging the Dog” (2013). He has also has taught economics courses at several leading business schools, including the MIT’s Sloan School of Management, the University of Michigan Stephen M. Ross Business School, Georgetown University Robert Emmett McDonough School of Business, and the University of Maryland Robert H. Smith School of Business. Dr. Chapman hold a Ph.D. in Economics from the Massachusetts Institute of Technology and a J.D. from the University of Michigan.
Dr. Michael Chapman is a Senior Managing Director at Ankura based in Washington, DC. Michael has more than 20 years …
Joel Wacek is a Principal of Hoffman Alvary. His practice focuses on financial and economic analysis for intellectual property disputes, licensing and business valuation matters. Mr. Wacek has more than a decade of experience in computing damages in intellectual property infringement matters, as well as providing financial analysis related to breach of contract and business valuation disputes.
Mr. Wacek’s experience includes providing expert testimony, preparing expert reports and assisting counsel in preparing for depositions and trial examinations. Mr. Wacek continually monitors the developing changes in patent damages case law to inform his complex damages analyses involving lost profits, reasonable royalties and price erosion.
Mr. Wacek holds an M.B.A. and a Masters of Science in Finance from the Carroll School of Management at Boston College, and a B.A. in both Economics and History from Boston College. He is a Certified Licensing Professional and member of the Licensing Executives Society and International Trademark Association.
Joel Wacek is a Principal of Hoffman Alvary. His practice focuses on financial and economic analysis for intellectual property disputes, …
Ron Cahill chairs Nutter’s IP Litigation practice group and works with clients of all sizes to maximize the value of their Intellectual Property. While much of Ron’s work involves presenting his clients’ case to judges and juries around the country, many clients ask him to apply that experience to strategic planning within their business, and especially with respect to their competitors or potential deal partners. Ron is a frequent speaker and commentator on patent damages, particularly in regards to lost profits. Ron holds both a master’s and bachelor’s degree in Mechanical Engineering from Cornell and received his law degree in Intellectual Property from the University of Pennsylvania. He has been practicing at Nutter for 21 years and is a member of the firm’s Executive Committee.
Ron Cahill chairs Nutter’s IP Litigation practice group and works with clients of all sizes to maximize the value of …
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Method Of Presentation:
General Knowledge of Patent Law
NY Category of CLE Credit:
Areas of Professional Practice
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About Ankura Consulting Group, LLCAnkura is a business advisory and expert services firm defined by HOW we solve challenges. Whether a client is facing an immediate business challenge, trying to increase the value of their company or protect against future risks, Ankura designs, develops, and executes tailored solutions by assembling the right combination of expertise. We build on this experience with every case, client, and situation, collaborating to create innovative, customized solutions, and strategies designed for todayÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s ever-changing business environment. This gives our clients unparalleled insight and experience across a wide range of economic, governance, and regulatory challenges. At Ankura, we know that collaboration drives results.
About Hoffman Alvary & Company LLC
Hoffman Alvary & Company is a consulting firm providing independent advisory services to law firms, their clients and other institutions worldwide.
The firm’s Intellectual Property and Valuation Consulting practices assist companies and their counsel in a broad range of areas including expert witness testimony, licensing matters, valuations and general business consulting. The firm’s principals are experienced in determining and testifying to the amount of damages arising from the infringement of intellectual properties, and as well as in analyzing financial, accounting and economic issues in investigations before the International Trade Commission.
The firm’s Law Firm Consulting practice focuses on management consulting to major law firms throughout the United States, Canada, the UK and Europe, and works regularly with nearly half the AmLaw 100 and AmLaw Second Hundred firms in their strategic and tactical considerations.
For more information on Hoffman Alvary, visit www.hoffmanalvary.com.
About Nutter McClennen & Fish LLP
Nutter is a full-service, Boston-based law firm that practices at the highest level. Our IP team has a long established track record of working with clients throughout the patent lifecycle to achieve their legal and business objectives. This includes managing complex litigation, IPR, prosecution, international, and licensing matters.