Summit 6 v. Samsung was decided on September 21, 2015 on appeal from the Northern District of Texas. The patent relates to the processing and uploading of digital photos. The jury found plaintiff Summit’s patent not invalid and infringed, and awarded Summit $15 million in damages. Summit settled with another defendant, RIM, before trial. At trial, relying on a methodology not previously used or published in peer-reviewed journals, Summit’s expert Benoit explained that defendant Samsung would have agreed to pay Summit $0.28 per device (cellphone). The district court granted Samsung’s pre-verdict motion for JMOL of no direct infringement. Both parties appealed.
The Federal Circuit affirmed the denial of Samsung’s motion for a new trial based on claim construction, affirmed the denial of its JMOL with respect to infringement and invalidity, and affirmed the jury award.
The Federal Circuit affirmed the denial of Samsung’s motion to exclude Benoit’s testimony on a reasonable royalty. “[T]here may be more than one reliable method for estimating a reasonable royalty.” A party may use the royalty rate from sufficiently comparable licenses, value the infringed features based on comparable features in the marketplace, value the infringed features by comparing the accused product to non-infringing alternatives, or use the analytical method, which focuses on the infringer’s projections of profit for the infringing product. All approaches have certain strengths and weaknesses; “[t]hat one approach may better account for one aspect of a royalty estimation does not make other approaches inadmissible.” A methodology is inadmissible if either (1) the data used is not “sufficiently tied to the facts of the case,” or (2) the methodology is logically deficient or otherwise unreasonable. But when both prongs are met, “the gatekeeping role of the court is satisfied, and the inquiry on the correctness of the methodology and of the results produced thereunder belongs to the factfinder.”
To estimate a reasonable royalty, Benoit used Samsung’s annual reports, internal cost-and-revenue sheets, and interrogatory responses to determine that the camera component accounted for 6.2% of the phone’s production cost. He then attributed to the camera functionality 6.2% of Samsung’s revenue from selling each phone, to arrive at $14.15 per phone — $228.23 x 6.2% = $14.15 (this estimates the amount the carriers pay Samsung per phone to include a camera component). To further apportion, Benoit relied on surveys to estimate that at least 65.3% of camera users used the camera regularly to capture only photos rather than video; he calculated that at least 77.3% of the photo users shared the photos, and that 41.2% of the photo sharers did so by infringing the patent. Multiplying these out, Benoit estimated that at least 20.8% of camera users used the camera for infringing features (65.3% x 77.3% x 41.2% = 20.8%).
Based on the estimate that carriers pay Samsung $14.15 per phone to include a camera, and that 20.8% of users infringe, “Benoit concluded that 20.8% of Samsung’s $14.15 revenue for including the camera component in each phone—i.e., $2.93—was due to the infringing features” (20.8% x $14.15 = $2.93). Using Samsung’s annual reports to estimate its profit margins and capital asset contributions, Benoit concluded that, for each phone, $0.56 of the $2.93 revenue was profit attributable to the infringement. The hypothetical negotiation (a reconstructed negotiation between a willing licensor and licensee at the time the infringement began) would concern the entire $0.56 because Samsung had no non-infringing alternatives. To determine a reasonable royalty at the hypothetical negotiation, Benoit testified that because neither party had a stronger negotiation position, the parties would have split the $0.56 evenly to derive a reasonable royalty of $0.28 per device, which resulted in a reasonable royalty of $29 million ($0.28 x number of phones sold). Benoit cited three academic articles and the Nash Bargaining Solution (the parties split incremental profits 50/50) to support his theory of an even split.
Benoit’s damages methodology was based on reliable principles and was sufficiently tied to the facts of the case. He estimated Samsung’s economic benefit from infringement by specifically focusing on the infringing features; and he envisioned a hypothetical negotiation in which the parties would have bargained for respective shares of the economic benefit. That Benoit’s methodology was not peer-reviewed or published does not necessitate its exclusion. Publication is not necessary for admissibility, “and in some instances well-grounded but innovative theories will not have been published.” “Where an expert otherwise reliably utilizes scientific methods to reach a conclusion, lack of textual support may go to the weight, not the admissibility of the expert’s testimony.”
The Court then rejected Samsung’s argument that a feature’s use is not proportional to its value. An “invention used more frequently is generally more valuable than a comparable invention used infrequently[,] and frequency of expected use and predicted value are related.” Further, under the Georgia Pacific factors (factors that help a court determine a reasonable royalty), the district court may consider the use of the invention and evidence probative of that use. Thus, the district court did not abuse its discretion in determining that Benoit’s methodology correlating use with value was not unreliable.
Regarding damages, the Federal Circuit held that the jury verdict of $15 million was supported by sufficient evidence and tied to the facts of the case. “[A] reasonable method for determining a reasonable royalty is the hypothetical negotiation approach, which attempts to ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agreement just before infringement began.” In determining this rate, the district court may rely on comparable licenses. The settlement agreement with RIM was sufficiently comparable. The jury heard testimony that the RIM license conveys the rights to the patent-in-suit, testimony that both Samsung and RIM sell camera phones containing the accused functionality, and evidence regarding the royalty amount in the RIM license and about Samsung’s sales volume in comparison to RIM’s. The RIM license was thus relevant to the hypothetical negotiation, and in conjunction with the testimony, it supported the jury’s damages verdict.
The Federal Circuit held that Summit was not entitled to an ongoing royalty, damages for future infringement. The district court correctly determined that the jury verdict represented a lump-sum license through the life of the patent and compensated Summit for both past and future infringement. Samsung’s expert testified that a lump sum was appropriate, and testified regarding the other licenses in evidence, all of which were lump-sum licenses. Summit’s expert, Benoit, admitted that a lump-sum award would compensate Summit through the life of the patent. And the jury indicated that the award was a lump sum by writing “lump sum” on the verdict form.
The astonishing thing about the Kamagra tablets UK, one of the viagra 20mg. A person should have Super P Force for about an order cialis on line hour before making any sexual activity with the use of Kamagra. Not to online cialis prescription appalachianmagazine.com mention, how pressuring the coital life can get when you go out globally to buy packets. buy cipla viagra Finding the right donor itself takes quite a lot of time, performing the surgery requires skill and experience.