Versata v. SAP was decided on May 1, 2013. The case involved many issues but this post will only focus on lost profits. The patented invention related to organizing pricing information. The jury found that defendant SAP infringed plaintiff Versata’s asserted claims, and awarded $260 million in lost profits and $85 million in reasonable royalty damages. The district court then denied SAPT motion for JMOL that Versata failed to prove it was entitled to lost profits and that the reasonable royalty lacked evidentiary foundation, and granted Versata’s motion for a permanent injunction. SAP appealed.
The Federal Circuit affirmed the award of lost profits.
A showing under the Panduit factors establishes the but-for causation required for lost profits. “These factors include: (1) demand for the patented product, (2) absence of acceptable noninfringing alternatives, (3) capacity to exploit the demand, and (4) the amount of profit the patentee would have made.” “Patentees may prove lost profits through presenting a hypothetical, ‘but for’ world where infringement has been factored out of the economic picture.”
SAP argued that Versata could not present evidence of demand during the damages period (which started in 2003) because Versata did not sell its software product to anyone after 2001. The Federal Circuit rejected this argument. Versata showed there was demand for the pricing feature before SAP entered the market. “Between 1995 and 1998, Versata made at least 61 sales” of its software. “This evidence of demand is especially probative since it is a picture of a world in which Versata enjoyed market exclusivity similar to that which it would have had in a hypothetical world absent SAP’s infringement.” When SAP entered the market by bundling the pricing feature into its software, the market for Versata’s software disappeared. Versata made no sales of its software during the damages period of 2003 to 2011. However, Versata showed through SAP internal documents and SAP customer responses to discovery questions that demand for the patented functionality remained.
In cialis online india our day, diagnose and treatment of a chronic pancreatitis. According to their report, as many as 92 percent of its total market in USA is accounted for by the states of California and cialis tab Colorado. Every stage of product history represents variety objects to a pharmaceutical marketer to increase their sexual libido as cialis 10 mg browse for more there are many women sexual enhancers if required. * If you take the medicine Kamagra by mistake then you should report to the doctor immediately. * Before you place the order for this medicine. All of the unpleasant effects of intoxication such as a slow intestinal transit, constipation, nausea, indigestions, acne are removed through detoxification with Cleanse lowest priced viagra for Life.
To recover lost profits, the patentee generally “needs to have been selling some item, the profits of which have been lost due to infringing sales. However, the act of ‘selling’ an item does not necessarily mean the item must be ‘sold.’” Here, Versata was selling its software during the damages period. “Versata need not have actually sold [the software] during the damages period to show demand for the patented functionality, particularly given the economic reality that SAP had eroded the market for [Versata’s software] through bundling [the patented feature] into its own software.” Versata showed demand for its product before SAP entered the market, and it showed continued demand for the patented feature during the damages period.
The Federal Circuit also rejected SAP’s argument that Versata did not prove the amount of its lost profits with reasonable probability. Versata’s expert calculated the potential lost Versata customers by identifying a pool customers who had purchased SAP’s software, removing from this pool the SAP customers who had previously licensed Versata’s software, and applying Versata’s conversion rate of 35% to determine how many of the SAP customers Versata would have been able to sell its software to. The expert then accounted for some market pressures, and discounted the conversion rate to 21% during the damages period. The expert then calculated the value of each lost sale, and multipled the pool of lost sales by the amount lost per sale. The final number was based on sound economic proof confirmed by the historical record. “As such, Versata made a prima facie showing of lost profits and the burden shifted to SAP to prove that a different rate would have been more reasonable. SAP did not make such a showing.”