United States District Court, D. Delaware
before the Court is Defendant's Motion to Preclude
Inadmissible and Undisclosed Damages Theories and Evidence.
(D.I. 581). The Parties have briefed the issues. (D.I. 581,
583, 587). For the reasons set out below, Defendant's
Motion is GRANTED-IN-PART.
August 29, 2018, 1 excluded the opinion of Plaintiff s
reasonable royalty expert, Dr. Christine Meyer, to the extent
that it relied on a jury verdict from Uniloc USA, Inc. v.
EA, No. 6:13-cv-00259-RWA (E.D. Tex. Dec. 15, 2014).
(D.I. 578 at 27-28). This ruling led the parties to
correspond regarding Plaintiffs damages case. (See
D.I. 581 at 1; D.I. 583 at 4-5). In a letter dated September
21, 2018, Plaintiff described the evidence of damages it
intends to provide at trial. (D.I. 581-1, Exh. 2). Plaintiff
identified three royalty bases and a royalty rate of 15.5%.
(Id.). Defendant takes issue with all the evidence
supporting Plaintiffs proposed reasonable royalty.
royalty damages must be awarded if infringement is proven.
See Dow Chemical Co. v. Mee Industries, Inc., 341
F.3d 1370, 1381-82 (Fed. Cir. 2003) (holding that district
court erred in concluding that "no damages could be
awarded, in light of the presumption of damages when
infringement is proven"). "That reasonable royalty
damages must be awarded if infringement is found, however,
does not mean that the rules of evidence do not apply to
proposed testimony." AVM Techs., LLC v. Intel
Corp., 927 F.Supp.2d 139, 146 (D. Del. 2013).
proposes to support its 15.5% royalty rate by presenting the
jury with: (1) the testimony of John Garland, Plaintiffs Vice
President of Licensing; (2) the testimony of John Ward,
Plaintiffs CEO; (3) an "industry report" Plaintiff
"had in its files" when researching industry rates;
and (4) a document showing a royalty Defendant pays to
Microsoft. (D.I. 583 at 9-10).
Testimony of John Garland, Vice President of
proposes that Mr. Garland will provide testimony, "based
on his decades of experience licensing intellectual
property," that in his opinion "the 15.5% starting
point rate is consistent with ... the 'high profit, low
cost' nature of licensing software." (D.I. 583 at
9). Defendant responds that Plaintiff did not offer Mr.
Garland as an expert and he has not provided an expert
report. (D.I. 587 at 4). Furthermore, Defendant argues that
Mr. Garland cannot offer a lay opinion on this topic.
Garland cannot properly testify about a reasonable royalty in
this case. Federal Rule of Evidence 701 precludes most
opinion testimony by lay witnesses. It provides:
If a witness is not testifying as an expert, testimony in the
form of an opinion is limited to one that is:
(a) rationally based on the witness's perception;
(b) helpful to clearly understanding the witness's
testimony or to determining a fact in issue; and
(c) not based on scientific, technical, or other specialized
knowledge within the scope of Rule 702.
(Fed. R. Ev. 701). An opinion on a reasonable royalty is
necessarily based on specialized knowledge. Thus, because he
is not serving as an expert, Mr. Garland's opinion that