In re Innovatio IP Ventures, LLC, Patent Litig.
| Decision Date | 17 September 2013 |
| Docket Number | Case No. 1:11-cv-09308 |
| Parties | In Re Innovatio IP Ventures, LLC, Patent Litigation This Document Relates To: All Cases |
| Court | U.S. District Court — Northern District of Illinois |
A. Innovatio Has Failed to Establish the Value of Any of the Patented Features....................................................................................................................3
B. Innovatio Ignored Hold-Up, Royalty Stacking, and Ex Ante Alternatives............13
921 F.2d 278 (7th Cir. 1990).......................................................................................................3
Fed. R. Civ. P. 52........................................................................................................................2, 3
Pursuant to Rule 52(c) of the Federal Rules of Civil Procedure, Cisco Systems, Inc., Motorola Solutions, Inc., NETGEAR, Inc., Hewlett-Packard Co., and SonicWALL, Inc. (collectively "Defendants") respectfully move for judgment in favor of Defendants. This motion is made on the grounds that Innovatio IP Ventures, LLC ("Innovatio") has failed to meet its burden of establishing that its proposed RAND royalties for the claims previously found "standard essential" comport with governing precedent of the Supreme Court and the Court of Appeals for the Federal Circuit related to the determination of patent damages in general, or with principles surrounding the setting of RAND royalties specifically. Defendants therefore respectfully request that the Court enter judgment setting a RAND rate in accordance with the RAND rate proposed by Defendants.
It has been black-letter law for over a hundred years that a patentee seeking damages must:
[i]n every case give evidence tending to separate or apportion the defendant's profits and the patentee's damages between the patented feature and the unpatented features, and such evidence must be reliable and tangible, and not conjectural or speculative; or he must show, by equally reliable and satisfactory evidence, that the profits and damages are to be calculated on the whole machine, for the reason that the entire value of the whole machine, as a marketable article, is properly and legally attributable to the patented feature.
Garretson v. Clark, 111 U.S. 120, 121 (1884) (emphasis added); see also LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 67 (Fed. Cir. 2012) (quoting Garretson, 111 U.S. at 121).
Innovatio bears the burden of proof on this issue1 and has rested its case-in-chief without putting forward any evidence apportioning the value of the patented features from the value of unpatented features in the accused products. In fact, Innovatio's expert witnesses explicitlyadmitted that none of them even attempted to determine the value of the patented features by apportionment or otherwise. And Innovatio agrees that the entire market value exception does not apply here. Tr. at 574:3-9 (McAndrews).
Therefore, because Innovatio has not complied with the requirements set forth by the Supreme Court in Garretson as elucidated by the Federal Circuit in LaserDynamics, Innovatio has not met its burden of establishing that it is entitled to the royalty rate it seeks. In addition, Innovatio has provided no cognizable basis for this Court to determine an appropriate RAND rate.
Accordingly, Defendants respectfully request that the Court enter judgment pursuant to Rule 52(c) against Innovatio on its proposed royalties, and find that Innovatio is entitled only to a nominal damages amount. Alternatively, Defendants request that this Court set a RAND rate in accordance with the RAND rate proposed by Defendants.
Federal Rule of Civil Procedure 52(c) authorizes a court to enter judgment against a party if the "party has been fully heard on an issue during a nonjury trial and the court finds against the party on that issue." Fed. R. Civ. P. 52(c); see Fillmore v. Page, 358 F.3d 496, 502 (7th Cir. 2004) (). The court may "enter judgment at any time that it can appropriately make a dispositive finding of fact on the evidence." Hulme v. Madison Cnty., 188 F. Supp. 2d 1041, 1045 (S.D. Ill. Nov. 28, 2001) ().
A motion under Rule 52(c) is not the same as a motion for a directed verdict. When ruling on a Rule 52(c) motion, "[t]he court neither draws special inferences in the nonmovant'sfavor, nor considers the evidence in the light most favorable to the nonmovant." Follett Higher Educ. Grp., Inc. v. Berman, 427 B.R. 432, 434 (N.D. Ill. 2010) aff'd sub nom. In re Berman, 629 F.3d 761 (7th Cir. 2011); BKCAP, LLC v. Captec Franchise Trust 2000-1, 3:07-CV-637, 2011 WL 4916590 at *3 (N.D. Ind. Oct. 14, 2011) aff'd, 688 F.3d 810 (7th Cir. 2012. The court is "bound to take an unbiased view of all the evidence, direct and circumstantial, and accord it such weight as the court believes it entitled to receive." BKCAP, LLC v. Captec Franchise Trust 2000-1, 3:07-CV-637, 2011 WL 4916590 at *3 (N.D. Ind. Oct. 14, 2011) aff'd, 688 F.3d 810 (7th Cir. 2012). In analyzing the evidence, the concern is not "whether the plaintiff has made out a prima facie case." Cartwright v. Am. Sav. & Loan Ass'n, 880 F.2d 912, 918 (7th Cir. 1989) (quotations and emphasis omitted). Instead, Fed. R. Civ. P. 52(c) allows the court to "weigh[] the evidence and determine whether the plaintiff has proven the case." Powell v. Roberts, 921 F.2d 278 (7th Cir. 1990); Neopost Industries B.V. v. PFE Int'l, Inc., 403 F. Supp. 2d 669, 675 (N.D. Ill. 2005), dismissed, 190 F. App'x 965 (Fed. Cir. 2006). "A judgment on partial findings must be supported by findings of fact and conclusions of law as required by Rule 52(a)." Fed. R. Civ. P. 52(c).
A. Innovatio Has Failed to Establish the Value of Any of the Patented Features
The law is clear that a patent owner is entitled only to be compensated for the use of its own invention, rather than for non-infringing features or components. If the basis for a damages demand is the revenue or profit associated with the accused products, the Supreme Court and the Federal Circuit explicitly require patent owners to "apportion" that amount between the value of the asserted patented features and the value of non-patented features. As the Federal Circuit has explained, it follows that "[w]here small elements of multi-component products are accused of...
To continue reading
Request your trial