On June 10, 2011, Judge O’Connor issued an opinion in Lighting Ballast Control v. Philips Electronics North America Corp. et al. (copy of opinion located here). Judge O’Connor struck the plaintiff’s damages expert’s opinion that used the entire market value theory to confirm the reasonableness of his proposed royalty rate. Judge O’Connor found that the expert “[was] clearly checking or analyzing his royalty rate in light of [the defendant’s] total sales of the accused products, without any evidence that the [patent-in-suit] drives or forms the basis for sales of the accused products.” According to Judge O’Connor, the use of the entire market value theory was improper under Federal Circuit authority where the expert failed to present evidence that the patented technology drove sales of the accused products.
Judge O’Connor also prohibited the plaintiff’s damages expert from relying on a settlement agreement between the plaintiff and a former defendant in the case, as such reliance was not reliable under Daubert in light of the relevant facts the case.
As patent practitioners know, the state of patent damages law is currently in flux. Judge O’Connor’s opinion in Lighting Ballast Control should be considered when formulating damages theories in patent infringement cases.
Judge O’Connor’s opinion is also notable because it rejected the defendant’s attempt to preclude the plaintiff from referring to the statutory presumption of validity before the jury.
Lighting Ballast Control is represented by Jonathan Suder and David Skeels, both of Friedman Suder & Cooke PC.
Universal Lighting Technologies, Inc. is represented by Deborah Sterling and Brenda Cubbage, both of Spencer, Crain, Cubbage, Healy, & McNamara; and Diana Szego, John Inge, Sten Jensen, Steven Routh, and Vann Pearce, all of Orrick Herrington & Sutcliffe LLP.