DDE Excludes Damages Approach Due to Lack of Comparability

In TC Tech. LLC v. Sprint Corp., Civil Action No. 1:16-cv-00153-RGA (D. Del. Oct. 18, 2019), Judge Richard Andrews granted Sprint's motion to exclude TC Tech's damages expert, Mr. Brett Reed, from testifying as to a damages approach based on Sprint's internal documentation. In particular, Mr. Reed opined that "Sprint had internally considered [a 5% royalty rate to be] reasonable for telecommunications patents, including the VoIP patents, and determined how that figure would relate to Sprint's LTE-related service revenue." Slip op. at 4. Sprint contended that this opinion should be excluded because Mr. Reed had "failed to establish the required comparability between Sprint's VoIP-related demands and the hypothetical negotiation." Id. The court agreed.

Judge Andrews noted that Mr. Reed's approach was insufficient to be admissible at trial because it "merely relies on the fact that Sprint's internal communications suggested '€˜that it would negotiate for a 5% royalty rate for the VoIP patents.'" Id.  However, according to the court, Mr. Reed had failed to account for the technological and economic differences between the patents that formed the basis of that 5% rate and the invention in the patent at issue, and "instead [had] glaze[d] over the concept by grouping them together as 'telecommunications patents.'" Id. The court concluded that without the requisite comparability analysis the opinion was irrelevant.

Judge Andrews' conclusion was bolstered by the fact that the VoIP patents were no longer part of the case. The court had eliminated VoIP from the case, and thus "bringing in a VoIP-related damages assessment would require background and create disputes about collateral issues." Id. at 5. On this additional ground, the court found this evidence not only irrelevant, but also excludable under Fed. R. Evid. 403.