EDTX Denies Plaintiff's MIL Seeking to Exclude Settlement Demands Made in Other Negotiations


On October 30, Judge Payne of the Eastern District of Texas issued a pre-trial order in Personalized Media Communications, LLC v. Zynga, Inc., Case No. 2:12-CV-00068-JRG-RSP (Doc. No. 213), addressing motions in limine. PMC had filed numerous MILs, including one seeking to exclude evidence of settlement demands made in other negotiations over the same patents. The ruling is brief, and we quote it in full:

Denied. PMC provides no reason that its demands from other negotiations on these same patents are not relevant. Contrary to Zynga's argument, the mere fact that such a category is not specifically identified as a factor in Georgia Pacific does not mean that it is wholly irrelevant or otherwise inadmissible.

This is a promising ruling for defendants facing plaintiffs who have previously licensed the patents-in-suit (or have reached prior litigation settlements). Settlement demands from other litigations (or even parties who have previously settled out of the current litigation) may reflect numbers much smaller than the damages sought at trial against the current defendant. Of course, the defendant will have to introduce evidence showing the comparability of the circumstances surrounding the prior settlements and the current damages case, e.g., same products at issue, similar sales volume, effective royalty rates, and other ways to demonstrate comparability. But if this marks a trend, defendants may have a forceful weapon to inform the jury that the plaintiff's damages figure is inflated.