ReedHycalog UK, Ltd. et al v. Diamond Innovations Inc (6-08-cv-00325) TXED


The district court allowed five settlement agreements to be admitted at trial along with other license agreements - holding that any risk of confusion or prejudice was outweighed by relevance - with the caveat that the settlement agreements not be called out as settlement agreements at trial. The Court found that the five settlement agreements were for the same license structure (running royalty) and roughly the same financial terms, and thus lent credence to Plaintiff's proposed damages model.
The Court noted that, in its opinion, ResQNet had not created a bright-line rule allowing settlement agreements as proper trial evidence, but that it was a case-specific inquiry, and that in this case any Rule 403 concerns were outweighed by relevance: "In, the Federal Circuit commented that 'the most reliable license in th[e] record arose out of litigation.'...Thus, the Federal Circuit's observation was not the adoption of a bright-line rule regarding the reliability of litigation licenses nor even a ruling on their admissibility. It was merely a reflection on the evidence before it."