LaserDynamics, Inc. v. Quanta Storage America, Inc. et al. (2-06-cv-00348) TXED


The district court granted a New Trial on damages, erasing the jury's verdict of $52M, finding that award to be clearly excessive and against the great weight of the evidence. The defendant had entered into numerous lump-sum licenses, varying from $57,750 to $266,000, and the plaintiff's prior licenses were also nowhere near $52M. The jury awarded a 6% royalty on stand-alone drives (which sold for $28), and a 2% royalty on finished computers incorporating the drives (which sold for $860).

The Court held that there was no basis for the jury to use the entire market value rule, citing to the 2009 Lucent decision. The evidence, and the Court's analysis, was similar to an earlier Lucent decision involving MP3 technology. Here, the Court found that "At best, Dr. Murtha testified that almost all computers sold in the retail market include optical disc drives and that customers would be hesitant to purchase computers without an optical disc drive. This evidence notwithstanding, there was no evidence from which the jury could conclude that the patented features of the invention formed the basis for the customer's demand for the entire computer."

The Court did uphold the royalty rate for the disk drives, however, finding them to not be "clearly excessive," which the Court believed to be the standard in the 5th Circuit based on i4i. Applying the royalty rate to the disk drives only, the Court remitted the damage award to $6.2M.