April 7, 2016
Fish & Richardson Secures Precedential Damages Win for Micron Technology in Federal Circuit Appeal
The Federal Circuit issued a precedential ruling in favor of Fish & Richardson client Micron Technology, Inc., affirming a lower court ruling that excludes testimony from a damages expert regarding a reasonable royalty calculation in a patent dispute over semiconductor memory technology.
The Federal Circuit's opinion affirms a U.S. District Court for the Northern District of California judge's ruling that excluded MLC Intellectual Property's damages expert's testimony before a 2019 trial against Micron. In the lawsuit, MLC accused Micron of infringing U.S. Patent No. 5,764,571 with flash memory devices used in computers, smartphones, and other devices.
To calculate a royalty rate, MLC's damages expert focused on licenses with Hynix Semiconductor Inc. and Toshiba Corp. for a portfolio of patents, concluding the licenses reflected a 0.25% royalty rate. Micron argued that the calculation was not based on sufficient data or reliable methods.
Upholding the lower court's decision, the Federal Circuit held that the 0.25% rate wasn't "tethered to the evidence presented," and also agreed MLC's expert did not properly apportion the accused Micron products for the value of the patented technology, indicating that patentees will be required to provide more thorough mathematical analysis to infer a running royalty rate from a lump-sum license agreement. The Federal Circuit also confirmed the lower court was within its discretion to find MLC was late to disclose certain information supporting its damages argument, again leaving MLC without a damages case to present at trial.
"We are pleased the Federal Circuit agreed that the expert in this case improperly justified the damages calculation," said Fish & Richardson Principal Adam Shartzer, who represented Micron. "The opinion is monumental for many reasons, including the significant impact it will have on how royalty rates and other facts relevant to a damages computation are disclosed during fact discovery in similar patent cases moving forward."
In addition to Shartzer, the Fish team representing Micron includes principals Ruffin Cordell (who argued the case at the Federal Circuit), Chris Dryer, Timothy Riffe, and Andrew Schwentker, and associate Michael Ballanco.
The case is MLC Intellectual Property, LLC v. Micron Technology, Inc.
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