Court admits royalty analysis on a convoyed sales approach, denied motion to exclude in Patent Infringement case

In this patent infringement lawsuit, the Court addressed Defendant’s motion to exclude Plaintiff’s damages expert under Daubert and Rule 702. The Defendant argued the expert improperly inflated the value of the patented inventions by including non-infringing products and features in his royalty calculations. However, the Court upheld the expert’s methodology. It found the expert permissibly based his royalty analysis on a convoyed sales approach, including revenue from non-patented maintenance packages that were functionally linked to the accused software. The Court explained convoyed sales principles allow tying non-patented items to patented ones when a close functional relationship exists, without meeting the same stringent standards as the entire market value rule urged by defendant. The Court also affirmed the expert’s apportionment methodology as sufficiently reliable and rejected arguments he failed to account for prior art. It emphasized alleged flaws in an expert’s methodology are better handled by cross-examination rather than exclusion.

The key focus is on summarizing the court’s decision to allow the expert’s testimony over Defendant’s Daubert challenge. The excerpt highlights the court’s findings that the expert reliably applied accepted damages principles and Defendant’s disputes could be addressed through cross-examination at trial.

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