Leveraging Surveys in Patent Litigation: Demonstrating Consumer - - PowerPoint PPT Presentation

Leveraging Surveys in Patent Litigation: Demonstrating Consumer Perception, Avoiding Errors That Impact Damages

Best Practices for Developing, Presenting and Challenging Surveys

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

The audio portion of the conference may be accessed via the telephone or by using your computer's

• speakers. Please refer to the instructions emailed to registrants for additional information. If you

have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

THURSDAY, JULY 10, 2014

Presenting a live 90-minute webinar with interactive Q&A Chris Larus, Partner, Robins Kaplan Miller & Ciresi, Minneapolis Bryan J. Mechell, Robins Kaplan Miller & Ciresi, Minneapolis

• Dr. Shankar Iyer, Vice President, Cornerstone Research, Washington, D.C.

Sound Quality If you are listening via your computer speakers, please note that the quality

• f your sound will vary depending on the speed and quality of your internet

connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-866-570-7602 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

FOR LIVE EVENT ONLY

For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps:

• In the chat box, type (1) your company name and (2) the number of

attendees at your location

• Click the SEND button beside the box

If you have purchased Strafford CLE processing services, you must confirm your participation by completing and submitting an Official Record of Attendance (CLE Form). You may obtain your CLE form by going to the program page and selecting the appropriate form in the PROGRAM MATERIALS box at the top right corner. If you'd like to purchase CLE credit processing, it is available for a fee. For additional information about CLE credit processing, go to our website or call us at 1-800-926-7926 ext. 35.

FOR LIVE EVENT ONLY

If you have not printed the conference materials for this program, please complete the following steps:

• Click on the ^ symbol next to “Conference Materials” in the middle of the left-

hand column on your screen.

• Click on the tab labeled “Handouts” that appears, and there you will see a

PDF of the slides for today's program.

• Double click on the PDF and a separate page will open.
• Print the slides by clicking on the printer icon.

FOR LIVE EVENT ONLY

Using Surveys and Other Quantitative Analyses In Patent Litigation

Developing, Presenting and Challenging Surveys and Regression Analyses July 10, 2014

“Determining a fair and reasonable royalty is often . . . a difficult chore, seeming often to involve more the talents

• f a conjurer than those of a judge.”

ResQNet.com v. Lansa, 594 F.3d 860 (Fed. Cir. 2010)

6

7

Using Surveys and Other Quantitative Analyses In Patent Litigation

OVERVIEW

• 1. The Evolving Patent Damages Landscape
• 2. Economic Analyses Applicable to Patent

Valuation

• 3. Recent Uses of Economic Analyses in Patent

Litigation: Effective Uses and Rejected Attempts

• 4. Avoiding Common Challenges to Economic

Analyses

8

PATENT DAMAGES LANDSCAPE: INCREASED SCRUTINY

• 1. Damage awards in patent infringement cases

must be supported by sound economic theory and tied to the patented invention’s “footprint in the marketplace.” Uniloc (Fed. Cir. 2011)

• 2. Damage awards have been rejected if based on

“speculative and unreliable evidence divorced from proof of economic harm linked to the claimed invention.” ResQNet (Fed. Cir. 2010)

Using Surveys and Other Quantitative Analyses In Patent Litigation

9

PATENT DAMAGES LANDSCAPE: INCREASED SCRUTINY

ResQNet.com v. Lansa:

Expert testimony as to reasonably royalty “must carefully tie proof of damages to the claimed invention’s footprint in the marketplace.”

IP Innovation v. Red Hat:

Damages must reflect “economic reality.”

Uniloc v. Microsoft:

Damages based on the entire market value of the accused product are appropriate only where the patented feature creates the “basis for consumer demand” or “substantially creates the value of the component parts.”

Using Surveys and Other Quantitative Analyses In Patent Litigation

i4i Ltd. P’ship v. Microsoft:

Consumer survey demonstrating real- world consumer behavior provided evidence to demonstrate an appropriate royalty base.

10

PATENT DAMAGES LANDSCAPE: INCREASED SCRUTINY

Oracle v. Google:

Consumer surveys not “inherently unreliable” but can become so when expert “artificially forced” participants

• r data to desired
• utcome.

TVI v. Sony:

Survey deemed “fundamentally flawed and unreliable” but court ruled criticism more appropriate for jury determination.

NetAirus v. Apple:

Survey results unreliable where sought to value something “significantly broader than the claimed invention without adequate justification.”

Apple v. Motorola:

Damages experts’ testimony excluded for lacking “intellectual rigor” – case dismissed with prejudice.

Using Surveys and Other Quantitative Analyses In Patent Litigation

11

PATENT DAMAGES LANDSCAPE: INCREASED SCRUTINY

• 1. Detailed economic analyses can help isolate and

demonstrate patent value, but must be tied to the patented technology.

• 2. Consumer surveys and regressions are

increasingly used to quantify the economic value

• f the invention in support of a reasonable

royalty rate analysis.

Using Surveys and Other Quantitative Analyses In Patent Litigation

12

ECONOMIC ANALYSES APPLICABLE TO PATENT VALUATION

• 1. Consumer Surveys
• A. Ranking-Based Conjoint Analysis
• B. Choice-Based Conjoint Analysis
• C. Direct Queries
• 2. Regression Analysis
• A. Price Premium / Hedonic Analysis
• B. Market Share Premium
• C. Merger Analysis

Using Surveys and Other Quantitative Analyses In Patent Litigation

13

CONSUMER SURVEYS: BACKGROUND

• Consumer survey evidence can demonstrate the

evidentiary link between the patented invention and consumer demand.

• Consumer survey evidence must be tied to the

patented technology.

Using Surveys and Other Quantitative Analyses In Patent Litigation

14

CONSUMER SURVEYS: TYPES OF SURVEY ANALYSES

Ranking-Based Conjoint Analysis Choice-Based Conjoint Analysis Direct Queries Methodology Allows ranking of products within a group Presents groups of products to choose Queries directed at patented feature/demand Outcome Relative comparison

• f consumer

preferences for product features & combinations Relative comparison of consumer preferences for product features & combinations Demand for patented feature and relative strength of any such demand Details Participants can rank

• choices. Potential

issues if participants

• versimplify.

Participants must make choices. Allows for multiple choice, yes/no, ranges, rankings. Must be carefully crafted to avoid bias

Using Surveys and Other Quantitative Analyses In Patent Litigation

15

• Ranking-Based Conjoint Analysis – 4 step process

1. Identify product attributes. 2. Conduct a survey where respondents rank the importance of specific attributes in products. 3. Analyze data using statistical analysis to determine relationship between rankings and attributes. 4. Conduct a simulation in which the results of step 3 determine additional value of the target attribute.

CONSUMER SURVEYS: RANKING-BASED CONJOINT ANALYSIS

Using Surveys and Other Quantitative Analyses In Patent Litigation

16

CONSUMER SURVEYS: RANKING-BASED CONJOINT ANALYSIS

• Example:

Using Surveys and Other Quantitative Analyses In Patent Litigation

17

• Choice-Based Conjoint Analysis – 4 step process

1. Identify product attributes. 2. Conduct a survey where respondents choose among products with different combinations of different attributes. 3. Analyze data using statistical analysis to determine relationship between choices and attributes. 4. Conduct a simulation in which the results of step 3 determine additional value of the target attribute.

CONSUMER SURVEYS: CHOICE-BASED CONJOINT ANALYSIS

Using Surveys and Other Quantitative Analyses In Patent Litigation

18

CONSUMER SURVEYS: CHOICE-BASED CONJOINT ANALYSIS

• Example:

Using Surveys and Other Quantitative Analyses In Patent Litigation

Appendix A, Survey Expert Report filed in Convolve v. Dell, Inc. (E.D. Tex. 2011).

19

CONSUMER SURVEYS: CHOICE-BASED CONJOINT ANALYSIS

• Example: Apple v. Samsung (N.D. Cal. Feb. 25, 2014)
• Choice-based conjoint model allowed where respondents

chose which of four hypothetical smartphones they

• preferred. (Dr. Hauser, Apple’s survey expert)

1. The use of conjoint survey to quantify decreased demand is supported by literature. 2. Studies have demonstrated that conjoint surveys are able to quantify consumer demand with respect to complex products. 3.

• Dr. Hauser’s approach has peer support.

4. Description of the claim was not overbroad.

Using Surveys and Other Quantitative Analyses In Patent Litigation

20

CONSUMER SURVEYS: DIRECT QUERIES

• Direct Queries can be used to query the extent to which

there is demand for a patented feature and the relative strength of any such demand.

• Include: Multiple choices, yes/no questions,

“unaided” questions, range of choices, rankings.

• Must be carefully crafted to avoid potential bias.

Using Surveys and Other Quantitative Analyses In Patent Litigation

21

CONSUMER SURVEYS: DIRECT QUERIES

• Example: Multiple Choice

Using Surveys and Other Quantitative Analyses In Patent Litigation

Day Decl., Lucent v. Microsoft (S.D. Cal. Dec. 13, 2010).

22

CONSUMER SURVEYS: DIRECT QUERIES

• Example: Unaided questions

Using Surveys and Other Quantitative Analyses In Patent Litigation

23

CONSUMER SURVEYS: KEY TAKE-AWAYS

• Serious flaws in survey design and

implementation can lead to exclusion of survey evidence.

• Surveys must be directed to the patented

technology.

• Courts will likely examine literature in the field to

determine whether a particular methodology can be used to quantify benefits of the invention.

Using Surveys and Other Quantitative Analyses In Patent Litigation

24

• Regression analysis is a set of statistical techniques that

uses data to estimate the relationship between a dependent variable (e.g., product price) and an independent variable (e.g., features).

• Allows for “random error” that represents other things

that could influence the dependent variable not included in the model.

• Useful in determining whether the value of a patented

feature drives price, market share, or profitability, and what that value is.

REGRESSION ANALYSES: BACKGROUND

Using Surveys and Other Quantitative Analyses In Patent Litigation

25

• Example: Multiple Regression
• 1. Identify relevant features in product that

likely affect price.

• 2. Hold other features constant and measure

impact patented feature has on the price.

• 3. Estimate value of patented feature to overall

product price.

REGRESSION ANALYSES: BACKGROUND

Using Surveys and Other Quantitative Analyses In Patent Litigation

26

REGRESSION ANALYSES: TYPES OF MODELS

Price Premium Market Share Prem. Merger Analysis Dependent Variable (patented technology) Price Market Share Change in Profits (price & market share) Method Use price hedonic analysis to estimate how prices co-move with product characteristics. Eliminate all other influences on market share & product success to estimate premium. Calculate demand for product with technology. Outcome Price premium enjoyed when using patented feature vs. same product using alternative technology. Measure market share premium enjoyed when using patented feature. Percentage change in product profitability when incorporate patented technology.

Using Surveys and Other Quantitative Analyses In Patent Litigation

27

• Price Premium Example: Multiple Regression

1. Identify relevant features in product that likely affect price. 2. Hold other features constant and measure impact patented feature has on the price.

• Result: price premium for a set of products that utilize

patented technology over a second set of otherwise identical product that do not use patented technology.

REGRESSION ANALYSES: PRICE PREMIUM

Using Surveys and Other Quantitative Analyses In Patent Litigation

28

• Stragent v. Intel (E.D. Tex. March 6, 2014) (Fed. Cir. Judge Dyk)
• Multivariate hedonic regression used to estimate value of

accused feature’s contribution to product price.

• 19 relevant features were either collectively present or not

at all in Intel processors. Combination of features was 42% average selling price Each feature assigned identical weight.

• Methodology relied on arbitrary assumptions not tied to facts.
• Need to have data points where patented feature is not always

part of the same bundle of other features.

REGRESSION ANALYSES: PRICE PREMIUM

Using Surveys and Other Quantitative Analyses In Patent Litigation

29

• Market Share Example:

1. Identify relevant influences on product that likely affect market share. 2. Hold other influences constant and measure impact patented feature has on market share.

• Analysis is similar to price premium / hedonics analysis,

but the dependent variable is now market share.

REGRESSION ANALYSES: MARKET SHARE PREMIUM

Using Surveys and Other Quantitative Analyses In Patent Litigation

30

• Merger Analysis Example:
• 1. Calculate initial demand for product with patented

feature.

• 2. Turn off patented feature to create new

“equilibrium” – picture of the product’s market without the patented technology.

• 3. Quantitative end result is the % change in profits

(product profitability) without patented technology.

REGRESSION ANALYSES: MERGER ANALYSIS

Using Surveys and Other Quantitative Analyses In Patent Litigation

31

REGRESSION ANALYSES: KEY TAKE-AWAYS

• Regression-based expert testimony has been

tested for years in the antitrust context.

• Courts in the antitrust context have tended to

carefully scrutinize specific variables and assumptions.

• Recent Federal District Court case law indicates

importance of sound methodology and discredits arbitrary assumptions lacking factual basis.

Using Surveys and Other Quantitative Analyses In Patent Litigation

• TV Interactive Data v. Sony (N.D. Cal. Mar. 1, 2013)
• Admitting use of conjoint analysis in patent case regarding autoplay

feature of DVD player, Blu-Ray player, and PlayStation 3 console.

• Conjoint analysis, which measured the market’s willingness to pay for

the patented technology, found reliable for providing a principled basis for choosing the non-patented features. Conjoint surveys can provide reliable insight into consumer choice and willingness to pay for patented technology.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: RECENT EFFECTIVE USES

Using Surveys and Other Quantitative Analyses In Patent Litigation

32



• Apple v. Samsung (Apple II) (N.D. Cal. Feb. 25, 2014)
• Admitted conjoint survey used to quantify the hypothetical reduction

in sales of accused products had noninfringing alternatives been developed.

• Conjoint technique was sufficiently supported by the marketing

research literature, indicating an acceptance of the technique used by the survey. New conjoint techniques allowed if sufficiently supported by literature.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: RECENT EFFECTIVE USES

Using Surveys and Other Quantitative Analyses In Patent Litigation

33



• Criticisms relating to under-inclusiveness and clarity
• f survey can survive a Daubert challenge.

– Microsoft v. Motorola (W.D. Wash. 2012)

• Admitting conjoint survey in a case concerning calculation of RAND

royalty rates for video decode and Wi-Fi capabilities of Xbox 360.

• Clarity of questionnaire and argument as to under-inclusiveness

best resolved at trial through cross examination.

– Apple v. Samsung (Apple I) (N.D. Cal. June 30, 2012)

• Admitting willingness-to-pay surveys relating to smartphones and

tablets.

• Defendant’s dissatisfaction with the description of the patented

features in the survey and appropriate universe of potential purchasers goes to weight, not admissibility and does not render survey testimony unreliable.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: RECENT EFFECTIVE USES

Using Surveys and Other Quantitative Analyses In Patent Litigation

34



• Survey not tied to asserted patent claims rejected as flawed.

– NetAirus Techs. v. Apple (C.D. Cal. Oct. 23, 2013)

• Portions of survey found unreliable; survey questions were about

all Wi-Fi use on accused phone, while asserted patent narrowly focused on email usage while connected to Wi-Fi.

– Apple v. Motorola (N.D. Ill. May 22, 2012), rev’d on other grounds, (Fed. Cir. April 25, 2014)

• Pertinent evidence excluded because damages model relied
• n survey designed to estimate value of a cellphone’s notification

window but survey not designed to determine the relative value

• f the patented technology to Motorola’s customers.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: RECENT REJECTIONS

Using Surveys and Other Quantitative Analyses In Patent Litigation

35



• Survey not tied to asserted patent claims rejected as flawed.

– Rembrandt v. Facebook (E.D. Va., Dec. 3, 2013), pet denied for interlocutory appeal, (Fed. Cir. April 7, 2014)

• Expert had improperly used surveys about importance to users
• f various features of the Facebook service; equated survey-result

percentages reflecting importance with percentages of advertising revenue received by Facebook, without adequate analysis or explanation.

• Conjoint surveys are rejected for illogical results.

– Oracle v. Google (N.D. Cal. March 13, 2012)

• Excluding conjoint analysis for its illogical results, noting that

testing only a portion of the total number of features may have caused the problem.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: RECENT REJECTIONS

Using Surveys and Other Quantitative Analyses In Patent Litigation

36

 

• Survey cannot be stretched beyond its intended purpose.

– VirnetX v. Cisco (E.D. Tex. March 1, 2013)

• Expert precluded from simply substituting a survey

result for actual sales data to show apportionment because the expert made no attempt to remove sales of noninfringing items from the sales data.

• But see Apple II, where new conjoint technique that was

sufficiently supported by literature was allowed.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: RECENT REJECTIONS

Using Surveys and Other Quantitative Analyses In Patent Litigation

37



• NetAirus retained two experts to conduct surveys regarding consumer use of

the accused iPhone 4 products.

• Portions of one survey struck as unreliable under Daubert because the survey

asked questions that had no reliable basis and were tied to functionality that was far beyond the asserted claims.

• Other survey struck in its entirety:

– (1) Expert made no effort to shield survey participants from the goals of the survey; (2) the gender of the survey participants was not balanced; and (3) the study asked prospective purchasers questions that required present use of the product.

Key Take-Away: Tie the survey to the asserted patent claims and retain an experienced survey expert.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: NETAIRUS V. APPLE

Using Surveys and Other Quantitative Analyses In Patent Litigation

38



(C.D. Cal. Oct. 23, 2013)

• Expert conducted conjoint analysis determination of market share that measured

the relative importance to consumers of seven smartphone features, three of which were covered by the patented technology, four of which were not.

• The expert offered no principle basis for selecting the four non-patented features

for inclusion in the analysis.

• Survey found unreliable because the features selected to be surveyed were

purposefully few in number and omitted important features that would have played an important role in real-world consumers’ preferences.

• Exclusion was required because the chosen features led to irrational results that

indicated the study participants failed to hold all other non-tested features constant.

Key Take-Away: Choose nonpatented features reliably.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: ORACLE V. GOOGLE

Using Surveys and Other Quantitative Analyses In Patent Litigation

39



(N.D. Cal. Mar. 13, 2012)

• Expert precluded from substituting a survey result for actual sales data to show

apportionment because the expert made no attempts to remove sales of noninfringing items from the sales data.

• The expert reduced the revenue of entire products by 70% apportionment

factor; a factor derived from a single survey which found 70% of customers valued VoIP security.

• “This apportionment factor is a poor substitute for the type of analysis one

should undertake when parsing an alleged infringer’s profits for patented versus unpatented features.”

Key Take-Away: Avoid making a survey something that it is not.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: VIRNETX V. CISCO

Using Surveys and Other Quantitative Analyses In Patent Litigation

40



(E.D. Tex. Mar. 1, 2013)

• Apple I: Samsung moved to exclude the willingness-to-pay opinions of expert hired

by Apple to design and conduct two surveys (one for smartphones, one for tablets) to determine what price premium, if any, Samsung customers are willing to pay for the features associated with the patents at issue.

– Expert’s failure to disclose written records of underlying interviews used to select appropriate “distraction features” does not render survey testimony unreliable. – Under-inclusiveness and clarity of the survey goes to weight, not admissibility.

• Apple II: Samsung moved to exclude the survey expert who designed and

performed the conjoint surveys to determine the demand for the patented features at issue in the case.

– First step in expert’s analysis was same as in Apple I and although conjoint technique in the expert’s second step had not been used in the same way before, it was adequately supported by marketing research literature indicating acceptance of the technique used by Apple’s survey.

USES OF ECONOMIC ANALYSES IN PATENT LITIGATION: APPLE I & APPLE II

Using Surveys and Other Quantitative Analyses In Patent Litigation

41

(N.D. Cal. Jun. 29, 2012) (N.D. Cal. Feb. 25, 2014)

• Properly-constructed consumer surveys can provide highly

persuasive evidence of patent value.

• Serious flaws in survey design and implementation can lead

to exclusion of survey evidence.

• Vulnerable to attack if not tied to the patented technology

and consumer demand for the inventive feature.

• Surveys conducted for litigation purposes often are very

different than those conducted by a company for non- litigation marketing purposes.

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES

Using Surveys and Other Quantitative Analyses In Patent Litigation

42

• Trial courts may choose to exclude direct testimony by the

survey expert when the damages expert will be relying on survey data.

• The party’s damages expert should be in the position of

presenting evidence about the consumer survey, and, in describing the underlying methodology used in the survey.

• The survey expert should provide detailed information as to the

design of the survey instrument, implementation of the survey, and analysis of the survey data.

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: ENSURE EXPERT FAMILIARITY

Using Surveys and Other Quantitative Analyses In Patent Litigation

43

• The damages expert should be familiar with details necessary to

ensure the validity and reliability of the survey data.

Using Surveys and Other Quantitative Analyses In Patent Litigation

• The Braun Corp. v. Vantage Mobility Int’l (N.D. Ind. Jun. 21, 2010)

– Defendant’s damages expert relied on a histogram that was derived from a consumer survey. – District court struck portions of testimony by defendant’s damages expert relating to the histogram.

• The damages expert’s report failed to disclose details of the underlying survey.
• The expert did not independently establish the validity and reliability of the

underlying survey data.

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: ENSURE EXPERT FAMILIARITY

44

• Proponents of survey evidence should carefully consider how

such evidence might be used against the proffering party.

Using Surveys and Other Quantitative Analyses In Patent Litigation

• Lear Automotive v. Johnson Controls (E.D. Mich. Feb. 7, 2011)

– Defendant provided its damages expert with a survey directed to assess the frequency of use of patented feature in accused garage door systems. – Defendant’s damages expert relied on the survey to calculate the royalty rate. – The plaintiff used the same survey to meet its burden of proof on direct infringement. – Over Defendant’s objection, the District court found the data admissible as an adoptive admission.

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: ENSURE EXPERT FAMILIARITY

45

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: DIRECT THE SURVEY TO THE PATENTED TECHNOLOGY

Using Surveys and Other Quantitative Analyses In Patent Litigation

• Consumer survey evidence is frequently challenged on ground

that it does not specifically address the issues in dispute.

• Fractus, S.A. v. Samsung Electronics (E.D. Tex. Apr. 29, 2011)

– District court excluded testimony re: survey of internal vs. external antennas, because survey was not directed at specific features of claimed technology. – Patent-in-suit did not address internal antennas, but rather multi-band functionality and reduced size.

• LaserDynamics v. Quanta Computer (E.D. Tex. Jan. 7, 2011)

– District court excluded expert testimony re: survey of royalty rates in computer component industry, because survey was not limited to comparable technologies.

46

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: PROPERLY DEFINE THE SURVEY POPULATION

Using Surveys and Other Quantitative Analyses In Patent Litigation

• Ensure that survey participants are selected from a

population encompassing the correct survey participants.

• Example: if the goal of the survey is to determine business

attitudes regarding an accused product . . .

– Survey is over inclusive if it includes non-business purchasers. – Survey is likely under inclusive if it fails to include certain types

• f business purchasers.

47

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: PROPERLY DEFINE THE SURVEY POPULATION

Using Surveys and Other Quantitative Analyses In Patent Litigation

• Case examples:
• Hodgdon Powder Co. v. Alliant Techsystems (D. Kan. 2007)

– Survey population consisting only of plaintiff’s customers was too narrow and should have included purchasers of competing products across the industry.

• Leelanau Wine Cellars v. Black & Red (S.D. Ind. 2003)

– Survey conducted by plaintiff in shopping malls was overbroad. Although plaintiff sold products through variety of channels, defendant only sold product through specific, narrow trade channel. District court gave the survey minimal weight.

48

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: PAY ATTENTION TO DETAIL

Using Surveys and Other Quantitative Analyses In Patent Litigation

• Utilize Procedures to Ensure a Fair Sample of the

Population.

– Ensure that the chosen sample accurately reflects a cross section of the total population.

• Clearly Define the Survey Objectives.

– When commissioning a survey, carefully define survey

• bjectives and tailor questions to squarely address

those objectives.

49

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: PAY ATTENTION TO DETAIL

Using Surveys and Other Quantitative Analyses In Patent Litigation

• Determine an Appropriate Mode of Data Collection

for the Survey. – In-person interviews – Telephone surveys – Mail surveys – Internet surveys

• Use Clear, Precise, and Unbiased Questions.

50

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: CHECK YOUR WORK

Using Surveys and Other Quantitative Analyses In Patent Litigation

• Employ Appropriate Controls to Ensure the Objectivity of the Survey.

– Attorneys should avoid direct participation in interview and results tabulation process. – Courts may exclude survey data where attorneys have undue influence. – United States v. Southern Indiana Gas & Electric Co. (S.D. Ind. 2003)

• District court “troubled” that defense counsel sent letter that “could

be interpreted as pressure or guidance” to survey participants before receiving the survey.

• Conduct a Post-Survey Validation of Data.
• Employ Procedures to Ensure that Survey Methodology and Data are

Properly Recorded.

51

AVOIDING COMMON CHALLENGES TO ECONOMIC ANALYSES: KEY TAKE-AWAYS

Using Surveys and Other Quantitative Analyses In Patent Litigation

• Federal Circuit trend: damages awards must be supported

by evidence that is firmly rooted in sound economic theory and tied to the patented invention’s “footprint in the marketplace.”

• Economic analyses can be used to demonstrate or refute

the evidentiary link between the patented invention and consumer demand.

• Economic analyses must be tied to the patented

technology at issue.

52

Christopher K. Larus Chair, Minneapolis IP Litigation Group CKLarus@rkmc.com 612.349.0116

Q & A

Using Surveys and Other Quantitative Analyses In Patent Litigation

Bryan J. Mechell IP Litigation Group BJMechell@rkmc.com 612.349.0172 Shankar Iyer Vice President, Cornerstone Research SIyer@cornerstone.com 202.912.8924

53