The fourth case being argued next week at the Federal Circuit that attracted amicus briefs is a patent case entitled MLC Intellectual Property LLC v. Micron Technology, Inc. In this case, the Federal Circuit will review a district court’s rulings related to damages law and expert testimony. In particular, the Federal Circuit will consider whether the district court erroneously excluded evidence of comparable license negotiations under the parol-evidence rule during a Georgia-Pacific reasonable royalty analysis. This is our argument preview.
In its opening brief, MLC makes four arguments. First, it argues that the district court improperly excluded its damages expert’s opinions based on the parol-evidence rule during its Georgia-Pacific reasonable royalty analysis. According to MLC, the expert did not rely on extrinsic evidence to interpret terms of a previous licensing agreement. Second, MLC asserts that the district court is “usurping the jury’s role as ultimate arbiter of factual disputes, by resolving disputes as to the competing evidence presented by the parties in Micron’s favor as part of its Daubert analysis.” Third, MLC contends that the district court imposed disclosure requirements “that are unsupported by the Federal Rules of Civil Procedure.” Fourth, MLC submits the court erred in applying an apportionment standard that violates Federal Circuit precedent.
Micron, in its response brief, asserts that the “district court’s evidentiary and discovery rulings were within its broad discretion.” In particular, Micron responds to MLC’s lead argument, that the district court erred in applying the parol evidence rule, by arguing that it “myopically focuses on one footnote to mischaracterize the district court’s holding.” In this regard, Micron contends the “district court properly analyzed the sufficiency of [the expert’s] data and methodology, setting forth its analysis in a set of thorough and careful opinions.” Moreover, Micron argues, “[a]t no time did the district court intrude upon the jury’s role.” With regard to the apportionment issue, Micron asserts that MLC’s distinction between “non-infringing ‘features’ and non-infringing ‘components'” is contrary to precedent and “futile in any event because the undisputed evidence establishes that Micron’s products include both.” In conclusion, Micron argues that “MLC fails to identify any abuse of discretion in the district court’s orders” and therefore asserts that the Federal Circuit should affirm.
In its reply brief, MLC contends that “Micron’s Responsive Brief, and the District Court’s . . . [decision], make it sound like MLC’s damages expert . . . endorsed a ridiculous damages number.” MLC asserts that “the [District] Court misread [its expert’s] Report as offering an opinion he never offered” and, as a result, its rulings “represent an abuse of discretion.” Further, its expert’s testimony, MCL maintains, was “reasonably derived from the record evidence.”
Three amicus briefs were filed, all in support of Micron.
Apple Inc., Dell Inc., and HP Inc. filed an amicus brief in support of Micron. In it, they argue that, due to the growth of multi-component and multi-featured technology, “[p]atentees must in all cases limit their damages theories to the alleged invention’s incremental benefit, without claiming the value added by unpatented features.” Further, they contend, “[d]istrict courts have a gatekeeping responsibility to exclude damages theories that do not comply with this apportionment requirement.”
The High Tech Inventors Alliance and the Computer & Communications Industry Association also filed an amicus brief in support of Micron. In it, they argue that too often “previous licenses are used as a shortcut around sound economic analysis.” They contend that this case is emblematic of a broader problem with the unreliable use of comparable-license evidence, and as a result they ask the court to release a published opinion that will promote confidence in how district courts address comparable-license theories.
Engine Advocacy and the R Street Institute also filed an amicus brief in support of Micron. In it, they categorize MLC’s damage theories as a “last-minute mulligan on a plainly erroneous expert report that was rooted in facts and theories not properly disclosed during trial.” They argue denying district courts proper discretion “would impose considerable costs, uncertainty, delay, and unfairness on future patent litigants.”
Oral arguments will be heard on Thursday, December 10. As in all four of this month’s argued cases that attracted amicus briefs, we will keep track of this case and report on any developments.