In Daubert Ruling Excluding Both Parties' Damages Experts, Judge Andrews Rejects FRAND Portfolio Rate As Ceiling On Reasonable Royalty, And Finds Use Of Surveys Not Properly Tied To Relevant Technology

On February 25, 2016, Judge Richard Andrews granted the parties' cross-motions to exclude both sides' damages experts in M2M Solutions LLC v. Motorola Solutions, Inc., C.A. No. 12-33-RGA, Dkt. Nos. 295 and 296 (D. Del. Feb. 25, 2016), and in doing so provided a salient reminder to all practitioners of the risks in presenting damages testimony uninformed by technical expertise. In the case, plaintiff M2M Solutions LLC's ("M2M") expert Herman "Whitey" Bluestein - admittedly not a technical expert - improperly supplied an otherwise-absent link between demand for technology gauged in surveys and the technology at issue. Defendant Telit Communications PLC ("Telit") similarly proffered damages opinions lacking needed technical support. Telit's expert Charles Donohoe opined that worldwide portfolio licenses on FRAND terms that did not include the patent-in-suit represented the upper bound of a reasonable royalty rate for the asserted patent. Concluding that Telit failed to adduce evidence that these portfolio licenses were relevant, the Court excluded Mr. Donohoe's opinion.

1. Background

   M2M sued, among others, Telit in January 2012, asserting that Telit infringed U.S Patent No 8,094,010 ("the '010 Patent"). As Judge Andrews described:

   The '010 patent claims a "programmable communicator device" that is capable of receiving transmissions, authenticating them using a particular form of coded number authentication, and storing numbers from authenticated transmissions in a list of permitted callers. ... The patent further contemplates a device that is remotely programmable and that allows for remote data monitoring, "which can be used to relay information about the status of a remote piece of technical equipment such as a vending machine."

   The parties cross-moved to exclude their counterpart's damages expert.

2. Plaintiff's damages expert

   The Court excluded Mr. Bluestein on three grounds: (1) Mr. Bluestein lacked the qualifications to opine on technical characteristics of the patented technology, (2) the surveys from which Mr. Bluestein drew his conclusions did not question participants specifically on the allegedly infringing features, and (3) the only link between the surveys and the patented technology was Mr. Bluestein's inadmissible opinion.

   In finding Mr. Bluestein unqualified to render a technical opinion, Judge Andrews noted Mr. Bluestein's admission that he is not a technical or patent expert. Rather, his expertise purportedly lay in his...