Federal Circuit: Damages Expert Credibility is a Question for the Jury

Summit 6 v. Samsung (Fed. Cir. 2015)

A jury sided with the patentee – finding that Summit 6 had proven infringement and that Samsung had failed to prove invalidity of U.S. Patent No. 7,765,482 (claims 38, 40, 44-46, and 49).  The award – $15 million in damages.  On appeal, the Federal Circuit affirms that judgment.  Here, I’ll focus on the damages issues.


Experts: In a Daubert appeal, Samsung asked the Federal Circuit to rule that Summit 6’s damages expert’s testimony was inadmissible.  The general rules for expert testimony are found in Fed. R. Evid. 702 and allows testimony from a qualified expert relating to:

(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the facts of the case.

Although a court may exclude testimony based upon unreliable principles or methods, once that threshold has been passed the question of expert credibility goes to the fact finder and may be uncovered by “[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.” Daubert.

Here, the damages expert (Paul Benoit) relied upon an unpublished methodology based upon the premise “that a feature’s use is proportional to its value.”   On appeal, the Federal Circuit indicated that this type of “analytical method” for calculating damages was sufficient to pass as expert testimony and be relied upon by a jury.

[W]here the methodology is reasonable and its data or evidence are sufficiently tied to the facts of the case, the gatekeeping role of the court is satisfied, and the inquiry on the correctness of the methodology and of the results produced thereunder belongs to the factfinder.

The particular invention at issue involves pre-processing of an image on a mobile device before uploading it to a server. In estimating a reasonably royalty, Benoit estimated that 65% of phone users regularly use the cameras to take photos; 77% of those share the photos; and 41% of those share by MMS in a way that infringes the patent. Taking the product of these percentages, Benoit found that 20% of the relevant users regularly infringe.  Taking a step back, Benoit estimated Samsung’s camera-related revenue as $14.15 per phone (calculated based upon proportional production costs) and then took the leap of concluding then that 20% of the $14.15 per phone ($2.93) is attributable to the infringement.  Thinking proportionally again, Benoit then estimated that $0.56 of every $2.93 in revenue was profit for Samsung and that – based upon a Nash Bargaining Solution, that a reasonable royalty would split that profit – or $.28 per phone in license fees. Since Samsung has distributed about 100,000,000 phones, that would add up to $29 million.

Reviewing that methodology, the Federal Circuit found:

Mr. Benoit’s damages methodology was based on reliable principles and was sufficiently tied to the facts of the case. Mr. Benoit first estimated Samsung’s economic benefit from infringement by specifically focusing on the infringing features and by valuing those infringing features based on Samsung’s own data regarding use and on its own financial reports outlining production costs and profits. Mr. Benoit then envisioned a hypothetical negotiation in which the parties would have bargained for respective shares of the economic benefit, given their respective bargaining positions and alternatives to a negotiated agreement. Mr. Benoit’s methodology was structurally sound and tied to the facts of the case.

That Mr. Benoit’s methodology was not peer-reviewed or published does not necessitate its exclusion. We recognize that the fact-based nature of Mr. Benoit’s damages testimony made it impractical, if not impossible, to subject the methods to peer review and publication. . . .  Here, the district court did not abuse its discretion in determining that Mr. Benoit’s methodology, involving the correlation of use with value, was not unreliable.

Verdict affirmed.


15 thoughts on “Federal Circuit: Damages Expert Credibility is a Question for the Jury

  1. 2


    Good point. This patent cites 111 prior art patents that are mostly relevant based on the titles, and 114 non-patent literature, with some relevant titles. The continuation, filed in 2004, with a first non-final rejection in 2007 followed by several more until 2010 indicates a fair amount of Examiner effort, at least.

    However, the Google IPR petition submitted 4 new patents that issued after the 1999 priority date, but were filed a year or two before then (before 2000, so not published for applicants to see). The grounds were 103 based on either of two sets of two patents.

    1. 2.2

      Also, should have checked. Only one was new. One was cited by the Examiner and two were cited by the applicants.

  2. 1

    Either Samsung’s attorneys are incompetent, or someone at the company tied their hands behind their backs (or both). $15 million for some incredibly broad and functionally claimed junk? Sad.

    Check out this claim. While you read it, instead of pretending that you weren’t born yesterday like the PTO and so many judges do when they see reference to “digital” in a claim (it’s just information, folks), recall that the problem of formatting information (aka “content”) for distribution by a second party is as old as printing, if not older.

    38. A computer implemented method for pre-processing digital content in a client device for subsequent electronic distribution, comprising:

    a. initiating, by said client device, a transfer of digital content from said client device to a server device, said digital content including one or more of image content, video content, and audio content;

    b. pre-processing said digital content at said client device in accordance with one or more pre-processing parameters, said one or more pre-processing parameters being provided to said client device from a device separate from said client device, said one or more pre-processing parameters controlling said client device in a placement of said digital content into a specified form in preparation for publication to one or more devices that are remote from a server device and said client device; and

    c. transmitting a message from said client device to said server device for subsequent distribution to said one or more devices that are remote from said server device and said client device, said transmitted message including said pre-processed digital content.

      1. 1.1.2

        Instead of gently (or otherwise) shepherding Malcolm back to the topic of the thread, you indulge his 101 windmill chase…

        …and still don’t get why your reputation is taking a hit…

      1. 1.2.1

        Apple filed four IPR requests, all of which were denied

        Fascinating. Once you clean all the incredibly ancient information communication nonsense out of the claim all you are left with is this functional hoo-haw: “one or more pre-processing parameters controlling said client device “.

        In other words: the party to whom the “content” is being sent tells the sender how to format the content or, alternatively, how the content may be formatted. You gotta love how the claim covers any device capable of receiving and transmitting digital information.

        And because folks always forget: “image” includes data corresponding to a single pixel. Audio includes data corresponding to a “click.” Video data includes a one second video a dot moving one pixel to the left. No doubt the patent background gives lip service to the the sooper techno “problems” associated with transferring this awesomely complex “content” that had been troubling “the industry” for decades.


          MM, someone ought to hire you to file IPRs against the junk issued from PTO. Your petitions would be something to behold, no doubt. You would begin, I believe, that the invention claims a notoriously well known techniques, then adds conventional elements. Let us now discuss 102/103.


            That’s exactly like the logic in my big box of electrons, protons, and neutrons….


            (Would absolutely L O V E to see Malcolm’s submission, no, really!)


            You would begin, I believe, that the invention claims a notoriously well known techniques, then adds conventional elements.

            Note the following

            1) The “technique” in question isn’t merely “well known”. In the generic, functional sense used here, “formatting data” is about as abstract as an information-processing paradigm gets.

            2) The “conventional elements” recited in the claim are not just “conventional” in the sense of being old but, as recited in the method, they perform the exact functions they were designed to perform, i.e., they enable the communication of data.

            Again, all the “inventor” (LOL) did with this claim is fling around this silly but oh-so-shiny-and-sooper-techno term “pre-processing parameters”. As if no publisher ever realized that he/she could save everyone some time by providing would-be authors with formatting options in advance of those authors providing their content to the publisher.

            But, hey, the PTO (and the patent system generally, with the exception of the Supreme Court and a few forward-thinkers on the CAFC) habitually chooses to pretend it was born yesterday when a “digital computer” is recited in the claims. And some people love it that way (the same people, ironically, who invariably puff themselves up as super sophisticated technology guardians whenever anybody points out what a joke our patent system has become).

    1. 1.3

      One should remember this is a continuation of a case that was filed in 1999, over 16 years ago. Was this known then?

      1. 1.3.1

        Was this known then?

        Was “what” known?

        That formatting could make a difference? That information about formatting could be transmitted from the publisher to the data submitter? That information about formatting could be useful to everyone involved?

        Or that computers could transmit information? Was that known in the dark ages of 1999? You were, like, two years old then, right? Like the Examiners who handled this case, apparently.

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