Jury Verdict of $145 Million Reduced to $10 Million Based on Expert’s Failure to Properly Apportion

Jan 10, 2019

Reading Time : 2 min

In the case, the accused product was the iPhone, and the patented feature was a “subscriber unit/station,” which Wi-LAN admitted was the Voice over LTE (VoLTE) capability of the phone’s baseband processor, not the entire iPhone. Both Apple and Wi-LAN agreed that apportionment was required, but disagreed on the method of apportioning. Apple apportioned based on the smallest saleable patent practicing unit, while Wi-LAN apportioned based on a “direct valuation” methodology.

Accordingly to Wi-LAN, three steps comprise a “direct valuation” apportionment analysis: (1) study the incremental benefits of the patented technologies and quantify those technological benefits for each patent group by comparing the accused product with the “next-best” noninfringing alternative, (2) assign the benefits discovered in Step 1 a monetary value through the use of a “willingness to pay” survey, and (3) use the benefits discovered in Step 1 and the valuation attributed to them in Step 2 to determine a reasonable royalty. The court noted that Wi-LAN was unable to cite to any case applying the direct valuation method. Moreover, the court found Wi-LAN’s application of its method fundamentally flawed due to Wi-LAN’s expert’s failure to start the analysis with the patented technology. Specifically, in Step 1 of the direct valuation analysis, Wi-LAN’s expert relied on the benefits of the VoLTE standard, which includes many aspects in addition to the patented features. The court found that, while the reliance on a product’s incorporation of certain standards-related technology may be suitable to prove infringement, a reasonable royalty calculation still demands an analysis of the patent features alone.

The court recognized that there is flexibility in arriving at an apportionment, but it stressed that the patented features must be the starting point for an apportionment analysis. Because the “benefits” of the patented technology described by Wi-LAN’s expert were not actually attributable to the patented technology, but the VoLTE standard, the court held that the opinion should not have been presented to the jury.

Practice Tip: Patent holders, understandably, are motivated to take damages positions that capture as much of the value of the accused product in the reasonable royalty base as possible. While there is flexibility in apportionment methodologies, this case illustrates that taking an overly aggressive approach to apportionment can backfire for a plaintiff. In particular, this case suggests that a damages opinion that is not centered on the patented features themselves may be excluded.

Apple Inc. v. WI-LAN Inc., et al, 3-14-cv-02235 (CASD 2019-01-03, Order) (Dana M. Sabraw)

Share This Insight

Previous Entries

IP Newsflash

June 26, 2025

The Northern District of Ohio denied a motion to compel the plaintiff to produce test results referenced in its initial disclosures and complaint. The court found that because the “test results are not facts but rather are opinions,” the information was protected as work product. Furthermore, because that testing would not be used as evidence in the litigation, the defendant was not prejudiced.

...

Read More

IP Newsflash

June 6, 2025

In a precedential opinion, the Federal Circuit definitively held that the Patent Trial and Appeal Board has jurisdiction over IPRs that concern expired patents.

...

Read More

IP Newsflash

June 6, 2025

In a patent infringement litigation in the U.S. District Court for the Eastern District of Texas, Judge Rodney Gilstrap denied a joint motion to stay the litigation pending resolution of inter partes review when it was uncertain that all defendants would be bound by the statutory estoppel provision of 35 U.S.C. § 315(e).

...

Read More

IP Newsflash

May 30, 2025

A district court recently dismissed a patent infringement complaint for improper venue under 28 U.S.C. § 1400(b), finding that the storage and distribution of products from an Amazon warehouse was not sufficient to establish that warehouse as a regular and established place of business in the district.

...

Read More

IP Newsflash

May 27, 2025

The Federal Circuit affirmed a District of Delaware finding of non-infringement in an ANDA litigation due to the patentee’s clear and unmistakable disavowal of claim scope during prosecution. Specifically, the court held that statements made during prosecution of a parent application before the asserted claims were allowed amounted to a prosecution disclaimer that extended to subsequent patents in the family. In reaching this conclusion, the court rejected an attempt by the patentee to resurrect the claim scope through a unilateral, self-serving statement made in later applications in the family.

...

Read More

IP Newsflash

May 13, 2025

The Federal Circuit recently affirmed a district court’s holding that patent term extension (PTE) for a reissued patent was properly based on the issue date of the original patent and not that of the reissued patent. The Federal Circuit concluded that, where both the original and reissued patents claimed a drug product under regulatory review, using the issue date of the original patent to calculate PTE comports with both the purpose of the Hatch-Waxman Act and the related statutory context.

...

Read More

IP Newsflash

May 12, 2025

The Patent Trial and Appeal Board recently declined to institute a petition for IPR that was filed on the same day that the petitioner filed another petition challenging the same claims of the same patent. The board was not persuaded by petitioner’s arguments that a second petition was needed due to alleged claim construction issues or the number, length or scope differences of the challenged claims.

...

Read More

IP Newsflash

May 9, 2025

The USPTO Director vacated the board’s decision to institute inter partes review based on an erroneous application of the Fintiv factors. Specifically, the Director found that the board placed too much emphasis on Petitioner’s Sotera stipulation, and not enough emphasis on the investment in the parallel litigation. Weighing the factors as a whole, the Director determined that institution should be denied.

...

Read More

© 2025 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.