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Jan 14

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Don’t Leave a Hole in Your Damages Timeline

The difficulty when calculating damages caused by production cutoffs was aptly demonstrated in TransPerfect Global, Inc. (“TransPerfect”) v. MotionPoint (“MotionPoint Corporation”), a recent case involving language translation patents. The fact that the jury award did not clearly describe the damage measurement adopted or period covered likely left significant damages on the table.

During discovery, MotionPoint failed to produce any financial records related to allegedly infringing sales after 2011. Although TransPerfect’s expert noted the missing information and claimed a reserved right to address it, TransPerfect never moved to compel production covering the period leading up to trial. Therefore evidence of a damage amount during that stub period was not presented to the jury.

The jury found that MotionPoint infringed TransPerfect’s patent and awarded damages of $1,002,006. In post-trial motions, TransPerfect argued that the parties’ experts did not have post-2011 financial information and therefore the jury could not have included these damages in its verdict. TransPerfect sought, among other things, increased and supplemental damages and pre-judgment interest as a matter of law. However, the Court rejected the motion for a number of reasons, generally:

  1. By failing to compel production, the Court found that TransPerfect shared in the blame.
  1. The information available regarding the jury’s award did not preclude the possibility that they had already performed some extrapolation of their own for the missing period in coming to their number.

A more thorough discussion of the case facts, precedents and ways in which problems with damage calculation timelines could have been avoided can be found in this related article.

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2015/01/dont-leave-a-hole-in-your-damages-timeline/

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