Sep 16

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Patent Feature Double Count Sinks Damages Calculation

Finjan, Inc. (‘Finjan”) vs. Sophos, Inc. (“Sophos”) is a patent infringement action involving 14 different claims related to six different patents for computer and network security technology.  Many patented products, particularly those involving technology, use more than one patent.  As described in this related article, a damage analyst in this situation will often need to allocate or “apportion” the value being measured between these multiple patents.  Sophos claimed that the plaintiff’s apportionment calculation resulted in a functional double or triple counting of revenues, using a royalty base that is over 100 percent of the total value of several of the accused products, and with several of the value-add calculations resulting in a combined value added of the alleged patents that exceeded the total product value.  The Court agreed and excluded the plaintiff’s calculations.

This example highlights the importance of taking a step back from a damages calculation to assess the critical question of “Does this damages presentation really make sense?” As the Judge described in this case, truly overlapping patents cannot both be valid as a matter of law.


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/2016/09/patent-feature-double-count-sinks-damages-calculation/

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