On Thursday, Marshall, Tex., federal magistrate judge Charles Everingham vacated a $139 million jury award for Versata Software in its patent infringementcase against SAP. Citing Uniloc, Judge Everingham held that the lower court had erroneously admitted certain damages testimony and that the jury had relied on an invalid damage calculation model.
In Uniloc, the Federal Circuit invalidated the “25 percent ruleof thumb” method for calculating damages in patent infringement cases. Using this rule, 25 percent of an infringer’s expected profits are used as a starting point to determine a reasonable royalty rate for a patent holder. SAP argued that this rule is fundamentally flawed because it “fails to account for the unique relationship between the parties” and relies too much on hypothetical situations. “The federal circuit emphasized that there must be a basis in fact to associate the royalty rates used in prior licenses to the particular hypothetical negotiation at issue in this case,” SAP argued in this filing.
