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Attorneys for Microsoft Corporation - page 11 / 74

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precedent command: it sought a new trial or remittitur as to the excessive damages.

The panel decision upheld the admission of “expert” testimony that Micro- soft would have agreed upon $200,000,000 as a “reasonable royalty,” holding that a damages expert’s methodology automatically “satisfie[s] Rule 702 and Daubertif he used (in any fashion) “a hypothetical negotiation and [the] Georgia-Pacific factors.” Slip op. 31. The decision then held that, although Microsoft had fol- lowed the rules and filed a motion for new trial or remittitur after the jury returned its verdict, Microsoft had “waived” traditional excessiveness review “by failing to file a pre-verdict JMOL on damages.” Id. at 37. The requirement of a pre-verdict JMOL challenging as excessive a not-yet-returned damages verdict is a creation of this decision; neither the Federal Rules nor any other case requires it.

The decision warrants en banc review. If the decision stands, there will be virtually no judicial constraint on the “expert” damages evidence that may be sub- mitted to the jury in a patent case, and virtually no judicial constraint on the amount ultimately awarded by the jury. That conflicts with the Supreme Court’s Daubert trilogy governing the admissibility of expert evidence, and with decisions of the Supreme Court and all twelve regional circuits establishing that a motion for new trial or remittitur is the proper procedural vehicle to preserve a defendant’s common-law right of excessiveness review of a damages award.

In every other appellate court, the law is that courts must act as gatekeepers both with respect to the jury’s inputs, and with respect to its ultimate output. The en banc Court should ensure that this remains the law in this Court as well.

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