X hits on this document

PDF document

Attorneys for Microsoft Corporation - page 15 / 74





15 / 74

cal negotiation at $96. Joiner, 522 U.S. at 146. The decision’s mode of analysis is irreconcilable with the Supreme Court’s command not to blindly accept “the ipse dixit of the expert,” and with the plain text of Rule 702.

If either the trial court or the panel had undertaken the analysis Rule 702 re- quires, Mr. Wagner’s baseline royalty methodology could not have survived. That methodology began with the untested, unaccepted, and wholly implausible as- sumption that, to obtain a license for one small feature in a product with many fea- tures, an infringer would agree to pay 25 percent of the profits from the entirety of the infringing product. This blind acceptance is contrary to this Court’s own recent precedent. Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1332 (Fed. Cir. 2009) (rejecting as “inconceivable” a royalty of 5.5% of sales for “one small fea- ture”). Mr. Wagner then disregarded the actual profits attributable to Microsoft’s sale of the accused functionality (unquestionably less than $50, see Blue Br. 63) and looked instead to the hypothetical profits Microsoft might have made if it had sold a third-party “benchmark” product at Word’s profit margin—an “apples and oranges” approach that has no basis in the Georgia-Pacific factors, or in any rec- ognized methodology. Crystal Semiconductor Corp. v. Tritech Microelectronics Int’l, Inc., 246 F.3d 1336, 1358 (Fed. Cir. 2001); see also MicroStrategy Inc. v. Bus. Objects, S.A., 429 F.3d 1344, 1353, 1358 (Fed. Cir. 2005) (methodology that “did not consider relevant factors” was “flawed”).

Moreover, the “benchmark” Mr. Wagner identified as a substitute for Word’s custom XML editor was a high-end software offering with a cost of $499—two to five times the retail cost of the whole of Word—that contains nu-


Document info
Document views256
Page views256
Page last viewedFri Jan 20 04:28:06 UTC 2017