Pharmaceuticals, Inc., 509 U.S. 579, 589-90 (1993).2 Daubert requires the district court
ensure that any scientific testimony “is not only relevant, but reliable.” Id. at 589; see
methodology is sound, and the evidence relied upon sufficiently related to the case at
hand, disputes about the degree of relevance or accuracy (above this minimum
threshold) may go to the testimony’s weight, but not its admissibility. Knight v. Kirby
Inland Marine Inc., 482 F.3d 347, 351 (5th Cir. 2007); Moore v. Ashland Chem. Inc., 151
F.3d 269, 276 (5th Cir. 1998) (en banc).
On appeal, Microsoft challenges the expert testimony by Dr. Wagner, i4i’s
damages expert. Wagner opined that a reasonable damages award would be $200
million dollars, based on a hypothetical negotiation between i4i and Microsoft at the time
the infringement began. To come up with the $200 million figure, Wagner calculated a
royalty rate ($98), then multiplied that rate by the number of Word products actually
used in an infringing manner (2.1 million).
At trial, the parties hotly disputed the correctness of the $98 royalty rate.
Microsoft argued that this rate was exorbitant given the price of certain Word products,
which could be as little as $97. As further evidence of its unreasonableness, Microsoft
pointed out that the rate resulted in a total damages amount ($200 million) greatly
exceeding the $1-$5 million Microsoft had paid to license other patents. In response, i4i
had its expert (Wagner) give a detailed explanation for how he arrived at the $98 royalty
2 An expert witness with “scientific, technical, or otherwise specialized knowledge,” may testify and form an opinion “if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods; and (3) the witness has applied the principles and methods reliably to the facts of the case.” Fed. R. Evid. 702.