Maybe it's just me, but pre-trial evidentiary opinions are always fun to read. They often involve rules that don't come up in other written opinions, and all of the rulings tend to be highly impactful for trial (otherwise the parties wouldn't be spending their extremely limited pre-trial time and MILs on the issues).
We got an opinion from Judge Bryson last week on pre-trial evidentiary issues in Acceleration Bay LLC v. Activision Blizzard Inc., C.A. No. 16-453-WCB (D. Del. Apr. 28, 2024). There are a number of interesting rulings in it, but one in particular that is worth calling out involved whether a party can offer evidence of past licenses to prove damages.
As the Court explained, other courts have barred plaintiffs from presenting evidence of their own past offers to license their patents, because it would be easy for a plaintiff to make an inflated licensing offer ($100 million! $1 billion!) to try to firm up the value of their patents at trial:
Activision seeks to introduce, over Acceleration Bay’s objection, that in 2010 Boeing offered to sell the patents at issue in this case, together with others, for $1,000,000. No sale was consummated at that time. Acceleration Bay argues that evidence of offers to sell or license patents is not admissible to show the value of a license to the patents in suit under Fed. R. Evid. 403. The cases cited by Acceleration Bay for that proposition, however, relate to efforts by patent owners to introduce evidence of the offers made by the patent owner to sell or license the patents. The courts have regularly rejected such evidence on the ground that the patent owner could offer to sell the patent at a vastly overstated price, which would not bear any relationship to the actual value of the patent.
Id., at 3.
But the Court explained that when the accused infringer offers a failed attempt by the patentee to license a patent to show a low value, that's totally fine:
In this case, by contrast, the offer is not being used by the patent owner, but by the accused infringer to show that the patent owner was willing to license or sell the patents for a particular amount. In that setting, the amount of the offer is quite relevant, as it shows that a license could have been acquired for the price being offered by the patent owner.
Id. Interestingly, the Court held that the accused infringer could rely on evidence that the offers were made, but could not show they were not accepted:
In both ChanBond and ViaTech, the court held the evidence of the offer admissible but ruled that the proponent of the evidence would not be permitted to introduce the fact that the offer was not accepted, on the ground that such additional evidence would be unduly prejudicial.
Accordingly, evidence of Boeing’s offers to sell or license the patented technology will be admitted for purposes of establishing Boeing’s valuation of the patents. Activision may not further introduce evidence that the offers were not accepted.
Id. at 4.
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