IP Litigation: Find the Best Economic Expert

December 03, 2024
A courtroom-ready expert must be able to clearly communicate complex technical details, defend their methodology under cross-examination, and ensure their testimony is both relevant and admissible.
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In complex intellectual property (IP) litigation, the selection of the right IP litigation expert witness can determine the outcome of a case. ResQNet.com, Inc. v. Lansa, Inc. illustrates the consequences of failing to select an expert witness with the appropriate mix of technical understanding, economic expertise, and adaptability. 

This case, which revolved around patent infringement related to screen recognition and terminal emulation technology, underscored the importance of thoroughly vetting expert witnesses. As we’ll see, the missteps in expert selection and methodology in ResQNet.com led to a flawed damages calculation, ultimately resulting in a remand for a new trial.

This article will discuss how law firms can avoid similar pitfalls in selecting an IP litigation expert by following a comprehensive expert witness matching process that addresses key challenges, such as vetting difficulties, bias and conflicts of interest, and changing case dynamics. The goal is to provide guidance on how to select an economic expert who can meet the rigorous demands of IP litigation while delivering reliable, admissible testimony.

IP litigation Expert witness matching

In complex IP litigation, selecting the right economic expert witness is crucial to avoid flawed damages calculations and courtroom setbacks. Learn how to overcome vetting difficulties, navigate bias and conflicts of interest, and ensure your expert adapts to changing case dynamics in this comprehensive guide on expert witness matching.

Lessons from ResQNet.com, Inc. v. Lansa, Inc.

In ResQNet.com, Inc. v. Lansa, Inc., the plaintiff sued for patent infringement involving software technologies. The case’s outcome heavily relied on the damages calculation for the alleged infringement. ResQNet brought in an experienced economist as their damages expert to calculate reasonable royalties for the patents in question. However, several critical issues with his testimony emerged during the trial, ultimately undermining the plaintiff’s position.

Key Issues with the IP litigation Expert Witness Testimony:

Lack of Technical Understanding: While the expert was highly qualified in economic analysis, he lacked a comprehensive understanding of the underlying technology in the case.

IP Litigation

This gap in knowledge made it difficult for him to provide a robust damages calculation tied to the patented technology’s value.

Improper Use of Past Licenses: The expert based his royalty calculations on previous licenses held by ResQNet. However, many of these licenses were not comparable to the patents in question, weakening the relevance of his analysis.

Failure to Apportion Value: One of the most significant flaws in the damages calculation was expert’s failure to adequately apportion the value of the patented features from the unpatented components of the accused products. This omission diluted the credibility of his damages model.

Insufficient Market Analysis: The expert’s analysis also lacked a comprehensive evaluation of the relevant market and competitive landscape, failing to account for factors that could have influenced the reasonable royalty rate.

Inability to Adapt to Changing Case Dynamics: As certain claims in the case were invalidated during the trial, the expert struggled to adjust his damages model accordingly, further complicating the plaintiff’s argument.


Outcome:

The Federal Circuit found the plaintiff expert’s testimony flawed and remanded the case for a new trial on damages. The court criticized the use of unrelated licenses and the failure to link the royalty base to the patented features. This led to a vacated damages award, significantly prolonging the litigation and increasing costs for ResQNet.

Avoiding Common Pitfalls in IP Litigation Expert Witness Selection

The ResQNet case provides valuable lessons on the importance of carefully matching an expert witness to the specific needs of IP litigation. Below are key strategies to help law firms avoid the common mistakes seen in this case.

expert witnesses for patent litigation

1. Prioritizing Both Economic Expertise and Technical Knowledge

A common error in expert witness selection is over-prioritizing economic credentials while neglecting the technical expertise necessary to understand the subject matter. As seen in ResQNet, the expert’s limited understanding of the patented technology hindered his ability to provide a credible and thorough damages analysis.

In patent litigation, it’s crucial to find an expert who not only excels in economic analysis but also possesses a deep understanding of the relevant technology.

2. Vetting Methodologies Early On

Ensuring that an expert’s methodologies align with legal standards for calculating patent damages is another critical step. In ResQNet, the expert relied on irrelevant licenses and failed to apportion the value of the patented features. This highlights the need to vet an expert’s approach thoroughly before trial. Law firms should test the expert’s opinions early by having them review case materials and provide an initial damages model. This helps identify potential weaknesses in their methodology.

3. Consider Industry-Specific Experience

Experts with experience in the specific industry relevant to the patents are better equipped to provide accurate testimony. In ResQNet, a more knowledgeable expert might have better understood the technical aspects of the software patents and provided a more accurate valuation of the patented features.

Ensuring that the expert has worked in the relevant field helps avoid the pitfalls of irrelevant market comparisons or inappropriate licensing data.

4. Conduct Comprehensive Background Checks

Beyond economic and technical qualifications, it’s essential to review the expert’s litigation history and assess how their testimony has been received in previous cases. Failing to thoroughly review an expert’s past testimony could result in repeating mistakes that have been previously flagged by courts. In ResQNet, a thorough review might have identified potential issues with the expert’s methodologies, providing an opportunity to make corrections before trial.

5. Scrutinize Communication Skills

An expert’s ability to clearly explain complex technical and economic concepts to a lay jury is just as important as their technical skills. In ResQNet, the expert’s failure to adjust his damages model after certain claims were invalidated suggests a lack of flexibility and effective communication under pressure. Law firms should interview potential experts to gauge their ability to break down complicated concepts into understandable terms.

6. Ensure Flexibility and Adaptability

In complex IP litigation, cases evolve, and experts must be able to adjust their analyses as new facts emerge. In ResQNet, the expert’s inability to adapt to changing case dynamics, such as the invalidation of certain claims, weakened the plaintiff’s position. Law firms should assess an expert’s flexibility during the vetting process, ensuring that they can update their analyses in response to new developments in the case.

7. Balance Academic Credentials with Practical Experience

While academic credentials are important, they should not be the sole criteria for selecting an expert. Practical experience in real-world IP valuation and patent litigation provides critical insights that can’t be gained in a purely academic setting. Law firms should ensure that their chosen expert has hands-on experience in both technical and economic aspects of IP disputes.

8. Allocate Sufficient Budget for Expert Work

The complexity of patent litigation often demands extensive work from expert witnesses, including research, analysis, and courtroom preparation.

Underestimating the cost and scope of this work can lead to inadequate preparation, which was a contributing factor in ResQNet. It’s essential to allocate a budget that allows the expert to conduct thorough research and prepare a well-supported analysis.

Conclusion: Matching the Right IP Litigation Expert to Your Case

The ResQNet.com, Inc. v. Lansa, Inc. case underscores the importance of selecting an expert witness who possesses both the economic expertise to calculate damages and the technical understanding necessary to value patented technology accurately. A thorough vetting process that addresses potential bias, conflicts of interest, and the expert’s ability to adapt to changing case dynamics is essential to ensuring their testimony is reliable and admissible.

By following these best practices for IP litigation expert witness matching, law firms can avoid the costly mistakes seen in ResQNet and build a stronger case for their clients. Leveraging vetted expert witness networks, like ExpertConnect Litigation Support, and conducting in-depth background checks can help ensure that the chosen expert is well-equipped to provide credible and robust testimony in complex IP litigation.

Source: ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860 (Fed. Cir. 2010).