Losing Argument of the Week: Patent Damages Discovery

Gaston Kroub

Markman Advisors LLC

Welcome to a new segment. In "Losing Argument of the Week", we take a look at a losing argument raised in a case involving a timely patent litigation issue.

This week, we focus on the always interesting area of patent damages, and in particular discovery obligations as they relate to the issue of damages. 

Plaintiffs hoping to force patent defendants into disclosing the maximum royalty rate they could afford to pay while remaining profitable from selling the allegedly infringing product face an uphill battle. In XY LLC, et al. v. Trans Ova Genetics LC, Civil Action No. 17-00944-Civ (WJM-NYW) (COD), the plaintiff tried to compel a response to an interrogatory requesting precisely that information, where the defendant had opened the door to a discussion of the maximum royalty rate in could bear in a prior pleading. Plaintiff's request was denied "as Plaintiffs, not Defendant, bears the burden of proof to establish their damages. Plaintiffs may serve an interrogatory related to Defendants’ basis for the information contained in the Amended Answer, that indicates that a 50% royalty rate would be too high." Request for discovery denied, but with permission to follow up on a previous admission by defendant on the issue.

To recap, discovery requests aimed at forcing defendants to admit their maximum pain point on damages are likely losers -- but prior admissions on the issue by defendant may be exploitable in discovery.