NexStep, Inc. v. Comcast Cable Communications, LLC DC

Courts tend to give patent litigants significant flexibility in crafting a damages theory, with the traditional Georgia-Pacific factors offering a variety of entry points for determining a reasonable royalty. However, as one plaintiff recently learned the hard way, a damages theory must have a sufficient connection to the relevant facts to approximate the results of a hypothetical negotiation between the parties. As recounted by RPX last week, Delaware District Judge Richard G. Andrews threw out the original damages case offered by plaintiff NexStep just before a scheduled trial earlier in the fall, ruling that a proposed 50-50 split of the cost savings with defendant Comcast was improperly based on a “rule of thumb” without sufficient linkage to the facts of the case.

Before the Thanksgiving holiday in the US, District of Delaware Judge Richard G. Andrews excluded a fact-based damages theory put together by inventor-controlled NexStep Inc. on the eve of its September 2021 trial against Comcast. That damages theory was so last minute because Judge Andrews had previously stricken from NexStep’s actual damages expert report a cost-savings approach, based on the expert’s “arbitrary” opinion that Comcast would have been willing to split any purported cost savings equally with NexStep, a choice that Judge Andrews found was “without support by facts specific to these parties” and thus was based on a “fundamentally flawed premise”. This ruling—throwing out a last-ditch damages theory after an earlier cost-savings approach was rejected—might sound familiar, as it echoes the circumstances now at the center of Finjan, Inc.’s appeal of an award of roughly $6M in attorney fees in its litigation against Juniper Networks.