STC.UNM v. Intel Corporation

Filing 95

MOTION for Leave to File To File A Supplemental Submission In Support of Motion to Compel by STC. UNM. (Attachments: # 1 STC's Supplemental Submission In Support of Motion to Compel, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C)(Pedersen, Steven)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW MEXICO
STC.UNM,
Plaintiff,
v.
INTEL CORPORATION,

Civil No. 10-CV-01077-RB-WDS

Defendant.

STC'S SUPPLEMENTAL SUBMISSION IN SUPPORT OF MOTION TO COMPEL
STC is compelled to bring to the attention of the Court a misrepresentation made by Intel's
counsel regarding Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 434 F. Supp.2d 257
(S.D.N.Y. 2006). Specifically, during oral argument, Intel's counsel had the following to say:
So the Merck case . . . had a number of different theories in the case, and one of
the theories was: Hey, we're entitled to a reasonable royalty for your stuff that's
going to happen after the patent expires. The Court actually granted summary
judgment on that and said: No. But with respect to the lost profits component of
your model, stuff where you can actually prove that you're losing sales, the case
law does say accelerated market entry is a viable theory. (emphasis added).
Transcript (May 18, 2011) (Ex. A) at 24:15-24.
The Merck decision, however, does not include the words royalty or royalties, and, let alone
any discussion of the availability of accelerated market entry to a claim for reasonable royalty
damages. At no time did the court distinguish between lost profits and reasonable royalties for
purposes of accelerated market entry. See id. at 265-66.
Nor was the court in Merck required to do so, as Merck was not seeking a reasonable royalty.
A review of the declaration of Merck's expert submitted in opposition to the summary judgment
motion that resulted in the afore-cited Merck decision reveals the Merck sought only lost profits.
Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 1:05-cv-03650-DC, Declaration of

Raymond S. Sims (S.D.N.Y. Nov. 23, 2005) [Docket No. 25] (Ex. B). Thus, the court in Merck
had no occasion to address the applicability of accelerated market entry to reasonable royalty
damages.
Even more importantly, in its opposition, Merck cited a case in which an accelerated market
entry component was included as part of the reasonable royalty damages awarded to the
patentee. Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 1:05-cv-03650-DC, Merck's
Opposition (S.D.N.Y. No. 23, 2005) [Docket No. 23] (Ex. C) at 17, citing Coyle v. Sega of
America, CV 90-2323 RJK (C.D. Cal. April 10, 1991) (jury awarded the patentee $21 million in
reasonable royalties for accelerated market entry).1 Of course, this is contrary to Intel’s main
argument for denying STC’s Motion to Compel, which is that AME damages are not available to
a reasonable royalty plaintiff.
In sum, Merck was not seeking a reasonable royalty, and the court in Merck had no occasion
to address the availability of accelerated market entry damages as part of a reasonable royalty
award, contrary to the express representation made by Intel's counsel at oral argument. Further,
Merck did cite to a case where accelerated market entry did apply to a reasonable royalty claim.

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 Merck also cited Bayer AG. v. Housey Pharms., in which the court stated "[a]ccelerated reentry
damages … are not the equivalent of a royalty which extends beyond the expiration of the
patent." Bayer AG. v. Housey Pharms., 228 F. Supp.2d 467, 473 (D. Del. 2002), quoting Amsted
Indus. Inc. v. National Castings Inc., 1990 U.S. Dist. LEXIS 8553 (N.D. Ill. Jul. 11, 1990).  

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Dated: May 25, 2011

Respectfully submitted,

Deron B. Knoner
KELEHER & MCLEOD, P.A
201 Third Street NW, 12th Floor
PO Box AA
Albuquerque, New Mexico 87103
[phone]

/s/ Steven R. Pedersen
Rolf O. Stadheim
Joseph A. Grear
George C. Summerfield
Keith A. Vogt
Steven R. Pedersen
STADHEIM & GREAR, LTD.
400 N. Michigan Avenue, Suite 2200
Chicago, Illinois 60611
[phone]

Attorneys for Plaintiff STC.UNM

Certificate of Service: I hereby certify that on May 25, 2011, I caused the foregoing to be
electronically filed with the Clerk of the Court using the CM/ECF system which will send
notification of such filing via electronic mail to all counsel of record.
/s/ Steven R. Pedersen

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