Licensing Expert Witness Testimony Allowed in “Modem Chips” Case

Summary: Licensing Expert Witness testimony was allowed despite the expert relying on the testimony of third parties.

Facts:  This case (Federal Trade Commission v. Qualcomm Incorporated – United States District Court – Northern District of California – December 10th, 2018) involves a complicated interaction between cellular communications standards, standard essential patents (“SEPs”), and the market for baseband processors, or “modem chips”.  The plaintiff has hired Richard L. Donaldson (Licensing Expert Witness) to provide expert testimony on their behalf.  The defendant has filed a motion to exclude this expert from testifying.

Discussion:  The defendant argues that Donaldson’s opinions are nothing more than improper speculation regarding the intent and motivations of the parties. In addition, they also attach Donaldson’s methodology of interpreting six licensing negotiations among several hundreds of other without stating why his narrow sample is representative.  Also, they argue that Donaldson does not control for a number of variables that factor into any licensing negotiation.  Last, the defendant argues that Donaldson’s experience with his former employer does not give him enough basis to provide an opinion on  component-level licensing in the cellular industry.

Regarding the first argument, the court opines that Donaldson relied on the testimony of third parties negotiating licenses with the defendant to arrive at his opinion about licensing negotiations.  The court opines that Donaldson may rely on his own knowledge, training, experience, and education to form opinions on the defendant’s licensing practices based on third-party testimony passed to him.  Any arguments related to this issue should be addressed by cross-examination at trial.

Regarding the second argument, the court opines that there is no authority that an expert must independently sort through all of the discovery in a case in order to determine the relevant evidence.  The court further states that Donaldson conducted a broad review of many types of documents that were produced in this action.  The court last opines that any discussion on this issue is best brought out during cross-examination.

Regarding the third argument, the court opines that Donaldson’s testimony does not involve testing a theory, peer review, an error rate, or whether a theory is generally accepted in the scientific community.  The court further notes that Donaldson is relying on his experience as a licensing professional to form an opinion about the defendant’s no license no chips policy.

Regarding the fourth argument, the court opines that Donaldson has established how his experience as a licensing professional leads to his conclusions regarding multi-level licensing.

Conclusion:  The motion to exclude the expert witness testimony of Richard L. Donaldson is denied.