Summary: A Business Valuation Expert Witness was not allowed to testify regarding infringement of a company’s technology patent because he used improper methodology.
Facts: This case Via Vadis, LLC et al v. Amazon.Com, Inc.,Case No. 1:2014cv00813 (United States District Court Western District of Texas) involves a disagreement over ownership of a data messaging system. Plaintiff Via Vadis, LLC and AC Technologies claims Amazon.com, Inc stole and used Via Vadis’ technology under their Patent “521.” Plaintiff alleges that the technology under Patent 521 allows users to transfer data between various electronic devices including computers. Via Ladis retained Business Valuation Expert Witness Paul Benoit to testify on how much profit had been made by Amazon with the stolen technology under the patent. He claims that the reasonable royalty for damages is over 30 million dollars. The Defendant argued that this figure was improperly based on the larger service of cloud storage, as opposed to only the patented technology. Amazon then filed a motion to exclude the Business Valuation Expert Witness’s testimony.
Discussion: Amazon found many errors within Benoit’s analysis in his damages report. First, the Defendant claims that evidence is lacking in regards to Benoit’s claim of revenue being at risk without the patented technology. Next, Benoit’s further assertions regarding lost revenue are not based on technology associated with Patent 521, but rather are based on the larger BitTorrent interface. Third, the report used a method of splitting profits that had already been rejected by the Federal Circuit Court of Appeals because it is not reliable. Lastly, the Business Valuation Expert Witness did not focus on split profits relating to the unpatented aspects of the BitTorrent technology. The Plaintiffs disagreed.


