Hoffman Alvary & Company LLC
You are known for providing expert analysis on damages arising from IP infringements. Can you summarise the role of a damages expert and the skills needed to excel in this area?
Providing expert analysis of damages in IP infringement matters requires a combination of analytical and communication skills. An essential part of the role involves accounting and economic analysis to evaluate the sales and profits of the products related to the intellectual property in dispute. In addition to financial analysis, an expert must understand the technical importance of the intellectual property at issue and how it contributes to the sales and profits that have been measured. A damages expert should also possess strong working knowledge of the case law framework that governs the damages analysis and, in particular, be well versed in recent developments in the law that may be relevant to the issues in a given case.
Next, an expert must prepare a well-written report that discloses all the relevant information with regard to the analyses and conclusions reached. Ultimately, these must be distilled and communicated to a jury in a clear, understandable and persuasive manner. This requires a careful balancing act – an expert’s testimony must include enough detail to demonstrate the reliability and accuracy of the work, while being mindful of focusing on the key concepts and conclusions.
What recent developments in the law have affected how you evaluate patent damages?
In the past decade, the Federal Circuit and district courts have refined many aspects of the process of calculating patent damages. These topics have ranged from whether and how settlement agreements may be used to evaluate reasonable royalties to how experts should focus their testimony on the specific economic value related to the patented technologies, rather than larger products into which these technologies may be incorporated. There has been a focus at the centre of these decisions on ensuring that both expert testimony and jury awards are reliably connected to the specific economic value of the patented technologies at issue.
The courts have rarely provided explicit rules on these issues. Instead, they have provided general guidance on what approaches may be appropriate under various circumstances. While the lack of specific rules can be challenging and at times lead to unpredictable results, this flexibility allows damages experts to focus on identifying the appropriate analysis to use according to the facts of each case.
How have client demands changed over the past five years and what impact is this having on your practice?
As the IP licensing and litigation landscape has changed in recent years, it appears that clients are increasingly focused on two things: effectiveness and efficiency. Meeting these demands requires an expert backed by a team of professionals that specialise in IP valuation, licensing and litigation. As damages issues have grown more complex, clients are demanding analyses that are supported by expertise and a proven, successful process honed by years of experience. Being a principal at Hoffman Alvary, as well as having the good fortune to work with talented colleagues, allows me to articulate to clients how our firm’s specialised skillset and experience efficiently translate into results.
What challenges will practitioners face in determining IP infringement damages over the next five years?
I expect that the primary challenges facing practitioners will reflect those that have been at the forefront of our profession in recent years. For patent damages, one ongoing issue will be how best to evaluate damages – particularly reasonable royalty damages – in instances where the patented technology relates to one component or functionality of a complex multi-component product or service. These issues routinely arise in disputes involving software and electronics and require that an expert carefully analyse the importance of a specific patented technology to an overall product or service that may include multiple patented technologies.
I also foresee a rise in the number of disputed matters that include various forms of intellectual property, in particular patents and trade secrets. In recent years, companies have increasingly sought to protect their products through multiple, overlapping forms of intellectual property. This will naturally lead to more instances where several types of intellectual property are in dispute. This can present interesting and challenging damages issues as remedies for trade secret misappropriation and patent infringement overlap in some areas, but also include important distinctions.
Joel Wacek serves as a principal at Hoffman Alvary and is an expert in providing financial and economic analyses in IP disputes. He has testified as an expert witness at trial on damages in IP infringement matters and provides financial analysis related to commercial disputes, licensing campaigns and matters before the International Trade Commission. Mr Wacek is a Certified Licensing Professional and member of the Licensing Executives Society and the International Trademark Association.