United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
W. DARRAH, United States District Court Judge
LoggerHead Tools, LLC (“LoggerHead”) filed a
Second Amended Complaint (“SAC”) against
Defendants Sears Holdings Corporation (“Sears”)
and Apex Tool Group, LLC (“Apex”) (collectively,
the “Defendants”), alleging, inter alia,
various patent and trademark violations associated with
United States Patents No. 6, 889, 579 (the “‘579
Patent”) and No. 7, 992, 470 (the “‘470
Patent”). Defendant Apex has filed a Motion to Exclude
the Testimony of Christopher J. Bokhart , on the
calculation of royalty patent damages and trade dress
damages. For the reasons set forth more fully below,
Apex's Motion  is granted in part and denied in
Brown was awarded the ‘579 Patent in 2005 and the
‘470 Patent in 2011 and is the founder and President of
LoggerHead. (SAC, ¶¶ 10, 11, 13.) Brown founded
LoggerHead in 2005 and began selling the Bionic Wrench.
(Id. at ¶ 17.) In 2009, Sears placed an order
for 15, 000 Bionic Wrench units for sale over the Christmas
season. (Id. at ¶ 38.) In 2010, Sears ordered
75, 000 Bionic Wrench units. (Id. at ¶ 39.)
Sears and LoggerHead entered into a one-year supply
agreement, which had an effective start date of February 1,
2011, and expired February 1, 2012. (Id. at ¶
40.) Sears represented that they would purchase more Bionic
Wrench units in 2012. (Id. at ¶ 47.) In
September 2012, Sears announced the “Max Axess Locking
Wrench” (“MALW”) and began retailing the
MALW in their stores. (Id. at ¶ 62.) LoggerHead
submitted an expert report by Christopher J. Bokhart on the
issue of economic damages.
the Federal Rule of Evidence 702, trial courts must
determine, as a precondition to admissibility, whether expert
evidence rests on a reliable foundation and is relevant.
Manpower, Inc. v. Ins. Co. of Pennsylvania, 732 F.3d
796, 806 (7th Cir. 2013). “Expert testimony is
admissible when the testimony is reliable and would assist
the trier of fact to understand the evidence or determine a
fact at issue in a case.” Lewis v. CITGO Petroleum
Corp., 561 F.3d 698, 705 (7th Cir. 2009) (citing
Fed.R.Evid. 702; Daubert v. Merrell Down Pharmaceuticals,
Inc., 509 U.S. 579, 589-91 (1993)). “The proponent
of the expert bears the burden of demonstrating that the
expert's testimony would satisfy the Daubert
standard.” Id. However, “the rule on
expert testimony [is] notably liberal.” Krist v.
Eli Lilly & Co., 897 F.2d 293, 298 (7th Cir. 1990).
assessing the admissibility of proposed expert testimony, the
focus “must be solely on principles and methodology,
not on the conclusions that they generate.”
Daubert, 509 U.S. at 595. A court must “make
the following inquiries before admitting expert testimony:
first, the expert must be qualified as an expert by
knowledge, skill, experience, training, or education; second,
the proposed expert must assist the trier of fact in
determining a relevant fact at issue in the case; third, the
expert's testimony must be based on sufficient facts or
data and reliable principles and methods; and fourth, the
expert must have reliably applied the principles and methods
to the facts of the case.” Lees v. Carthage
College, 714 F.3d 516, 521-22 (7th Cir. 2013). Apex does
not challenge Bokhart's knowledge, skill, experience,
training, or education or the relevancy of Bokhart's
report. Apex does challenge the basis of parts of the report
and the reliability. There is no bright-line reliability
test, and the reliability inquiry should be
“flexible.” Kumho Tire Co. v.
Carmichael, 526 U.S. 137, 139 (1999). However, there
must be “a link between the facts or data the expert
has worked with and the conclusion the expert's testimony
is intended to support.” United States v.
Mamah, 332 F.3d 475, 478 (7th Cir.2003).
finding of infringement, “the court shall award the
claimant damages adequate to compensate for the infringement,
but in no event less than a reasonable royalty for the use
made of the invention by the infringer, together with
interest and costs as fixed by the court.” 35 U.S.C.
§ 284. “The patentee bears the burden of proving
damages.” Uniloc USA, Inc. v. Microsoft Corp.,
632 F.3d 1292, 1315 (Fed. Cir. 2011). Bokhart assumed a
hypothetical negotiation between the parties. “In
litigation, a reasonable royalty is often determined on the
basis of a hypothetical negotiation, occurring between the
parties at the time that infringement began.”
Uniloc, 632 F.3d at 1312 (citing Wang Labs. Inc.
v. Toshiba Corp., 993 F.2d 858, 869-70 (Fed. Cir.
1993)). “Although a reasonable royalty calculation
includes some approximation, the Federal Circuit requires
sound economic and factual predicates for that
analysis.” Sloan Valve Co. v. Zurn Indus.,
Inc., 33 F.Supp.3d 984, 990 (N.D. Ill. 2014) (internal
quotations and citations omitted).
factors are relevant when determining a reasonable royalty:
1. The royalties received by the patentee for the licensing
of the patent in suit, proving or tending to prove an
2. The rates paid by the licensee for the use of other
patents comparable to the patent in suit.
3. The nature and scope of the license, as exclusive or
non-exclusive; or as restricted or non-restricted in terms of
territory or with respect to whom the manufactured product
may be sold.
4. The licensor's established policy and marketing
program to maintain his patent monopoly by not licensing
others to use the invention or by granting licenses under