BRG Experts Testify on Patent Damages in The California Institute of Technology v. Broadcom and Apple

BRG experts David Teece and Cathy Lawton testified regarding patent damages in The California Institute of Technology (“Caltech”) v. Broadcom and Apple. On January 29, 2020, following a twelve-day trial, a Central District of California jury found Apple and Broadcom liable for infringing three of Caltech’s patents and awarded $1.1 billion in reasonable royalty damages for past infringement. Caltech’s counsel Quinn Emanuel stated: “The jury found all asserted claims of the three patents in the case infringed by both Apple and Broadcom and awarded the full damages requested by Caltech as fair compensation for Apple and Broadcom’s years of unauthorized use of Caltech’s technology.”

The technology at issue was described as “a revolutionary type of error correction coding that performed at or near theoretical perfection” that was “vital to the companies [Apple and Broadcom]” and helped to improve Wi-Fi rate and range and device reliability. According to Cult of Mac, Caltech technical expert “Matthew Shoemake said the Caltech patents improve the range, rate and reliability of devices like mobile phones. Because they reduce the number of mathematical equations needed to transmit data, Apple was able to make smaller iPhones and other devices that give off less heat with longer-lasting batteries, the engineer said.” The Register described the patented technology as “form[ing] the basis of error correction used in Wi-Fi standards 802.11n and 802.11ac – in particular, IRA/LDPC encoders in Broadcom chips (IRA – irregular repeat and accumulate codes; LDPC – low density parity check).” Ars Technica added: “[Caltech’s] IRA codes offered a better tradeoff between robustness and decoding time than previous techniques.”

On January 30, 2020, an article in AppleInsider summarized the damages evidence presented by BRG’s experts and the resulting damages award for the infringement, which began in 2010 and spanned a decade, as follows: “a hypothetical licensing deal in 2010 for chips used in iPhone, iPad, Mac, Apple Watch and other products would have brought in some $1.40 per device from Apple and 26 cents each from Broadcom. That calculation was adopted by the jury to level an $838 million fine for Apple and accompanying $270 million fine for Broadcom.” On August 3, 2020, the court entered judgment, which upheld the jury verdict and awarded “an ongoing royalty from both Apple and Broadcom at the rates set by the jury verdict.”

Dr. Teece and Ms. Lawton were assisted by BRG colleagues including Cleve Tyler, Deepa Sundararaman, and Claire Mackoul from BRG’s DC office; John Davis and Jeannie Kim Wong from BRG’s Emeryville office; and Josh Lathrop, Colette Porter, and Ryan DeLoughry from BRG’s New York office.

The views and opinions expressed in this case study are those of the experts and do not necessarily reflect the opinions, position, or policy of Berkeley Research Group, LLC or its other employees and affiliates.