In this CRA Insights, we update the Rule 702 decision trends in last year’s Insights with 2023 data.[1] We also provide descriptions of four specific challenges in 2023 Rule 702 decisions.
As discussed in the 2023 CRA Insights, the Supreme Court approved a clarifying amendment to Federal Rules of Evidence Rule 702 that went into effect on December 1, 2023. A February 2024 Rule 702 decision in Regents of the University of Minnesota v. Sprint Solutions, Inc. et al. regarding comparability of agreements, calculation of the royalty base, and a forward-citation analysis demonstrated the clarifying nature of this amendment in finding that “[t]he Court will apply the new language of Rule 702, but the result would be the same regardless of whether the Court applied the current or prior version of the rule.”
Rule 702 decision trends are based on our review of available US district court decisions concerning damages experts in patent infringement matters that have sufficient information for analysis. The number of Rule 702 decisions available to analyze in 2023 increased to 165, the highest number of decisions in any year during the 2015–2023 time period analyzed in this newsletter. The overall exclusion rate in such decisions—where the court either granted or partially granted a motion to exclude or limit a damages expert’s testimony—was approximately 41%, in line with 41% in 2022 and down from 49% in 2021.
Decisions regarding challenges to the reliability or relevance of a damages expert’s methodology, including in determining lost profits or a reasonable royalty, continued to be the most prevalent. In 2023, 82% of decisions included a ruling on reliability or relevance; 6%, a ruling on qualifications; and 32%, a ruling on other topics, such as disclosure issues, missed deadlines, and Rule 403 concerns. Challenges to these other topics have historically been the most successful, with an exclusion rate of approximately 37% over the entire period.[2] As shown in Table B below, in 2023 Rule 702 decisions, challenges to the reliability or relevance of an expert’s reasonable royalty methodology were most successful, with an exclusion rate of 31%.
In 2023, courts in the District of Delaware, Western District of Texas, and Eastern District of Texas produced approximately two-thirds of Rule 702 decisions. As shown in Table C below, the number of Rule 702 decisions in the Western District of Texas increased significantly in 2023.
The five judges with the most Rule 702 decisions are also located in the District of Delaware, Western District of Texas, and Eastern District of Texas. From 2015 to 2023, inclusive, these five judges issued 112, 75, 74, 71, and 51 total decisions, although the Western District of Texas judge (with 51 decisions) has been issuing decisions only since 2020. Notably, this judge issued 31 decisions in 2023, while the judge who issued the second-highest number of decisions in 2023 issued only 15. These five judges each ruled on a significant number of decisions, and the remaining 218 judges with decisions during the 2015–2023 time period each issued 20 or fewer decisions, with the majority issuing one or two decisions. Table D below shows the total number of decisions from 2015 to 2023 for each of the 223 judges that issued decisions during this time period.
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