Patent Misuse Case Involving Portable Secure USB Memory Products

BRG Managing Director Cleve B. Tyler, PhD, served as an expert economist to evaluate claims of patent misuse made by Kingston Technology against SPEX regarding patents relating to an alleged relevant market in the United States for portable secure USB memory products. Dr. Tyler provided an expert report and testified at deposition regarding market definition, market participants, market power, competitive effects, and damages. BRG Director Kelly Lear Nordby, PhD, provided consulting expert services.

In its motion for Summary Judgment on Patent Misuse, SPEX stated:

SPEX served an expert report prepared by Cleve B. Tyler, Ph.D. demonstrating the lack of anti-competitive conduct from Kingston’s allegations of patent misuse. For example, Dr. Tyler opines that in order for SPEX’s alleged conduct to have impacts on competition, Kingston would have to (1) win on liability with regarding to infringement of the ’802 patent, (2) lose on liability with regarding to the ’135 patent, (3) be subject to a large enough damages award for past infringement (since the patent is expired) or litigation costs with regard to this issue to potentially impact Kingston’s pricing decisions or participation in the market, and (4) change its current and/or future prices or withdraw from the market based upon the damages award and/or litigation costs. Dr. Tyler’s report explains in detail why this speculative chain of events is unlikely and contrary to basic economic principles, especially given circumstances in the relevant market. Dr. Tyler’s expert opinions are unrebutted. (references omitted)

In his Order Regarding Pending Summary Judgment Motions, US District Court Judge James V. Selna for the Central District of California granted SPEX summary judgment for Kingston’s patent misuse claims, “because Kingston has failed to adduce any evidence of any anticompetitive effect, as required for a showing of patent misuse.” Further, the Court stated:

Meanwhile, SPEX’s February 21, 2020 Expert Report prepared by Cleve B. Tyler, Ph.D. suggests that anti-competitive effects from SPEX’s conduct were unlikely, and Kingston did not put forth evidence negating his analysis.

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.