Replies to post #8571 on Rambus (RMBS)

[Skeptic]

MisterPeabody did a hell of a lot better job rebutting Nic's assumption on Teece and worldwide sales. From TMF...


"The results have me confused on the former, since on the one hand he is allowing Teece to talk about a higher rate, but on the other hand he is seemingly restricting it to US sales." - Nic

I disagree with your interpretation on this point. From the opinion on motion 11 to exclude portions of Teece's testimony:
"Hynix also objects to Teece's use of Hynix's worldwide sales data to calculate a reasonable
royalty, noting that it is undisputed that Rambus cannot recover for foreign sales. Rambus licenses
the patents in suit on a worldwide basis. According to Teece, changing the royalty base from the
world to the United States would increase the rate. Contrary to Hynix's argument, Teece's opinion
does not try to award damages for foreign sales. Instead, it merely takes these sales into account to
make the point about Rambus's damages in the United States...The court denies this aspect of the motion."
The opinion clearly denies Hynix's objection that the royalty be calculated from the Rambus royalty rate on the worldwide sales base. Teece's view is the 3.5% (possibly doubled as a result of Hynix's litigation)is reasonable for the worldwide sales base. If the sales base used for the calculation of the royalty is restricted to the US, then the reasonable royalty rate would be inversely higher to compensate for the decrease in base. "("generally
speaking, the royalty rate and royalty base have an inverse relationship, so that when the base goes
down the rate goes up, and vice versa")". In quoting Teece's comment on this point without objection, and then denying Hynix's motion in the following sentence, Whyte gives evidence that he concurs with this viewpoint.
Worldwide sales figures for Hynix are available and accessible. Given that Whyte appears to be allowing the worldwide figures to be used as the base, it is irrelevant for the calculation of the base what sales in the US are "direct" or "indirect". Rambus (Teece) is simply restricted in using indirect sales estimates in arguing that their arguments for a "reasonable" rate are "conservative.

Mister Peabody