Dewberry Group, Inc. v. Dewberry Engineers, Inc.—Constraints Using Disgorgement In 1946, the United States Congress enacted the Lanham Act to create a registry and provide protections for certain forms of intellectual property and protect consumers from unfair competition. Damages arising from Lanham Act claims can be severe. In Dewberry Group, Inc. v. Dewberry Engineers Inc., an unusually unified Supreme Court addressed how disgorgement can be constrained. In 1946, the United States Congress enacted the Lanham Act (15 U.S.C. §§1051 et seq.) (the “Act”) to create a registry and provide protections for certain forms of intellectual property and protect consumers from…
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Core Finance Team Affiliates, LLC v. Maine Medical Center—The Distinction Between Quantum Meruit and Unjust Enrichment What is the difference between a claim of quantum meruit and unjust enrichment? This very issue was addressed in Core Finance Team Affiliates, LLC v. Maine Medical Center and is discussed in this article. The legal profession is famously hidebound; for goodness’ sake, they still where robes and wigs in English courts. As a result, they still throw around many Latin phrases, which can lead to confusion. In Core Finance Team Affiliates, LLC v. Maine Medical Center, 2024 ME 78, 2024 Me. LEXIS 85…
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Matter of Weber—Challenges to a Trustee’s Accounting Go Awry Serving as a Trustee of a Trust is difficult. In the case presented, a trust beneficiary alleged that the trustee—his aunt—breached her fiduciary duty. The trust beneficiary retained an expert in connection to this claim and this did not go well for either the beneficiary or damages expert. The article summarizes the case, provides a road map and an admonition to experts in these types of cases regarding what is needed, and the perils of using AI. British mathematician, Hannah Fry, once said, “People are often quite lazy. We like taking…
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The Court Assess Substantive and Procedural Advanced to Disqualify Expert Witness This article provides an in-depth review of a recent infringement, unfair competition and cybersquatting where Plaintiff sought disgorgement of profits. The case highlights procedural and substantive arguments advanced during litigation and basis the Court used to partly disqualify the testimony of defendant’s expert witness. It also serves as a caution and learning opportunity for current and prospective financial damages expert witnesses. Plaintiff, Mission1st Group, Inc. (“M1G”), owns the federally registered trademark MISSION1st in connection with business advisory, information, technology, telecommunications, engineering support, and risk mitigation services. Plaintiff provides these…
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Court Admits Royalty Analysis on a Convoyed Sales Approach and Denies Motion to Exclude Patent Infringement Case This case arose from a patent infringement lawsuit filed by the Plaintiff, Daedalus Blue, LLC against the Defendant, MicroStrategy Incorporated. Daedalus alleged that MicroStrategy’s analytics software products infringed on two patents originally developed by IBM: the ‘172 patent related to data storage and retrieval techniques, and the ‘076 patent related to restricting user access. As the case proceeded to the damages phase, MicroStrategy filed a motion to exclude certain opinions of Daedalus’ damages expert, Jim W. Bergman, under Daubert and Federal Rule of…
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A Unique Take on Causation Experts are becoming aware of how the COVID-19 pandemic has affected lost profit analyses that include 2020 and 2021. The pandemic and the slow recovery have created separate causations which may or may not become the proximate cause of a damaged business’ loss. For this reason, the effects of COVID-19 must be considered as an alternative causation to lost profits. The lockdowns across the country, the shuttering of non-essential businesses, and the overall fear which gripped the nation even as the economy was reopening caused a loss of revenue and profits to many businesses and…
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Dieckman v. Regency GP LP et al. This article discusses Dieckman v. Regency GP, LP, a recent Delaware Chancery Court decision. It is a reminder for valuation professionals providing damages testimony to be wary when mixing the use of the market approach and income approach when estimating damages in situations where multiple entities are involved. For example, using the income approach in valuing the allegedly harmed subject company and then using a market approach for a similarly situated company that allegedly harmed the subject company (and vice versa). On February 15, 2021, Chancellor Andre Bouchard of the Delaware Court of…
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The Proof is in the Accounting Principles When presenting or rebutting construction claims, there is merit in the forensic accounting adage, “Follow the money trail you will find what happened” The reasonableness and reliability of the construction damages claimed on a project is in the accounting principles. The message in this article is how a forensic accountant can benefit the construction claims process on a construction project through the application of basic accounting principles. When presenting or rebutting construction claims on a construction project, there is merit in the forensic accounting adage, “Follow the money trail and you will find…
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Finance & Accounting for Lawyers, Second Edition, by Brian Peter Brining, JD, CPA BVR has just released Finance & Accounting for Lawyers, Second Edition, by Brian Peter Brining, JD, CPA. The purpose of this edition is to provide the reader, lawyers particularly, with a technical overview of accounting principles and methods so the knowledge can be applied in the practice of law. In the finance and valuation sections of the textbook, the reader is introduced to the principles of finance and valuation that underlie monetary transactions that are the subject of contracts, tax matters, disputes, and litigation. The textbook proceeds…
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What Forensic Accountants Need to Avoid Doing What do forensic accountants need to know when performing a business interruption loss engagement? What are some of the common errors and pitfalls that forensic accountants need to avoid? In this article, the author will answer these questions as well as walk through the process of performing a business interruption loss engagement. [su_pullquote align=”right”]Resources: Business Interruptions and Lost Profits [/su_pullquote] When natural disasters or damages occur and business operations are interrupted, forensic accountants are an invaluable tool for both the insured and the insurance companies. Forensic accountants are engaged to calculate a fair…
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To Measure Trustee Breach of Fiduciary Duty Damages The but for investment portfolio is a tool that damages analysts utilize to estimate economic damages when there is an allegation of a breach of fiduciary duty with regard to the management of an investment. In its simplest form, the but for investment portfolio estimates the value of a portfolio but for the alleged breach of fiduciary duty. Case law precedents established the but for investment portfolio analysis as a method to estimate economic damages on a market adjusted basis. While the concept of a but for investment portfolio analysis is simple,…
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Often the Link Between Damages and Causation Even with established liability, a plaintiff seeking damages must be able to calculate damages with reasonable certainty and demonstrate a causal link between the defendant’s acts and the plaintiff’s injury. The concept of causation is simple—did a defendant’s wrongful act cause the plaintiff’s damages? Proving causation, however, is not always as simple. Many times, damage experts simply assume causation. However, courts sometimes reject a finding on causation, and therefore the resulting damages, when an expert fails to consider alternative factors that could have caused or contributed to the plaintiff’s damages. Accordingly, a damage…
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In Measuring Trustee Breach of Fiduciary Duty Damages (Part II of II) The second part of this article focuses on the methodologies employed to quantify the economic damages when a fiduciary breach is claimed.
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In Measuring Trustee Breach of Fiduciary Duty Damages (Part I of II) The prudent investment of trust assets can minimize the potential for trustee fiduciary litigation risk, in addition to maximizing the trust beneficiaries’ economic interest in the trust. However, trust beneficiaries may initiate a breach of fiduciary duty tort claim when they feel that the trustee has breached any investment management fiduciary duties to the trust. For trust beneficiaries, and their legal counsel, who have brought breach of fiduciary duty tort claims against a trustee, one of the issues is how to measure the “damage” to the beneficiaries because…
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On Patent Damages and Apportionment In two recent cases, the U.S. Court of Appeals for the Federal Circuit provided important guidance when applying apportionment principles to calculate reasonable royalty damages. See Finjan, Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299 (Fed. Cir. 2018); Exmark Mfg. Co. v. Briggs & Stratton Power Products Group, LLC, 879 F.3d 1332 (Fed. Cir. 2018). The Federal Circuit signaled greater flexibility when apportioning damages, which may permit using the royalty rate and not just the royalty base, to value a patented invention’s contribution to a larger, multicomponent product. The Circuit also reaffirmed, however, that…
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Engage and Assist Legal Counsel It is critical that the right person with the right expertise, training, and background be selected. This article will describe the various areas of specialization in which a forensic accountant performs, how counsel should select the right professional for the job, and the benefits of using a forensic accountant.
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A Closer Look at Unjust Enrichment Financial experts typically calculate damages remedies that focus on a plaintiff’s loss that is quantified either through lost profits or lost business value. In contrast, unjust enrichment is a damages remedy that measures the defendant’s benefit or gain. While the three remedies all serve to quantify damages, an expert must understand the similarities and differences among the remedies to render a relevant and reliable opinion that can withstand the court’s scrutiny in litigation. This article discusses issues that arise, measuring unjust enrichment and how it differs from a lost profit calculation.
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Effective Trial Preparation and Presentations What is the role of a financial expert? How important is the financial expert? In this article, the author answers these questions and shares his experience serving as a damage expert.
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Correlating Patent Values with Prior Citations What is forward patent citation? Why is it relevant? In this article, the author answers the above questions and details how these may be relevant to a damages expert in a patent infringement matter. These experts may need to ascertain the value attributable to the patented technology at issue. While comparable license agreements may serve useful in providing a market-based approach to arriving at a value, the damages expert must also seek to apportion out the comparable patents related to the patented technology within the comparable license agreements from that of the intellectual property…
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Prepare, Verify, and Excel at Trial In order to recover lost profits in a commercial damage case, three standards must be met. First, plaintiff must show proximate cause; second, the foreseeability; and third, reasonable certainty. This article will focus on the third standard, reasonable certainty. Experts seeking to provide realistic lost profit estimates must be aware of this standard. The following discussion will review literature, court decisions, and practical efforts that may assist experts in addressing reasonable certainty.