Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze and apply the fifteen factors articulated in Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970), to establish a defensible reasonable royalty benchmark for the three United States patents asserted by Apex Surgical Innovations, Inc. ("Apex") against Solstice Biomedical, Inc. ("Solstice") in the above-captioned litiga

II. Background A. The Asserted Patents Apex has asserted three patents from a broader patent family (the "Apex Trocar Patent Family") consisting of fourteen total issued United States patents and six pending continuation applications, all directed to various aspects of laparoscopic trocar design and functionality. The three asserted patents and their relevant characteristics are as follows: U.S. Patent No. 9,814,237

III. Analysis of the Fifteen Georgia-Pacific Factors Factor 1: Royalties Received by the Patentee for Licensing the Patents-in-Suit The first Georgia-Pacific factor considers the royalties received by the patentee for the licensing of the patents-in-suit, proving or tending to prove an established royalty. This factor is often viewed as among the most probative when reliable comparable license data exists. We have co

1. Apex–Hightower Medical Agreement (2018). Apex entered into a non-exclusive license agreement with Hightower Medical Systems, Inc., a manufacturer of specialty endoscopic instruments, in November 2018 (APEX-004712 through APEX-004743). This agreement licensed certain claims of the '237 Patent (but not the '884 or '105 Patents, which were not yet issued at the time) for use in Hightower's EndoPort™ line of single-us

2. Apex–MedVault Settlement License (2020). Apex resolved a patent infringement dispute with MedVault Surgical Technologies GmbH through a settlement agreement and license executed in June 2020 (APEX-011293 through APEX-011340). The settlement included a lump-sum payment of $1.2 million and a prospective non-exclusive license under the '237 and '884 Patents at a running royalty of 4.5% of net sales, with a five-year

1. Inflated Royalty Base: Danaher uses the entire revenue of the accused products ($74.6 million) as the royalty base without adequate apportionment, effectively invoking the entire market value rule without satisfying its prerequisites.

2. Failure to Apportion: As discussed under Factor 13, Danaher does not properly isolate the value contribution of the three patented features from the substantial non-patented elements of the PrecisionEdge™ products.

3. Reliance on Non-Comparable Licenses: As discussed under Factor 2, Danaher's comparable license set includes exclusive licenses in robotic surgery and drug-eluting stent technologies that are not meaningfully comparable to a non-exclusive license for conventional laparoscopic trocar patents.

4. Failure to Account for Narrowed Claim Scope: Danaher's report was prepared in February 2025, after the December 6, 2024 Claim Construction Order, yet does not adequately adjust his analysis to account for the narrowed claim scope resulting from the Court's constructions, particularly the construction of "integrated valve assembly" in the '105 Patent.

5. Inconsistency with Industry Norms: Danaher's implied royalty rate of 42.6% (or his running rate of 8%–10%) is dramatically above any identified industry benchmark for non-exclusive surgical device patent licenses, which cluster in the 2%–5% range. We believe that Danaher's analysis would be vulnerable to a Daubert challenge at trial. His methodology suffers from the same deficiencies that the Federal Circuit has i