In the fall issue of the New York Dispute Resolution Lawyer, Laura Kaster reports on a case that brings together my two fields–Evidence and ADR–in a way I’ve never seen before. The case, Lucent Technologies, Inc. v. Microsoft Corp. (2011 WL 5513225), is a long-running patent dispute in which Lucent claims Microsoft infringed by incorporating a patented component into Outlook. Part of the damages calculations required a determination of “the royalty on which the parties would have agreed had they successfully negotiated an agreement just before the infringement began.” Microsoft retained Harvard’s Robert Mnookin as its expert witness to explain how that hypothetical negotiation would have played out, and in particular, to analyze Microsoft’s “walk-away” point by reference to its BATNA and reservation price.
Lucent sought to preclude Professor Mnookin’s testimony, relying on the Supreme Court’s Daubert test, which requires that expert testimony be based on reliable scientific principles and methods. Under the Daubert test, a court must assess scientific validity by considering a number of factors, including publication and peer reveiw and general acceptance in the relevant scientific community. Lucent argued in effect that the way Professor Mnookin analyzed the negotiation was too realistic, because in the hypothetical negotiation required by patent law, the parties cannot walk away and have presumed knowledge about certain future events. Nevertheless, the court allowed him to testify, finding that Professor Mnookin’s negotiation theory “is widely accepted in the scientific community and has been published in many journals.”
So for the first time that I am aware of (are there others?) a court has found that negotiation theory is scientifically reliable!
Oh, and for those considering serving as negotiation experts, you might first consider whether you want to subject yourself to being deposed. (The transcript of Professor Mnookin’s deposition is partially available at 2011 WL 2711888–he held up just fine.)