Case 1:17-cv-00770-JDW Document 307-12 Filed 02/02/24 Page 1 of 5 PageID #: 30583
`Case 1:17-cv-00770-JDW Document 307-12 Filed 02/02/24 Page 1 of 5 PagelD #: 30583
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`EXHIBIT 19
`EXHIBIT 19
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`Case 1:17-cv-00770-JDW Document 307-12 Filed 02/02/24 Page 2 of 5 PageID #: 30584
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`HIGHLY CONFIDENTIAL—SUBJECT TO PROTECTIVE ORDER
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`IN THE UNITED STATES DISTRICT COURT
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`BEFORE THE
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`THE DISTRICT OF DELAWARE
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`WIRTGEN AMERICA, INC.
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`Plaintiff
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`v.
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`CATERPILLAR, INC.
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`Defendant
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`C.A. No. 17-770-JDW
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`EXPERT REPORT OF
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`DR. PALLAVI SETH
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`ON BEHALF OF
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`WIRTGEN AMERICA, INC.
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`M AY 1 9, 20 23
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`HIGHLY CONFIDENTIAL—SUBJECT TO PROTECTIVE ORDER
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`extensively in economic literature on innovation, and have been found to correlate with the
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`assignee firm’s market value and other indicia of value.344
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`231. Further, the difference in apportionment rates between measures (1)/(2) and (3)/(4) is
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`informative. It reveals that while Caterpillar may own relatively more patents, my preferred
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`method for apportioning the joint surplus value (4) accounts for the fact that Wirtgen’s patents
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`are more valuable on average, as indicated by their relatively higher number of family-level
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`forward patent citations. The difference between apportionment rate measures between (3) and
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`(4) further highlights how certain patents within patent families receive more citations, despite
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`the fact that the Asserted Patents support the same idea or invention for any given patent
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`family.345 In fact, since I understand from Wirtgen’s technical expert, Dr. Christopher Rahn, that
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`the Asserted Patents support the same idea or invention for any given patent family, then a
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`forward citation to any patent in a given patent family is indicative of the value of any patent in
`that family.346 Therefore, I find that an apportionment rate that incorporates family-level forward
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`patent citation information is the most reliable.
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`232. For my preferred method, I determine the apportionment rate by dividing the number of forward
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`citations collectively for the Asserted Patents in a given patent family by the total number of
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`forward citations collectively for the patent families Caterpillar is inferred to practice. The
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`numerator of this calculation is simply the collective forward citations of patents in a given
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`Asserted Patent family. Determining the denominator, the forward citations of the patent families
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`Caterpillar practices, requires an approximation. I understand that Caterpillar has not identified
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`an exhaustive list of its patents it claims are practiced by the Accused Products. Instead, I use
`Wirtgen’s patent marking information for its machines347 to infer the proportion of Caterpillar’s
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`344 See, e.g., Dietmar Harhoff, Francis Narin, Frederic M. Scherer, and Katrin Vopel, “Citation frequency and the
`value of patented inventions,” Review of Economics and Statistics, 81, no. 3 (1999): 511-515; Jean O. Lanjouw,
`and Mark Schankerman, “Patent quality and research productivity: Measuring innovation with multiple
`indicators,” The Economic Journal, 114, no. 495 (2004): 441-465; and Dietmar Harhoff, Frederic M. Scherer,
`and Katrin Vopel, “Citations, family size, opposition and the value of patent rights,” Research Policy, 32, no. 8
`(2003): 1343-1363.
`345 For example, I understand that the ’788 patent and the ’474 patent are both part of the Sensor Switching family
`and cover the same invention.
`346 Conversation with Dr. Christopher Rahn, May 19, 2023.
`347 “U.S. Intellectual Property Rights,” Wirtgen Group, April 7, 2023, accessed May 4, 2023, https://www.wirtgen-
`group.com/webspecial/wirtgen/patents.pdf.
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`Expert Report of Pallavi Seth, Ph.D.
`C.A. No. 17-770-JDW
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`HIGHLY CONFIDENTIAL—SUBJECT TO PROTECTIVE ORDER
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`patents that it practices relative to all the patents it owns. The details of this inference and of my
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`apportionment rate calculation are fully laid out in Appendix B.
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`233. Based on this measure, my apportionment rate varies between 1.7 percent and 5.5 percent for
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`individual Asserted Patents and between 8.6 percent and 16.8 percent for all Asserted Patents
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`collectively based on machine size. For example, based on my apportionment rate for Large
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`Accused Products, I estimate that the Asserted Patents account for roughly 16.8 percent of the
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`value of the Large Accused Products based on family-level forward patent citations.
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`234. Apportionment rate ranges for all three other measures are similar: my apportionment rates vary
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`between 0.1 percent and 3.4 percent for individual Asserted Patents and between 1.9 percent and
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`12.9 percent for all Asserted Patents collectively.348
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`348 See, Appendix B and Table A. 14 and Table A. 15.
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`Expert Report of Pallavi Seth, Ph.D.
`C.A. No. 17-770-JDW
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`the sale of Accused Products, Wirtgen is entitled to a reasonable royalty rate of at least 31.6
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`percent, and potentially up to 40.7 percent, of revenues from the sale of Accused Products.361
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`This rate considers, among other things, both Wirtgen’s loss of market profits and the portion of
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`the value created by Caterpillar’s products that can be attributed to the Asserted Patents.
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`Respectfully Submitted,
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`Pallavi Seth, Ph.D.
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`361 See, Table 9, row [14].
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`Expert Report of Pallavi Seth, Ph.D.
`C.A. No. 17-770-JDW
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