testimony to the effect that it was the patent protest that influenced the Schnabel Foundation Company to turn to other investment opportunities.
The Hecht case requirement of affirmative steps toward entering the market has not been met here. The evidence indicates that the plaintiffs consummated no contract for the sale of the TRES wall at any time prior to, during or after the patent protest. The plaintiffs thus could offer no evidence to show the financial backing and affirmative steps toward entry that are necessary to establish standing.
Similarly, on the question of causation, the plaintiffs' evidence fails. The plaintiffs' efforts to market Mr. Neumann's wall have been devoted to the unpatented designs, rather than the patented TRES design. Thus, any delays in marketing the unpatented design cannot have resulted from delays in receiving a patent on a design that was never actually marketed even after the patent was issued. Under the criteria outlined in Hecht v. Pro-Football, Inc., the plaintiffs in this case lack standing.
Competency of the Damages Evidence
The defendant has moved to exclude the testimony of Dr. David Schwartzman, plaintiff's expert economist, on the $3 million and $19 million estimates of damage to the plaintiffs. The Court admitted this expert testimony over the repeated objections of counsel for the defendant, and the defendant has now renewed its request for a ruling that Dr. Schwartzman's testimony was wholly speculative and that the jury had no competent evidence on which to base a damage calculation.
Dr. Schwartzman's testimony was based on sales projections prepared by Albert Neumann in 1979 when he was trying to enlist the support of the Schnabel Foundation Company in marketing his TRES wall. These projections, according to the testimony of Mr. Neumann, were "a possibility, an aim, completely abstract figure" and "speculation" and a "guess." According to the testimony of Dr. Schwartzman, Dr. Schwartzman did not make any effort to evaluate the reasonableness of the expenses projected by Mr. Neumann.
It was from this basis that Dr. Schwartzman derived his two damage calculations of $3 million and $19 million. Dr. Schwartzman expressed the opinion that the actual damages were closer to the $19 million figure than to the $3 million figure but was unable to state where between the $3 and $19 million figures the actual damages fell. In his deposition as to both damage estimates and at trial as to the $19 million damage estimate, Dr. Schwartzman admitted that he had made no attempt to evaluate competitive response to Albert Neumann's entry into the market.
Dr. Schwartzman's preference for the $19 million damage figure was premised on an assumption that Mr. Neumann would achieve sales of $214,000 per month in April 1977. The testimony of Albert Neumann himself, however, indicated that two months prior to April 1977 no contracts were expected to be entered into by April of 1977. Likewise, the $3 million damages projection anticipated expenses in the first year totaling $38,000, and the evidence indicated that the only possible money available to cover any portion of those expenses was a $30,000 loan sought from C.E.D.A., which loan would have been predicated on Mr. Neumann's obtaining an approval letter for his wall from the Maryland Department of Transportation, a letter Mr. Neumann stated he never sought.
The wall on which the Neumann projections were based was the Richardson wall. Dr. Schwartzman stated that his estimate was based on a patented product. The Richardson wall is not the patented TRES and did not exist in 1977 or 1978, the first two years of the Schwartzman estimates.
Moreover, as noted above, the jury at the trial on this matter found that the Maryland litigation was not a violation of the antitrust laws. Yet underlying the damage estimates submitted by Dr. Schwartzman was the assumption that both the Maryland suit and the patent protest were causes of the damage. No effort was made to differentiate between damage caused by the patent protest and damage caused by the Maryland litigation in the damage estimate offered by this expert.
In antitrust cases it is admittedly difficult to establish damages with mathematical precision, Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123-24, 89 S. Ct. 1562, 1576-77, 23 L. Ed. 2d 129 (1969). Nevertheless, the plaintiffs in an antitrust suit must submit for the jury's consideration damage estimates that are based on more than "mere speculation or guesswork." Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264, 66 S. Ct. 574, 579, 90 L. Ed. 652 (1946); Smith v. Pro-Football, Inc., 193 U.S. App. D.C. 19, 593 F.2d 1173, 1189 (D.C.Cir.1978). At the trial in this matter the Court repeatedly asked counsel for the plaintiff to submit for the jury's consideration damage estimates based on a foundation grounded in real world market conditions and the plaintiffs' own actual situation and relationship to that market. Only in this manner could the expert arrive at an estimate that would avoid the taint of speculativeness that appeared to afflict the expert testimony on this matter. This the plaintiff failed to do.
The Court therefore rules the expert testimony on damages to be incompetent and finds that there is absent from the record of the trial in this matter any competent evidence upon which a damage calculation could be based.
The Court has reviewed the record in this case and the memoranda submitted by the parties in support of and in opposition to the motion for JNOV. The record of the evidence adduced at trial leads to the inescapable conclusion that reasonable minds could not differ. The patent protest clearly was not sham, and no attempt to monopolize occurred. Moreover, the evidence does not permit a finding that the plaintiffs had the necessary business preparedness to enter the retaining wall market or that the patent protest resulted in any injury to the plaintiffs. There is furthermore no competent evidence in this record from which the jury could arrive at a damage figure. Accordingly, the defendant's motion for JNOV must be granted.