This morning the Federal Circuit granted a petition for en banc rehearing filed by Google in EcoFactor, Inc. v. Google LLC, a patent case appealed after a jury trial in the Western District of Texas. Google asked the court to consider whether the district court erred in “failing to rigorously scrutinize a patentee’s reliance on supposedly comparable licenses” resulting in an “artificially inflated damages award that is divorced from market realities and devoid of connection to the patent’s incremental improvement to the art.” Here are the details.
Google’s petition presented the following question for the en banc court to consider:
- Did the court err in “failing to rigorously scrutinize a patentee’s reliance on supposedly comparable licenses” resulting in an “artificially inflated damages award that is divorced from market realities and devoid of connection to the patent’s incremental improvement to the art”?
Notably, Judge Prost dissented in part from the court’s panel opinion, writing the following:
In recent years, our court has made some progress in clarifying important questions related to damages for patent infringement. Such clarifications relate to deriving a reasonable royalty from a lump-sum license and requiring the patentee to confine its damages to the value of the patented technology. Unfortunately, the majority opinion here at best muddles our precedent and at worst contradicts it.
In its response to the petition, EcoFactor argued this case is a “poor candidate” for en banc review because the “majority applied a highly deferential standard of review and found it was not an abuse of discretion to admit a damages opinion that ‘was sufficiently tied to the facts of the case and thus admissible.’” Furthermore, EcoFactor argued, the royalty rate “was based on unrebutted testimony from EcoFactor’s technical expert establishing that these licenses have ‘built-in apportionment’ because of the close comparability of the licensed products and features in the licenses and the comparable scope of the licensed patents and the [allegedly infringing] patent, which cover the ‘same interrelated smart thermostat technologies.’”
Today, however, the Federal Circuit granted en banc rehearing. In its order doing so, the court requested the parties “to file new briefs, which shall be limited to addressing the district court’s adherence to Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), in its allowance of testimony from EcoFactor’s damages expert assigning a per-unit royalty rate to the three licenses in evidence in this case.”
The court also indicated “[a]ny briefs of amici curiae may be filed without consent and leave of the court.” In particular, “[a]ny amicus brief supporting Google’s position or supporting neither position must be filed within 14 days after service of Google’s en banc opening brief,” while “[a]ny amicus brief supporting EcoFactor’s position must be filed within 14 days after service of EcoFactor’s response brief.”
We will continue to keep track of this case and report on developments.