Summary
This Federal Circuit en banc opinion addresses whether the district court abused its discretion in denying a motion for a new trial on damages based on the admissibility of an expert's testimony under Federal Rule of Evidence 702 and Daubert. The court reversed the denial, holding that the expert's reliance on three lump-sum settlement licenses to establish a per-unit reasonable royalty rate lacked sufficient factual basis and contradicted the express terms of the agreements. The case was remanded for a new trial on damages, while the panel's prior affirmance of the denial of summary judgment on invalidity and JMOL on noninfringement was reinstated.
Topics
Practice areas
Questions Presented
- Whether the district court abused its discretion in admitting EcoFactor’s damages expert testimony under Fed. R. Evid. 702 and Daubert.
- Whether the denial of a new trial on damages was erroneous.
Holdings
- The court held that the district court abused its discretion because the expert’s opinion was not based on sufficient facts or data, as required by Rule 702(b).
- The denial was reversed; the case is remanded for a new trial on damages.
Key quotations
“For issues not unique to patent law, we apply the law of the regional circuit in which this appeal would otherwise lie. i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d at 841 (Fed. Cir. 2010).” (at 1380)
“The district court’s decision to admit Mr. Kennedy’s unreliable testimony was undoubtedly prejudicial.” (at 1380)
Factual background
EcoFactor owned U.S. Patent No. 8,738,327 covering smart thermostats. Google’s Nest allegedly infringed. EcoFactor’s damages expert, Mr. Kennedy, testified that three prior license agreements reflected an $X per‑unit royalty rate, forming the basis of a reasonable‑royalty calculation. The district court admitted the testimony despite disputes over whether the licenses actually bound the licensees to that rate.
Procedural history
The district court denied Google’s motions. The panel affirmed the denial of JMOL and held the denial of summary judgment was not appealable. The en banc court reversed the denial of the new‑trial motion and remanded.
Remand instructions
Remand for a new trial on damages consistent with the proper application of Fed. R. Evid. 702 and Daubert.