Recent Federal Circuit Decisions Regarding Damages

”[W]e have held that a “superficial recitation of the Georgia-Pacific factors, followed by conclusory remarks, [cannot] support the jury’s verdict.” Whitserve, 694 F.3d at 31. When an expert employs the Georgia-Pacific factors, “reciting each factor and making a conclusory remark about its impact on the damages calculation before moving on does no more than tell the jury what factors a damages analysis could take into consideration.” Id. When performing a Georgia-Pacific analysis, damages experts must not only analyze the applicable factors, but also carefully tie those factors to the proposed royalty rate. “[W]hile mathematical precision is not required, some explanation of both why and generally to what extent the particular factor[s] impact[] the royalty calculation is needed.” Id.

"That Mr. Benoit’s methodology was not peer-reviewed or published does not necessitate its exclusion. We recognize that the fact-based nature of Mr. Benoit’s damages testimony made it impractical, if not impossible, to subject the methods to peer review and publication. But '[p]ublication . . . is not a sine qua non of admissibility,” and “in some instances well-grounded but innovative theories will not have been published.' Daubert, 509 U.S. at 593. Consequently, '[w]here an expert otherwise reliably utilizes scientific methods to reach a conclusion, lack of textual support may go to the weight, not the admissibility of the expert’s testimony.' Knight v. Kirby Inland Marine Inc., 482 F.3d 347, 354 (5th Cir. 2007) (internal quotation marks omitted).

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"Samsung argues that Mr. Benoit’s 'premise . . . that a feature’s use is proportional to its value' was incorrect and contradicted by expert testimony. Defendant-Appellant’s Opening Br. at 6. But as we noted in Lucent, 'an invention used more frequently is generally more valuable than a comparable invention used infrequently' and 'frequency of expected use and predicted value are related.' 580 F.3d at 1333. There is no dispute that use of the claimed invention is relevant under Georgia-Pacific: Georgia-Pacific factor 11 looks at use of the invention and at evidence probative of the value of that use. Here, the district court did not abuse its discretion in determining that Mr. Benoit’s methodology, involving the correlation of use with value, was not unreliable.

“It is not the case that the value of all conventional elements must be subtracted from the value of the patented invention as a whole when assessing damages. For a patent that combines ‘old elements,’ removing the value of all of those elements would mean that nothing would remain. In such cases, the question is how much new value is created by the novel combination, beyond the value conferred by the conventional elements alone.”

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“The district court did not clearly err in concluding that the subcoating is so important to the viability of the commercial omeprazole product that it was substantially responsible for the value of the product.” “By inventing a structure in which a subcoating separates the drug core, and thus the ARCs, from the enteric coating, and finding the right subcoating material, Astra was able to achieve both storage stability and acid resistance. That combination of features made it possible for drug manufacturers to commercialize omeprazole.” “Accordingly, the district court permissibly found no reason to exclude the value of the active ingredient when calculating damages in this case.”

“[T]he district court did not err in considering IPC’s profits. But it did err in treating the profits IPC actually earned during the period of infringement as a royalty cap. That treatment incorrectly replaces the hypothetical inquiry into what the parties would have anticipated, looking forward when negotiating, with a backward-looking inquiry into what turned out to have happened.” See Interactive Pictures, 274 F.3d at 1385 (expectations govern, not actual results)

“Having thus purported to determine those profits [attributable to use of the patents], Weinstein then testified about how the parties would split those incremental profits. To do this, he began with the assumption that each party would take 50% of the incremental profits, invoking the Nash Bargaining Solution, and then adjusted that split based on ‘the relative bargaining power of the two entities.’ J.A. 1632.”

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“For the reasons that follow, we agree with the courts that have rejected invocations of the Nash theorem without sufficiently establishing that the premises of the theorem actually apply to the facts of the case at hand. The use here was just such an inappropriate ‘rule of thumb.”

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“The problem with Weinstein’s use of the Nash Bargaining Solution, though somewhat different, is related, and just as fatal to the soundness of the testimony. The Nash theorem arrives at a result that follows from a certain set of premises. It itself asserts nothing about what situations in the real world fit those premises. Anyone seeking to invoke the theorem as applicable to a particular situation must establish that fit, because the 50/50 profit-split result is proven by the theorem only on those premises. Weinstein did not do so. This was an essential failing in invoking the Solution.”