This morning the Federal Circuit released a precedential decision in Jiaxing Super Lighting Electric Appliance Co. v. CH Lighting Technology Co., opinion by Judge Dyk joined by Judges Chen and Hughes. Plaintiff Super Lighting sued defendant CH Lighting for the infringement of U.S. Patent Nos. 10,295,125, 10,352,540, and 9,939,140, all relating to LED tube lamps. CH Lighting conceded infringement but not validity of the ’125 and ’540 patents; the district court, however, excluded “evidence relating to the validity of the asserted claims of the ’125 and ’540 patents and subsequently granted Super Lighting’s motion for judgment as a matter of law (“JMOL”) that the ’125 and ’540 patents were not invalid on the ground of an on-sale bar. A jury found the ’140 patent infringed and not invalid and awarded damages for infringement of claims of the three patents” (p.2). For evidentiary reasons which I will not go into here, the Federal Circuit holds that the district court erred in excluding evidence pertaining the invalidity of the ’125 and ’540 patents and should conduct a new trial on that issue (but “substantial evidence supports the jury’s verdicts of infringement and no invalidity” as to ’140). Relevant to this blog, the court also holds that “the district court should assess the reliability of [Super Lighting expert] Ms. Kindler’s testimony consistent with this court’s recent en banc decision in EcoFactor and under Rule 702 of the Federal Rules of Evidence,” and thus orders a new trial on damages as well, for the following reasons.
First, and more obviously, “having reversed the district court’s grant of JMOL as to invalidity of the tube patents and ordering a new trial on this issue, a new trial as to damages is appropriate because “the jury rendered a single verdict on damages, without breaking down the damage attributable to each patent.” Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1310 (Fed. Cir. 2007)” (pp. 17-18).
Second, and of greater interest insofar as it applies EcoFactor, Inc. v. Google LLC (for previous discussion of which on this blog, see here), the court discusses whether the district court paid sufficient attention to the reliability of the plaintiff’s damages expert’s methodology. The court describes this methodology as follows:
At trial, Ms. Kindler relied on Super Lighting’s previous portfolio licenses with Technical Consumer Products (“TCP license”) and Lunera Lightning, Inc. (“Lunera license”)—along with evidence from Super Lighting—to propose a per-unit royalty based on a hypothetical negotiation. The TCP licensing agreement involved a 30-cent per-unit royalty, and the Lunera license involved a flat 5% fee (which she calculated would translate to a per-unit royalty fee between 35 and 45 cents). Although the Lunera and TCP licenses granted a license to Super Lighting’s entire patent portfolio, Ms. Kindler opined that three particular patents comparable to the asserted patents drove the negotiations. Specifically, Ms. Kindler observed that a “subset of patents” comparable to the three asserted patents “drove th[e] negotiation” with TCP . . . based solely on a document sent from Super Lighting to TCP alleging that TCP might be infringing 15 of Super Lighting’s patents . . . and similarly, that patents comparable to the asserted patents were “very important patents to Super Lighting’s portfolio” during the Lunera negotiation . . . based solely on discussions with Super Lighting personnel” (pp. 18-19).
The court then addresses the question of whether this methodology was sufficiently reliable in view of EcoFactor:
In its pretrial Daubert motion and motion for a new trial, CH Lighting argued that Ms. Kindler’s testimony was not reliable and that she failed to apportion the license fees to account for licensed patents that were not asserted. The district court denied CH Lighting’s Daubert motion without explanation. Our recent en banc decision in EcoFactor, Inc. v. Google LLC, 137 F.4th 1333 (Fed. Cir. 2025), noted that “[a]n absence of reviewable reasoning may be sufficient grounds for this court to conclude the district court abused its discretion.” Id. at 1338. Though the district court briefly elaborated in its decision denying a new trial, it should have conducted a more exacting analysis of Ms. Kindler’s testimony. . . .
On remand, the district court should consider the reliability of Ms. Kindler’s expert testimony in light of EcoFactor, with a particular focus on whether “she reasonably rel[ied] on [the] kinds of facts or data in forming an opinion” that would be reasonably relied upon by an expert in her field. Fed. R. Evid. 703. See, e.g., EcoFactor, 137 F.4th at 1344 (finding the patentee’s CEO’s testimony insufficient to sustain Mr. Kennedy’s methodology because the CEO “reference[d] no evidentiary support” and because “[his] claim regarding calculation of the lump-sum amounts is not supported by any record evidence”).
In the context of patent damages, we have repeatedly explained that the damages expert must apportion among licenses. Apple Inc. v. Wi-LAN Inc., 25 F.4th 960, 971 (Fed. Cir. 2022). We have explained that expert testimony should be excluded when it fails to allocate license fees among the licensed patents covered by an agreement. MLC Intell. Prop., LLC v. Micron Tech., Inc., 10 F.4th 1358, 1374–75 (Fed. Cir. 2021) (affirming a Daubert exclusion of a damages expert who relied on an “agreement grant[ing] a license to a portfolio of forty-one U.S. and international patents and patent applications[] [when] only one of those forty-one patents [was] at issue in the hypothetical negotiation”); Omega Pats., LLC v. CalAmp Corp., 13 F.4th 1361, 1380 (Fed. Cir. 2021) (vacating a damages award when the patentee’s expert “failed to adequately account for substantial distinguishing facts between the proffered licenses and a hypothetical negotiation over a single-patent license to the [asserted] patent” (internal quotation marks and citation omitted)).
On remand, the trial court must consider whether Super Lighting properly apportioned damages. If there is a problem with Ms. Kindler’s damages testimony, her testimony cannot be justified simply because she made a series of blanket upward and downward adjustments based on such factors as the level of competition between the parties and changes in the price of LED tubes. . . . See Apple, 25 F.4th at 972–74 (concluding that a damages expert’s flat 25% discount for five unasserted patents covered by a previous licensing agreement was unreliable).
In a new trial on damages, these concerns may form the basis for a Daubert motion (pp. 20-21).
As you can see, the court cites with approval recent Federal Circuit decisions that envision a more searching inquiry into the reliability of a damages experts' testimony on the issue of apportionment, something the en banc decision in EcoFactor did not expressly engage. (See here.) What the result will be on remand, of course, remains to be seen.
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