Alba, Helmers and Love on Octane Fitness’ Effect on PAEs and Innovation

Tommaso Alba, Christian Helmers, and Brian J. Love have posted a paper on ssrn titled A Tale of Trolls and Fees:  The Role of Fee-Shifting in Patent Litigation.  Here is a link to the paper, and here is the abstract:  

Patent Assertion Entities (PAEs) are often viewed as taxing innovative activity; we show how fee shifting in patent litigation can effectively deter their more frivolous assertions, increasing exposed firms' R&D, innovation output, and startup success. Our identification relies on the U.S. Supreme Court's 2014 ruling in Octane Fitness v. ICON Health & Fitness, which broadened courts' discretion to award attorneys fees against exceptionally weak infringement claims. Using a quasi-regression discontinuity design comparing cases pending at Octane's release with those filed and decided before or after, we find that the decision increased defendants' willingness to contest weak claims and prompted plaintiffs, especially PAEs, to file stronger ones. Pending cases saw more fee awards and lower settlement as well as plaintiff success rates; subsequent PAE cases involved stronger patents and higher success rates. A difference-in-differences analysis further shows that Octane boosted innovation: public firms that were particularly exposed to PAE assertions prior to Octane increased R&D and patenting in response, and private startup firms performed better in venture capital markets.

On a somewhat related note, the Federal Circuit last week affirmed a judgment awarding fees in EscapeX IP, LLC v. Google LLC, precedential opinion by Judge Stark joined by Judges Taranto and Stoll.  The court found no abuse of discretion in view of the district court’s finding—“well-supported in the record and . . . part of the totality of circumstances,” that "EscapeX failed to conduct an adequate pre-suit investigation” (p.8).  The court also affirmed additional fees and an award pursuant to 28 U.S.C. § 1927, in connection with the patentee’s Rule 59(e) motion to amend the judgment.

My Book "Remedies in Intellectual Property Law" Is Now Available for Pre-Order

My book Remedies in Intellectual Property Law (Edward Elgar Publ. 2026) is now available for pre-order.  Publication expected sometime in January!  Details here.  I understand that there will be an eBook available as well.

 

Müller-Stoy and Lepschy on BSH v. Electrolux

Tilman Müller-Stoy and Paul Lepschy have published an article titled Practical Implications of BSH v Electrolux for resolving global patent disputes, 7/2025 GRUR Patent 331.  Here is the abstract:

Until recently, the following practical rule applied (with a few exceptional cases in the Netherlands in interim proceedings):  39 EPC Member States — theoretic need for 39 infringement actions.  This rule changed when the UPC opened its doors on 1 June 2023 offering a one-stop-shop for patent disputes in the EU, centralizing infringement and revocation proceedings for meanwhile 18 Contracting Member States.  And it changed again in spring 2025 with the ruling of the CJEU in BSH v Electrolux offering a one-stop-shop litigation solution also for the remaining nine EU Member States, the remaining 12 non-EU members of the EPC, and in fact any third state when dealing with EU-domiciled defendants.  This article analyses practical implications of the ruling on the level of national courts as well as on the UPC level from a claimant’s and a defendant’s perspective.  Some open questions are addressed and a short outlook is provided.

The article makes a number of interesting observations, among them that an EU-domiciled defendant can now be sued for the infringement of a U.S. patent.  (According to ip fray and JUVE Patent, this has now happened in at least one case pending in Munich—a good reason, perhaps, for U.S. patent professionals who don’t already do so to start reading some of the non-U.S. commentary and journals!)  The authors also suggest that some plaintiffs may try a “split strategy” of suing for an injunction in the E.U. (which might apply eBay differently from a U.S. court—assuming that remedies are considered substantive law, I assume) and for an award of damages in the U.S. (given the possibility of treble damages for willful infringement—though as the authors also note, there might a question whether an E.U. court would refuse to award treble damages on public policy grounds).  I wonder, though, if such a split strategy would be advisable, or is even possible?  The authors also discuss whether the UPC has authority under the UPCA to determine invalidity on an inter partes basis, in a case in which that would otherwise be permitted under BSH (see p. 335).

For previous posts on this blog about BSH, see, e.g., here, here, and here.

Conference on the Intellectual Property Rights Enforcement Directive

Tomorrow and Friday, the Faculty of Law, Economics and Finance at the University of Luxembourg will be presenting a conference titled Equality of Arms: Revisiting the IPR Enforcement Directive.  Here is the description:

Directive 2004/48/EC on the enforcement of intellectual property rights (IPRED) marked its 20th anniversary last year. Originally adopted to harmonise national enforcement regimes and strengthen the position of right holders, IPRED has had a significant impact across the EU—particularly in combating piracy and counterfeiting. Nevertheless, enforcement practices still vary widely among Member States. Moreover, the Directive’s right holder-centric focus has raised concerns about a potential lack of balance in the enforcement framework. In response, the European Commission (DG GROW) has launched a study on the implementation of IPRED, which also considers possible legislative amendments.

 

With a particular focus on the concept of “equality of arms”, this working conference examines whether the Directive provides a sufficiently harmonised and balanced enforcement regime—or whether its design requires reform. Bringing together leading figures from academia, legal practice, and the judiciary across multiple jurisdictions, the event will explore key issues addressed in the Commission’s study, including dynamic blocking injunctions and proportionality. It will also discuss important yet underexplored topics, such as the award and calculation of damages and unjustified enforcement of IPRs.

I have a scheduling conflict, or I would be there myself—looks like a terrific event!  For further information, see here.

Federal Circuit Vacates Lost Profits Award

The case is Inventist Inc. v. Ninebot Inc. (USA), nonprecedential opinion (released last Friday) by Judge Dyk, joined by Judges Hughes and Stark.  The patent in suit (the ’250 patent) “discloses an electrically powered self-balancing unicycle” (p.2).  The patentee alleged that two generations of defendant’s products infringed.  The district court, construing the claims, concluded that the first generation infringed as a matter of law (and the defendant “does not challenge this ruling on appeal, p.4 n.2), but that the second generation did not.  The case went to trial on damages, and a jury awarded $835,220 in lost profits and $29,593 as a reasonable royalty.  Both parties appeal certain aspects of the lower court’s judgment.  The Federal Circuit affirms the finding that the defendant’s second generation product did not infringe, but vacates the damages award; given the subject matter of this blog, I will focus on the latter.

As for damages, the defendant argues, first, that it is entitled to a new trial “because the evidence was insufficient to establish marking of Inventist’s products in compliance with 35 U.S.C. § 287(a)” (pp. 8-9); but the Federal Circuit concludes that it lacks jurisdiction to consider this argument, because the defendant “did not amend its notice of appeal to include the district court’s later ruling on the new trial motion” (p.9).  Similarly, the defendant argues that “the lost profits award cannot be sustained because “the district court’s acceptance of Inventist’s flawed lost profit theory was unsupported by the evidence and contrary to well established law,” but the appellate court says it can’t consider this issue either because the defendant “did not file a [Federal Rule of Civil Procedure] Rule 50(b) motion after the verdict, nor did it file a motion for new trial on this ground” (p.10).  However, the defendant did preserve its third damages argument, that “the district court improperly excluded evidence of noninfringing substitutes” (id.), and the Federal Circuit agrees:

            The district court excluded “any proposed evidence” of “[n]on-infringing substitutes not on sale during period of infringement” and did not instruct the jury about the second Panduit factor [absence of acceptable noninfringing substitutes]. . . . Under our precedent in Grain Processing Corp. v. American Maize-Products Co., 185 F.3d 1341, 1349 (Fed. Cir. 1999), the noninfringing substitutes need not be on sale. Evidence of “available alternatives—including but not limited to products on the market”—may be used “to preclude lost profits damages.” Id. We held that under Panduit, “[t]he ‘but for’ inquiry . . . requires a reconstruction of the market, as it would have developed absent the infringing product, to determine what the patentee would . . . have made.” Id. at 1350 (internal quotation marks omitted; second omission in original). This means that just as a patentee engages in a “hypothetical enterprise” to construct its lost profits model, “alternative actions the infringer foreseeably would have undertaken had he not infringed” must also be taken into account. Id.at 1350–51. Thus, “an available technology not on the market during the infringement can constitute a noninfringing alternative.” Id. at 1351 (citing Slimfold Mfg. Co. v. Kinkead Indus., Inc., 932 F.2d 1453 (Fed. Cir. 1991)) . . . . We agree with Ninebot that the district court erred in applying the wrong legal standard. Indeed, Inventist conceded at oral argument that the district court applied the wrong legal standard. . . .

 

However, Inventist contends that under the correct standard, Ninebot did not show that its proposed noninfringing substitute could be readily commercialized, as required by Grain Processing. In its summary judgment motion, Ninebot argued that first-generation models could be modified to become noninfringing through a “simple design change, namely removing the pads from the lateral side cover,” and referred the Court to its later unicycle models. . . . In the first joint pretrial statement, Ninebot offered several witnesses who would testify:

 

[P]urpose of protruding pad was just a battery cover. Cost of wheel cover was minimal. About $20.00–30.00 US.

 

. . . . Contrary to Inventist, no more detailed offer of proof was required. . . . . This evidence, if credited by a jury, could have been sufficient to establish the existence of noninfringing substitutes, which would have defeated the lost profits claim, and Ninebot is entitled to a new trial (pp. 11-12).

The decision doesn’t indicate how many units the defendant sold or what the plaintiff's profit margin would have been on the lost sales--and I haven't looked into the underlying record--but if the trier of fact credits the defendant’s evidence, one might imagine that the lost profits awards could be substantially reduced on appeal.

EWCA Vacates Declaration of Interim License in Samsung v. ZTE

I was taking a blogging break ever since this decision was handed down on October 31, so I hadn’t written anything about it yet.   By way of background, this summer the EWHC (Mellor, J.) granted the interim declaration (which Samsung had sought), including among others the following terms:

1. ZTE are in breach of their obligations of good faith under clause 6.1 of the ETSI IPR Policy.

2. A willing licensor in the position of ZTE, and in light of the undertaking given by Samsung, would enter into the interim cross-licence with Samsung on terms and including the sum to be paid by Samsung by way of royalty in respect of the interim licence period as set out in Confidential Annex 1 to this Order (the Interim Licence).

  
3. The terms (including the sum to be paid) of the Interim Licence are subject to adjustment and amendment so as to bring the terms into line with the terms of the final cross-licence determined to be FRAND by the Patents Court after the FRAND Trial in these proceedings (subject to any later adjustments or amendments following any appeals).

4. In the event that, within seven days of the date of this Order, ZTE refuse either 4.1 or 4.2 below, ZTE are in breach of their FRAND commitments under the ETSI IPR Policy and are unwilling licensors (and unwilling licensees).

4.1 To offer Samsung the Interim Licence and to enter into the same with Samsung; or

4.2 Give the following undertaking to the Court on condition that Samsung give the reciprocal undertaking set out above:

 

Pending any application for permission to appeal or the determination of any such appeal, ZTE undertake that they shall abide by the terms of the Interim Licence as if the same were in full force and effect and shall enter into the Interim Licence within seven days of any such appeal or permission to appeal being refused or withdrawn. If any appeal is finally allowed, ZTE shall repay any sums paid by Samsung under their undertaking given above which the Court decides should  be repaid (including interest if appropriate). 

On Halloween, however, the EWCA concluded that ZTE is not in breach of its obligation of good faith and is not an unwilling licensor/licensee.  (Meanwhile, the English courts’ willingness to grant declarations of interim FRAND licenses in some other cases remains controversial, as witness the back-and-forth between the EWHC and the UPC Mannheim Local Division in recent weeks in cases involving Amazon and InterDigital (see, e.g., here), and also the recent judgment in Warner Brothers Discovery Inc. v. Nokia Corp., [2025] EWHC 2888 (Pat.).  These cases remain works-in-progress, and I’m sure I will have something more to say about them all in due time.)

Anyway, on appeal in Samsung v. ZTE, Lord Justice Arnold writes the principal opinion, stating at the outset that this case differs from other EWCA decisions concerning interim licenses—Panasonic Holdings Corp. v. Xiaomi Tech. UK Ltd. [2024] EWCA Civ 1143, Alcatel Lucent SAS v. Amazon Digital UK Ltd. [2025] EWCA Civ 43, and Lenovo Group Ltd. v Telefonaktiebolaget Ericsson (Publ) [2025]—

 

in that the parties agree that there should be an interim cross-licence, and even agree as to the terms of the interim cross-licence, and in particular how much should be paid for it (the amount is confidential). They disagree as to whether the terms of the interim cross-licence, and in particular the amount payable, should be subject to adjustment so as to bring them into line with the terms of the final cross-licence determined to be FRAND by the Patents Court, as the Claimants (“Samsung”) contend, or so as to bring them into line with the terms of the final cross-licence determined to be FRAND by the Intermediate People’s Court of Chongqing Municipality (“the Chongqing Court”), as the Defendants (“ZTE”) contend. The appeal raises an important issue of principle: does it constitute bad faith for a SEP owner to commence infringement proceedings in multiple courts with the objective of forcing an implementer to accept determination of FRAND terms by the SEP owner’s preferred court rather than the implementer’s preferred court? Mellor J answered that question in the affirmative for the reasons given in his judgment dated 25 June 2025 [2025] EWHC 1432 (Pat) (para. 1).

The court states further that the relevant issues in such cases are whether the SEP owner is “in breach of its obligation to negotiate FRAND terms with the implementer in good faith,” whether the grant of the declaration would “serve a useful purpose,” whether it would be “contrary to comity with foreign courts,” and “[w]hat terms for an interim licence would be FRAND?” (para. 8).  Further, “the burden of proof lies on the implementer and the court must have a high degree of assurance before granting a declaration” (para. 9).

The relevant facts here, in brief, are that both parties have portfolios of certain FRAND-committed SEPs, but that when all is said and done Samsung will be a net licensee.  Samsung nevertheless was the first to file suit for a global cross-license, in the U.K., in December 2024, after which it filed an antitrust action in Frankfurt, and ZTE filed suit against Samsung in Chongqing seeking a global FRAND cross-license.  ZTE subsequently initiated proceedings in Munich, the UPC, Brazil, and Hangzhou, and Samsung countered with infringement actions in Germany, the UPC, and Hangzhou.  In July, “Samsung complained to ETSI that ZTE was in breach of the ETSI IPR Policy. On 14 October 2025 ZTE obtained an ex parte preliminary injunction from the Munich I Regional Court requiring Samsung to withdraw the complaint.  On 16 October 2025 Samsung withdrew the complaint in compliance with the injunction” (para. 37).  The parties have each offered to arbitrate but “neither had accepted the other’s offer” (para. 39).  Lord Justice Arnold then summarizes Mr. Justice Mellor’s judgment below, and proceeds to discuss ZTE’s first two grounds for appeal, namely that the lower court “was wrong to hold that ZTE had acted in bad faith” and “to treat the fact that the English courts were first seised as a decisive factor” (para. 54).  In effect, Lord Justice Arnold agrees with ZTE:

 

. . . In my judgment, unless there is a legitimate and substantiated objection to the forum in question, it does not constitute bad faith for a SEP owner to seek to force an implementer to accept determination of FRAND terms by the SEP holder’s preferred court rather than the implementer’s preferred court.

 

If (and I emphasise if) there is a legitimate and substantiated objection to determination of FRAND terms by the forum in question, then there may (and I emphasise may) in an appropriate case be a remedy by way of an anti-suit injunction. In the present case, however, both parties have laudably refrained from seeking anti-suit injunctions . . . .

 

Whether or not anti-suit relief would be available if there were a legitimate and substantiated objection to determination of FRAND terms by the Chongqing Court, Samsung have not substantiated any legitimate objection to this. . . .

 

If it is not illegitimate for the Chongqing Court to determine FRAND terms, I do not see how it can be bad faith for ZTE to use legal proceedings which it is not suggested are not otherwise properly open to ZTE to put pressure on Samsung to agree to that course. Such conduct is unattractive, and I should not be taken to endorse it, but that is not sufficient to constitute bad faith.

 

As I have explained in numerous judgments, a SEP portfolio will typically include patents which subsist in multiple jurisdictions. Patents are territorial, but the contractual defence provided by the FRAND obligation is global. It follows that the possibilities both of parallel SEP infringement proceedings and parallel FRAND determinations in multiple jurisdictions are inherent in the current system.  The principled answer to this might be that the court first seised should determine what terms are FRAND, but that answer has a number of negative consequences. One of these is that it encourages forum shopping by pre-emptive commencement of proceedings. As the judge recognised, forum shopping is to some extent inevitable in this context, but it should be discouraged rather than encouraged. Even if the English courts consider that jurisdiction should be exercised by the court first seised, this cannot be said to be an answer that commands universal assent: as I pointed out in Nokia v OPPO, there are no internationally agreed jurisdictional rules applicable to FRAND disputes. If the principle of ceding jurisdiction to the court first seised was internationally accepted, the Chongqing Court would have declined jurisdiction as the court second seised. The fact that the English courts were first seised is therefore not a sufficient basis for a conclusion that ZTE have acted in bad faith. Given that ZTE were otherwise entitled to bring the infringement proceedings of which Samsung complain, there is nothing else to support the conclusion that ZTE have acted in bad faith.

 

I would add that another problem which this case illustrates is that, if jurisdiction is not ceded to the court first seised, the court first seised is not guaranteed to be the first to decide. As the parties agreed during the course of argument, the consequences of this will have to be worked out in due course (paras. 70-75).

Although Lord Justice Arnold does not reach ZTE’s other two grounds for appeal, he does close by stating that “comity is a real concern in this case” (para. 78).

In a brief concurring opinion (with which Lord Justice Arnold expresses agreement), Lord Justice Birss makes some interesting points:

 

. . . this case is quite different from the previous cases concerned with interim licences in a FRAND context. In this dispute there are two competent courts both seised with the issue of making a global FRAND determination as between these two parties. The judge rejected Samsung’s criticisms of the Chongqing Court and there is no appeal from that conclusion. The judge also found (and again there is no appeal) that the behaviour of ZTE which was said to be in bad faith was not directed to extracting supra-FRAND rates. . . .

 

Rather, as the judge held, what ZTE were doing was directed at trying to force Samsung to agree to a FRAND determination in Chongqing rather than London. To “force” ZTE to reconsider was the reason for making the interim licence declarations below. A striking aspect of ZTE’s case on this appeal was that a flaw with the scheme of the declarations and interim licence made by the judge was, conversely, that it was not just designed to force ZTE to reconsider Chongqing, it has the effect of forcing ZTE to agree to a FRAND determination in London instead. Despite counsel for Samsung’s best efforts to submit to the contrary, in my judgment there is a significant degree of symmetry between the positions of the two parties in this case (para. 82-83).

Lord Justice Birss also contends that “[t]he concept of an interim licence is inherent in” Huawei v. ZTE, in which 

the CJEU identified the idea that in some circumstances it might be for the implementer, in advance of a final resolution of the dispute between the SEP holder and the implementer, to provide appropriate security for the royalties which will end up being due in a licence agreement. . . .  Once that principle is identified, one is entitled to ask: what is it that the implementer is getting in return for the financial commitment they are making? Although not spelled out explicitly by the CJEU, the answer is fairly simple. The implementer is demonstrating their willingness to pay for the licence, once the terms can be agreed or resolved, and so, in the meantime the SEP holder ought not to be able to take the implementer’s products off the market by means of an injunction. In other words what the implementer gets in return for the financial commitment is, at least implicitly, a form of licence pending the final resolution of the dispute. It could be called an interim licence. Assuming the sum being committed or paid is calculated on a global basis, then the willingness of the implementer which it embodies is also global in nature. . . .

 

The difficulty in this case is that the terms of the interim licence itself and the declarations made are designed to seek to fore on party to do something they clearly do not wish to do and have no intention of doing. . . (paras. 84, 86). 

Lord Justice Jackson agrees with both judgments (para. 89). 

Blogging Break

As we head into November, I have a great deal of work to do finishing up classes, preparing my exams, preparing for some upcoming talks, and (I expect) reviewing edits for my two forthcoming books.  I therefore will be taking a two-week break from blogging.  I plan to resume the week of November 17.

Damages for Industrial Property Infringement in France

Grégoire Desrousseaux, Mayeul Ottaviani, and Louis Jabert have published an article titled L’évaluation du prejudice de la contrefaçon devant les juridictions françaises, Propriété Industrielle (“Quantifying infringement harm before the French courts”), Sept. 2025, pp. 15-26.  I highly recommend the article to anyone who wants to understand how the French courts calculate damages for the infringement of patents, trademarks, and designs.  The abstract reads as follows (my translation):

 

The transposition into French law of the damages calculation rules of Directive 2004/48/CE has caused a lot of ink to flow.  The authors have attempted an empirical, cross-sectional approach for the amount and calculation of damages, in compiling the accessible decisions rendered between 2016 and 2025 concerning patents, trademarks, and design and models.  An objective was to analyze, concretely, how the parties and the courts make use of the economic factors (often incomplete) to which they have access, to justify their demands and to guide their decisions.  Another objective was to try to identify—if they exist—the most common methods of calculation.

The article is enlightening.  The authors identified 52 decisions from the relevant time period, decided by courts of first or second instance (juridictions du fond), consisting of 26 patent decisions, 19 trademark decisions, and 7 involving designs and models.  They divide these into two basic categories, paragraph 1 and paragraph 2, reflecting the division set forth in the relevant statutory provisions for patents, trademarks, and designs, which for all three reads the same, to wit (again, my translation):

            For assessing damages and interest, the court takes into account distinctly:  (1) the negative economic consequences of the infringement, including lost profits and the loss sustained by the injured party; (2) the moral prejudice incurred by the latter; and (3) the profits realized by the infringer, including the intellectual, material, and promotional investments which the latter has derived from the infringement.

    

            However, the court may, alternatively and upon request by the injured party, award damages as a lump sum.  This amount is higher than the royalties or fees that would have been due if the infringer had requested authorization for the use of the right infringed.  This sum does not exclude compensation for moral prejudice inflicted upon the injured party.

According to the authors, 45 of the 52 cases (87%) made use of the first paragraph, and only 7 (13%) the second.  Of those falling into the first class, they found 4 that (wrongly, in their view) cumulated (that is, added together, if I understand correctly) lost profits with infringer’s profits.  15 were based on lost profits, 24 on infringers’ profits, and 2 used a mixed methodology (meaning that the amount awarded fell in between lost profits and infringers’ profits).  They describe the formula for lost profits as follows:  (1) the number of infringing products sold by the infringer, (2) multiplied by the price at which the plaintiff would have sold those products, (3) multiplied by the plaintiff’s profit margin, (4) multiplied by the taux de report—a term I find difficult to translate into idiomatic English, but which they define as the percent of the infringing products the plaintiff would have sold but for the infringement—(5) multiplied by the taux de pondération (the percent by which the infringed right contributed to the infringer’s sales).  The formula for calculating the infringer’s profits is:  (1) the number of infringing products sold by the infringer, (2) multiplied by the price at which the infringer sold them, (3) multiplied by the infringer’s profit margin, (4) multiplied by the taux de pondération.   They also find that plaintiffs frequently request and frequently are granted some amount for moral prejudice.  Finally, they remark that courts have a fair amount of discretion in applying the rules; they do not have to follow a strictly mathematical rule, and sometimes the relevant evidence (e.g., of consumer  behavior) have to be estimated qualitatively rather than quantitatively.

Judge Connolly on Willful Infringement

U.S. District Court Judge Colm Connolly’s October 14 opinion in Inari Medical, Inc. v. Inquis Medical, Inc., has received attention on both Bloomberg Law and Law360, and I thought I should say a few words about it myself.  (For those who are not familiar with him, Judge Connolly sits in the District of Delaware.  He is probably best known in patent circles for his standing orders, requiring parties to provide information concerning litigation financing arrangements.  According to the Law360 article, moreover, he is “the nation’s third-busiest judge for patent litigation.”)  His decision in Inari addresses two questions that have divided the federal district courts, and that the Federal Circuit has yet to take up.  Both involve what I have sometimes referred to as the “timing” question.

“The first issue is whether the complaint filed in a lawsuit can provide the required knowledge for claims asserted in the lawsuit of post-suit indirect infringement and demands for willfulness-based enhanced damages”; or whether, instead, such knowledge must exist prior to suit.  As Judge Connolly notes, some judges (including Judge Connolly himself in at least one previous decision, as well as Judge Alsup in the Sonos v. Google litigation) have held that knowledge must precede the filing of the lawsuit.  Others, including the District of Delaware’s Magistrate Judge Christopher Burke, have held that, while knowledge must exist prior to the filing of the lawsuit, judges should permit the patentee to amend its suit to allege willful infringement if the infringement continues after service.  And some—including Federal Circuit Judge Bryson, sitting by designation in the District of Delaware, and Judge Alan Albright) don’t even require an amendment.  On this issue, Judge Connolly sticks to his guns, reasoning that the plaintiff could file a second suit if the defendant continues infringing after service of the complaint.  This would be preferable, in his view, because it “avoid[s] thorny privilege and attorney work product issues that arise when a defendant relies on the opinions of its trial counsel to form its own opinion about whether it infringes the asserted patents”; in addition, “[t]he results of the first suit and estoppel doctrines would likely reduce substantially the scope of the second suit.”  Judge Connolly also isn’t persuaded by the plaintiff’s argument that his ruling is undesirable, insofar as it might induce more plaintiffs to send pre-suit notices of infringement, which in turn will enable accused infringers to file actions for declaratory judgments in the latter’s preferred venues; in the court’s view, this consequence appears neither unfair nor unwise.

“The second issue is whether a district court has the authority to address in the context of resolving a Rule 12(b)(6) motion a request by the defendant to preclude the plaintiff from pursuing enhanced damages under § 284 based on the plaintiff’s failure to plead adequately a claim of willful infringement.”  On this issue, Judge Connolly had previously held that the answer was yes, but he has now reconsidered, writing that “Regardless of whether a demand for enhanced damages under § 284 is based on willful conduct or on behavior that is wanton, malicious, deliberate, consciously wrongful, flagrant, done in bad faith, or characteristic of a pirate, such a demand is not a claim that can be dismissed pursuant to Rule 12(b)(6),” because enhanced damages are a remedy, not a claim upon which relief may be granted.  “Thus, assuming the complaint sufficiently alleges a claim of patent infringement, a plaintiff preserves its rights to seek enhanced damages for that infringement under § 284 with a simple demand for such damages in the complaint.”  As a practical matter, this would mean that if the plaintiff doesn’t have the factual basis for alleging pre-suit willful (or whatever) infringement in the complaint, but gains such information through discovery, it can elicit those facts at trial and request a finding of willfulness.  (It would have to amend its complaint to assert a claim for induced infringement, however, if it acquires facts it didn’t previously have that would support that type of claim going forward.)  Given the first holding above, however, in a given lawsuit willfulness cannot be based on the knowledge of the patent that the defendant gained solely from the filing of the complaint (though the latter might enable the plaintiff to file a second lawsuit seeking enhanced damages for post-complaint continuation of infringing conduct). The Bloomberg article suggests that this second holding could make it more difficult for parties to settle, since it increases the potential range of damages that could be awarded at trial, but also notes that some questions of potential entitlement to enhanced damages might be resolved post-discovery on a motion for summary judgment even if not on a motion to dismiss.    

Based on these holdings, the judge granted the defendant’s motion to dismiss a claim of induced infringement without prejudice and with leave to amend, and denied the motion to dismiss the “claim” for enhanced damages. 

The EWHC’s Ex Parte Order Against InterDigital

As noted here two weeks ago, following reports on ip fray, the Mannheim Local Division of the Unified Patent Court and the Munich Regional Court both recently entered ex parte orders forbidding Amazon from pursuing a declaration of entitlement to an interim FRAND license from the High Court of England and Wales.  In response, it was reported a few days ago, Amazon obtained an ex parte order from the Patents Court for England and Wales, enjoining InterDigital (on an interim basis, prior to an inter partes hearing next week) from trying to prevent Amazon from pursuing “Final Relief” (a declaration of the terms of a FRAND license and possibly an order of specific performance) against InterDigital in its action in the EWHC.  Mr. Justice Meade explains his reasoning here, stating inter alia that Amazon is complying with the Munich and Mannheim orders not to pursue an interim license in the U.K.  Amazon’s concern, he writes, is rather that “InterDigital may be formulating a position or an application to either the UPC in Mannheim or the German national court in Munich (or both, as before, or some other court):  an application to restrain Amazon from carrying on its claim to the substantive, final RAND relief, which remains within these proceedings” (para. 13).  (The judgment also sets out, in para. 22 et seq., a concise summary of English law relating to the entry of antisuit injunctions, though Mr. Justice Meade characterizes his order as an anti-antisuit injunction.) ip fray suggests, however, that the Munich and (possibly) the Mannheim judgments might be understood as implicitly forbidding Amazon from pursuing final relief in the U.K. (see discussion here and here).  I’m not in a position to evaluate whether it is likely the Munich and Mannheim decisions would be so interpreted under German (or still-to-be-determined UPC) law; I take it that Mr. Justice Meade is proceeding on the assumption that those orders are limited to the explicit prohibition on interim licenses, and that he views his order as a prophylactic one to prevent InterDigital from obtaining an order, somewhere, forbidding Amazon from litigating the matter to final judgment in the U.K.  But how all of this will play out after upcoming inter partes hearings in the U.K. and Germany, I cannot begin to guess.   

Jüngst and Schroeder on Damages for Wrongly-Issued Preliminary Injunctions in the UPC

I commend to readers’ attention an article by Oliver Jan Jüngst and Moritz Schroeder titled ֦PI damages֞:  Revocation of provisional measures and compensation of the Defendant under R.213.2 RoP, 2025 GRUR Patent 340.  Here is the abstract:

The tide can turn in any patent case for various reasons – e.g. if a patent is revoked at some point.  Yet, what can be done to compensate for damages incurred by a party because of provisional measures being granted on the basis of said patent?  The economic consequences of such a measure can be severe and hence, a compensation mechanism is necessary to strike a fair balance between the interests of right holders and other parties as emphasized in the UPCA considerations.  While the RoP indeed provide for a compensation in R. 213.2 RoP, once again, the specific assertion raises many questions, some of which are presented here.

The authors state that, to their knowledge, there are at present no cases in which the UPC has addressed the compensation due to a defendant who is preliminarily enjoined on the basis of a patent that is subsequently determined to be invalid or not infringed; and the wording of the relevant provisions, namely article 60(9) of the UPCA (read in conjunction with article 62(5)) and Rule 213.2 of the Rules of Procedure, require some interpretation.  The authors suggest that there may be no uniformly correct answers in regard to the court (first instance or appellate) in which the claimant should seek relief, or the deadline for filing its claim   And while they do not discuss the CJEU’s decision in Mylan v. Gilead (previously noted on this blog here), which holds that a regime of strict liability is compatible with IPRED article 9(7)—and they note that the wording of Rule 213.2 suggests a discretionary standard (“. . . the Court may order”)—they imply that it might make sense for the UPC “to ‘mirror’ its developing practice of allowing injunctions on a regular basis . . . via also regularly finding the general liability of a PI applicant under R. 213.2 RoP if a PI is lifted at a later stage.”  They also suggest that, in an appropriate case, liability could include not only the accused infringer’s lost profits but also other expenses incurred as a result of the injunction, and (perhaps) even losses suffered outside the UPC territory if these are caused by the injunction.

In the same issue of GRUR is Hans-Jürgen Ahrens’ article Schadensersatz nach aufgehobener einstweiliger Verfügung wegen nichtigen Arzneimittelpatents—zugleich Besprechung von BGH GRUR 2025, 574—Glatirameracetat (“Damages following a preliminary injunction vacated on the basis of an invalidated drug patent—the German Federal Supreme Court’s Decision in Glatiramer Acetate, GRUR 2025, 574").  The decision under consideration—BGH, Judgment of March 13, 2025,  IX ZR 201/23, previously noted on this blog here under the heading “Update” —holds, inter alia, that consistent with previous German case law and the Mylan decision, the patentee can be held strictly liable to the wrongly-enjoined party for the latter’s damages attributable to the injunction, though not (as a general matter) the patentee is not liable to affected third parties (here, a sister corporation of the accused infringer to whom the latter had leased its business); and that the claimant cannot also recover the patentee’s profit attributable to the wrongly-issued injunction (though it may be possible for the amount of the patentee’s profit to serve as evidence of the claimant’s damages, if I understand correctly).  (Regarding the issue of recovering the patentee's profits, cf. the recent EWHC decision to similar effect, noted here.)    

Merges on Lost Profits and Reasonable Royalties

Rob Merges’ paper Lost Profits and Reasonable Royalties:  Two Distinct Remedies for Two Separate Harms, 40 Berkeley Tech. L.J. 323 (2025), is now available on the journal’s website.  (I was favorably impressed with an earlier version of the paper, which I blogged about here.)  Here is the abstract:

I argue that the two types of damages described in the Patent Act are more than a menu of compensatory options. They describe two distinct types of harm caused by patent infringement. Each comes with a distinctive cluster of remedies. Harm to Product Markets (HPM) is redressed by lost profit damages, and in most cases a permanent injunction against future infringement. This type of damages can be thought of as the mirror image of damages for violations of antitrust law. Antitrust cases are about illicit lack of competition: a wrongful reduction in the competitive state of a product market. Patent damages are about illicit competition: the presence of an unauthorized competitor (the infringer) wrongly increasing the level of competition in the market for the patented item. Odd as it may seem to students of microeconomics, HPM damages are all about giving compensation for interference with a virtuous, or at least statutorily protected, monopolist.

 

The other type of harm, Lost Licensing Opportunity (LLO), occurs when a patent owner is not a participant in the product market for products embodying the patented invention. The traditional remedy of a reasonable royalty is applied in these cases: the law in effect writes a hypothetical contract in which the patent owner licenses its patent to the infringer. Compensation takes the form of an estimate of the value the infringer gained by using the patent owner’s technology as an input. When the input adds real value, and the patent owner is a repeat-player, specialized research and licensing company, the reasonable royalty measure of damages does much the same as HPM damages. The only difference is that damages in LLO cases are measured in markets for patent licensing, rather than for patented products.

 

But not all LLO harm is truly equal. Not all involuntary conferral of benefits should be thought of as the equivalent of a market exchange. Restitution emerged as a distinct branch of equity to address just this issue. Restitution principles reflect the fact that sometimes a benefit is conferred not on a willing market participant, but on a recipient who never asked for the “benefit” and had no effective notice of it; would prefer not to have received it; and in some cases is the victim of strategic, opportunistic tactics that make “receipt” of the benefit unavoidable. One example from patent law is when a patent owner alters patent boundaries to capture some of the value of the recipient’s own contributions. I call this “engineered encroachment.” In most contemporary private law interactions, the law protects the innocent defendant by requiring fault or intent before liability is imposed. But lack of notice, and the good vs. bad faith of the patent owner, are irrelevant in patent law’s regime of strict liability for direct infringers. My proposal here is for courts to sort out the different types of LLO harm using traditional principles of restitutionary recovery. When a patented, intangible input (benefit) is used (received) by an infringer, patent courts should deploy the full spectrum of restitutionary doctrine in pursuit of interparty fairness under the facts of each infringement case. In extreme cases of “engineered encroachment,” for example, courts might deny any recovery for infringement.

I don’t have much to add in addition to my comments from last year’s blog post on the draft version of the article.  One thing that struck me forcefully on reading the published version, however, was this portion from near the end of the paper, where Professor Merges argues against U.S. patent law’s turn towards formalism:

What’s needed, in my view, is patent law heresy. We need a little more wiggle room in at least parts of patent law. Formalism—or better, a stale formalism—stands in the way of flexibility, adaptability. Rules dominate over standards, when sometimes it ought to be the reverse. It seems at least odd, if not in fact heretical, to argue for the exercise of more judicial discretion. That goes against the grain of patent law in the Federal Circuit era. And it raises the anti-democratic specter of elite Platonic Guardians—monarchs in black robes—who are in charge because “they know better.” I realize all that.

 

But I have two extremely powerful responses. First, ironically perhaps, is history: patent law has always been a flexible and adaptable body of law. It has not, traditionally, been (as the Supreme Court put it in a not-long-ago opinion) “the prisoner of a formula.” Most notably, federal judges have at times invented doctrine out of thin air. In response to felt needs, they made up more stringent tests for patentability [citing to the origins of the nonobviousness doctrine], resolved a knotty issue of follow-on inventions [citing to the origins of the rule against double patenting], adapted remedies (as we have seen) to fit different types of patent-related harms . . . and so on. . . .

 

The second reason to install more flexibility in patent infringement doctrine is that flexible standards will promote true innovation more than the current rigid formalism. This is certainly true when it comes to remedies for LLO-type infringement harm. . . . Engineered patent encroachment may be in some sense legitimate in more than a few cases. But in many others, intentional boundary-shifting to capture third-party contributions will be the real story. There is little social value in this. . . .

 

The kind of balancing I am calling for ensures continued attention to overall fairness, and to the primary goals of the patent system. A conventional objection to this sort of attention to the big picture is that it is subjective, it is unpredictable. But absolute predictability through strict adherence to clear rules can produce unfairness. Especially when clever and creative actors take advantage of strict rules to manufacture an injustice (as, arguably, small component patent owners did when receiving a permanent injunction, pre-eBay). To prevent the “gaming” of rules, it is sometimes necessary to resort to meta-rules or principles whose very purpose is to modify strict rules when they lead to an unfair outcome [citing to Henry Smith, Equity as Meta-Law, 130 Yale L.J. 1050, 1080-81 (2021)].

I am inclined to agree.  Especially in this era of hyper-textualism, it is important to recognize that many familiar doctrines of patent law originated as judge-made common law, and that even the current statute leaves many gaps that have to be filled by judicially-crafted doctrine.  There is, to be sure, some risk that too much flexibility, balancing, and resort to multi-factor standards (as opposed to bright-line rules) will result in unpredictable, inconsistent, arbitrary, ad hoc, uninformed, or otherwise unwise results (as Merges recognizes).  But especially in IP law, some degree of “ad hockery” is inevitable, as Learned Hand pointed out more than once in the context of IP law.  More generally, in my view, judging sometimes requires the exercise of, well, judgment, as opposed to mechanical application of formal rules; and much the same reasoning underlies the civil law’s abuse of right doctrine, as I understand it from my reading of the work of Amandine Léonard and others.  That said, the debate is unlikely to be resolved anytime soon, if ever; and for a thoughtful discussion of a contrasting perspective, primarily within the context of copyright law, I recommend taking a look at Norman Siebrasse's paper Against Balancing, 35 IPJ 181 (2023).       

Harvard JOLT Issue on IP Remedies

Volume 38, Issue 3 of the Harvard Journal of Law & Technology is titled “The Role of Intellectual Property Remedies in the Global Innovation Economy Symposium 2024.”  I’d seen (and noted on this blog) drafts of some of these articles before; among those I hadn’t, and that are deserving of attention, are John Golden’s The Rise of Judicial Ratemaking in Patent Law and Poorna Mysoor’s License Fee Damages and the Nature of IP Rights.  Here is the entire list:

• Comparative Online Bad Guys - Justin Hughes
• The Economic Impact of Patent Holdout - Bowman Heiden & Justus Baron
• Compulsory Licensing Under Actavis - Emily Michiko Morris
• Copyright Social Justice in Service of Art: Lessons from Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith - Lateef Mtima
• Injunctive Relief in Patent Cases: The Impact of eBay - Kristina M.L. Acri née Lybecker
• Reconsidering the Patent Jurisdiction of the International Trade Commission - Jorge L. Contreras
• The Rise of Judicial Ratemaking in Patent Law - John M. Golden
• The World-Wide Retreat on Patent Protection of Bayh-Dole March-In Rights and EU Takeovers of Licensing by Government Decree - Richard A. Epstein
• License Fee Damages and the Nature of IP Rights - Poorna Mysoor
• Capturing Intangibles in a Property Restatement - Christopher M. Newman & Henry E. Smith
• Injunctions for Patent Infringement: Historical Equity Practice Between 1790–1882 - Adam Mossoff 

Bonadio and Solanki on Interim FRAND Licenses

Enrico Bonadio and Arjun Solanki have just published The emergence of FRAND interim licences, 47 EIPR 592 (2025).  The article provides an overview of  the English courts' practice, as developed over the past year, of granting declarations concerning interim FRAND licenses, from Panasonic v. Xiaomi though Samsung v. ZTE.  It also offers some arguments in defense of the practice, including some analogous practices elsewhere--though as I noted earlier this week, the recent decisions of the Mannheim Local Division of the UPC and of the Munich Regional Court, which came down too late for discussion in the article, would seem to present a substantial obstacle for the continued use of such declarations in FRAND litigation.  Anyway, here is the abstract (the paper itself can be found on Westlaw, if you don't have a hard-copy subscription to EIPR): 

This article analyses the emergence of FRAND interim licences in UK law, a judicial innovation addressing disputes over standard-essential patents (SEPs) during protracted negotiations or litigation. Reviewing landmark cases, i.e. Panasonic v Xiaomi, Alcatel Lucent v Amazon, Lenovo v Ericsson, and Samsung v ZTE, it explains how interim licences balance the interests of SEP holders and implementers by enabling continued technology use with provisional royalties, subject to retroactive adjustment. The study highlights the mechanism’s grounding in good faith obligations, its distinction from anti-suit injunctions, analogies in other legal fields, and its potential to influence global FRAND policy and standard-setting practices.

Bonadio and Solanki also have another paper, coauthored with Vansh Tayal, in the same issue, titled Brazilian antitrust authority's decision on SEP licensing practices, 47 EIPR 635 (2025), discussing a recent investigation launched by Brazil's competition authority into Ericsson's FRAND licensing practices.

The UPC and Munich Anti-Interim License Injunctions

As I noted on Friday, following reports elsewhere, the Mannheim Local Division of the Unified Patent Court and the Munich Regional Court both have entered orders forbidding Amazon from pursuing a declaration of entitlement to an interim FRAND license from the High Court of England and Wales.  The cases are InterDigital VC Holdings, Inc. v. Amazon.com, Inc., UPC_CFI_936/2025 (L.D. Mannheim Sept. 30, 2025), and InterDigital VC Holdings, Inc. v. Amazon.com, Inc., Judgment of the Munich Regional Court, Case No. 21 O 12112/25 (Sept. 26, 2025, as amended).  The decisions are available, with redactions, in the original German and in English translation on ip fray.  Both were entered ex parte—in other words, they are ex parte preliminary injunctions.  The UPC decision provides the more extended analysis, concluding that jurisdiction over the matter is proper even though InterDigital has not yet initiated a patent infringement action in the UPC, and that InterDigital has satisfied the requirements for a preliminary injunction, namely a risk of imminent infringement (Erstbegehungsgefahr), in the sense of imminent undermining of InterDigital’s ability to enforce its property rights; urgency; and the balance of harms.

The context in which these actions are being litigated, for readers who are not familiar with the subject matter, is the evolving practice of the English courts of granting declarations that the owner of a portfolio of FRAND-committed SEPs is obligated to enter into an interim license of those SEPs, pending the final resolution of its dispute with the implementer over terms.  The first such decision, Panasonic Holdings Corp. v. Xiaomi Tech. UK Ltd., [2024] EWCA Civ 1143, was handed down just over a year ago.  As the UPC panel notes, in that case Panasonic had previously agreed that the English court would establish the terms of a global FRAND license, only to subsequently initiate actions in Germany that would seem to undermine that commitment.  Rather than enter an antisuit injunction (ASI), however, the Court of Appeal for England and Wales concluded that a willing licensor in the position of Panasonic “would agree to enter into, and would enter into, an interim licence of” Panasonic’s portfolio “pending the determination by the Patents Court of the FRAND terms of the final licence,” and that a declaration to this effect “would serve a useful purpose in forcing Panasonic to reconsider its position.”  In two subsequent decisions, however, the English courts have entered similar declarations despite the absence of any agreement on the part of the SEP owner that the English courts would determine the terms of a global license.  (For previous discussion on this blog, see here, here, and here). 

Anyway, these two recent decisions from the UPC and the Munich court may put an end to the English practice.  The UPC decision in particular emphasizes that the effect of a declaration for an interim license is intended to, and likely would, deprive the SEP owner of its ability to litigate claims for patent infringement in other courts that are properly seised of infringement actions pending before them.  (If the SEP owner agrees to an interim license, then the existence of the license puts an end to any claim for injunctive relief elsewhere; if the owner refuses, it then becomes, at least in the eyes of the English courts, an unwilling licensor, which could have negative consequences.  And, at least in the present case, assuming that Swiss law governs the terms of InterDigital’s FRAND commitment to the ITU, Amazon might be entitled to specific performance of any obligation to enter into an interim license.)  In this sense, then, the interim license, even if less formally coercive than an ASI, is nevertheless likely to coerce the affected party to abandon litigation in other forums.

The decisions of these two courts, while dramatic, is not altogether surprising, given the similar effect of an interim license to an ASI, and the willingness of the continental courts to enter anti-antisuit injunctions (AASIs) in similar circumstances.  Although it remains an open question whether these courts would reach the same result in a case with facts similar to Panasonic v. Xiaomi, I would guess there may not be other cases like that one anytime soon; SEP owners, I suspect, will be quite reluctant to agree to having the English courts make global FRAND determinations—quite a reversal of what most people thought would be the case after Unwired Planet v. Huawei, when the English courts were perceived as being more favorable to SEP owners.      

UPC and Munich Courts Enter Anti-Interim License Injunctions

This news broke yesterday on ip fray (here and here) and on IAM.  The Mannheim Local Division of the UPC and the Munich Regional Court have both entered orders enjoining Amazon from seeking or enforcing a declaration for an interim license in the U.K.  (The English courts pioneered the practice of granting declarations regarding interim FRAND licenses in Panasonic v. Xiaomi one year ago today, see here, and have continued the practice since then, see, e.g., here.)  Translations of the decisions are available on ip fray; I plan to read them over the weekend and will probably have something to say about them next week. 

Federal Circuit Affirms Award of Nominal Damages

The case is Rex Medical, L.P. v. Intuitive Surgical, Inc., precedential opinion by Judge Stoll, joined by Judges Dyk and Prost.  Rex sued Intuitive for infringing two surgical stapling patents, U.S. Patent Nos. 9,439,650 and 10,136,892, but while the litigation was pending Rex agreed to dismiss with prejudice its  claims regarding ‘892. The infringement action with respect to ‘650 then went to trial and resulted in a jury award of $10 million, but the trial judge granted Intuit’s motion for JMOL and awarded $1 in nominal damages.  On appeal, Rex challenges the exclusion of its damages expert’s testimony and the reduction of the damages award, while Intuit cross-appeals the district court’s rulings on infringement and validity.  The Federal Circuit affirms the judgment in its entirety.  As is my practice on this blog, I will confine my remarks to the remedies issues.

Rex’s damages expert’s report opined “that a hypothetical negotiation between Rex and Intuitive for a license to the ‘650 patent would have resulted in a lump sum payment of $20 million,” and that the closest comparable was a settlement agreement between Rex and (nonparty) Covidien in which the latter agreed to pay $10 million for a portfolio that included the ‘650 and ‘892 patents, as well as seven pending U.S. applications and nineteen foreign patents or applications.  (The expert also analyzed an agreement between Rex and Boston Scientific, but "Rex concedes that its expert did not form an opinion about a reasonable royalty based on that license," see pp. 6 n.2, 17; and it's possible that some of the other patents that formed part of the Covidien license had expired before that agreement was signed, but there was no admissible evidence confirming that point, see p.15 & n.4.)  During trial, however, the district court granted Intuit’s motion to exclude the expert’s testimony to this effect, on the ground that the expert had “failed to adequately address the extent to which [the] ‘892 and the other patents contributed to the lump sum payment in the Covidien license” (p.7).  In the event, neither party’s damages expert testified at trial, although Rex’s president Mr. Carter did.  On appeal, the Federal Circuit (citing, inter alia, EcoFactor, Inc. v. Google LLC, 137 F.4^th 1333 (Fed. Cir. 2025) (en banc)), finds no abuse of discretion in the exclusion of the damages expert’s testimony.  The court notes, among other matters, that the expert “opined that most of the value in a license to Rex’s patent portfolio ‘is contained in a license to either the ‘892 Patent or the ‘650 Patent” (emphasis added by the court), but as noted above only the ‘650 was at issue at trial, and the expert didn’t apportion value among all of the licensed patents and applications.  In addition, the court affirms the district court’s judgment in the amount of $1, concluding that there was insufficient evidence in the record from which the trier of fact could have derived an appropriate reasonable royalty:

            . . . the patent damages statute, 35 U.S.C. § 284, “does not require an award of damages if none are proven that adequately tie a dollar amount to the infringing acts.” TecSec, Inc. v. Adobe Inc., 978 F.3d 1278, 1291 (Fed. Cir. 2020). Damages “must not be left to conjecture by the jury. They must be proved, and not guessed at.” Promega, 875 F.3d at 660 (citation omitted). Section 284 “requires the award of a reasonable royalty, but to argue that this requirement exists even in the absence of any evidence from which a court may derive a reasonable royalty goes beyond the possible meaning of the statute.” Devex Corp. v. Gen. Motors Corp., 667 F.2d 347, 363 (3d Cir. 1981) (affirming an award of zero damages for lack of evidence). “[T]here must at the least be enough evidence in the record to allow the factfinder to formulate a royalty.” Id. (p.14). 

Further to this point, “Rex presented no evidence that would allow the jury to overcome the deficiencies in [the] excluded expert opinion.” The testimony of the company’s president didn’t suffice, for the following reasons:

 

Mr. Carter testified that the “factors” that Rex considered in licensing to Covidien were: (1) Covidien settled “very early in the litigation process,” (2) Covidien was “very cooperative,” (3) Covidien “wanted special language in the license,” (4) Covidien did not challenge Rex’s patents in the U.S. Patent and Trademark Office, and (5) Covidien “saw real value in licensing the ’650 and the ’892 Patents.” . . . But the jury heard no testimony on how to consider these five “factors” to apportion the value of the ’650 patent—or whether all, some, or none were applicable. Moreover, Mr. Carter also testified that (1) there may be a royalty rate range for licensing the ’650 patent, but he was not sure of an established royalty rate; (2) he did not know what Intuitive would conclude is a reasonable royalty or what Intuitive hypothetically would have paid for a license to the ’650 patent; (3) he was not sure whether the Covidien license was relevant to damages; (4) Covidien did not agree to the $10 million figure based on the amount of its product sales, rather, Covidien and Rex just came to a negotiated agreement; and (5) he could not actually assign any value to the ’650 patent. . . .

 

. . . The record does not provide evidence from which the jury could find or infer a damages number for a license to the ’650 patent between ~$1 and $10 million. Nor does there appear to be any other record evidence that would allow reasonable apportionment. The jury would have to speculate as to how much of the $10 million would be allocated to the ’650 patent. But damages may “not be determined by mere speculation or guess.” Oiness v. Walgreen Co., 88 F.3d 1025, 1030 (Fed. Cir. 1996) (citation omitted). . . .

 

The outcome here is fact-specific. Had Rex (or Intuitive) put forth other evidence from which a jury could reasonably determine damages for infringement of the ’650 patent without speculation, JMOL of no damages would be inappropriate and a new trial might be appropriate. But the parties did not, and it was Rex’s burden to do so. Because, on this record, awarding damages between ~$1 and $10 million for a license to the ’650 patent would require improper guesswork, we affirm the JMOL of no damages.

 

We also discern no abuse of discretion in the district court’s denial of Rex’s request for a new damages trial (p.17).

The opinion seems correct to me, based on previous Federal Circuit case law including TecSec, which I have written about in my article Standing, Nominal Damages, and Nominal Damages “Workarounds” in Intellectual Property Law After TransUnion, 56 UC Davis L. Rev. 1085, 1142-45 (2023).  As I noted there, the court has rejected the argument that § 284 entitles the prevailing patent owner to some nontrivial reasonable royalty award if no damages are proven, even if it seems unlikely that the actual value of the patent in suit is greater than zero.