Sitting en banc, the Federal Circuit threw out a patent-damages verdict because the royalty expert's per-unit rate rested on lump-sum licenses that did not support it. The decision is a Rule 702 warning to the patent-damages bar.
The Federal Circuit vacated a $368 million award, holding that even the smallest salable unit must be apportioned to the patented features and rejecting the Nash Bargaining Solution as a disguised rule of thumb.
The Federal Circuit declared the once-ubiquitous 25 percent royalty shortcut a fundamentally flawed tool, inadmissible under Daubert because it never connects to the facts of the case.
The Federal Circuit held that a patentee cannot base a royalty on the price of a whole laptop when the invention covers only an optical-drive feature, recasting the entire market value rule as a demand-driven exception.
