United States: 2015 Patent Damages Year In Review

Last Updated: April 19 2016
Article by Michael A. Oakes


In last year's issue of our Patent Damages Year in Review, we highlighted three important decisions from the Federal Circuit: VirnetX v. Cisco Systems, Inc.,1 Ericsson, Inc. v. D-Link Systems, Inc.2 and Apple, Inc. v. Motorola, Inc.3 In particular, we focused on how these decisions might impact the courts' rapidly changing application of apportionment and the entire market value rule with respect to the determination of a reasonable royalty. While we noted that these decisions provided clarity in some respects, we raised concerns that the Federal Circuit failed to address key issues regarding the proper methodology for an apportionment analysis and primarily left this issue to the district courts to sort out. Not surprisingly, district courts in 2015 were inconsistent in determining whether or not the entire market value rule applied, and if not, how a patent owner could satisfy the apportionment requirement.

In several decisions this year, the Federal Circuit attempted to provide additional guidance on the entire market value rule and apportionment, and in this issue we analyze four decisions from the Federal Circuit that we believe may impact how district courts analyze patent damages for years to come: 1) AstraZeneca LP v. Apotex, Inc.4; 2) Info-Hold, Inc. v. Muzak LLC5; 3) Summit 6, LLC v. Samsung Electronics Co., Ltd.6; and 4) Commonwealth Scientific and Industrial Research Organisation ("CSIRO") v. Cisco Systems, Inc.7

The Federal Circuit in its AstraZeneca decision addressed the entire market value rule and apportionment with respect to AstraZeneca's formulation patents for the drug Prilosec. The court rejected the argument that the entire market value rule ("EMVR") could never apply in the pharmaceutical context, but held that the EMVR was not applicable in this particular case because the patents at issue covered the infringing product as a whole, rather than a single component of a multicomponent product. Nevertheless, the Federal Circuit held, citing Ericsson, that when a patent covers the infringing product as a whole, and the claims recite both conventional elements and unconventional elements, the court must determine how to account for the relative value of the patentee's invention in comparison to the value of the conventional elements recited in the claim, standing alone. Stated another way, the court indicated that "the question is how much new value is created by the novel combination, beyond the value conferred by the conventional elements alone."8

In Info-Hold, the patent owner's expert conceded that the EMVR applied, but he failed to address whether the patented features drove customer demand, relied on a litigation-induced license and applied the now-discredited 25 percent rule of thumb. The district court struck his report based on these shortcomings, and granted summary judgment of no damages. The Federal Circuit affirmed the decision to strike the damages expert report but, relying upon last year's Apple v. Motorola decision, reiterated that even without testimony from a damages expert, an award of zero damages is appropriate only if the evidence demonstrates that zero is the only appropriate royalty. Thus, the Federal Circuit reversed and remanded the case to the district court, with instructions that the district court consider the Georgia-Pacific factors and award whatever reasonable royalties were supported by the record.

In Summit 6, the Federal Circuit's decision provided more of a roadmap for future apportionment analyses. After a finding that Samsung infringed Summit's patent related to digital data processing, Summit's damages expert calculated damages through an apportionment methodology that was based on surveys of customers' usage of various smartphone functions. The court awarded Summit $15 million in damages and Samsung appealed. The Federal Circuit held that the district court had not abused its discretion in allowing testimony based on Summit's apportionment methodology, and that the expert need not be a survey expert to rely upon surveys compiled by third parties, so long as the information is of a type reasonably relied upon by experts in the field to form opinions upon the subject. Moreover, the Federal Circuit found that the fact that the expert's methodology was novel did not mean that it must be excluded, because "[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."9

Finally, the Federal Circuit in CSIRO addressed apportionment in the context of a standard essential patent, in this case a patent related to wireless networking that was incorporated into the 802.11 standard. The district court held a bench trial on damages, after which the judge rejected both parties' damages analyses and instead adopted a model using the parties' prior negotiations as a starting point and then adjusting the rate based on his analysis of the Georgia-Pacific factors. On appeal, the Federal Circuit rejected Cisco's argument that all damages analyses must start with the smallest saleable patent practicing unit, and approved of the district court's use of the prior negotiations as the starting point. However, citing last year's Ericsson decision, the Federal Circuit found that the district court erred by overvaluing the fact that the patented technology was incorporated into the standard, and reiterated that the royalty analysis "must be premised on methodologies that attempt to capture the asserted patent's value resulting not from the value added by the standard's widespread adoption, but only from the technology's superiority."10

Perhaps because of the recent uncertainty regarding apportionment and the reasonable royalty method of computing damages, this past year saw many decisions in cases in which patent owners instead sought lost profits and other means of expanding the potential revenue base to obtain more significant damages. Thus, in addition to apportionment and the entire market value rule, we also address notable Federal Circuit and district court decisions related to three patent damages topics that garnered significant attention this year: 1) lost profits; 2) design patent damages; and 3) damages for activities that take place, in whole or in part, outside the United States.

To read this Review in full, please click here.


1. 767 F.3d 1308 (Fed. Cir. 2014).

2. 773 F.3d 1201 (Fed. Cir. 2014).

3. 757 F.3d 1286 (Fed. Cir. 2014).

4. 782 F. 3d 1324 (Fed. Cir. 2015).

5. 783 F. 3d 1365 (Fed. Cir. 2015).

6. 802 F. 3d 1283 (Fed. Cir. 2015).

7. __ F. 3d __, 2015 WL 7783669 (Fed. Cir. Dec. 3, 2015).

8. AstraZeneca, 782 F. 3d at 1339.

9. Summit 6, 802 F. 3d at 1298.

10. CSIRO, 2015 WL 7783669, at *8.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions