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Tuesday, September 2, 2025, 10:00AM
Rex Medical, L.P. v. Intuitive Surgical, Inc., No. 24-1072, Courtroom 203, Panel C
This appeal arises from the district court's remittitur of a $10 million damages award to $1. Rex sued Intuitive for infringing its surgical stapler patent (U.S. Patent No. 9,439,650). Rex's damages expert presented a reasonable-royalty theory using a previous Rex-Covidien license, which included the '650 patent (and other patents) in the $10 million licensing fee. The court precluded Rex's expert from testifying about that license on the ground that he failed to apportion the total licensing fee to the '650 patent at issue. At trial, Rex introduced the Covidien license through a fact witness. The jury found the '650 patent valid and infringed, and it awarded Rex $10 million in damages. The district court upheld the jury's validity and infringement findings but reduced the damages award to a nominal $1 because it found the evidence insufficient to support the jury's award. Rex appealed.
On appeal, Rex first argues that the district court misapplied precedent on apportionment in precluding its expert's testimony on the Covidien license. Rex contends that its expert used a reliable hypothetical-negotiation methodology with a starting point (the Covidien license) that both sides agreed to be the best evidence. According to Rex, its expert provided reasons supporting his conclusion that the '650 patent accounted for most of the value in the Covidien license, and any challenge to that reasoning should be addressed through cross-examination, not a wholesale preclusion.
Rex further argues that the court erred in overturning the jury's damages award. To Rex, its fact witness testified that the '650 patent was a key patent driving the Covidien license negotiations. So based on that testimony and other evidence about the patent's value to Intuitive, the jury's damages award was sufficiently supported. At a minimum, Rex contends that damages should be retried because it never waived its right to a reasonable royalty and the record did not support zero royalty, even if the full $10 million-award was not supported.
In its cross-appeal, Intuitive argues that the claim-at-issue was not infringed and was invalid for lacking written description. Even if the validity and infringement rulings stand, Intuitive contends that the district court's damages remittitur should be affirmed. Responding to Rex's contentions, Intuitive argues that the district court acted within its discretion in excluding Rex's expert testimony based on the lack of apportionment, that the remittitur was proper because Rex failed to supply evidence tying the damages award to the patent-at-issue, and that a new trial is not warranted because Rex chose not to argue damages outside of the Covidien license at trial.
Co-authored by John Yates
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