R. J. Reynolds Vapor Company v. Altria Client Services LLC
Patent Trademark Copyright
Does the Federal Circuit's 'built-in apportionment' exception violate Garretson v. Clark's requirement of apportionment in patent damages cases?
Most products are made up of numerous components and features, patented and unpatented both. Their commercial success may be attributable to consumer demand for their patented features , or demand for unpatented features, or even savvy marketing. Consistent with longstanding principles of tort damages, t he Patent Act contains a damages provision entitling patent owners to damages only for what they actually invented: “damages adequate to compensate for the infringement .” 35 U.S.C. § 284 (emphasis added). These damages may take the form of “a reasonable royalty for the use made of the invention by the infringer.” Id. (emphasis added). F or nearly 150 years , this Court has required patent damages to be apportioned, holding that patent owners seeking damages “ must in every case give evidence tending to separate or apportion the defendant’s profits and the pa-tentee’s damages between the patented feature and the unpatented feature s.” Garretson v. Clark , 111 U.S. 120, 121 (1884) (emphasis added) . The question s presented are: 1. Does the Federal Circuit’s judicially created “built -in apportionment” exception, which allows patent owners to use unrelated prior licenses to prove damages without providing “evidence tending to separate or apportion” the patent’s contribution, violate Garretson v. Clark ’s requirement that apportionment “must in every case” be shown? 2. Alternatively, in light of the Federal Circuit’s intervening en banc decision in EcoFactor, Inc. v. Google LLC, 137 F.4th 1333, 133940, 1346 (2025) — ii which reiterated that expert damages opinion evidence “that is connected to existing data only by the ipse dixit of the expert” is inadmissible under Daubert and Federal Rule of Evidence 702 and rejected damages expert testimony regarding a royalty rate purportedly used in reaching lumpsum license agreements that did not support such a rate —should the Court grant the petition, vacate the judgment, and remand for application of that precedent, as is typical practice when an intervening development reasonabl y shows that the lower court’s decision rests on a premise that it would reject if given the opportunity for further consideration?