In This Issue:

- Castle Defense: Federal Circuit Reinforces Patent Damages Gate in VirnetX

- Standards Patent Licensing: Always Apportionment, Sometimes Stacking

- Supreme Court to Consider Good-Faith Belief of Invalidity Defense

- The Convergence of Life Sciences and High Tech

- Considerations in Obtaining Advice of Counsel to Rebut a Claim of Willfulness

- Excerpt from Castle Defense: Federal Circuit Reinforces Patent Damages Gate in VirnetX

Introduction:

In medieval times, castle defenders developed countermeasures to thwart siege tactics. For example, large fortified gatehouses, or “gate keeps,” often were used to prevent attackers from breaching the castle’s gate.

Modern patent law involves a similar concept of a “gate keep,” at least in the damages context. As plaintiffs in patent cases have introduced expert testimony based on new patent damages theories, defendants have asked courts to fulfill their gatekeeping role by preventing certain types of expert testimony from reaching the jury. In its recent VirnetX, Inc. v. Cisco Sys., Inc., decision, the Federal Circuit reinforced the damages “gate” in patent cases by further clarifying the district court’s responsibility for ensuring that unreliable expert testimony on purported patent damages does not reach the jury. Vacating a $368 million jury award against Apple, the Federal Circuit concluded that the district court should have excluded expert testimony on damages because: (1) the purported royalty base was predicated on the “smallest salable unit” of the accused product and failed to apportion between patented and unpatented features, and (2) the purported royalty rate was determined using the assumption that the parties would have agreed to a 50/50 split of incremental profits as a starting point, without showing that such assumption was tied to the facts of the case.