Split En Banc CAFC Says Google Gets a New Trial on Damages, Scrapping $20 Million Award for EcoFactor

By Editorial Team

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued a split precedential decision in EcoFactor v. Google, overturning a district court's denial of Google's motion for a new trial on damages. The decision scrapped a $20 million damages award for EcoFactor, Inc., with Judges Reyna and Stark dissenting in part.

District Court Proceedings

EcoFactor had sued Google for infringing its U.S. Patent No. 8,738,327 related to smart thermostat technology, particularly targeting Google's Nest thermostat products. Google's attempts to invalidate certain patent claims and exclude EcoFactor's damages expert's testimony were unsuccessful. The jury found Google infringed the patent and awarded EcoFactor damages, which Google contested in a motion for a new trial on damages.

CAFC Appeal and En Banc Rehearing

Google appealed the district court's decisions on patent ineligibility, non-infringement, and the denial of a new trial on damages. In the original appeal, the CAFC upheld the damages award, finding EcoFactor's expert's methodology admissible. However, an en banc rehearing was granted to address the district court's adherence to Federal Rule of Evidence 702 and Daubert in allowing the damages expert's testimony.

En Banc Decision

The en banc majority concluded that the existing licenses on which the damages expert relied were insufficient to support his conclusion on royalty rates. The court found the expert's opinion lacked sufficient factual basis and ordered a new trial on damages. The majority also addressed challenges to the en banc proceeding, including the absence of Judge Newman, ruling that the court was properly constituted for the decision.

Dissents and Final Remarks

Judges Reyna and Stark issued dissents, criticizing the majority's departure from the en banc scope. They expressed concerns about potential misinterpretations of the ruling's implications on damages experts. The decision, which sets the stage for a new trial on damages, highlights the importance of expert testimony standards in patent litigation.