Overview

Damages must be consistent with the apportioned value of patented feature.

The patentee... must in every case give evidence tending to separate or apportion the defendant's profits and the patentee's damages between the patented feature and the unpatented features, and such evidence must be reliable and tangible, and not conjectural or speculative.

— Garretson v. Clark, 111 U.S. 120, 121, 4 S.Ct. 291, 28 L.Ed. 371 (1884).

In particular, a reasonable royalty must apportion the value of the infringing features from other aspects of a multi-component product.

This principle—apportionment—is the governing rule where multi-component products are involved. Consequently, to be admissible, all expert damages opinions must separate the value of the allegedly infringing features from the value of all other features.

— CSIRO v. Cisco Systems, Inc., 809 F. 3d 1295, 1301 (Fed. Cir. 2015).

Similarly, the principle of apportionment applies to non-royalty forms of damages.

Indeed, apportionment is required even for non-royalty forms of damages: a jury must ultimately apportion the defendant's profits and the patentee's damages between the patented feature and the unpatented features using reliable and tangible evidence.

— Ericsson, Inc. v. D-Link Systems, Inc., 773 F. 3d 1201, 1226 (Fed. Cir. 2014).

Apportionment is, to some extent, built into the Georgia-Pacific factors.

Several of the factors set forth in the Georgia-Pacific case bear directly on this issue. Georgia-Pacific factors nine and ten refer to the utility and advantages of the patent property over any old modes or devices that had been used and the nature of the patented invention, its character in the commercial embodiment owned and produced by the licensor, and the benefits to those who used it, respectively. Factor thirteen, which refers to the portion of the realizable profit that should be credited to the invention, embodies the same principle.

— Astrazeneca AB v. Apotex Corp., 782 F. 3d 1324, 1338 (Fed. Cir. 2015).

Apportionment may, in some cases, include the value conferred by the combination of patented elements with conventional elements.

[W]hile it is important to guard against compensation for more than the added value attributable to an invention, it is improper to assume that a conventional element cannot be rendered more valuable by its use in combination with an invention.

— Astrazeneca AB v. Apotex Corp., 782 F. 3d 1324, 1338 (Fed. Cir. 2015).

Apportionment does not always mean it is necessary to subtract the value of conventional elements from the value of a patented invention.

It is not the case that the value of all conventional elements must be subtracted from the value of the patented invention as a whole when assessing damages. For a patent that combines old elements, removing the value of all of those elements would mean that nothing would remain. In such cases, the question is how much new value is created by the novel combination, beyond the value conferred by the conventional elements alone.

— Astrazeneca AB v. Apotex Corp., 782 F. 3d 1324, 1338 (Fed. Cir. 2015).

Apportionment may be subsumed in the but-for analysis with lost profits damages.

Kelley's concern that lost profits must relate to the intrinsic value of the patent is subsumed in the but for analysis; if the patent infringement had nothing to do with the lost sales, but for causation would not have been proven.

— Rite-Hite Corp. v. Kelley Co., Inc., 56 F. 3d 1538, 1548 (Fed. Cir. 1995).

For example, when several patents are involved, a but for analysis should focus on sales that would be made but for infringement of the claims at issue.

In this case, the district court based its lost profits award on evidence of sales of a device embodying features in addition to those present in the infringed '376 patent, namely, those features attributable to the '991 patent. The district court therefore failed to distinguish the allocation of profits that would have been made but for the infringement of the '376 patent with the profits that could fairly be allocated to customer demand related to the features embodying the '991 patent.

— Ferguson Beauregard/Logic v. Mega Systems, 350 F. 3d 1327, 1346 (Fed. Cir. 2003).