Beware Waiver: Recovery Not Permitted on Damages Theories Not Presented/Preserved at Trial

Federal CircuitPromega Corp. v. Life Techs. Corp., Nos. 2013-1011, 2013-1029, 2013-1376, (Fed. Cir. Nov. 1, 2017) (Before Prost, C.J., Mayer, and Chen, J.) (Opinion for the court, Chen, J.)

On remand from the Supreme Court, the Federal Circuit affirmed district court rulings that granted Life Technologies’ motion for judgment as a matter of law (“JMOL”) that Promega Corp. had failed to prove its infringement case under 35 U.S.C. § 271(a) and § 271(f)(1), and subsequently denied Promega’s motion for a new trial.

Life sold five-component genetic testing kits that were assembled in the United Kingdom. At least one of the five components in the kit was supplied from the United States. Promega licensed a patent for similar kits, and sued Life for infringement of the licensed patent.

District Court Proceedings

At trial, the parties stipulated that Life’s total worldwide kit sales amounted to over $700 million. However, they disagreed on the effect of this stipulation. Promega thought it entitled them to damages from Life’s worldwide sales. Life thought Promega still had to prove whether it was entitled to damages on all worldwide sales or U.S. sales only. Promega was unable to prove a specific amount of Life’s U.S. sales. Instead, Promega proffered the stipulated worldwide sales to determine damages. The jury used this figure to award Promega a portion of that amount as lost profit damages based on infringing U.S. sales. Promega expressly waived its right to an award based on a reasonable royalty.

After trial, Life filed a motion for JMOL asking the district court to find that the damages verdict could not stand, because Promega had inadequate evidence of infringing sales, and insufficient evidence to support an award on a subset of sales. Promega argued that the damages verdict should stand, but did not challenge Life’s claim of insufficient evidence to support lesser damages based on a subset of total sales.

Under 271(a), patent infringement occurs when one “makes, uses, offers to sell, or sells any patented invention, within the United States.” Further, under 271(f)(1), infringement occurs if a “substantial portion” of the infringing product is supplied from the United States to a foreign country, if that supplying act would infringe the patent if it occurred in the U.S. At trial, Promega argued that the one component of the infringing kits produced in the U.S. was sufficient to be “substantial portion” of the product, and the jury agreed.

However, post-trial, the district court granted Life’s JMOL motion, holding that no reasonable jury could have found that all the accused products infringed Promega’s licensed patent under 271(a), or that a “substantial portion” of Life’s product infringed under 271(f)(1). Specifically, the district court found that a single kit component could not be a “substantial portion” of a product, and Promega’s evidence was insufficient to show that all of the infringing kits contained two or more components from the U.S. Therefore, no reasonable jury could have found infringement under 271(a) or 271(f)(1). Since Promega waived any argument that the evidence at trial could support a damages calculation based on a subset of total sales, and because no reasonable jury could have found that all of the accused products infringed under § 271(a) or § 271(f)(1), the district court granted Life’s motion. Promega moved for a new trial, arguing for the first time that damages could be based on a subset of worldwide sales, but the district court denied the motion.

The Federal Circuit’s Initial Ruling, and the Supreme Court’s Reversal and Remand

Promega appealed to the Federal Circuit, which reversed both decisions by the district court, holding that “a single component supplied from the United States could qualify as a ‘substantial portion’ of a multicomponent product, depending on the circumstances in a given case.” Therefore, the jury could have found Life liable for infringement under 271(f). However, the Supreme Court later reversed this holding, finding that a “single component does not constitute a substantial portion of the components that can give rise to liability under § 271(f)(1),” and remanded for further proceedings.

The Federal Circuit’s Decision on Remand

In patent infringement cases, the burden of proving damages falls on the patentee, and they must be “proved, and not guessed at.” Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009). Further, when a patentee seeks lost profits as the measure of damages, “the patent holder bears the burden of proving the amount of the award.” Minco, Inc. v. Combustion Eng’g, Inc., 95 F.3d 1109, 1118 (Fed. Cir. 1996). Promega waived any argument that the trial record could support a damages award based on something less than total sales. Further, the trial record could not support a damages award based on less than total sales. Therefore, even though Life admitted infringement on the record at trial, Promega could not recover damages because it could not prove that all of Life’s accused products infringed under 271(a), or that the infringing kits contained a “substantial portion” of elements produced in the U.S. to infringe under 271(f)(1).

While this seems unfair, the Federal Circuit emphasized that “a patent owner may waive its right to a damages award when it deliberately abandons valid theories of recovery in a singular pursuit of an ultimately invalid damages theory.” In light of this, the Federal Circuit affirmed the district court’s denial of Promega’s motion for a new trial and the grant of Life’s motion for JMOL, finding that Promega had failed to adequately prove infringement.

Take Away

When seeking damages for patent infringement under 271(f)(1), a single component cannot form a “substantial portion” of a product; further, it is important not to limit or prematurely waive available theories of recovery when litigating patent damages in the trial phase. 




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