USA - TEXAS Trends and Developments Contributed by: Danielle Healey and Matthew David, Spencer Fane LLP
Apportionment of value of a patent in a complex device: VLSI v Intel Microprocessors are extremely complex devices that incorporate a myriad of patented inven- tions. The ongoing legal battle in VLSI v Intel has drawn significant attention due to its large damages award and the Federal Circuit’s scru- tiny of the damages calculation methodologies. Central to the dispute is whether VLSI’s dam- ages model properly apportioned the value of patented technology within Intel’s processors. VLSI accused Intel of infringing patents related to power management in microprocessors, ulti- mately securing a USD2.18 billion jury award. However, Intel challenged the methodology used to calculate damages, arguing that VLSI failed to adequately apportion the value of the patented invention from the broader value of Intel’s prod- ucts. The Federal Circuit subsequently found flaws in the technical evaluation used to justify the award, leading to remand for a retrial on damages. Key takeaways: • Large, billion-dollar damages awards are increasingly vulnerable to appellate scrutiny, especially where technical evaluations fail rigorous examination. • Courts are reinforcing apportionment require- ments to ensure that damages reflect only the incremental value of the patented technology rather than unrelated features. • The remand for a damages retrial under- scores the importance of reliable expert testi- mony in high-stakes patent litigation. 2025 – a tougher standard requiring more precision for patent damages? EcoFactor v Google The Federal Circuit’s upcoming en banc ruling in EcoFactor v Google will be consequential
Key takeaways: • Design patents will be increasingly vulnerable to obviousness challenges based on applying the utility patent obviousness standard. • Practitioners may need to supplement design patent protection strategies with trade dress and copyright protection measures. • The Patent Trial and Appeal Board (PTAB) is likely to see an increase in petitions challeng- ing design patents based on this new stand- ard. Expanding foreign damages: Brumfield v IBG The Federal Circuit’s decision in Brumfield v IBG held that foreign damages are equally applica- ble under 271(a), not just 271(f). However, the court emphasised that liability must be tied to US-based infringing acts, even if revenue is gen- • Patentees should revisit damages models to capture foreign sales where US acts of infringement serve as proximate cause. • Damages experts must address the proxi- mate cause of damages by specifically explaining facts as to both base and rate. • An enhanced rate may be argued even if the base cannot be added in, so long as there is a direct tie-in to the Georgia-Pacific factors. Offers for sale, actual sales, and use of the claimed system may be easier to tie in due to the law on extraterritorial acts (eg, Transo- cean). • The ruling may lead to more aggressive dam- ages claims in international patent disputes. • Method claims remain more challenging to enforce internationally when compared with apparatus claims. erated overseas. Key takeaways:
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