Patentee Failed to Apportion Licenses to Bundled Patents to Establish Royalties

OMEGA PATENTS, LLC v. CALAMP CORPORATION

Before Prost, Dyk, and Hughes.  Appeal from the United States District Court for the Middle District of Florida.

Summary: Licensing policies that allow use of any or all of a bundle of patents for a single per-unit fee are not a proper basis for establishing royalties without apportionment.

Omega sued CalAmp for direct infringement and induced infringement of various claims across four separate patents.  During the jury trial, Omega introduced multiple licenses and presented evidence that its policy was to negotiate a license for “five dollars [per unit,] whether it’s one patent or 50 patents.”  The jury found that CalAmp directly infringed and awarded Omega royalties of $5 per unit.  CalAmp moved for a new trial on damages, arguing that Omega’s damages theory was legally flawed and unsupported by the evidence. The district court denied CalAmp’s motion.

The Federal Circuit reversed and remanded for a new trial on damages.  To prove damages, the patentee must provide evidence that apportions the damages between the patented features and the unpatented features of an accused product.  The Federal Circuit held that the patentee failed to show that the patented feature drove demand for the accused product and also failed to show the incremental value that the patented feature added to the accused product.  The Federal Circuit then turned to the patentee’s comparable license theory.  The Federal Circuit held that Omega failed to adequately account for the differences between the licenses charging $5 per unit for multiple patents and a hypothetical negotiation on a single patent. 

Judge Hughes dissented, arguing that Omega’s licenses and its licensing policy were sufficient to support the jury award.

Editor: Paul Stewart

Written by: Kendall Loebbaka