No matter how you slice and dice it, conclusory evidence can’t support entire market value damages
The US Court of Appeals, Federal Circuit, concluded that the entire value rule did not apply where conclusory testimony was the sole evidence that a product’s infringing characteristics drove consumer demand and reversed the decision. Provisur Techs., Inc. v. Weber, Inc., Case No. 23-1438 (Fed. Cir. Oct. 2, 2024) (Moore, C.J. ; Taranto, Cecchi, JJ. )
Provisur filed a lawsuit against Weber in the Western District Missouri over three patents relating to slicing, packaging and storing meats and cheeses. The jury found that Weber had willfully violated several claims in the three asserted Patents, and awarded damages. Weber filed a motion for judgment as a mater of law (JMOL), on the issues of willfulness and infringement, and a retrial on infringement, damages, and willfulness. Weber appealed. Weber appealed.
The Federal Circuit upheld the district court’s judgement with respect to the two asserted claims but reversed the finding of infringement on the sole asserted demand of the third patent. Provisur’s theory of infringement was that a consumer could program a device to violate the limitations of the claim. Provisur did not provide any evidence at trial that the consumer could configure the device in order to practice the claim. The consumer was not able to access some of the software required to configure the device in a way that violates the claim. Only Weber technicians had access to it. Provisur also proffered no evidence that the devices had ever actually been configured to infringe the claims, instead only offering evidence that the claims could have been infringed.
Next, the Federal Circuit assessed willfulness. Weber’s main argument was that the district judge had improperly allowed expert witness testimony in violation 35 U.S.C. SS 298 states that a party who fails to “ask for legal advice in relation to any allegedly infringement patent” is violating 35 U.S.C. . . may not be used to prove that the accused infringer willfully infringed the patent.” Provisur’s expert, who testified about industry standards for intellectual property management, “did not distinguish between legal and non-legal services when testifying about consulting a third party.” The Court concluded that that portion of the testimony was inadmissible and the remaining evidence could not support a finding of willfulness.
Finally, the Federal Circuit addressed the damages issue, specifically focusing on the reasonable royalty award. The infringing parts were part of a larger product that had many non-infringing components. The accused product contained multiple separate machines unrelated to the alleged invention.
Provisur’s royalty award was predicated on its use of the entire market value rule, where the base to which the royalty rate is applied is the cost of the entire accused product as opposed the cost of just the infringing part. The Federal Circuit noted that the entire market value rule is an acceptable theory, but it requires a showing that the infringing part “is the basis for customer demand.”
Provisur’s damages expert used the entire market value rule in calculating the damages, relying on another expert who testified that “the patented features drive the demand or substantially create the value of Weber’s accused products.” That expert noted that the non-infringing features “are considered conventional, and the patented features are unique selling points.” However, the expert did not cite any evidence suggesting that the patented features drive the sales of the entire multi-machine product. The expert failed to explain why non-infringing elements, no matter how “conventional”, did not drive customer demand. The Court found that Provisur had not provided any evidence, other than conclusory expert testimony that was unsupported, that the infringing feature drove consumer demand.
