Under 35 U.S.C. § 284, a patentee is entitled to recover no less than a reasonable royalty as damages for patent infringement. Typically, the reasonable royalty is calculated using a hypothetical negotiation framework for a license to use the patented invention. “This approach attempts to calculate the royalty rate the parties would have agreed upon had they negotiated an agreement prior to the start of the infringement. Damages, however, may “not be determined by mere speculation or guess.” Oiness v. Walgreen Co., 88 F.3d 1025, 1030 (Fed. Cir. 1996) (citation omitted). 

While a jury may choose “within the range encompassed by the record as a whole,” see Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512, 519 (Fed. Cir. 1995); Fuji Photo Film Co. v. Jazz Photo Corp., 394 F.3d 1368, 1378 (Fed. Cir. 2005) (“[T]he jury is not bound to accept a rate proffered by one party's expert but rather may choose an intermediate royalty rate.”); damages “must be proved, and not guessed at,” see Promega Corp. v. Life Techs. Corp., 875 F.3d 651, 660 (Fed. Cir. 2017) (citation omitted). “The amount [of damage] is normally provable by the facts in evidence or as a factual inference from the evidence.” Promega, 875 F.3d at 660 (cleaned up) (citations omitted).  

In determining a reasonable royalty under this framework, 'parties frequently rely on comparable license agreements.'” Apple Inc. v. Wi-LAN Inc., 25 F.4th 960, 971 (Fed. Cir. 2022) (quoting Bio-Rad Labs., Inc. v. 10X Genomics Inc., 967 F.3d 1353, 1372 (Fed. Cir. 2020)). “When relying on comparable licenses to prove a reasonable royalty, we require a party to 'account for differences in the technologies and economic circumstances of the contracting parties.'” Id. (quoting VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1330 (Fed. Cir. 2014)). Patent licenses often license whole patent portfolios, however, and “expert testimony should be excluded when it fails to allocate license fees among the licensed patents covered by an agreement.” Jiaxing Super Lighting Elec. Appliance, Co. v. CH Lighting Tech. Co., 146 F.4th 1098, 1112 (Fed. Cir. 2025). But damages theories “relying on [comparable prior] licenses must account for . . . distinguishing facts [(such as covering more patents than are at issue in the action and covering foreign intellectual property rights)] when invoking them to value the patented invention.” Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 1227 (Fed. Cir. 2014).

In the Apple case, Wi-LAN's damages expert David Kennedy relied on three comparable license agreements (Vertu, Doro, and Unnecto) to estimate a reasonable royalty as damages for infringement of U.S. Patent Nos. 8,457,145 and 8,537,757. Id., 25 F.4th at 971–72. While each comparable license agreement licensed additional patents, Mr. Kennedy opined “that the '145 and '757 patents were key patents in the three licenses for three reasons[.]” Id. at 972. His reasons included: (1) the '145 and '757 patents were listed in the comparable licenses; (2) they were discussed in negotiations with Apple; and (3) Apple continued to use the patented technology after a finding of infringement. Id. at 972–73. “To separate the value of the key patents from the rest of the licensed portfolio, he reduced the royalty rate by 25 percent. He selected this rate based on [other] testimony that, in practice, the rest of a portfolio was licensed for a 5 to 35 percent markup.” Id. at 973 (citations omitted). 

But none of the three licenses listed the '757 patent among the “Asserted Patents.” Id. And neither Doro nor Unnecto listed the '145 patent as one of the “Asserted Patents.” Id. Vertu, on the other hand, did list the '145 patent as one of the “Asserted Patents,” but it also listed “five other ‘Asserted Patents.'” Id. The Court found that “Mr. Kennedy failed to address the extent to which these other patents contributed to the royalty rate in the Vertu license,” and “[y]et he opined that excluding these patents (and the rest of Wi-LAN's portfolio) from the hypothetical negotiation would have netted Apple only a 25 percent discount.” Id. “Mr. Kennedy's silence on these equally situated patents [wa]s troubling and ma[de] his opinion unreliable.” Id. at 973–74. Accordingly, the Court in Apple held that “Mr. Kennedy's opinion that the asserted patents were key patents [wa]s untethered to the facts of th[e] case,” and the district court had abused its discretion in failing to exclude his damages testimony. Id. at 973-4.

More recently, in Rex Medical, L.P. v. Intuitive Surgical, Inc., No. 2024-1072 __ F.4th __ (Fed. Cir. Oct. 2, 2025), reducing a jury award of $10 million for patent infringement to nominal damages of $1 was affirmed because “the jury received insufficient evidence from which it could apportion the lump sum payment in the [allegedly comparable multi-patent] license or otherwise reasonably infer a reasonable royalty award for infringement of the [patent-in-suit] alone.” 

At trial, the patentee Rex relied on a comparable license with Covidien that covered the patent-in-suit “along with eight other U.S. patents, seven U.S. patent applications and nineteen patents or applications from countries outside the United States.” The license was part of a settlement agreement in which Covidien agreed to pay $10 million. 

The district court excluded Rex's expert's opinion that failed to apportion the value of the patent-in-suit from the value of the other licensed patents or allocate any value to the other patents and patent applications. For example, there was no witness testimony discussing the relationship or differences between the patent-in-suit and the other patents in the so-called comparable license agreement. And the district court found there was no evidence of record that would allow the jury to apportion the $10 million lump sum payment in the Covidien license or otherwise infer a reasonable royalty. 

     Damages theories “relying on [comparable prior] licenses must account for . . . distinguishing facts [(such as covering more patents than are at issue in the action and covering foreign intellectual property rights)] when invoking them to value the patented invention.” Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 1227 (Fed. Cir. 2014). Rex did not meet this requirement. The record does not provide evidence from which the jury could find or infer a damages number for a license to the '650 patent between ~$1 and $10 million. Nor does there appear to be any other record evidence that would allow reasonable apportionment. The jury would have to speculate as to how much of the $10 million would be allocated to the '650 patent. But damages may “not be determined by mere speculation or guess.” Oiness v. Walgreen Co., 88 F.3d 1025, 1030 (Fed. Cir. 1996) (citation omitted).

Citing Devex Corp. v. Gen. Motors Corp., 667 F.2d 347, 363 (3d Cir. 1981) (affirming an award of zero damages for lack of evidence), the Federal Circuit held that Section 284 “requires the award of a reasonable royalty, but to argue that this requirement exists even in the absence of any evidence from which a court may derive a reasonable royalty goes beyond the possible meaning of the statute.” In short, “there must at the least be enough evidence in the record to allow the factfinder to formulate a royalty.” Id.

Because the patentee had not put forth evidence from which a jury could reasonably determine damages for patent infringement without speculation, and awarding damages between ~$1 and $10 million would require improper guesswork, JMOL of no damages was affirmed. So, the patentee was left with nominal damages of $1. 

A take-away by Professor Crouch was that “Comparable-license apportionment is mandatory - when a comparable license covers more than simply the patent at issue, additional evidence must be presented to the jury to explain how to apportion the license value between the patent at issue in the case, and the other rights licensed.” 

Thomas P. Howard, LLC is located in Louisville, Colorado.