In Rex Medical, L.P. v. Intuitive Surgical, Inc., Intuitive Surgical Operations, Inc., Intuitive Surgical Holdings, LLC, Nos. 2024-1072, 2024-1125 (Fed. Cir. Oct. 2, 2025), the Federal Circuit affirmed the decision of the U.S. District Court for the District of Delaware that 1) excluded the patent owner’s damages expert’s testimony and 2) reduced the jury’s $10 million damages award to $1.
Background
Rex Medical, L.P. (“Rex”) sued Intuitive Surgical, Inc., Intuitive Surgical Operations, Inc., and Intuitive Surgical Holdings, LLC (collectively, “Intuitive”) for alleged infringement of its two related patents directed to surgical stapling: U.S. Patent Nos. 9,439,650 (the “’650 patent”) and 10,136,892 (the “’892 patent”). Rex later withdrew the ’892 patent from the case.
Rex’s damages expert, Mr. Kidder, opined that a hypothetical license negotiation for the ’650 patent would have resulted in a $20 million lump sum payment. His analysis was based on a license agreement stemming from a prior litigation between Rex and non-party Covidien (the “Covidien License”). The Covidien License was a $10 million license agreement covering multiple patents, including not only the ’640 patent and ’892 patent, but also eight other US patents, seven US patent applications, and 19 foreign patents or patent applications. The district court excluded Mr. Kidder’s testimony for failure to “adequately address the extent to which [the] ’892 and the other patents contributed to the lump sum payment in the Covidien license.” Slip Op. at 7.
At trial, neither party’s damages expert testified. The jury found that Intuitive infringed the ’650 patent and awarded Rex $10 million in damages. Intuitive filed a renewed motion for judgment as a matter of law (JMOL) on infringement, invalidity, and damages. While the district court upheld the infringement and validity findings, it concluded that Rex failed to prove its damages and reduced the damages award to nominal damages of $1 and denied a new trial. Rex appealed the district court’s exclusion of its damages expert’s testimony and reduction of the jury’s damages award.
Fed. Cir. Decision
Exclusion of Expert Testimony for Failure to Apportion was Proper
The Fed. Cir. agreed with the district court’s conclusion that Mr. Kidder’s apportionment analysis was deficient. In particular, Mr. Kidder did not allocate the Covidien lump sum payment between the ’650 and ’892 patents. Slip Op. at 11. Nor did he allocate any value to the other patents and patent applications. Id. The Fed. Cir. further noted that the fact that the ’650 and ’892 patents were the only ones asserted against Covidien and Intuitive proves little to nothing about the relative value of foreign patents. Id. As a result, the Fed. Cir. determined that “Mr. Kidder’s opinion that nearly all the value of the Covidien license derives from either the ’892 patent or the ’650 patent is untethered to the facts of this case.” Id.
Reduction of Jury Award was Proper
The Fed. Cir. agreed with Rex that the district court’s decision to “remit the damages aware to nominal damages of $1” was effectively a grant of JMOL of no damages, not a remittitur. Id. at 12. Rex further argued that it was an error to grant JMOL because “a license to the ’650 patent has some value” and “the evidence does not compel the conclusion that zero is the only reasonable royalty.” Id. at 13. The Fed. Cir. disagreed, noting that the patent damages statute, 35 U.S.C. § 284, “does not require an award of damages if none are proven that adequately tie a dollar amount to the infringing acts.” The Fed. Cir. pointed out that Rex presented no evidence at trial that would allow the jury to apportion the $10 million lump sum payment in the Covidien License or otherwise reasonably infer a reasonable royalty award for infringement of the ’650 patent alone. Id.
In particular, the Fed. Cir. noted that Rex did not present any testimony discussing the relationship or differences between the ’650 and ’892 patents, which was important because Rex asserted only the ’650 patent at trial. Id. at 14. In addition, while Rex’s lay witness testified as to certain factors that Rex considered in licensing to Covidien, there was no testimony on how to consider these factors to apportion the value of the ’650 patent. Id. at 14-15. Overall, the Fed. Cir. found that Rex did not meet the requirement that damages theories relying on comparable licenses must account for distinguishing facts when invoking them to value the patented invention. Id. at 16. The Fed. Cir. further emphasized that 35 U.S.C. § 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.” Id. at 14.
This decision highlights the importance of proper apportionment in damages analysis. When relying on “comparable” licenses that include unasserted patents to support a damages theory, it is crucial that the damages expert factually align the licenses with the circumstances of the case and adequately separate the value of the asserted patent(s). Failing to meet these standards and lacking evidentiary foundation for damages risk not only exclusion of expert testimony but also the loss of meaningful recovery.