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EcoFactor v. Google: Where a Royalty Number Comes From

Federal Circuit, en banc, decided 21 May 2025. The court divided 8 to 2. Read from the opinion; quotations verified against the court's text.

Holding

On May 21, 2025 the Federal Circuit, sitting en banc, reversed the denial of a new trial on damages and held that a damages expert's foundational premise, that three licensees had agreed to a particular per-unit rate, "was not based on sufficient facts or data, as required by Rule 702(b)," because it rested on a unilateral recital rather than on the licenses' actual terms.

EcoFactor's damages expert built a royalty rate on three prior licenses. The problem was where in those licenses he found it.

Each contained a "whereas" recital stating a rate. The operative terms were lump sums, and nothing showed the licensees had agreed to the recited number. The en banc court held the expert's premise was not based on sufficient facts or data and ordered a new damages trial.

For any company that licenses patents, the lesson lands at signing time. The documents you create are the evidence a damages case gets built from years later, and a number that appears only in a preamble is not evidence that anyone agreed to it.

What This Case Is Not

This is not a license-drafting checklist. The practical lesson invites one, and contract drafting advice is legal advice. This opinion is about the admissibility of one expert's testimony, not about how to write licenses. What the court found deficient is described here; the drafting question goes to a lawyer.
  • It does not say whether your licenses will support a royalty.
  • It does not say any drafting practice protects you.
  • It was 8 to 2, not unanimous.
  • It does not make an expert's opinion inadmissible in any other case.

Educational, not legal advice. Litigation strategy and exposure are determinations for counsel with the actual facts.

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