Federal Circuit Precedential

Holding:  A party is not required to identify in advance which witness is going to authenticate a document.  A damages expert must properly apportion license fees among licensed patents in a hypothetical negotiation based on prior licenses, and testimony cannot simply be justified by a series of adjustments without concrete facts or data.

Super Lighting sued CH Lighting for infringement of US Patent Nos. 10,295,125; 10,352,540; and 9,939,140.  Each of these patents is related to LED tube lamps.  CH Lighting conceded infringement of the ‘125 Patent and the ‘540 Patent.  At trial, the district court excluded evidence relating to validity of the ’125 Patent and the ‘540 Patent and granted judgment as a matter of law (JMOL) that the ’125 Patent and the ‘540 Patent were not invalid on the ground of an on-sale bar.  A jury found infringement of the ‘140 Patent and awarded damages for infringement of all three patents.

CH Lighting’s invalidity expert, Dr. Lebby, presented testimony that the three different LED tube lamp products that embodied the claims of the ‘125 Patent and the ‘540 Patent were on sale before the effective filing dates of these patents.  However, the district court found that a reasonable jury could not find Dr. Lebby’s testimony alone to be sufficient to show that the prior art tubes were on sale prior to the effective filing dates.

For the on-sale bar to apply, an offer for sale must embody the claims of the asserted patent and be the subject of a commercial offer for sale and be ready for patenting.  Dr. Lebby testified that each of the prior art tubes satisfied the claim limitations of the asserted claims of the ‘125 Patent and the ‘540 Patent.  Dr. Lebby also testified that the prior art tubes were on sale in 2014, before the effective filing date of the ‘125 Patent and the ‘540 Patent in 2015.  However, Super Lighting contended that Dr. Lebby did not have personal knowledge that the prior art tubes were on sale before the effective filing dates of the patents in suit.  The Federal Circuit found that the district court did not err in concluding that Dr. Lebby’s testimony on its own was not sufficient to establish the on-sale date of the prior art tubes.

CH Lighting also appealed the JMOL decision as to the validity of the patents, arguing that the district court improperly excluded relevant evidence that was sufficient to establish that the prior art tubes were on sale before the effective filing dates of the patents.  The district court excluded testimony of a representative from MaxLite, one of the sellers of the prior art tubes.  The MaxLite representative could have authenticated documents showing an offer for sale for the prior art lighting tubes.  CH Lighting had initially listed a different MaxLite representative who was unable to attend the trial.  The new representative was identified, but the district court refused to allow him to authenticate the documents, stating that CH Lighting did not give Super Lighting sufficient notice.

There is no federal or local rule or order that requires a party to identify in advance which witness will authenticate documents.  Although district courts have wide latitude to determine admissibility of evidence at trial, the Federal Circuit did not see a reasonable basis for excluding the substitute MaxLite witness in this case.  This caused Dr. Lebby’s testimony to be unsupported since Dr. Lebby relied on MaxLite documents.

The Federal Circuit also found that the district court abused its discretion by excluding an internal Super Lighting presentation that showed that Super Lighting had acquired two other prior art light tubes, Cree and Philips tubes, before the effective filing date of the ‘125 Patent and the ‘540 Patent.  Super Lighting argued that CH Lighting had introduced this presentation as evidence of inequitable conduct rather than invalidity.  However, CH Lighting had dropped its inequitable conduct defense before trial, and Dr. Lebby’s expert report used portions of the presentation in his expert report that only addressed invalidity.  Since the presentation had been used in the context of invalidity in Dr. Lebby’s report, the Federal Circuit held that this evidence should not have been excluded.

In addition to reversing the district court’s JMOL decision, the Federal Circuit also ordered a new trial on damages.  CH Lighting appealed the denial of its Daubert motion challenging the admissibility of the testimony of Super Lighting’s damages expert, Ms. Kindler.  Ms. Kindler relied on several of Super Lighting’s licensing agreements with third parties to propose a per-unit royalty based on a hypothetical negotiation.  However, these third-party licenses were for Super Lighting’s entire patent portfolio.  Ms. Kindler stated that a subset of patents that are similar to the patents-in-suit in this case drove the licensing negotiation.  However, no specific testimony as to apportionment of the licensing fees was given.

The district court denied CH Lighting’s Daubert motion without giving any explanation for denial.  In its recent en banc decision in EcoFactor,¹ the Federal Circuit stated that an “absence of reviewable reasoning may be sufficient grounds for this court to conclude the district court abused its discretion.” Therefore, in this case, the Federal Circuit found that the district court should have conducted a more thorough analysis of Ms. Kindler’s damages testimony.  On remand, the district court should focus on whether Ms. Kindler relied on the kinds of data that would be reasonably relied upon by an expert in the field.  Further, for patent damages, the damages expert must apportion value among comparable licenses that include more than one patent.  A failure to properly apportion cannot be satisfied by simply making an upward or downward adjustment to the hypothetical royalty rate based on factors such as level of competition between the parties or changes in prices of the light tubes.  Other differences in the licenses must also be taken into account.

Full Opinion (PDF)

1. EcoFactor, Inc. v. Google LLC, 137 F.4th 1333, 1338 (Fed. Cir. 2025) ↩︎