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EcoFactor Inc. has urged the Federal Circuit to deny Google LLC's request for a full court rehearing after a panel upheld a $20 million patent infringement damages award in EcoFactor's favor. The case centers on allegations that Google's Nest thermostats infringed EcoFactor's smart thermostat patent, and the current ruling could have significant implications for future patent litigation.

$20M Google Royalty Ruling : Google's Bid for Rehearing

Google's petition for an en banc rehearing follows a split panel decision in June that affirmed the $20 million award. Google argues that the decision permits patent holders to "manufacture a royalty rate" without properly apportioning it to the value of the patent in question relative to the infringing products. This, according to Google, could set a dangerous precedent allowing inflated damages in patent cases.

In support of its position, Google cites U.S. Circuit Judge Sharon Prost's dissent, which contends that the damages awarded were improperly based on license agreements that did not reflect the appropriate royalty rate structure.

$20M Google Royalty Ruling : EcoFactor's Response

EcoFactor, in its Wednesday response, counters that the June decision was both legally sound and supported by evidence. The company maintains that the $20 million damages award was appropriately calculated using multiple license agreements with Google’s competitors, which were relevant and indicative of the value of the patent in question.

EcoFactor argues that Google’s call for new apportionment rules would disrupt the established roles of trial courts and juries in patent cases, undermining their authority to evaluate evidence and determine damages. The response also emphasizes that the existing license agreements, though structured as lump-sum payments, were derived from royalty rate calculations, making them pertinent to the case.

"These new rules would obviate the deferential standard of appellate review and require courts to assume both the gatekeeper role of the trial court and the factfinder role of the jury in weighing evidence and evaluating credibility," EcoFactor's response states.

Industry Reactions

Google’s petition has garnered support from major tech companies, including Intel and Apple, which filed amicus briefs backing the call for an en banc rehearing. These companies echo Google's concerns that the current ruling could enable patent holders to secure inflated damages, potentially stifling innovation and market competition.

However, EcoFactor argues that the real motive behind Google's petition is to weaken the protection of patents held by smaller, pioneering companies. EcoFactor asserts that Google and its allies are attempting to overturn legal precedents that ensure fair compensation for patent infringement, particularly when the infringer is a dominant market player.

Conclusion and Next Steps

The Federal Circuit’s decision on whether to grant a rehearing could have far-reaching implications for how patent damages are calculated and what evidence is considered relevant in determining those damages. For now, EcoFactor remains steadfast in its defense of the original ruling, which it believes appropriately reflects the value of its intellectual property.