Patent Damage Arguments Move to the Supreme Court: Built-In-Apportionment

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by Dennis Crouch

R.J. Reynolds has petitioned the Supreme Court to review a $95 million patent damages award that relied on the Federal Circuit’s “built-in apportionment” doctrine, setting up a potential Supreme Court showdown. In R.J. Reynolds Vapor Company v. Altria Client Services LLC, Reynolds argues that the Federal Circuit effectively nullified the Supreme Court’s 140-year-old mandate in Garretson v. Clark, 111 U.S. 120 (1884), that patent damages “must in every case” be apportioned between patented and unpatented features. [RJR v Altria Petition][RJR v. Altria – Appendix]

The RJR opinion released prior to the Federal Circuit’s recent en banc decision in EcoFactor, Inc. v. Google LLC, 137 F.4th 1333 (Fed. Cir. 2025), and that case may be enough to warrant a new outcome (although note that EcoFactor does not mention RJR). And, the petition for certiorari asks the Supreme Court to “grant, vacate, and remand in light of the Federal Circuit’s recent en banc decision in EcoFactor.”

The petition also asks a more fundamental question focusing Supreme Court precedent: “whether the Federal Circuit’s “built-in apportionment” exception violates Garretson‘s apportionment requirement.”

Meanwhile, EcoFactor has filed for an extension application so that its own petition for certiorari will be due mid-September 2025, with a likely parallel focus on the Federal Circuit’s approach to patent damages expert testimony under Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). A third case focusing on apportionment, Jiaxing Super Lighting Electric Appliance Co. v. CH Lighting Technology Co. (Fed. Cir. July 28, 2025), would make an interesting trio for the Supreme Court to consider.

Famed Patent Litigator Bill Lee and Stanford professor Mark Lemley recently published an influential article that provides grounding for RJR’s petition. William F. Lee & Mark A. Lemley, The Broken Balance: How “Built-In Apportionment” and the Failure to Apply Daubert Have Distorted Patent Infringement Damages, 37 Harv. J.L. & Tech. 256 (2024). The article extends prior work by both, including Lee’s 2016 article with Prof. Melamed. Douglas A. Melamed and William F. Lee, Breaking the Vicious Cycle of Patent Damages, 101 Cornell L. Rev. 385 (2016).