Experts just got torched.
The U.S. Court of Appeals for the Federal Circuit didn’t mince words Thursday in Rex Medical v. Intuitive Surgical: a patent owner’s damages testimony was so sloppy, it got tossed, and a $10 million jury award shrank to a measly buck. We’re talking surgical stapling patents here—‘650 and ‘892—tech that’s supposed to revolutionize operations, or so the PR goes. But forget the gadgets; this is about cold, hard cash. And who cashed in? Not Rex Medical.
Judge Stoll’s opinion, with Dyk and Prost signing on, backs the Delaware district court’s gatekeeping under Daubert. Trial judges aren’t rubber stamps—they’re bouncers at the expert club. Rex’s guy, Douglas Kidder, tried waltzing in with a $10 million Covidien settlement as his golden ticket. Problem? That deal bundled Rex’s whole stapling portfolio—dozens of U.S. patents, foreign ones, applications galore. Kidder just shrugged: nearly all the value’s in our two asserted patents. No math. No breakdown. Nada.
“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.” – CAFC opinion
Boom. That’s the money quote. Untethered—like a balloon in a Silicon Valley hype storm. I’ve covered these medtech wars for two decades; this reeks of the same old trick. Patentees grab a fat lump-sum license from some desperate settler, then pretend it’s all about their pet patent. Judges aren’t buying it anymore.
Why Did Kidder’s License Comparison Crash and Burn?
Look, comparable licenses sound straightforward. But Kidder? He ignored the baggage. Covidien’s deal swallowed eight other U.S. patents, 19 foreign ones, seven apps. Rex even withdrew the ‘892 from the suit midstream—IPR got canned after they hugged it out. Yet Kidder acts like it’s a clean proxy for a hypothetical royalty on just the ‘650. No apportionment. No foreign patent valuation. The CAFC nods to Apple v. Wi-LAN: experts must slice the pie properly, or get excluded.
Here’s my unique spin, one you won’t find in the dry legalese: this echoes the LaserDynamics playbook from 2012, where the Fed Cir nuked a $140M verdict because the expert cherry-picked a non-comparable license without dissecting the portfolio. Back then, it was smartphones; now staplers. History repeats because patentees don’t learn— they’re too busy chasing unicorn royalties in crowded fields like surgical tools, where everyone’s got overlapping claims. Prediction? Medtech trolls will pivot to technical experts only, ditching damages until they hire real quants.
But wait—Rex’s president testified to the Covidien deal too. Jury loved it: $10 million. District judge says nope, JMOL for no damages. CAFC agrees: lay witness chatter ain’t expert analysis. With Kidder out, zero proof left. No new trial needed; it’s not a remittitur, it’s a kill shot.
On the flip—Intuitive’s non-infringement JMOL? Denied. And claim 6 of the ‘650? Not invalid for written description. Rex wins the infringement war, loses the payout battle. Cynical me asks: who’s really winning? The lawyers billing hours on appeals, that’s who.
Does This Kill Lump-Sum Licenses in Patent Cases?
Short answer: no. But it sure tightens the screws. CAFC isn’t banning portfolios; it’s demanding rigor. Kidder could’ve run regressions on patent citations, sales data from Covidien products, even teed up a Georgia-Pacific factor deep-dive. Didn’t. So, exclusion.
Think about Intuitive Surgical—da Vinci robots, billions in revenue. They’re the Goliath here, fending off Rex’s David with procedure. But Goliath’s lawyers just got a precedent: challenge every damages expert on apportionment, especially in multi-patent deals. Rex appeals the zero damages? CAFC says it’s JMOL, not discretionary—end of story.
I’ve seen this spin cycle before. Remember the 2010s patent troll heyday? Juries handed out nine-figure checks on gut feels. Post-Halo, post-Octane, courts got stingy. This? Another nail. Patentees in biotech, medtech—your homework’s doubled. Buzzword “hypothetical negotiation” means actual math now, not vibes.
And the PR spin? Rex probably leaks “win on infringement!” Intuitive touts “no payout!” Reality: nominal damages. A pyrrhic split decision that costs everyone.
What Changed on Invalidity and Infringement?
Cross-appeal was quick. District court nailed claim construction, JMOL denial on non-infringement. Written description for claim 6? Solid—spec supported it. No reversals there. Rex keeps its infringement finding, but it’s lipstick on a pig without cash.
Buried nugget: the ‘892 got yanked, IPR joint-terminated. Parties cutting side deals mid-litigation? Smells like settlement games. Who’s making money? Contingency firms salivating over the next stapler suit.
So, verdict to $1. Precedential. Gatekeepers empowered. Experts, sharpen up—or stay home.
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Frequently Asked Questions
What happened in Rex Medical v. Intuitive Surgical?
CAFC affirmed excluding Rex’s damages expert, slashing $10M jury award to $1, while upholding infringement and validity findings.
Why was the damages expert excluded?
Douglas Kidder failed to apportion value from a multi-patent Covidien license to just the asserted patents, ignoring foreign patents and others.
Does this affect patent damages calculations?
Yes—it stresses rigorous apportionment for portfolio licenses, echoing Apple v. Wi-LAN; expect tighter scrutiny in tech and medtech cases.
