Continued Scrutiny: A Brief Look at Damages Updates

In 2026, the Federal Circuit continues to iterate on its 2025 en banc decision in EcoFactor and 2024 decision in Brumfield, issuing several notable opinions addressing the gatekeeping role of district court judges in evaluating expert opinions and the availability of extraterritorial sales in damages awards. The court has also signaled that it may be becoming increasingly comfortable with larger damages awards. These recent decisions offer numerous practice tips for practitioners, as well as one big-picture theme.

Expert gatekeeping post-EcoFactor

Barry v. DePuy Synthes Companies

In Barry v. DePuy Synthes Companies, 164 F.4th 896 (Fed. Cir. Jan. 20, 2026), Dr. Mark A. Barry sued DePuy in the Eastern District of Pennsylvania, alleging that it had induced surgeons to infringe his claimed method for performing spinal surgery. Dr. Barry’s damages expert relied on the results of his survey expert to estimate that at least 610,000 infringing surgeries had been performed during the pertinent damages period. While the court had denied DePuy’s pretrial Daubert motions, it reversed course mid-trial, excluding both of Dr. Barry’s experts and granting judgment as a matter of law to DePuy.

The Federal Circuit reversed the district court in a 2-1 split. Writing for the majority, Judge Stark held that the district court abused its discretion in granting the motion to exclude because its decision was based on no record evidence to support that the alleged survey flaws made it unreliable as opposed to unpersuasive. Judge Prost dissented, citing EcoFactor: “As the 2023 amendments to the Federal Rules of Evidence now make abundantly clear, the proponent of evidence must ‘demonstrate[ ] to the court’ its reliability. Fed. R. Evid. 702 (emphasis added). The Advisory Committee explicitly criticized district courts for treating the ‘critical questions of the sufficiency of an expert's basis, and the application of the expert's methodology’ as ‘questions of weight and not admissibility.’” 

As interesting background, Judge Prost dissented from the original panel decision in Ecofactor and Judge Stark was among the dissenters in the en banc holding. The en banc holding reached the opposite result as the panel on a motion for a new trial on damages, consistent with what Judge Prost had argued in her Ecofactor panel dissent and her dissent in this case. 

Takeaways:

• Preserve every reliability objection with specificity and frame your expert attacks as methodology vs. execution.
• Unexplained admissibility rulings are vulnerable to appeals.
• Outcomes involving damages expert reliability issues may be impacted by the panel.

Exafer Ltd. v. Microsoft Corp.​

In Exafer Ltd. v. Microsoft Corp., 169 F.4th 1089 (Fed. Cir. Mar. 6, 2026), Exafer accused some Microsoft Azure Network features of infringement. Its damages expert built a royalty based on virtual machine (VM) hours using Microsoft’s VM pricing. The expert opined that, based on the defendant’s documents, implementation of the accused features allowed reduction in central processing unit (CPU) usage in servers, freeing up CPU cores to host additional VMs, and calculated an incremental benefit attributable to the claimed inventions of $534.3 million.​ Microsoft argued in a Daubert motion that the opinion should be excluded because the expert used unaccused VMs for the damages estimate.

Relying on Enplas Display Device Corp. v. Seoul Semiconductor Co., 909 F.3d 398 (Fed. Cir. 2018), the Western District of Texas excluded Exafer’s damages expert for including unaccused VMs in the royalty base, then denied leave to re-open discovery and granted summary judgment for absence of a remedy.

The Federal Circuit reversed, finding that the district court abused its discretion in excluding the non-infringing activities. The court explained that Enplas bars a royalty base only when the unaccused products have no causal connection to the infringement; it is not a categorical bar on any unaccused product being included in a royalty base. Here, the court found that there was a causal chain based on the defendant’s own documents: The accused features cut CPU usage and allowed Microsoft to host more VM hours. The Federal Circuit found that Exafer’s expert sufficiently tied an incremental benefit to that usage, which was $0.0625 per VM hour, for a total of about $534 million.

Takeaways:

• Plaintiffs may be able to recover damages for non-accused activities if there is a strong causal chain from feature to measurable benefit to royalty base.
• Defendants should not rely on a per se rule excluding damages for non-accused activities; instead, attempt to break the causal chain.
• This is also an example of a larger damages award that was upheld by the Federal Circuit.

Willis Electric Co. v. Polygroup Ltd.

In Willis Electric Co. v. Polygroup Ltd., 166 F.4th 1363 (Fed. Cir. Feb. 17, 2026), Willis sued Polygroup in the District of Minnesota on patents related to pre-lit artificial Christmas trees. After 16 inter partes review proceedings, only a single dependent claim remained. The claim added a coaxial trunk connector limitation to an independent claim that otherwise was invalid. The jury found infringement of the dependent claim and awarded roughly $42.5M. Polygroup moved for a new trial on damages, arguing that Willis’ expert’s apportionment methodologies took into account more than the independent value of the limitation added by the dependent claim and analyzed profit premiums and comparable licenses.​ The district court denied the motion, whereafter Polygroup appealed the admission of the patentee's damages expert under Rule 702.

The Federal Circuit affirmed, holding that apportionment does not require stripping out the value of conventional elements: “[I]t is improper to assume that a conventional element cannot be rendered more valuable by its use in combination with an invention.”​ The court found that Polygroup’s attacks on license comparability, price averaging, and profit premiums went to weight, not admissibility, and that a comparability dispute is “one of fact over which reasonable minds can differ.”​

Takeaway: 

• For apportionment, conventional elements can be made more valuable by being combined with an invention, and patentees should show their apportionment using multiple approaches.

Foreign sales post-Brumfield

Trustees of Columbia Univ. v. Gen Digital Inc.

In Trustees of Columbia Univ. v. Gen Digital Inc., 169 F.4th 1320 (Fed. Cir. Mar. 11, 2026), Columbia sued Gen Digital in the Eastern District of Virginia, asserting two patents involving anti-virus and anti-malware computer software. The jury found willful infringement and awarded about $185M, including about $94M in foreign sales.​ The royalty for extraterritorial sales was based on findings that the infringing product sold to foreign customers was made in the United States and distributed from the United States. However, Columbia had not presented a foreign sales damages theory under Brumfield.​

The Federal Circuit vacated the judgment. On foreign sales, the court applied Microsoft v. AT&T Corp., 550 U.S. at 446, holding that software sold abroad is not “made in” or “distributed from” the United States merely because it was transmitted from domestic servers or copied from a domestic master. Further, the court found that Columbia could not save the award on a Brumfield-style causation theory — implying that such a theory might otherwise have been acceptable — because it never presented such a theory to the jury. The court explained that a patentee may “waive its right to a damages award when it deliberately abandons valid theories of recovery.”

Takeaways:

• To obtain damages for foreign sales, patentees must present a domestic nexus theory to the jury that fits the statue and follows the Brumfield model.
• Though the court vacated damages here under a different theory, the court again signaled an acceptable path for extraterritorial royalties under Brumfield. 

Large damages theories are surviving

Versata Software, LLC v. Ford Motor Co.

In Versata Software, LLC v. Ford Motor Co., 176 F.4th 1336 (Fed. Cir. May 22, 2026), Versata sued Ford on the basis of a software license that had expired in 2014, alleging that Ford developed its own product while it still had access to Versata’s software. At trial in the Eastern District of Michigan, the jury awarded over $100 million in damages to Versata ($22.4M for trade secret misappropriation and $82.3M for breach of contract). The district court granted Ford’s motion for judgment as a matter of law, cutting the trade-secret damages to $0 and the contract damages to $3. It precluded Versata from seeking unjust enrichment damages for trade secret misappropriation and found that “the jury had no way to calculate Versata’s claimed breach of contract damages with reasonable certainty.”

On breach of contract, the Federal Circuit reversed, holding that there was “sufficient evidence that provided the jury with a discernible path to properly calculate damages.” The court explained that Michigan law requires reasonable certainty — not mathematical certainty — and reinstated the full damages award. On trade secret misappropriation, the Federal Circuit vacated and remanded for a new trial on damages, finding that unjust enrichment damages are available under both the Defend Trade Secrets Act and the Michigan Uniform Trade Secrets Act as a statutory right.

Takeaway: 

• Here, the court reversed and vacated two post-trial rulings that had reduced damage to almost $0, reinstating a nearly nine figure damages award and clearing the path for additional damages after a new trial.

Big-picture theme

The Federal Circuit seems to be increasing scrutiny on expert admissibility decisions, requiring they be sufficiently supported in the record, while perhaps becoming more permissive on the amount and bases for damages calculations.