On May 21, 2025, the Federal Circuit, sitting en banc for just the second time in recent years, vacated a $20 million smart-thermostat damages award against Google and sent the case back for a new damages trial.  In EcoFactor, Inc. v. Google LLC (No. 23-1101) the court held that the district judge abused his discretion by allowing EcoFactor’s damages expert to anchor his royalty on an “$X per unit” rate supposedly embodied in three prior settlement licenses—without any facts showing the licensees ever agreed to that rate.

What Happened

• The verdict. A Waco jury found Google’s Nest thermostats infringed EcoFactor’s ’327 patent and awarded $20,019,300 in lump-sum damages.
• The appeal. Google argued the expert’s opinion violated Federal Rule of Evidence 702.  A three-judge panel first affirmed, but the court took the case en banc to revisit the Rule 702 issue.

The Holding

• The court parsed the three relevant agreements and found each showed only EcoFactor’s belief of the per unit rate, but not the licensees’ assent to that rate.  In fact, two of the agreements even disclaimed that implication.
• Because the expert’s central premise—that “other people have paid” $X per unit—was unsupported, his testimony lacked “sufficient facts or data” under Rule 702 and should have been excluded.
• The court remanded for a fresh damages proceeding, while reinstating the earlier panel’s affirmance on infringement and §101 validity issues.

Why this Matters to Practicing Lawyers

• Application of the 2023 Rule 702 amendments. The opinion underscores that trial judges must find—by a preponderance—that an expert’s foundation actually exists; shaky assumptions are out. The 2023 amendment’s thrust was exactly that—a desire to give more teeth to the district court’s gatekeeping function.
• Lump sum licenses are not plug-and-play. A recital stating what the patentee believes is a reasonable royalty does not, by itself, establish that rate as an “established royalty” or a comparable license.  Expect tougher scrutiny of lump-sum settlements offered to prove a per-unit royalty.

The Bottom Line

EcoFactor is a cautionary tale: recitals aren’t reality, and Rule 702’s “sufficient facts or data” requirement now has sharper teeth, just as the rule makers intended.  Patent litigators—whether offering or attacking damages opinions—should expect closer judicial gatekeeping and craft their expert evidence accordingly.

The Future

Keep an eye out for a petition to the Supreme Court.  Two Federal Circuit judges dissented on the merits, indicating a split view.  EcoFactor also presented an interesting argument that the en banc review was improper because two judges had been recused, which it could try to bring to the Supreme Court.