IP Law Daily, PATENT NEWS—EcoFactor petitions Supreme Court over Federal Circuit’s reversal of $20M jury damages award, (Sep 26, 2025)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

The Federal Circuit improperly supplanted the jury’s factfinding role and deprived the petitioner of due process in vacating a $20M jury verdict against Google, EcoFactor alleges.

EcoFactor, Inc., a Silicon Valley-based energy technology company, has filed a petition for certiorari challenging the Federal Circuit's en banc decision invalidating a jury award for damages in its long-running patent dispute with Google LLC. EcoFactor alleged that the Federal Circuit reweighed expert testimony in violation of the Seventh Amendment, created a patent-specific evidentiary standard inconsistent with Rule 702 and Daubert, and resolved the appeal on a contract interpretation theory that had not been litigated, in violation of due process (EcoFactor, Inc. v. Google LLC, Dkt. No. 25-341 (U.S. filed Sept. 18, 2025)).

Background. EcoFactor, headquartered in California, develops smart energy management solutions, including networked thermostat systems designed to optimize HVAC performance. The company licenses its patented technology to major HVAC manufacturers, including Schneider Electric, Daikin, and Johnson Controls. Through its Nest brand, Google LLC manufactures one of the most widely used consumer smart thermostats. The parties' relationship has been adversarial since EcoFactor filed suit in 2020 in the Western District of Texas, alleging that Google's Nest thermostats infringed EcoFactor's patented methods.

The case centers on U.S. Patent No. 8,738,327 (the '327 patent), issued May 27, 2014. The patent discloses methods of integrating thermostats into computer-networked HVAC systems to enhance energy efficiency. Claim 5 of the '327 patent became the focus of the trial. EcoFactor has described the '327 patent as a cornerstone of its portfolio, emphasizing its role in advancing smart home automation technologies.

At trial, EcoFactor’s damages expert, David Kennedy, testified that a reasonable royalty should be calculated based on comparable licenses EcoFactor had executed with Schneider, Daikin, and Johnson Controls, as well as Google’s own conjoint surveys and internal communications. Kennedy proposed a per-unit royalty that, when applied to Google’s sales, resulted in damages of over $20 million.

The jury returned a verdict for EcoFactor, awarding $20,019,300 in damages. Google moved for judgment as a matter of law and for a new trial, arguing that Kennedy’s methodology was speculative. The district court denied the motions, holding that Kennedy’s testimony was rooted in sufficient evidence and that credibility disputes were for the jury.

On appeal, a Federal Circuit panel initially affirmed, observing that Kennedy had not “plucked his rate from nowhere” but relied on license agreements and Google’s data. After an en banc rehearing, however, the Federal Circuit reversed. The majority held that Kennedy’s testimony failed Rule 702 and Daubert standards because it was not based on “sufficient facts or data.” The court vacated the damages award and remanded for a new trial.

Two judges dissented, contending that the majority exceeded its mandate, reweighed facts, and introduced contract interpretation issues sua sponte. EcoFactor now seeks Supreme Court review.

Seventh Amendment. EcoFactor contends that the Federal Circuit violated the Seventh Amendment by displacing the jury’s role as factfinder. The Supreme Court has repeatedly held that appellate courts may not reexamine jury-determined facts if supported by probative evidence. In Lavender v. Kurn, 327 U.S. 645, 653 (1946), the Court stated that verdicts must stand if “reasonable men could differ as to the conclusions to be drawn.” Likewise, in Tennant v. Peoria & P.U. Ry. Co., 321 U.S. 29, 35 (1944), the Court emphasized that conflicting testimony must be resolved by the jury.

EcoFactor argues that the en banc court violated these principles by substituting its own view of the licenses and discounting corroborating testimony, including that of EcoFactor’s CEO, Shayan Habib. Judge Reyna’s dissent echoed this concern, warning that appellate courts cannot reweigh expert credibility. Judge Stark similarly observed that the majority blurred the line between admissibility and weight, improperly collapsing the two inquiries.

Rule 702 and Daubert. EcoFactor next contends that the Federal Circuit has developed a patent-specific, heightened application of Rule 702 that diverges from other circuits. Under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993), the trial court's role is to act as a gatekeeper, excluding testimony only if it lacks reliability or relevance. Once admitted, disputes over an expert's assumptions or methods are for the jury.

Other circuits apply Rule 702 with deference to juries. The Second Circuit in In re Pfizer Inc. Sec. Litig., 819 F.3d 642, 665 (2d Cir. 2016) held that weaknesses in methodology affect weight, not admissibility. The Third Circuit in Leonard v. Stemtech Int’l Inc., 834 F.3d 376, 391 (3d Cir. 2016) and the Fifth Circuit in Pipitone v. Biomatrix, Inc., 288 F.3d 239, 249–50 (5th Cir. 2002) adopted similar reasoning.

By contrast, the Federal Circuit excluded Kennedy’s testimony wholesale, concluding that the licenses did not support his per-unit royalty. EcoFactor cites Enplas Display Corp. v. Seoul Semiconductor Co., 909 F.3d 398, 410–11 (Fed. Cir. 2018) and Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1339–40 (Fed. Cir. 2009) as part of a pattern in which the Federal Circuit displaces juries by reinterpreting damages evidence. EcoFactor argues that this practice creates a “dual evidentiary regime,” one for patent cases and another for all other civil litigation.

Due process. EcoFactor further asserts that the en banc court violated its Fifth Amendment rights by deciding the case on an unbriefed issue of contract interpretation. The majority's reasoning hinged on whether EcoFactor's license agreements established a per-unit royalty. Google had not raised this theory in the district court or on appeal. The en banc order itself limited review to whether the district court correctly applied Rule 702.

The petition contends that the Supreme Court has condemned such departures from adversarial principles. In Nelson v. Adams USA, Inc., 529 U.S. 460, 466 (2000), the Court held that due process requires notice and an opportunity to be heard. Similarly, in United States v. Sineneng-Smith, 140 S. Ct. 1575, 1579 (2020), the Court vacated a Ninth Circuit decision for deciding on grounds not raised by the parties. Judge Reyna, dissenting, characterized the majority’s decision as a “sua sponte transformation” that deprived EcoFactor of fair process.

Broader implications. EcoFactor contends that the case offers an ideal vehicle for Supreme Court review. Damages are often the most contested issue in patent trials, and jury verdicts carry particular importance in high-value cases. If the Federal Circuit’s approach persists, EcoFactor warns, virtually any jury damages award could be overturned by appellate courts reinterpreting expert testimony.

EcoFactor likens the situation to past instances where the Supreme Court corrected the Federal Circuit’s deviation from general law. In eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), the Court rejected the Federal Circuit’s categorical rule on injunctions. In Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), the Court restored the traditional standard for fee-shifting. EcoFactor urges the Court to again intervene, this time to restore uniformity in evidentiary law and reaffirm the constitutional role of the jury.

Questions presented. The petition asks the Court to address two questions: (1) Whether the Federal Circuit is permitted to apply a different, more stringent standard for the admission of expert testimony regarding damages in patent cases than is applied by other appellate courts reviewing expert testimony on other subjects, thereby creating a conflict in the application of Federal Rule of Evidence 702;and (2) Whether the Federal Circuit violated EcoFactor’s due process rights under the Fifth Amendment by deciding the appeal on a contract interpretation issue that was not raised in the district court, was not briefed by the parties on appeal, and was outside the scope of the en banc proceeding.

Relief sought. EcoFactor requests the Supreme Court to grant certiorari, reverse the Federal Circuit’s judgment, reinstate the $20,019,300 jury damages award, and clarify that appellate courts may not reweigh expert testimony admitted at trial, create patent-specific evidentiary rules, or resolve unbriefed issues. According to the petitioner, these steps are necessary to safeguard the predictability of the patent system, ensure uniform application of Rule 702, and preserve due process protections in patent litigation.

The Case is Dkt. No. 25-341.

Attorneys: Brian Ledahl (Russ August & Kabat) for EcoFactor, Inc. Ginger D. Anders (Munger, Tolles & Olson LLP) for Google, LLC.

Companies: EcoFactor, Inc.; Google, LLC

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