Federal Circuit Grants En Banc Rehearing in EcoFactor vs. Google

The current news is some arcana about an en banc appellate rehearing about EcoBee's damages expert. I won't attempt to explain the issue since I don't understand it myself.

Anyhow, I had a conversation once with Catherine Lacavera, who at the time was head of Patent Litigation. I argued that damages awards should be based on what a willing buyer pays a willing seller in other cases, not on some "hypothetical negotiation. She didn't quite understand the issue, and said their damages formulas already did take that into account.

In reality, another VP of Engineering confirmed for me that he would never agree to a royalty-based license of anything, unless it had a cap on it. I don't know where they got this $20M figure, but "damages experts" get paid the big bucks.

I wasn't involved in this one, but I WAS an advisor on a different Nest case, back in 2015 or so. Apparently Google lost this one in a jury trial in West Texas (Waco).

Here's the form the jury returned:

https://fingfx.thomsonreuters.com/gfx/legaldocs/gkplgjkqyvb/...

Claim 5 reads:

the patent in question is https://patents.google.com/patent/US8738327B2/en?oq=us873832..., claim 5.

1. A system for controlling the operational status of an HVAC system comprising: at least one thermostat associated with a structure that receives temperature measurements from inside the structure, the structure conditioned by at least one HVAC system, the thermostat having at least a first setting stored therein; one or more servers located remotely from the structure, the one or more servers configured to receive measurements of outside temperatures from at least one source other than the HVAC system,

the one or more servers are further configured to communicate with the thermostat via a network, wherein the one or more servers receive inside temperatures from the thermostat and compares the inside temperatures of the structure and the outside temperatures over time to derive an estimation for the rate of change in inside temperature of the structure in response to outside temperature,

the one or more servers are further configured to receive a demand reduction request and determine whether the structure is associated with demand rejection request, and

based on the determination that the structure is associated with the demand reduction request, the one or more servers are further configured to send a signal to the thermostat to change the setting to a second setting to reduce electricity demand by the HVAC system.

5. The system as in claim 1 in which the estimation is a prediction about the future rate of change in temperature inside the structure.

If you scroll down, the jury awarded EcoBee $20,019,300.