The Federal Circuit Edits Its Damages Footnote in Constellation Designs v. LG

by Dennis Crouch

The Federal Circuit today reissued its panel decision in Constellation Designs, LLC v. LG Electronics Inc., No. 2024-1822 (Fed. Cir. Aug. 31, 2026), four months after the original April 28 opinion.  But, the court did not follow the rehearing path suggested by the adjudged infringer LG, and the April panel decision stands unchanged:

• The "optimization" claims of US8842761 and US10693700 are ineligible under § 101;
• The "constellation" claims of US11019509 and US11018922 are eligible;
• The infringement verdict stands (denial of JMOL was proper); and
• The $1.7 million past royalty and $6.75 per television ongoing royalty stand.

What moved in the rehearing decision was just a footnote. The April opinion gave two reasons for leaving the damages award alone even though five of the nine asserted claims are headed toward a judgment of ineligibility. The first was forfeiture. The second was that Constellation's damages expert had testified that the value of the asserted patents was tied to the technology rather than to any of the particular asserted patents or claims, and that no LG witness disputed that testimony. LG's rehearing petition pointed to that testimony to argue that no apportionment ever happened. Valuing the technology instead of the asserted claims is the thing Garretson and its descendants forbid, and the panel converted that concession into the reason the award could survive the loss of five claims. LG went on to argue that its lack of rebuttal testimony was irrelevant because the damages theory was deficient on its face.

The rehearing petition asked the court to vacate the opinion and reverse the denial of judgment as a matter of law of no damages, or in the alternative to remand for damages proceedings on the surviving claims.  The court did not do any of these. It simply deleted the sentence regarding "technology based damages" for patent infringement, the sentence that would have supported infringement damages not tied appropriately to the patents being infringed. The result then is that the holding stands on forfeiture and says nothing about whether a single undifferentiated royalty survives the loss of half the asserted claims.

Here is the edit, with deleted text struck through:

During oral argument, LG argued for the first time that if we determine—as we do here—that some asserted claims are patent ineligible, we should vacate the damages award. See Oral Arg. 18:03–19:34, 42:44–45:38. This argument was foreseeable and should have been raised in LG's opening brief. See, e.g., ABS Glob., Inc. v. Cytonome/ST, LLC, 984 F.3d 1017, 1027 (Fed. Cir. 2021) (collecting cases for proposition that arguments raised for the first time during oral argument are forfeited). Even so, Constellation's damages expert, Dr. Sullivan, testified that the value of Constellation's asserted patents was tied to the technology rather than any asserted patent or claim, J.A. 20280 (Trial Tr. 42:11–23) (testimony of Dr. Sullivan), and none of LG's witnesses disputed this testimony. Cf. J.A. 20333 (Trial Tr. 256:3–16) (testimony of Mr. Lewis acknowledging that the Zenith licenses were similarly tied to the technology rather than any patents or claims).

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