A Pennsylvania district court ruled that the EMVR criteria need not be applied where the ancillary device is a part of the patented product and appears in the patent claims. The court considered arguments by defendant Varian that linear accelerators should not be included in the royalty base under the EMVR.
By way of background, the EMVR requires that three conditions be met in order to include an entire apparatus as the royalty base:
- The infringing components must be the basis for customer demand for the entire machine including the parts beyond the claimed invention (or the infringing aspects substantially created the value of the component parts);
- The individual infringing and non-infringing components must be sold together so that they constitute a functional unit or are parts of a complete machine or single assembly of parts; and
- The individual infringing and non-infringing components must be analogous to a single functioning unit.
Here, the patent relates to plaintiff’s “RPM System” that is used with linear accelerators. Defendant argues that the EMVR applies because linear accelerators are not a part of the patented invention. Defendant also argues that the linear accelerators are prior art, and that this “artful drafting” cannot serve as a basis to expand the royalty base. Varian further argues that Pitt cannot meet the three-prong test under the EMVR to include linear accelerators in the royalty base.
Plaintiff Pitt argues that the EMVR only applies to unpatented components of an apparatus, and thus the EMVR does not apply here because linear accelerators are part of the infringing apparatus.
The Court agrees with Pitt, stating that the EMVR does not apply. It states: “[t]he United States Court of Appeals for the Federal Circuit has repeatedly held, and Varian acknowledges in its brief, that the EMVR only applies when unpatented products are combined with patented products. Uniloc, 632 F.3d at 1318.” Although this may describe the traditional use of the EMVR, the court doesn’t attempt to square that with the CAFC’s positions in other recent EMVR cases. For example, in Lucent, the CAFC applied the EMVR where the only software product at issue was Microsoft Outlook and hence, the distinction between patented and unpatented product does not seem relevant. Similarly, in Uniloc, the products were Microsoft Office and Windows, and the CAFC rejected the use of total product sales since the EMVR was not met.
The Court also explains that the linear accelerators are part of the patented apparatus, and states: “the linear accelerators were a critical component of the infringing apparatus for Claims 22 and 38 and not just an accessory that is used in conjunction with the RPM System.”
So right now, it’s unclear how to square this decision with Lucent and Uniloc. It actually sounds like the EMVR criteria would have likely been met (had the Court applied it) based upon the Court’s thoughtful description of how the linear accelerators work together with the RPM System.
University of Pittsburgh v. Varian Medical Systems, Inc., 2-08-cv-01307 (W.D. PA, February 10, 2012, Memorandum Opinion) (Schwab)