We’ve written a lot about the recent amendment to Federal Rule of Evidence 702.  As noted here, the amendment (1) mandates that the court must determine the admissibility of evidence before presenting it to the jury, (2) integrates the preponderance of evidence standard—requiring the proponent of expert testimony to prove that it is more likely than not that all of Rule 702’s requirements are met, and (3) reinforces that each expert opinion must reliably apply the expert’s principles and methods to the facts of the case. These changes were driven by the fact that “many courts have held that the critical questions of the sufficiency of an expert’s basis, and the application of the expert’s methodology, are questions of weight and not admissibility.”  Fed. R. Evid. 702 Advisory Committee’s Note to 2023 Amendment.  The changes to Rule 702 are intended to prevent such erroneous “weight vs. admissibility” findings.  We’re also fans of the Don’t Say Daubert movement that reminds lawyers that Rule 702 itself – not the Daubert decision – defines the applicable standard for the admission of expert testimony. 

Today’s decision involves a patent infringement decision that doesn’t address drug or medical device subject matter. But the decision may be the best application of amended Rule 702 by a federal court of appeals. In an 8-2 decision an en banc panel of the Federal Circuit held that the trial court abused its discretion in admitting expert testimony under amended Rule 702. EcoFactor, Inc. v. Google LLC, 2025 WL 1453149 (Fed. Cir. May 21, 2025).

The case involves a claim for patent infringement by EcoFactor against Google related to the Nest thermostat. EcoFactor offered an expert opinion from a damages expert who opined on the value of a royalty for the patented technology. Google moved to exclude the expert’s opinion under Rule 702 before trial, but the trial court denied the motion and the jury returned a verdict for approximately $20 million. On appeal, a panel of the Federal Circuit upheld the admission of the expert’s opinions and the jury’s verdict.  The Federal Circuit granted Google’s petition for en banc review to address the district court’s application of Federal Rule of Evidence 702 in admitting testimony from EcoFactor’s damages expert. Id. at *2.

In discussing the application of amended Rule 702 to its analysis, the court noted the following:

In 2023, Rule 702 was amended to clarify that the proponent of the expert testimony bears the burden of establishing its admissibility and to emphasize that an expert’s opinion must stay within the bounds of a reliable application of the expert’s basis and methodology.  The Advisory Committee noted that “many courts have held that the critical questions of the sufficiency of an expert’s basis, and the application of the expert’s methodology, are questions of weight and not admissibility. These rulings are an incorrect application of Rules 702 and 104(a).”  The Advisory Committee explained that “[j]udicial gatekeeping is essential” to ensure an expert’s conclusions do not “go beyond what the expert’s basis and methodology may reliably support.”

Id. at *3 (internal citations omitted).  Distilling this to courts’ gatekeeping roles under Rule 702, the panel stated that “[d]eterminations of admissibility, which fall within the gatekeeping role of the court, are separate from determinations of weight and credibility, which are within the province of the jury in a jury case.”  Id. at *4.  “While the credibility of an expert’s damages calculation is properly left to a jury, a determination of reliability under Rule 702 is an essential prerequisite.”  Id. (emphasis added).

The court then turned to its analysis of the damages opinions from EcoFactor’s expert. The expert based his damages calculations on an analysis that was intended to identify the royalty to which the parties would have agreed if they had negotiated an agreement before the infringement occurred.  That is an accepted approach—if it is done reliably.  Here the expert looked at license agreements reached as part of infringement settlements between the plaintiff and three other companies. Those agreements all identified certain “lump sum” amounts that the alleged infringers agreed to pay to EcoFactor. They were not royalty rates, and the agreements expressly stated that they should not be interpreted as an agreement by the companies that the amounts were reasonable royalties.  Despite that, EcoFactor’s expert treated the numbers as reasonable royalty rates and extrapolated those numbers to calculate a damages amount based on the alleged infringement by Google.

The licenses therefore did not support the premise of the expert’s opinion that the other companies agreed to pay a specific royalty rate or that the amounts in the agreements were reasonable royalties. Without that connection, the expert’s opinions did not satisfy the requirements of Rule 702. In explaining its holding, the court noted that:

This analysis does not usurp the province of the jury, nor does it involve this court deciding disputes of fact. It involves the gatekeeping function of the court to ensure that there are sufficient facts or data for [the expert’s] testimony that the licensees agreed to the . . . royalty rate.

Id. at *7.

The expert also relied on testimony from EcoFactor’s CEO regarding the calculations of the lump-sum amounts included in the licensing agreements with the three other companies. The CEO testified that the basis for these calculations was his “general understanding of the relevant industry.” Id. The court found that this testimony amounted to an “unsupported assertion from an interested party” that “cannot provide a sufficient factual basis for [the expert] to provide a reliable opinion” regarding a reasonable royalty rate. Id. at *8.

Finally, EcoFactor argued that, apart from the information relied on by its damages expert, there was additional record evidence that supported his methodology.  The panel rejected that argument:

When evaluating the sufficiency of an expert’s factual basis for the propositions asserted as the expert’s opinion, a court examines the evidence on which the expert purports to rely. Rule 702 requires the expert’s relied-upon facts or data—not the record as a whole—to constitute a sufficient basis for the expert’s testimony.

Id. at *8. The court concluded that “Rule 702 sets forth the overarching requirement of reliability, and an analysis of the sufficiency of the expert’s basis cannot be divorced from the ultimate reliability of the expert’s opinion.” Id.

Holding that the district court’s decision to admit the damages testimony was “undoubtedly prejudicial,” the court reversed the decision denying Google’s motion for a new trial and remanded for a new trial on damages.  In the drug and device context we routinely see plaintiff-side expert opinions where the facts do not support the opinions. And, despite the amendments to Rule702, some courts are still neglecting their gatekeeping role and employing an incorrect “weight versus admissibility” rationale to admit opinions that are unsubstantiated or based on unreliable methodologies.  Today’s decision provides strong support to counter those situations. The Federal Circuit fulfilled its gatekeeping role with a straightforward application of amended Rule 702.