A common bone of contention in reasonable royalty damages is apportionment of the patented feature or improvement with respect to the infringing product as a whole. See generally Garretson v. Clark, 111 U.S. 120, 121 (1884). The Federal Circuit’s recent affirmance of a $42 million reasonable royalty award in Willis Electric Co. v. Polygroup Ltd., 166 F.4th 1363 (Fed. Cir. 2026) provides an instructive example—by demonstrating the profits attributable to products having the patented features versus those products without them. What stands out even more about the facts of Willis was that the damages were tied to infringement of only a dependent claim, since its independent claim had been found invalid.
Both patentee Willis and defendant Polygroup are in the business of artificial pre-lit Christmas trees—an annual joy or chore (or both). Willis’s U.S. Patent No. 8,454,186 aims to ease the decorator’s work: It relates to artificial trees with separable, modular trunk portions that are mechanically and electrically connectable to each other, providing electricity to the trees’ attached lights at any rotational orientation. The prior art required making separate mechanical and electrical connections when assembling pre-lit trees—first by mechanically joining the trunk sections, then by manually connecting electrical cords to power the lights. The ’186 patent improved upon this with a single, integrated connection in which assembling the trunk sections establishes the mechanical and electrical connections simultaneously, allowing a tree to illuminate automatically without additional wiring steps. Independent claim 10 essentially recited this apparatus, where the electrical connection was independent of the rotational orientation of the connected trunk sections. Dependent claim 15—the crux of this case—depended on claim 10 and recited:
15. The lighted artificial tree of claim 10, wherein the trunk connectors of the first and second tree portions form coaxial trunk connectors.
Willis sued Polygroup in the District of Minnesota nearly eleven years ago in August 2015. A foray into IPR proceedings and appeals ensued, the end result of which was independent claim 10 being found unpatentable, but dependent claim 15 surviving. Back in district court litigation, the jury found that Polygroup’s accused trees infringed claim 15, for they included coaxial trunk connectors (among other elements). They further found claim 15 not invalid as obvious, and awarded Willis $4 per infringing tree—a total of $42 million, based on the opinion of Willis’s damages expert Michele Riley.
Ms. Riley used income-based apportionment to compare the profit margins for light-up trees having the claimed coaxial connection versus those trees without it. Ms. Riley assembled evidence that cleanly showed this difference in profits, including data showing that:
- Willis’s embodying One Plug Trees earned a profit of $24, while non-One Plug Trees earned a profit of $4, leading to an incremental profit premium for the One Plug Tree of $20.
- Polygroup’s infringing Quick Set Trees having coaxial barrel connectors earned an incremental profit premium of $4.30 as compared to trees without such connectors, leading to an incremental profit premium of $4.30. Thus, the Willis One Plug and Polygroup Quick Set trees established a profit premium range of $4.30–$20.
- A witness confirming that One Plug Trees earned 20–30% higher profit margins than their non-One Plug counterparts, owing to the One Plug feature.
- Polygroup’s own surveys showing customers were willing to pay more for the Quick Set feature because they viewed it as appealing.
In light of this evidence, Ms. Riley testified that her income approach led to a reasonable royalty range between $4.30–$20. Though Polygroup renewed several Daubert attacks on Ms. Riley’s methodology—for example, her reliance on quoted prices rather than realized revenues or profit margins—the Federal Circuit found her methodology reliable (as had the district court); Polygroup’s criticisms amounted to issues of fact for the jury.
Ms. Riley further complemented her income-based profits analysis with a market-based approach, where she analyzed five licenses and determined a reasonable royalty range of $2–$5. Key here was that four of the licenses had a royalty rate of 5%; on a tree that sold for $100, this was $5. One license—from Willis—provided a royalty of $2 per tree. Polygroup seized upon this discrepancy to attack Ms. Riley’s methodology, but the district and appeals court rejected it. Ms. Riley had explained Wilis’s bargaining position was weakened, since it had been litigating against Polygroup at the time of the license and could not afford to pursue other infringers. This explanation was sufficient to render Ms. Riley’s methodology sound enough to present to the jury. Moreover, at trial, Polygroup did not cross-examine Ms. Riley on any of these discrepancies—again confirming to the trial and appeals courts that her analysis was sound.
Last, Ms. Riley had taken her apportionment-based figures and analyzed them under the Georgia-Pacific framework, using the factors “fine-tune her reasonable royalty to a single figure . . . by applying upward or downward adjustments” and arriving at a royalty of $5 per tree, or $53 million total. The Federal Circuit again rejected Polygroup’s challenges to her Georgia-Pacific analysis. The end result: The jury’s $42 million damages award was affirmed.
