Case: 20-1054 Document: 54 Page: 1 Filed: 11/19/2020
United States Court of Appeals
for the Federal Circuit
______________________
VECTURA LIMITED,
Plaintiff-Appellee
v.
GLAXOSMITHKLINE LLC, GLAXO GROUP
LIMITED,
Defendants-Appellants
______________________
2020-1054
______________________
Appeal from the United States District Court for the
District of Delaware in No. 1:16-cv-00638-RGA, Judge
Richard G. Andrews.
______________________
Decided: November 19, 2020
______________________
CHRISTOPHER P. BORELLO, Venable LLP, New York,
NY, argued for plaintiff-appellee. Also represented by
DAMIEN N. DOMBROWSKI, MICHAEL S. SCERBO, JOSHUA
DANIEL CALABRO, DOMINICK A. CONDE.
WILLIAM F. LEE, Wilmer Cutler Pickering Hale and
Dorr LLP, Boston, MA, argued for defendants-appellants.
Also represented by CHRISTOPHER R. NOYES, New York,
NY; THOMAS SAUNDERS, DAVID P. YIN, Washington, DC.
______________________
Case: 20-1054 Document: 54 Page: 2 Filed: 11/19/2020
2 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
Before PROST, Chief Judge, BRYSON and WALLACH, Circuit
Judges.
BRYSON, Circuit Judge.
Following trial, a jury in the United States District
Court for the District of Delaware found that defendants
GlaxoSmithKline LLC and Glaxo Group Limited (collec-
tively, “GSK”) infringed U.S. Patent No. 8,303,991 (“the
’991 patent”), owned by plaintiff Vectura Limited, and that
the patent was not invalid. The district court denied GSK’s
post-trial motions for judgment as a matter of law and a
new trial. GSK now appeals from the judgment against it.
We affirm.
I
A
Vectura filed this action in 2016, alleging that GSK had
directly and vicariously infringed various claims of the ’991
patent. Vectura later narrowed its infringement case to al-
lege only direct infringement of claim 3 of the patent.
The ’991 patent concerns the production of “composite
active particles” for use in pulmonary administration, such
as in dry-powder inhalers. The composite active particles
described in the patent consist of additive material that is
adhered to particles of active ingredient. ’991 patent, col.
11, ll. 48–55. The active ingredient produces the desired
chemical or biological effect, while the additive particles
promote the dispersion and delivery of the active ingredi-
ent into the lungs when the inhaler is activated.
Id. at col.
10, ll. 6–16.
The specification of the ’991 patent first discloses a
method for adhering additive material to the active ingre-
dient. The method entails milling solid active particles in
the presence of solid additive particles with sufficient en-
ergy to break down coarse particles into fine particles, re-
sulting in the additive particles smearing over, and fusing
Case: 20-1054 Document: 54 Page: 3 Filed: 11/19/2020
VECTURA LIMITED v. GLAXOSMITHKLINE LLC 3
onto, the active particles.
Id. at col. 2, line 4, through col.
3, line 8. The specification also discloses various composite
particles that are created by the disclosed milling method.
Id. at col. 11, ll. 44–59; cols. 13–15. The specification con-
tains a list of additive materials that promote pulmonary
dispersion and are compatible with its milling method.
Id.
at col. 8, line 62, through col. 10, line 52. Magnesium stea-
rate is one of the additive materials discussed in the speci-
fication.
Id. at col. 10, ll. 4–5.
The claims of the ’991 patent cover the composite active
particles, not the milling method. Apparatus claim 1 reads
as follows:
1. Composite active particles for use in a pharma-
ceutical composition for pulmonary administra-
tion, each composite active particle comprising a
particle of active material and particulate additive
material on the surface of that particle of active
material, wherein the composite active particles
have a mass median aerodynamic diameter of not
more than 10 μm, and wherein the additive mate-
rial promotes the dispersion of the composite active
particles upon actuation of a delivery device.
Claim 2 depends from claim 1 and requires the additive
material to include one or more of certain compounds, one
of which is “a metal stearate or derivative thereof.” Claim
3 depends from claim 2 and requires the additive material
to be magnesium stearate.
B
In the district court, Vectura alleged infringement by
GSK’s Ellipta-brand inhalers: the Breo, Anoro, and Incruse
devices. Each of the accused inhalers features one or more
“blisters,” which are sealed receptacles containing a single
active ingredient, an excipient, and, optionally, additive
material. The blisters use magnesium stearate as the ad-
ditive material and lactose as the excipient. As for the
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4 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
active ingredients, the blisters contain one of three drugs—
vilanterol, umeclidinium, or fluticasone.
The Breo inhaler features two blisters. The first con-
tains a mixture of vilanterol, lactose, and magnesium stea-
rate. The second contains a mixture of fluticasone and
lactose, but not magnesium stearate.
The Anoro inhaler also features two blisters. The first
contains a mixture of vilanterol, lactose, and magnesium
stearate. The second contains a mixture of umeclidinium,
lactose, and magnesium stearate.
The Incruse inhaler features only one blister. That
blister contains a mixture of umeclidinium, lactose, and
magnesium stearate.
In preparing the mixtures containing magnesium stea-
rate, GSK uses a multi-step mixing process. GSK first
mixes the lactose excipient with magnesium stearate in the
absence of the active ingredient. That step yields lactose
particles that are discontinuously coated with magnesium
stearate. After a de-lumping step, GSK then mixes the lac-
tose particles with the active ingredient. In that step,
small particles of the active ingredient are deposited onto
the larger lactose particles, which are already coated with
small particles of magnesium stearate.
C
The district court construed various claim terms in the
’991 patent, two of which are relevant to this appeal. First,
the court construed the phrase “promotes the dispersion of
the composite active particles” (the dispersion limitation)
to mean “wherein a composition that contains one or more
composite active particles has increased dispersion of the
active material upon activating a delivery device for inha-
lation into the lungs by a patient, as compared to the same
composition wherein unmodified active particles are sub-
stituted for the composite active particles.” Vectura Ltd. v.
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VECTURA LIMITED v. GLAXOSMITHKLINE LLC 5
GlaxoSmithKline LLC, No. 1:16-CV-00638,
2018 WL
4700222, at *9 (D. Del. Oct. 1, 2018).
Second, the court construed the term “composite active
particles.” GSK’s proposed construction of that term in-
cluded a process limitation requiring that the composite ac-
tive particles be “formed by milling . . . using sufficient
energy and duration to ensure sufficient break-up of ag-
glomerates of both constituents, dispersal, and even distri-
bution of additive over the active particles.”
Id. at *2. The
district court rejected GSK’s proposed construction, hold-
ing that the term “composite active particles” does not in-
clude a process limitation.
Id. at *3–8. The court construed
the term to mean “[a] single particulate entit[y/ies] made
up of a particle of active material to which one or more par-
ticles of additive material are fixed such that the active and
additive particles do not separate in the airstream.”
Id. at
*8.
At trial, Vectura’s infringement theory focused on the
vilanterol and umeclidinium mixtures in the accused inhal-
ers. Vectura presented evidence that those mixtures con-
tain active particles coated with magnesium stearate, i.e.,
composite active particles, even though GSK’s multi-step
process does not mix the active ingredient and the magne-
sium stearate in isolation, but instead mixes them in the
presence of lactose.
Vectura prevailed on the issues of validity, infringe-
ment, and willful infringement. The jury awarded Vectura
a royalty of 3% on a royalty base of $2.99 billion in sales for
the accused inhalers, which resulted in an award of
$89,712,069 in damages for the period of infringement end-
ing in December 2018.
Following the jury’s verdict, GSK moved for judgment
of noninfringement as a matter of law or, alternatively, a
new trial on infringement. GSK argued that Vectura pre-
sented insufficient evidence to support the jury’s implied
finding that the accused inhalers satisfy the dispersion
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6 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
limitation. GSK also moved for a new trial on damages.
GSK argued that Vectura’s damages theory was legally
flawed and that Vectura’s counsel made prejudicial com-
ments that affected the jury’s damages award. The district
court denied GSK’s post-trial motions, Vectura Ltd. v. Glax-
oSmithKline LLC,
397 F. Supp. 3d 579, 596 (D. Del. 2019),
and GSK appealed to this court.
II
On appeal, GSK raises four issues: First, GSK argues
that it is entitled to judgment of noninfringement as a mat-
ter of law because Vectura failed to present substantial ev-
idence that the accused inhalers use additive material that
“promotes the dispersion” of the active material. In the al-
ternative, GSK requests a new trial on infringement. Sec-
ond, GSK argues that the district court’s construction of
the term “composite active particles” was erroneous, re-
quiring a new trial on infringement. Third, GSK argues
that it is entitled to a new trial on damages because of flaws
in the calculation of the royalty proposed by Vectura’s dam-
ages expert. Fourth, GSK argues that it is entitled to a new
trial on damages because Vectura made prejudicial refer-
ences to GSK’s sales and advanced an improper “pennies
on the dollar” argument in comparing Vectura’s royalty re-
quest to GSK’s sales.
The denial of a motion for judgment as a matter of law,
an issue not unique to patent law, is governed by the re-
gional circuit’s standard of review. Personalized User
Model, LLP v. Google Inc.,
797 F.3d 1341, 1345 (Fed. Cir.
2015). Under Third Circuit law, a district court must grant
judgment as a matter of law if a jury’s verdict is not sup-
ported by substantial evidence, i.e., if “the record is criti-
cally deficient of the minimum quantum of evidence from
which the jury might reasonably afford relief.” Gomez v.
Allegheny Health Servs., Inc.,
71 F.3d 1079, 1083 (3d Cir.
1995).
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VECTURA LIMITED v. GLAXOSMITHKLINE LLC 7
This court is also bound by the Third Circuit’s applica-
tion of an “abuse of discretion” standard for reviewing the
denial of a motion for new trial. Union Carbide Chems. &
Plastics Tech. Corp. v. Shell Oil Co.,
308 F.3d 1167, 1182
(Fed. Cir. 2002) (citing Greenleaf v. Garlock, Inc.,
174 F.3d
352, 363 (3d Cir. 1999)). Under Third Circuit law, a district
court should grant a new trial only if the jury’s verdict is
against the great weight of evidence and either is a miscar-
riage of justice or cries out to be overturned. Leonard v.
Stemtech Int’l Inc.,
834 F.3d 376, 386 (3d Cir. 2016).
A
The parties agree that, under the district court’s con-
struction of the dispersion limitation, Vectura needed to
prove that the use of magnesium stearate in the accused
inhalers improves the dispersion of the active ingredient
compared to identical products in which only the lactose
excipient is coated with magnesium stearate. GSK argues
that there was no substantial evidence of infringement as
to that limitation because Vectura staked its case on a de-
fective scientific test. That test, referred to as “Study 2,”
was a GSK study in which GSK examined the dispersion
rates of experimental blends of vilanterol, magnesium stea-
rate, and lactose.
The principal flaw in GSK’s argument is that Vectura
did not rely solely on Study 2 to prove that the accused in-
halers satisfy the dispersion limitation. Vectura intro-
duced other evidence on dispersion as well. We first
address GSK’s criticisms of Study 2 and then turn to the
other evidence introduced by Vectura.
Study 2 included a total of six blends of lactose and vi-
lanterol particles. In blend 5, the lactose particles were
coated with magnesium stearate, but the vilanterol parti-
cles were uncoated. In blend 6, both the lactose particles
and the vilanterol particles were coated with magnesium
stearate. Study 2’s results showed that blend 6 produced
better dispersion than blend 5, thus appearing to support
Case: 20-1054 Document: 54 Page: 8 Filed: 11/19/2020
8 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
Vectura’s infringement theory on dispersion, at least as to
the accused inhalers containing vilanterol mixtures.
At trial, GSK sought to discount Study 2 as evidence of
infringement. First, GSK introduced evidence that blend 5
was a flawed control due to its poor content uniformity.
GSK pointed to a statement in the report on Study 2 that
the low dispersion in blends in which magnesium stearate
had been used to coat the lactose but not the active drug
was likely due to poor content uniformity and that drawing
conclusions regarding dispersion “is not possible for those
blends.” J.A. 6194. Second, GSK argued that it was im-
proper for Vectura to extrapolate from Study 2 to the ac-
cused inhalers in light of the differences between the
mixing processes used to prepare the blends in Study 2 and
the processes used to prepare the blends in the accused in-
halers. Finally, GSK contended that Study 2 was irrele-
vant to the umeclidinium mixtures in the accused inhalers
because Study 2 tested only vilanterol mixtures.
While Study 2 was not a perfect model for GSK’s com-
mercial products, the authors of the report on Study 2 con-
cluded that coating all components with magnesium
stearate “produced a blend with a stable high FPF,” i.e., a
high degree of dispersion, and that when the active drug is
coated with magnesium stearate, “better uniformity has
been observed.” J.A. 6193. From that evidence and the
testimony of the experts at trial, the jury could conclude
that despite its drawbacks, Study 2 generally supported
the view that coating the active ingredient with magne-
sium stearate improves dispersion of the active ingredient.
As to whether Study 2 provides any support for Vec-
tura’s claim of infringement as to the blisters containing
only umeclidinium, the record contained evidence that vi-
lanterol and umeclidinium behave similarly when coated
with magnesium stearate. See, e.g., J.A. 1324. On this rec-
ord, if the jury credited the results of Study 2 regarding
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VECTURA LIMITED v. GLAXOSMITHKLINE LLC 9
vilanterol, it could reasonably have extrapolated those re-
sults to umeclidinium.
More fundamentally, regardless of any infirmities in
Study 2 as evidence for the dispersion limitation, there was
ample other evidence at trial indicating that coating vilan-
terol with magnesium stearate and coating umeclidinium
with magnesium stearate improves the dispersion of both
active ingredients. That evidence included testing evi-
dence and testimony from Vectura’s infringement expert
and employees of both Vectura and GSK, as well as numer-
ous documents relating to GSK’s work on dry-powder-in-
haler formulations.
Vectura’s witnesses testified that coating active ingre-
dient particles with magnesium stearate helps overcome
the tendency of the particles to stick together and therefore
increases the dispersion of the particles in the lungs. J.A.
1151–54. Evidence of tests conducted on coated and un-
coated active-ingredient particles showed that coating the
active particles substantially increased the dispersion of
the active-ingredient particles and thus the amount of the
active ingredient that could be delivered deep into the
lungs. J.A. 1154–55. Tests run on GSK’s products showed
that the particles of vilanterol and umeclidinium were con-
sistently associated with magnesium stearate. J.A. 1201–
04, 1208–12. And a GSK employee who was involved in
testing GSK products acknowledged that the presence of
magnesium stearate in the GSK products has the effect of
increasing the fine particle mass of vilanterol, i.e., increas-
ing the dispersion of the drug. J.A. 1426–27. 1
Vectura also relied on GSK’s own documents as evi-
dence that GSK’s products satisfy the dispersion
1 The evidence showed that “fine particle mass,”
“fine particle fraction,” and “fine particle dose” are all indi-
cators of dispersion. See J.A. 1295–96, 1426–27, 1593–94.
Case: 20-1054 Document: 54 Page: 10 Filed: 11/19/2020
10 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
limitation. A 2013 GSK report documenting the “current
understanding associated with the use of magnesium stea-
rate as a stabilising excipient” in vilanterol dry-powder-in-
haler formulations relied on a finding that coating the
active particles with magnesium stearate “provided better
drug delivery in giving higher fine particle dose [(i.e., dis-
persion)] than coating the matrix particles.” J.A. 1259–62,
1292–95, 5008, 5013–14. Vectura’s expert testified that
the recited portion of the GSK report meant that “coating
the drug particles give[s] better dispersion than coating the
matrix particles [(i.e., in this context, the lactose parti-
cles)].” J.A. 1295. Based on the physical tests of GSK’s
products, GSK’s documents, and his own analysis, the ex-
pert concluded that coating the active ingredients in GSK’s
products with magnesium stearate “would promote disper-
sion of the composite active particle.” J.A. 1350.
Another GSK document, directed to the use of magne-
sium stearate as an excipient in the Ellipta inhalers,
acknowledged that magnesium stearate, which acts to coat
inhalation powder particles, tends to “physically stabilize
the aerodynamic particle size distribution of the active in-
gredient.” J.A. 5001. It does so, the document explained,
by coating particles, thereby “reduc[ing] interparticle inter-
actions.”
Id. Vectura’s expert explained that reducing in-
teractions between the particles improves particle
dispersion. J.A. 1297–98.
GSK’s documents also established that the active in-
gredient becomes coated with magnesium stearate in
GSK’s mixing process, and that magnesium stearate when
mixed with the lactose and the drug substance in GSK’s
products “tends to coat drug substance and the lactose.”
J.A. 1309–13 (referencing documents at J.A. 5020 and
5562). The addition of the magnesium stearate, according
to those documents, aids “chemical stability and/or physi-
cal (i.e., Fine Particle Dose) stability.” J.A. 5025 (referring
to products containing umeclidinium); J.A. 5566 (referring
to products containing vilanterol). Vectura’s expert
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VECTURA LIMITED v. GLAXOSMITHKLINE LLC 11
explained that fine particle dose “is how much drugs go into
the lungs. So it’s a measure of the dispersion.” J.A. 1312;
see also J.A. 1313–15.
In sum, substantial evidence supported the jury’s im-
plied finding that the accused inhalers satisfy claim 1’s dis-
persion limitation.
B
GSK next challenges the district court’s construction of
the claim term “composite active particles.” GSK contends
that the court should have construed that term to require
that the composite particles be produced by the “high-
energy milling” process referred to in the specification.
To support its argument, GSK relies on two pieces of
intrinsic evidence. First, GSK points to various passages
in the ’991 specification that describe high-energy milling.
According to GSK, those passages indicate that the dis-
closed milling method is essential to the claimed composite
active particles.
Second, GSK looks to the ’991 patent’s prosecution his-
tory and in particular an April 2012 response to an office
action in which the applicants distinguished a prior art ref-
erence to Bosch et al. GSK argues that the applicants dis-
tinguished Bosch on the ground that Bosch’s wet-mixing
processes were different from the “aggressive milling pro-
cedure” recited in the application. For that reason, GSK
argues, the applicants clearly disclaimed mixing processes
other than high-energy milling, confirming that the term
“composite active particles” should be construed to include
a process limitation.
Because GSK challenges the district court’s claim con-
struction based only on intrinsic evidence, this court ap-
plies de novo review. See Teva Pharm. USA, Inc. v. Sandoz,
Inc.,
574 U.S. 318, 332 (2015).
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12 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
At the outset, Vectura argues that GSK waived its
claim construction challenge by proposing a different con-
struction in the district court. We disagree. The construc-
tion that GSK proposed to the district court required that
the composite particles be crafted by “milling . . . using suf-
ficient energy and duration to ensure sufficient break-up of
agglomerates of both constituents, dispersal, and even dis-
tribution of additive.” Vectura,
2018 WL 4700222, at *2.
In support of that construction, GSK argued that the in-
trinsic evidence established that “‘composite active parti-
cles’ must be defined by how the particles are made—by a
high energy milling process.” J.A. 10359. GSK makes the
same argument to this court. See Appellants’ Opening Br.
53 (“Vectura disclaimed processes for making ‘composite
active particles’ other than high-energy milling.”). Also, as
in its proposed construction, GSK asserts that the inherent
milling process must be “capable of breaking coarse parti-
cles . . . down to fine particles” by “appl[ying] a sufficiently
high degree of force or energy to the particles.” See
id. at
53–54 (quoting the ’991 patent) (ellipses in original). Given
the similarities between GSK’s arguments here and in the
district court, we find no waiver.
As to the merits of GSK’s claim construction argu-
ments, this case falls between two prior cases from this
court: Continental Circuits LLC v. Intel Corp.,
915 F.3d 788
(Fed. Cir. 2019), and Andersen Corp. v. Fiber Composites,
LLC,
474 F.3d 1361 (Fed. Cir. 2007). In Andersen, we con-
strued an apparatus claim to include a process
limitation.
474 F.3d at 1373–74, 1377. In Continental Circuits, we de-
clined to import a process limitation into an apparatus
claim. 915 F.3d at 799–800. In both cases, we recognized
that “process steps can be treated as part of the product
claim if the patentee has made clear that the process steps
are an essential part of the claimed invention.” Continen-
tal
Circuits, 915 F.3d at 799 (quoting
Andersen, 474 F.3d
at 1375). In both cases, as here, the accused infringers ar-
gued that the patent’s specification made it clear that a
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VECTURA LIMITED v. GLAXOSMITHKLINE LLC 13
process was an essential part of the apparatus claim and
that the patent’s prosecution history confirmed that essen-
tial role. See Continental
Circuits, 915 F.3d at 796–99; An-
dersen, 474 F.3d at 1371–75.
In Andersen, we emphasized that the specification used
“language of requirement, not preference,” when describ-
ing the apparatus-producing
process. 474 F.3d at 1372. In
Continental Circuits, however, we found that the specifica-
tion “merely indicate[d] a preference for using” the appa-
ratus-producing
process. 915 F.3d at 799. We considered
the specification’s statements that the apparatus “can be
carried out” by the disclosed process and that the process
was merely “one technique for forming the [apparatus].”
Id. at 797.
The specification of the ’991 patent is more like the
specification in Continental Circuits than the specification
in Andersen. Although the ’991 patent contains a few state-
ments suggesting that its high-energy milling is required,
see, e.g., col. 2, ll. 57–65, and col. 3, ll. 9–14, those state-
ments are outweighed by the numerous statements indi-
cating that high-energy milling is merely a preferred
process. See, e.g., col. 3, ll. 15–25 (describing how high-en-
ergy milling may not be required for smaller particles be-
cause the short-range Van der Waals forces may be
sufficient to ensure adhesion); col. 3, ll. 59–65, and col. 5,
ll. 35–37 (naming “preferred methods”); col. 4, ll. 22–25
(“Preferably, the milling step involves the compression of
the mixture of active and additive particles . . . .”); col. 6, ll.
38–57. Moreover, the fact that the ’991 patent criticizes
other methods, see, e.g., col. 2, ll. 57–65, and col. 3, ll. 52–
58, is not dispositive. See AstraZeneca LP v. Breath Ltd.,
542 F. App’x 971, 976 (Fed. Cir. 2013) (“[M]ere criticism of
a particular embodiment encompassed in the plain mean-
ing of a claim term is not sufficient to rise to the level of
clear disavowal.” (quoting Thorner v. Sony Comput. Entm’t
Am. LLC,
669 F.3d 1362, 1366 (Fed. Cir. 2012)). We thus
conclude that the specification of the ’991 patent does not
Case: 20-1054 Document: 54 Page: 14 Filed: 11/19/2020
14 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
make its milling method an essential part of apparatus
claim 1.
We also reject GSK’s argument that the prosecution
history requires “composite active particles” to be con-
strued to include a process limitation. In Andersen, the ap-
plicant distinguished the prior art based on the method
used to produce the claimed
product. 474 F.3d at 1373. We
held that the applicant clearly disclaimed apparatuses pro-
duced by the prior art’s methods, confirming that the appa-
ratus claim should be construed to include a process
limitation.
Id. at 1373–74.
In this case, the applicants distinguished the Bosch ref-
erence on the ground that Bosch disclosed only “the appli-
cation of surface modifier material that is in the liquid
phase,” while the applicants’ claim recited active particles
coated with “particulate additive material.” J.A. 10218–19.
Thus, according to the applicants, Bosch involved “wet pro-
cesses that involve dissolution of the surface modifier, or
use of a liquid surface modifier, and subsequently forming
a film over the active particle,” while “the composite parti-
cles claimed in the present application do not comprise
‘coatings such as those formed by wet processes that re-
quire dissolution of one or both components.’” J.A. 10220
(quoting the patent application). The applicants added
that Bosch “does not teach or suggest the milling of partic-
ulate surface modifier with drug particles. Instead, the
milling operations disclosed in the Bosch reference are per-
formed with liquid phase surface modifier, in other words,
surface modifier that is a liquid or is in solution.”
Id. Be-
cause Bosch teaches “the application of a film layer of sur-
face modifier material by adsorption, which will produce a
thin, uniform, continuous coating on the drug particles,” it
does not “include particulate additive material on the sur-
face of the active particles” and therefore “does not disclose
the particles claimed in the present application.” J.A.
10221.
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VECTURA LIMITED v. GLAXOSMITHKLINE LLC 15
Although the applicants stated that the composite par-
ticles “are fused to the active particle in a manner only pos-
sible using an aggressive milling procedure,” J.A. 10218, 2
that statement did not purport to add a process limitation
to the apparatus claim. Instead, that statement merely
sought to demonstrate that Bosch’s coated particles were
necessarily different from the applicants’ coated particles
because Bosch used a process that could not possibly pro-
duce “particulate additive matter on the surface of [a] par-
ticle of active material,” as required by the applicants’
claim. Accordingly, the most reasonable interpretation of
the April 2012 response is that the applicant distinguished
Bosch based on the unique structure of the claimed compo-
site particles, not the disclosed milling method. We there-
fore reject GSK’s challenge to the district court’s claim
construction.
C
GSK argues that Vectura’s damages theory is legally
flawed, leaving the jury’s award unsupported by the record.
GSK requests a new trial on damages as a remedy. As ex-
plained above, we review the district court’s denial of a new
trial for an abuse of discretion.
The parties have a licensing history. In 2010, Vectura
granted GSK a non-exclusive, worldwide license to more
than 400 patents, the sum of which covered GSK’s respira-
tory therapeutics containing vilanterol and/or umec-
lidinium. The centerpiece of the 2010 license was a now-
expired Vectura patent with claims directed to coating lac-
tose excipients with additive material such as magnesium
stearate. The 2010 license also contained a non-assert
2 See also J.A. 10222 (“These particles can only be
produced using high energy milling processes to fuse and
smear the additive particles on to the surface of the active
particles.”).
Case: 20-1054 Document: 54 Page: 16 Filed: 11/19/2020
16 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
clause for Vectura patents that covered formulations con-
taining magnesium stearate. The non-assert clause in-
cluded the application that matured into the ’991 patent.
The 2010 license featured a tiered royalty structure in
which GSK would pay a royalty of 3% on its first 300 mil-
lion British pounds in sales, 2% on sales between 300 mil-
lion and 500 million pounds, and no additional royalties on
sales above 500 million pounds. The 2010 license expired
on July 25, 2016.
At trial, Vectura presented a damages theory based on
the 2010 license being a comparable license. Vectura’s
damages expert, Kimberly J. Schenk, adopted the 2010 li-
cense’s first-tier royalty rate (3%) as a flat royalty rate and
the 2010 license’s royalty base (total sales of the licensed
products) as her royalty base. Ms. Schenk declined to
adopt the royalty cap from the 2010 license, citing changed
circumstances by the time of the hypothetical negotiation,
which would have occurred in July 2016 when the 2010 li-
cense expired. GSK presented an alternative theory, also
based on the total revenue produced by the licensed prod-
ucts. Under GSK’s theory, however, the royalty rate would
have been much lower, only 0.0187%.
GSK argues that Vectura’s evidence was insufficient to
support the jury’s damages award. GSK first attacks Ms.
Schenk’s use of the total sales of the accused inhalers as
her royalty base. GSK argues that, under this court’s prec-
edents, Ms. Schenk needed to show that the patented vi-
lanterol and umeclidinium mixtures drove consumer
demand for the accused inhalers before presenting a dam-
ages theory based on the entire market value of the accused
inhalers. GSK contends that Ms. Schenk did not make
such a showing and, as a result, she needed to apportion
her royalty base to account for the non-infringing compo-
nents in the accused inhalers, such as the fluticasone blis-
ter in the Breo inhaler. Appellants’ Opening Br. 61 (citing
Case: 20-1054 Document: 54 Page: 17 Filed: 11/19/2020
VECTURA LIMITED v. GLAXOSMITHKLINE LLC 17
Ericsson, Inc. v. D-Link Sys., Inc.,
773 F.3d 1201 (Fed. Cir.
2014)).
The damages theories tried in this case present a ra-
ther unusual circumstance. Ordinarily, an entire-market-
value royalty base is appropriate only when the patented
feature creates the basis for customer demand or substan-
tially creates the value of the component parts, and appor-
tionment is required when an entire-market-value royalty
base is inappropriate. Virnetx, Inc. v. Cisco Sys., Inc.,
767
F.3d 1308, 1326 (Fed. Cir. 2014). However, this court has
explained that when a sufficiently comparable license is
used as the basis for determining the appropriate royalty,
further apportionment may not necessarily be required.
See, e.g., Bio-Rad Labs., Inc. v. 10X Genomics Inc.,
967 F.3d
1353 (Fed. Cir. 2020); Elbit Sys. Land & C4I Ltd. v. Hughes
Network Sys., LLC,
927 F.3d 1292 (Fed. Cir. 2019); Com-
monwealth Sci. & Indus. Rsch. Organisation v. Cisco Sys.,
Inc.,
809 F.3d 1295 (Fed. Cir. 2015). That is because a dam-
ages theory that is dependent on a comparable license (or
a comparable negotiation) may in some cases have “built-
in apportionment.” See, e.g.,
Commonwealth, 809 F.3d at
1303.
This is one such case. Although GSK refers to the 2010
license as being “purportedly comparable,” the evidence
clearly supports Vectura’s contention that the 2010 license
was sufficiently comparable for use in its damages calcula-
tion. Indeed, GSK’s own damages expert, Dr. William
Kerr, testified that the 2010 license was “a very close com-
parable, much closer than you ever find in a patent case.”
J.A. 1857–60.
Built-in apportionment effectively assumes that the
negotiators of a comparable license settled on a royalty rate
and royalty base combination embodying the value of the
asserted patent.
Id. As the district court noted, a party
relying on a sufficiently comparable license can adopt the
comparable license’s royalty rate and royalty base without
Case: 20-1054 Document: 54 Page: 18 Filed: 11/19/2020
18 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
further apportionment and without proving that the in-
fringing feature was responsible for the entire market
value of the accused product.
Vectura, 397 F. Supp. 3d at
593 (citing
Commonwealth, 809 F.3d at 1301–04).
That is what Ms. Schenk did when she adopted the roy-
alty rate and royalty base that was used in the 2010 li-
cense. To support Ms. Schenk’s damages theory, Vectura
offered evidence that the circumstances of the 2010 license
and the hypothetical negotiation in 2016 were highly com-
parable and that principles of apportionment were effec-
tively baked into the 2010 license. J.A. 1447–48; see Bio-
Rad, 967 F.3d at 1373.
We have cautioned that “district courts performing rea-
sonable royalty calculations [must] exercise vigilance when
considering past licenses to technologies other than the pa-
tent in suit” and “must account for differences in the tech-
nologies and economic circumstances of the contracting
parties.”
Virnetx, 767 F.3d at 1330. Here, GSK argues that
even if the 2010 license is superficially comparable, Ms.
Schenk failed to account for the technical and economic dif-
ferences between the 2010 license and the hypothetical ne-
gotiation that would have occurred when the 2010 license
expired in 2016. GSK notes that the 2010 license encom-
passed rights to more than 400 patents and that the royalty
established in that license was subject to a cap for sales
above a certain amount.
Vectura introduced evidence, however, that the key
component of the 2010 license was permitting GSK to use
Vectura’s invention of coating lactose particles with mag-
nesium stearate. The 2010 license and the hypothetical ne-
gotiation thus cover “roughly very similar technologies,” as
Ms. Schenk testified. J.A. 1448. Similarity of scope is con-
firmed by the fact that the mixtures Vectura points to as
infringing the ’991 patent would have been the very same
mixtures covered by the 2010 license. On appeal, GSK has
offered nothing to undermine that conclusion. Accordingly,
Case: 20-1054 Document: 54 Page: 19 Filed: 11/19/2020
VECTURA LIMITED v. GLAXOSMITHKLINE LLC 19
the fact that other patents were included in the 2010 li-
cense does not fatally undermine Ms. Schenk’s theory of
comparability.
Ms. Schenk also considered and rejected the argument
that there were meaningful economic differences between
the benefits of coating the lactose particles and coating the
active ingredients. J.A. 1481–82. She also considered and
rejected the suggestion that there were other technical or
economic distinctions between the 2010 license and the
2016 hypothetical negotiation that rendered them not com-
parable. J.A. 1465–85. GSK cross-examined Ms. Schenk
on those matters, and the disputes over that evidence were
properly left for the jury to resolve. See
Bio-Rad, 967 F.3d
at 1374.
GSK’s second line of attack focuses on the absence of a
royalty cap in Vectura’s damages theory. GSK argues that
if the 2010 license is truly a comparable license, it was im-
proper for Ms. Schenk to discard the royalty cap while sim-
ultaneously retaining the royalty rate and royalty base
used in the 2010 license. For support, GSK asserts that
the royalty cap was an integral part of the 2010 negotia-
tions and that in 2016 Vectura had proposed an extension
of the 2010 license that would have retained the royalty
cap.
Ms. Schenk testified that the assumption of validity
and infringement in a hypothetical negotiation, among
other changed circumstances, supported not including a
cap on her proposed royalty. J.A. 1458, 1484. The jury was
entitled to credit that testimony and to note that by 2016
the accused inhalers had already become hugely success-
ful, which would have increased Vectura’s leverage in the
hypothetical negotiation. It was therefore permissible for
the jury to credit Ms. Schenk’s testimony and to award
damages without applying a royalty cap. In sum, the dis-
trict court did not abuse its discretion in denying GSK’s
motion for a new trial on damages.
Case: 20-1054 Document: 54 Page: 20 Filed: 11/19/2020
20 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
D
Finally, GSK contends that the district court should
have ordered a new trial on damages because Vectura
made improper references during the trial to GSK’s $3.8
billion in U.S. sales for the accused inhalers. In particular,
GSK complains that Vectura overemphasized GSK’s U.S.
sales and made an improper “pennies on the dollar” argu-
ment by framing its requested damages as small compared
to those sales. Under Third Circuit law, a new trial is
proper with respect to such claims if the appellee made
prejudicial remarks and it is “reasonably probable” those
prejudicial remarks influenced the jury’s verdict. Draper
v. Airco, Inc.,
580 F.2d 91, 97 (3d Cir. 1978).
At the outset, Vectura argues that GSK waived its prej-
udice arguments by not moving to bar Vectura from refer-
ring to GSK’s total inhaler sales and by not making timely
objections to those references during trial.
The waiver issue is complicated by the unusual way
that the evidentiary record developed at trial. In a motion
in limine directed to the issue of sales, GSK requested that
Vectura be prohibited from introducing evidence of GSK’s
foreign sales, and the motion was granted. Notably, how-
ever, GSK did not request that evidence of the volume of
U.S. sales be prohibited. In fact, GSK admitted at trial
that “under the agreement of the [motion in limine], the
sales of the accused products come in. But global sales for
GSK, global sales for the respiratory division, anything
else are out.” J.A. 1464.
Vectura referred to GSK’s U.S. sales of the accused in-
halers twice during its opening statement and once during
the direct testimony of Vectura’s corporate witness, all
without objection from GSK. Not until Vectura elicited the
amount of GSK’s sales during Ms. Schenk’s testimony on
damages did GSK’s counsel object. Counsel claimed that it
was improper for Ms. Schenk “to give an opinion on the en-
tire market value of the product” without apportioning
Case: 20-1054 Document: 54 Page: 21 Filed: 11/19/2020
VECTURA LIMITED v. GLAXOSMITHKLINE LLC 21
damages to the infringing features; that it was improper
for her to rely on the 2010 license between Vectura and
GSK “without apportioning between the value of the pa-
tent-in-suit, and that license, and all other intellectual
property rights that were obtained in that license”; and
that she should not be allowed to “rely on the entire market
value rule without addressing non-infringing alternatives.”
J.A. 1429. Counsel also stated that it was “inflammatory
to put billion dollar numbers in front of juries, and that
should be avoided if at all possible.” J.A. 1430–31. Counsel
added that it was inflammatory “to put up billion dollars
on the screen, and then do the math from that, or worse to
do what we heard a little bit in the opening of, and I expect
to hear in closing, all we want is three percent of the bil-
lions of dollars that GSK made.” J.A. 1435–36.
The district court noted that GSK had not filed a pre-
trial Daubert motion. See Daubert v. Merrell Dow Pharms.,
Inc.,
509 U.S. 579 (1993). For that reason, the court deter-
mined that GSK had waived its general objections to Ms.
Schenk’s built-in apportionment testimony and would be
required to object to any particular question asked of her.
However, the court made clear that it did not regard GSK
as having waived its objection to the argument that “it’s
just pennies on the dollar, so what’s the big deal?” The
court added, “I don’t think the sales should be in any way
emphasized beyond what is strictly required by the law. So
if I hear that happening, I will make my own objection and
I will sustain it because that should not be an argument.”
J.A. 1437–40.
Subsequently, Ms. Schenk provided testimony on dam-
ages, in which she referred several times to GSK’s U.S.
sales. GSK did not object to those references or to the
demonstrative exhibits that included the dollar amount of
those sales.
During GSK’s case, its damages expert, Dr. Kerr, testi-
fied that he thought Vectura’s three percent royalty rate
Case: 20-1054 Document: 54 Page: 22 Filed: 11/19/2020
22 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
was “holding GSK over a barrel.” J.A. 1886. On cross-ex-
amination, Vectura’s counsel challenged that statement,
saying, “so it’s your testimony that a three-percent royalty
would be putting GSK over a barrel when they had $3 bil-
lion worth of infringing product at stake?” J.A. 1887. At
that point, the trial judge interceded, noting that he had
said that he would police excessive references to the sales
amounts. He added: “Let’s not talk any more about [the] 3
billion figure.” J.A. 1888.
There was no further reference at trial to the amount
of GSK’s sales. Following the close of the evidence, the
court instructed the parties not to refer to the overall sales
figure during closing arguments. In his closing argument,
Vectura’s counsel referred to GSK’s profits, but not the
amount of its sales. GSK did not object to counsel’s closing
argument.
In its opinion on the motion for judgment as a matter
of law and for a new trial, the district court found that Vec-
tura had “repeatedly emphasized the amount of revenues
made by Defendants and the relative smallness of the dam-
ages award they were requesting,” and that its conduct in
that regard was improper.
Vectura, 397 F. Supp. 3d at 594.
However, the court agreed with Vectura that, unlike in
most cases in which there was no legitimate reason for the
jury to hear large total revenue figures, in this case “there
was no smallest salable patent-practicing unit, and the to-
tal revenue was an appropriate base that the jury needed
to hear to understand Plaintiff’s damages expert’s analy-
sis.”
Id. at 596. For that reason, the court concluded, “I do
not find the introduction of the total revenue figure to be so
prejudicial that the damages verdict ‘cries out to be over-
turned.’”
Id.
With respect to the issue of waiver, the district court
concluded that GSK had not waived its objections to the
“pennies on the dollar” argument or to statements “empha-
sizing [GSK’s sales] beyond what’s strictly required by the
Case: 20-1054 Document: 54 Page: 23 Filed: 11/19/2020
VECTURA LIMITED v. GLAXOSMITHKLINE LLC 23
law” in proving damages. J.A. 1439–40, 1888. We agree
with the district court that although GSK may have waived
its more general objections to Ms. Schenk’s damages testi-
mony, it did not waive its objections to the “pennies on the
dollar” argument or to statements unnecessarily emphasiz-
ing GSK’s billion-dollar sales. The district court’s finding
of no waiver is particularly well-founded in light of the
court’s statement during trial that it would enter its own
objection if it heard such arguments being made.
We also agree with the district court that where Vec-
tura made such arguments, they were improper. The dis-
trict court pointed to three places in the trial record that
Vectura made what the court considered to be the improper
“pennies on the dollar” argument: during opening state-
ment; during the cross-examination of Dr. Kerr; and in
closing argument, where counsel referred to Vectura’s
three percent royalty as “a small portion of GSK’s profits,
which are in excess of 75 percent of its sales.” J.A. 2023. 3
The district court was correct in not condemning the
remaining references to GSK’s total U.S. sales because
those remaining references were neither objected to nor ob-
jectionable. They were not objectionable because it was
necessary for Vectura to reference GSK’s total sales, either
directly or indirectly, considering that Vectura’s damages
theory asked the jury to multiply the three-percent royalty
rate by the royalty base, i.e., GSK’s total sales. In particu-
lar, it was legitimate for Ms. Schenk to reference GSK’s to-
tal sales when calculating her proposed damages award
because her royalty base was the total sales of the accused
3 Notably, however, the remarks made by Vectura’s
counsel in his opening statement, which were not objected
to, occurred prior to the time the district judge announced
that he would make his own objections to any references to
GSK’s sales that were directed to the “pennies on the dol-
lar” argument.
Case: 20-1054 Document: 54 Page: 24 Filed: 11/19/2020
24 VECTURA LIMITED v. GLAXOSMITHKLINE LLC
inhalers. As the district court noted, GSK did not attempt
to prevent her from doing so with a motion in limine or a
Daubert motion.
It was also proper for Ms. Schenk to refer to the sales
figures when analyzing the comparability of the 2010 li-
cense and the 2016 hypothetical negotiation—an analysis
critical to any built-in apportionment theory. She ex-
plained that the 2016 negotiation, unlike the 2010 negoti-
ation, featured certainty as to commercial success and
profitability, considerations that bear on the eighth Geor-
gia Pacific factor, “the commercial success and profitability
of the accused products.” See Georgia-Pacific Corp. v. U.S.
Plywood Corp.,
318 F. Supp. 1116, 1120 (S.D.N.Y. 1970).
Her references to GSK’s sales in that connection were
therefore proper. See Bio-
Rad, 967 F.3d at 1373–74; Fin-
jan, Inc. v. Secure Computing Corp.,
626 F.3d 1197, 1210
(Fed. Cir. 2010) (rejecting defendant’s argument that its fi-
nancial numbers from the years after the hypothetical ne-
gotiation were irrelevant for purposes of the eighth Georgia
Pacific factor). 4 The same is true of the brief reference to
GSK’s sales by Vectura’s corporate representative, in the
context of addressing the uncertainties surrounding the
2010 negotiation relative to 2016. See J.A. 1108–09.
After carefully surveying the remarks GSK identified
as prejudicial, the district court found that the effect of the
4 Ms. Schenk’s references to GSK’s sales do not suf-
fer from the flaw found in the references to the defendant’s
total sales in Uniloc USA, Inc. v. Microsoft Corp.,
632 F.3d
1292 (Fed. Cir. 2011), relied on by GSK. In Uniloc, we held
that the patentees’ using the defendant’s $19 billion in
sales as a “check” on its proposed damages was “irrelevant
and tainted the jury’s damages
award.” 632 F.3d at 1318–
21. Unlike in this case, the patentee’s damages theory in
Uniloc did not depend on the use of the total amount of
sales of the accused products. See
id. at 1312.
Case: 20-1054 Document: 54 Page: 25 Filed: 11/19/2020
VECTURA LIMITED v. GLAXOSMITHKLINE LLC 25
remarks that it found improper was not so prejudicial as to
require a new trial. On the issue of the impact of improper
conduct at trial, the views of the judge who supervised the
trial proceedings are entitled to considerable weight. See
Fineman v. Armstrong World Indus., Inc.,
980 F.2d 171,
207 (3d Cir. 1992) (“Because the trial judge was present
and able to judge the impact of counsel’s remarks, we defer
to his assessment of the prejudicial impact.”). We find no
basis to second-guess the judgment of the experienced trial
judge in this regard. We therefore decline to conclude that
the district court abused its discretion, and we uphold the
court’s decision denying a new trial on this ground.
III
For the foregoing reasons, we affirm the district court’s
post-trial order denying GSK’s motion for judgment of non-
infringement as a matter of law, GSK’s motion for a new
trial on infringement, and GSK’s motion for a new trial on
damages. We also uphold the district court’s claim con-
struction with respect to the “composite active particles”
limitation in claim 3 of the ’991 patent.
AFFIRMED
