Take a Free Trial | Energy Labs Cleared By Jury In Nortek Patent Dispute Try Law360 FREE for seven days Nortek Air Solutions, LLC fka CES Group, LLC v. Energy Labs, Inc et al 7,922,442 - Fan array fan section in air-handling systems 8,414,251 - Modular fan housing with multiple modular units having sound attenuation for a fan array for an air-handling system 8,398,365 - Modular fan units with sound attenuation layers for an air handling system 8,562,283 - Fan array fan section in air-handling systems 8,694,175 - Fan array fan section in air-handling systems 8,734,086 - Modular fan housing with multiple modular units having sound attenuation Get instant access to the one-stop news source for business lawyers You must correct or enter the following before you can sign up:News & Press: Featured Articles Nortek v. Energy Lab: District Court Guidance on the Entire Market Value Rule Tuesday, August 02, 2016 By Philip Kline and Ryan Penkowski

In a July 15, 2016 order in the matter of Nortek Air Solutions, LLC (“Nortek”) v. Energy Lab Corporation, et al. (“Energy Lab”), the U.S. District Court for the Northern District of California found that a defendant’s marketing materials alone are an inadequate basis for establishing that a feature drives demand for a product and therefore applying the Entire Market Value Rule.  Additionally, the District Court reiterated the Federal Circuit’s finding in LaserDynamics, Inc. v. Quanta Computer, Inc., et al. that demonstrating that the accused feature is essential to the operation of a product is not an adequate basis for applying the Entire Market Value Rule. In general, courts have found that the appropriate royalty base for the determination of reasonable royalty damages is often the “smallest salable unit” (for instance, LaserDynamics, Inc. v. Quanta Computer, Inc., et al.); however, under the Entire Market Value Rule, a multi-component product that incorporates the accused features may be the appropriate royalty base if the accused features drive demand for the entire product.

In the Nortek v. Energy Lab matter, Nortek alleged that Energy Lab’s “air handling units” infringed a variety of Nortek patents covering fan elements.  what size ac unit for 2500 square foot homeThe District Court found that the asserted patents did not – either individually or collectively – cover the entire air handling system.  2 ton air conditioner dimensionsDespite the limitations of the asserted patents, Nortek’s damages expert contended that the asserted patents drove demand for the entire air handling system and that it was therefore appropriate to calculate reasonable royalty damages using the entire system as the royalty base.  window ac unit cheapestNortek’s expert provided two bases for this conclusion: (1) the patented features were highlighted by Energy Lab in its marketing materials;

and (2) the patented features are essential to the use of the accused systems.  Both of these bases were rejected by the District Court. The District Court found that “the fact that a company chooses to advertise its products in a certain way says nothing about why a customer chooses to purchase a particular product.”  It therefore found that Energy Lab’s marketing materials did not provide adequate support for Nortek’s expert’s application of the Entire Market Value Rule.  Additionally, the District Court reiterated the Federal Circuit’s finding in LaserDynamics, Inc. v. Quanta Computer, Inc., et al. that “it is not enough to merely show that the [patented technology] is… essential to the use of the [accused product]” to support the application of the Entire Market Value Rule.  The District Court therefore found that Nortek’s expert’s claims that the patented features were the “heart” of the system and “essential” to the operation of the accused air handling units did not provide adequate support for the application of the Entire Market Value Rule.

Ultimately, the District Court found that Nortek’s expert’s application of the Entire Market Value rule was inappropriate and excluded his reasonable royalty opinion on that basis.  Professionals in the field may wish to consider this guidance when assessing damages in future cases involving multi-component products. Authors: Philip Kline is a Managing Director at 284 Partners, LLC.  Ryan Penkowski is a Senior Associate at 284 Partners, LLC. « Back to IndexNot a member yet? 9/27/2016The Kardashians v. Haven Beauty: Can Aggrieved Licensees Withhold Royalty Payments? 9/27/2016License Defense is Waived Due to Unjustified Delay and Prejudice 9/29/2016Keeping It Between the Lines: The Current State of Copyright Fair Use9/29/2016Responding to Patent Application Rejections Based on the U.S. Supreme Court's "Alice" Decision©2013 This excerpt taken from the article of the same name which appeared in ASHRAE Journal, vol. 55, no. 9, September 2013. Barry Barnet, P.E., is a senior professional associate and senior mechanical engineer at HDR in Princeton, N.J.

Energy recovery in laboratories has some special concerns because of the possibility of cross contamination between the supply and exhaust streams. This article illustrates two methods of improving energy recovery in laboratory air-handling systems (with 100% outside air), where fume hoods and similar exhaust are considered to be hazardous (as defined by the International Mechanical Code [IMC]) and the energy recovery system is designed to preclude the possibility of cross-contamination between supply and exhaust. With both methods of recovery, the air-handling system supplies air at a neutral air temperature using dual energy recovery. For the purpose of revealing the improvement in energy recovery with the neutral air concept, both methods of recovery are also compared to a more traditional air-handling unit supplying air at a temperature of 55°F (13°C). The results show that with the neutral air approach it is possible to achieve efficient energy recovery even where the general exhaust used for recovery is only 40% of the total supply air, while still precluding the possibility of cross-contamination and complying with the IMC requirements for hazardous exhaust.

The first energy recovery method uses an energy wheel. The second recovery method uses glycol runaround. Under the first air-handling system, the traditional unit serves as a combined ventilating, makeup, humidity control, and cooling system (in a sense a “jack of all trades”), producing leaving air at a temperature of 55°F (13°C). Energy recovery in this case is single stage using only one energy wheel or a single glycol coil. With the second air-handling system (neutral air), the unit provides only ventilation, makeup air, and humidity control using dual-energy recovery, and produces a leaving-air temperature in the range of approximately 63°F to 70°F (17°C to 21°C). This system is combined with air recirculating supplemental cooling devices: typically fan coil units, chilled beams, or other similar devices. In hood intensive rooms care should be exercised to avoid interference between these devices and proper hood performance. Dual energy recovery consists of two energy wheels, one enthalpy and one sensible, for the first recovery method.

Under the second recovery method, two glycol coils are substituted for the wheels. The two glycol coils in this case can be described as a wraparound/runaround system.  The glycol flows in series from the second coil, where the supply air is heated up to neutral conditions, then wraps around the chilled water coil (providing dehumidification) to the first glycol coil (serving to precondition the outside air). Based on the previous variations, there are a total of four different combinations, with two energy recovery methods each applied to two different air-handling systems: Energy wheel method of recovery with a traditional system (Figure 1; with first wheel only); Energy wheel method of recovery with a neutral air system (Figure 1; with dual wheels); Glycol coil method of recovery with a traditional system (Figure 4; with first glycol coil only); Glycol coil method of recovery with a neutral air system (Figure 4; with dual coils). A method of recovery using heat pipes is not examined as this system is expected to have characteristics similar to glycol runaround but with slightly higher recovery effectiveness, due to the higher heat content of refrigerant verses a glycol solution.