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In 2010, the Federal Circuit issued ResQNet.com, Inc. v. Lansa, Inc., a landmark decision holding that settlement-related evidence can be compelling proof of damages in subsequent litigation. The effects of ResQNet were immediately evident. Some practitioners argued that ResQNet granted unlimited permission to use prior patent settlement agreements and related negotiations as evidence of damages for patent infringement. Some courts agreed, while others decided that the Federal Circuit’s ruling had no effect on Federal Rule of Evidence 408’s prohibition on the use at trial of settlement-related evidence to prove damages. Simply put, ResQNet wrought havoc on the standards for the …

The federal courts have struggled to define the role that prior third-party settlements should play in determining damages for patent infringement. Although the use of such evidence is governed by the Federal Rules of Evidence, appellate and district courts have failed to reach consensus regarding the appropriate application of these rules. Most recently, in ResQNet v. Lansa, the Federal Circuit noted that the most reliable evidence of damages for infringement may be a license that emerges from a previous settlement. This decision prompted a flurry of new rulings by district courts regarding the admissibility and discoverability of evidence of previous …