Federal Circuit Clarifies Limits on Convoyed Sales, Vacates Damages

A&O Shearman writes that on March 24, 2025, the US Court of Appeals for the Federal Circuit affirmed a district court’s judgment in Wash World Inc. v. Belanger Inc. that Wash World infringed Belanger’s patent, but vacated and remanded the associated $9.8 million damages award.

The court found insufficient evidence to support approximately $2.6 million of that amount, which stemmed from sales of unpatented components bundled with the patented car wash system.

The ruling reinforces the importance of distinguishing between apportionment and convoyed sales in assessing patent damages.

Belanger holds US Patent No. 8,602,041 for a car wash system featuring lighted spray arms to guide vehicles into wash bays. The patented claims do not include auxiliary components, such as dryers.

A jury found Wash World’s “Razor EDGE” system to infringe the ’041 Patent, and Belanger was awarded $9.8 million in lost profits.

Wash World challenged the judgment, arguing in part that the damages improperly included profits from unpatented items that lacked a direct functional relationship to the patented technology.

The district court applied the Panduit factors to uphold the damages, but the Federal Circuit clarified that the key issue was not apportionment, but rather whether the unpatented components qualified as convoyed sales under Rite-Hite.

Convoyed sales require a functional relationship with the patented invention. The Federal Circuit concluded that Belanger failed to demonstrate how the dryers and other auxiliary components functionally interacted with the patented system.

This case serves as a cautionary guide when structuring damages theories in patent litigation. It underscores the need for patentees to substantiate claims for damages on unpatented components with clear technical evidence. Merely selling products together as a package is not enough; a demonstrable functional relationship is essential for recovering damages from convoyed sales.