Royalty Bases And Damages Theories: A Fed. Circ. Update
Law360, New York ( April 7, 2016, 10:21 AM EDT) -- Patentees frequently attempt to estimate reasonable royalty damages as a percentage of the defendants' sales of an accused product. This approach has lead to outsized jury awards in some cases where the patent covers only a minor feature of a much larger product. In recent years, the Federal Circuit has clamped down on such awards, limiting the situations where royalties may be based on sales of an entire end product, and requiring instead that royalties generally be based on the "smallest salable unit" (or some portion of it) that incorporates the patented feature. This has led some patentees to turn to alternative reasonable royalty approaches, such as royalties based on comparable licenses and license offers, in an attempt to evade the "smallest salable unit" requirement. This article will discuss the evolution of these different approaches in light of recent Federal Circuit precedent....
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