Laura W. Smalley presented at a national webinar entitled “Determining Patent Infringement Reasonable Royalty Damages” hosted by The Knowledge Group. Reasonable royalties are the minimum damages for patent infringement guaranteed under the patent laws. The law surrounding reasonable royalty damages for patent infringement is ever-evolving. Laura provided an in-depth look at recent case law regarding reasonable royalty damages, including decisions on calculating post-verdict royalties and the admission of settlement agreements. The Federal Circuit Court of Appeals has blessed several approaches to establishing a reasonable royalty in addition to the hypothetical negotiation, including the analytical approach, which may be based on the incremental profits generated by the patented invention, and the cost approach, which may be based on the infringer’s cost savings from using the patented technology. Recent cases demonstrate how these methods satisfy the Federal Circuit’s requirement that the damages analysis apportion the patent infringement damages between the patented feature and the unpatented features.
The Federal Circuit also provided additional guidance on the use of settlement agreements in the hypothetical negotiation analysis, confirming that relevant settlement agreements are admissible as proof of a reasonable royalty and stating that the courts should balance the probative value against the prejudice in allowing the use of such agreements. To be admissible, a settlement agreement must be demonstrated to be technologically and economically comparable to the facts of the hypothetical negotiation posited between the patent owner and accused infringer.
Click here to watch the webinar.