Beyond the Smallest Salable Unit: How Surveys Provide a Path from Recent Case Law to an Appropriate Royalty Base

Vol. 6 No. 5

By

Alexander L. Clemons is an associate with Ocean Tomo’s expert testimony practice in the firm’s Chicago office, where he quantifies economic damages arising from intellectual property disputes and provides general litigation support.

In recent opinions, the U.S. Court of Appeals for the Federal Circuit (CAFC) has increasingly scrutinized reasonable royalty calculations and demanded that both royalty bases and royalty rates be closely tailored to the specific facts of the case at issue. In Uniloc USA, Inc. v. Microsoft Corp., the CAFC prohibited the use of the 25 percent rule,1 while in LaserDynamics, Inc. v. Quanta Computer, Inc., it provided for a very restricted application of the entire market value rule (EMVR).2 These rulings, and others like them, challenge parties, counsel, and damages experts to find new and reliable sources of evidence that can be used to more closely tie damages calculations to the unique facts of each patent infringement case.

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