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

Alexander L. Clemons

©2014. Published in Landslide, Vol. 6, No. 5, May/June 2014, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

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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