Compensating a Patentee for the Value of a Patented Invention: Apportionment

27 October 2020
Capabilities and Services

Compensatory damages for patent infringement are often expressed as a reasonable royalty for a license to practice the patent(s) at issue. To anchor the royalty amount to the value of the patented invention(s), the royalty is assumed to be determined by a hypothetical negotiation between the patentee and the infringer occurring on the eve of the first infringement. Economics teaches that, in negotiating the royalty, the parties evaluate the incremental gains and losses from the license. Measuring those gains and losses can be a complex exercise involving various economic and statistical methods. The complexity can be compounded by the possibility that the feature or attribute of a product enabled by the patented invention is only one of many features or attributes of the product. Recognizing this fact, courts have demanded that royalty damages reflect no more than the “footprint” of the invention. 

NERA experts have provided advice, analysis, and expert testimony related to patent infringement damages in many cases. Those cases have covered a broad range of factual circumstances and spanned a variety of industries, including computer hardware and software, pharmaceutical and biotechnology, consumer products, and telecommunications, among many others. Our experts use a variety of rigorous methods to quantify infringement damages that properly account for the economic value of the alleged infringement.