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Intellectual Property Patent Licensing and Transactions Patent Litigation

A Reasonable Royalty Rate Must Be Tied to Facts

Exmark Manufacturing Company Inc. v. Briggs & Stratton Power Products Group, LLC

The rate of the reasonable royalty awarded to a successful patent plaintiff must be based on the facts of the case. A damages expert cannot merely pay lip service to the Georgia-Pacific factors and then “pluck” a royalty rate from thin air.

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The rate of the reasonable royalty awarded to a successful patent plaintiff must be based on the facts of the case. Exmark Mfg. Co. Inc. v. Briggs & Stratton Power Products Group, LLC, No. 2016-2197 at 28 (Fed. Cir. Jan. 12, 2018). A damages expert cannot merely pay lip service to the Georgia-Pacific factors and then “pluck” a royalty rate from thin air. Id. Moreover, the reasonable royalty must be apportioned, so that it is based on the patented contribution and not unpatented aspects of the accused product. This can be achieved by adjusting either the royalty base or the royalty rate. However, the rate selected must be based on facts presented to the jury. It is insufficient to address the Georgia-Pacific factors superficially and then announce a royalty rate, without explaining how those factors or other evidence led to the selection of the rate. Id. at 24-25.

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