Determinants of Patent Value in U.S. Litigation

3) To what extent would the accused infringer expect to make additional profits if it were granted a license to the patented technology? In addition to non-infringing alternatives and historical license agreements, the courts often allow evidence on both: a) the amount of profit that the alleged infringer stands to earn as a result of employing the patented technology, and b) the portion of that realizable profit that should be credited to the patented invention as distinguished from non-patented elements (e.g., the manufacturing process, business risks, or significant features or improvements added by the alleged infringer). If the profitability of the accused products is unknown to the prospective litigant, an estimate of firm and/or industry profitability may be obtained from EDGAR online (www.edgaronline.com), the Cost of Capital Yearbook published by Morningstar (www.morningstar.com), or Annual Statement Studies published by The Risk Management Association (www.rmahq.org). The portion of realizable profits that should be credited to the patented invention often requires an evaluation of qualitative business issues.