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Intellectual PropertyFeaturesPatent Licensing and TransactionsPatent LitigationThe Intellectual Property Strategist

A Reasonable Royalty Rate Must Be Tied to Facts

By Matthew Siegal
April 01, 2018

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.

Exmark sued Briggs & Stratton for infringing U.S. Pat. No. 5,987,863 (the '863 Patent), which claims a lawnmower in its entirety. The district court granted summary judgment that patent claim 1 was not invalid and denied summary judgment that claim 1 was indefinite. After trial, the jury found that Briggs & Stratton willfully infringed Exmark's patent and awarded $24 million in damages. The district court doubled the award as enhanced damages, due to Briggs & Stratton's willful infringement.

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