By David M. LaSpaluto of Perkins Coie LLP | David LaSpaluto is an attorney in the Phoenix office of the law firm Perkins Coie LLP. He focuses his practice on patent, intellectual property, and commercial litigation. He can be contacted at: DLaSpaluto@perkinscoie.com. |
Overview
Does the recent spate of decisions on patent reasonable royalty damage calculations
signify a stricter standard or simply more of the same? Have courts finally provided clearer guidance on
this
complex - and potentially costly - area of the law, or are these cases much ado about very little? In a
nutshell,
it appears that courts are paying more attention to reasonable royalty standards, stepping up where
Congress
has held off (by choice or inertia); but the royalty analysis needs further clarity, which the Federal
Circuit may soon have the opportunity to provide.
Recent Decisions
In Lucent v. Gateway,1
a panel of the Federal Circuit vacated a $358 million jury verdict against Microsoft and
remanded for
further proceedings, holding that the verdict did not rest on substantial evidence and was grossly out of
proportion
with realizable profit that might be credited to the patented invention. In Cornell University v.
Hewlett-Packard,
2 Judge Rader of the Federal
Circuit, sitting
by designation in the Northern District of New York, reduced a $184 million jury award to $53 million. He
held
Cornell overreached in trying to apply the "entire market value rule" to include in the royalty base
the larger compute...
