What is a Reasonable Royalty? A Comparative Assessment of Patent Damages Methodologies

Abstract

The article surveys theories of licensing royalty rates in patent damages cases. After first reviewing, analyzing and critiquing Georgia-Pacific factors of patent licensing, the article evaluates the entire market value rule in light of the Lucent decision. The article reviews and analyzes real property compensation cases and assesses additional value factors including the restitution model. The article assesses different bargaining scenarios, including voluntary licensing without availability of an injunction and patent licensing with different transaction cost scenarios. Finally, the article offers patent licensing solutions from real options analysis, including hybrid options.