Reasonable Royalty for Patent Infringement of Non-Direct Revenue Producing Products
54 Pages Posted: 17 Oct 2015 Last revised: 21 Feb 2016
Date Written: January 27, 2015
In today’s information age, data is immensely valuable. Data is so valuable that many companies are willing to give away products and services in order to generate that data. Once these companies have this data, they are able to monetize it typically via advertising or licensing access to their vast database. But, what if the products or services these companies give away infringe upon a valid patent? What is the correct remedy to an injured patentee against a defendant whose accused product or service generates no direct revenue? A royalty that reaches through to the final product enabled by the patented technology, analogous to the reach-through royalty used in the biotechnology and pharmaceutical industries seems applicable in these cases and can be supported by a correct application of the Georgia-Pacific reasonable royalty factors. Valuing this enabling technology as a building block and analogous to the basic research tools of the biotechnology industry in constructing damage remedies will achieve an equitable result while still maintaining the incentives of the patent system.
Keywords: Patent, Patent Infringement, Patent Remedies, Reasonable Royalty, Reach-Through Royalty, NPE
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