Tax Solutions to Patent Damages

24 Pages Posted: 10 Jan 2018 Last revised: 13 Jan 2018

See all articles by Jennifer Blouin

Jennifer Blouin

University of Pennsylvania - Accounting Department

Melissa F. Wasserman

The University of Texas at Austin - School of Law

Date Written: January 9, 2018


The calculation of patent damages lies at the epicenter of patent policy, yet it remains one of the most contentious issues in all of intellectual property law. The dominant legal framework equates a reasonable royalty, the most prevalent patent damage award, to a hypothetical negotiation between the parties at the time infringement began. Commentators and courts generally agree that existing comparable patent licenses, which represent arms’-length transaction between two unrelated private parties that places a monetary value on the patent, are highly probative in determining a reasonable royalty. The lack of publicly available licensing data, however, limits the ability of courts to identity appropriate comparable licenses. In this paper, we argue that there is a large untapped trove of information on existing patent licensing agreements, many of which are likely more probative to reasonable royalty calculation than currently existing licensing data offered by patent damage experts. This novel source of data is tax-related “transfer prices.”

Keywords: patent damages, reasonable royalty, tax, transfer pricing, patents, transfer-pricing

JEL Classification: O34, K34

Suggested Citation

Blouin, Jennifer and Wasserman, Melissa F., Tax Solutions to Patent Damages (January 9, 2018). Texas Intellectual Property Law Journal, (Invited Symposium Contribution) Forthcoming, Available at SSRN:

Jennifer Blouin

University of Pennsylvania - Accounting Department ( email )

1315 SHDH
3620 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-1266 (Phone)

Melissa F. Wasserman (Contact Author)

The University of Texas at Austin - School of Law ( email )

727 East Dean Keeton St
Austin, TX 78705
United States

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