Finding Reasonable Royalty Damages: A Contract Approach to Patent Infringement

86 Pages Posted: 5 Mar 2018 Last revised: 5 Apr 2018

Date Written: March 30, 2018

Abstract

The article introduces a contract approach to patent infringement and develops a methodology for finding reasonable royalty damages. The contract approach complements approaches based on property and tort, thus providing a more complete understanding of damages. The article argues that the patent infringement case should specify an informed contract. The informed contract improves estimation of damages by taking into account information revealed during the period of infringement. The article introduces a market value method for calculating reasonable royalty damages based on patent transfer prices. The contract approach helps calculate reasonable royalty damages based on royalties in comparable patent licenses. The contract approach addresses various controversies over reasonable royalty damages.

Keywords: Patent, contract, infringement, damages, reasonable royalties

JEL Classification: K10, K30

Suggested Citation

Spulber, Daniel F., Finding Reasonable Royalty Damages: A Contract Approach to Patent Infringement (March 30, 2018). Northwestern Law & Econ Research Paper No. 18-08. Available at SSRN: https://ssrn.com/abstract=3133323 or http://dx.doi.org/10.2139/ssrn.3133323

Daniel F. Spulber (Contact Author)

Northwestern University - Kellogg School of Management ( email )

Kellogg Global Hub
2211 Campus Dr.
Evanston, IL 60208
United States
847-491-8675 (Phone)
847-467-1777 (Fax)

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