Apportioning Value in Patent Portfolio License and Sale Agreements
les Nouvelles - Journal of the Licensing Executives Society, Volume LV No. 4, December 2020
21 Pages Posted: 4 Mar 2021
Date Written: October 19, 2020
In patent infringement cases, there is often a need to rely upon patent license agreements and patent sale agreements to determine the royalty that the alleged infringer should pay for using the patent-in-suit. When the payment in the license or sale agreement reflects compensation for more than the patent-in-suit, it may be necessary to apportion the royalty or price to account for the value attributed to the other patents in the portfolio. In order to account the well-known disproportionality of patent values, we propose the use of information from various patent value distribution studies to aid in this apportionment. This paper summarizes the literature related to patent value distributions and provides a framework for how these distributions may be used in patent litigation to apportion patent value from license or sale agreements.
Keywords: patent value; apportionment; valuation; portfolio license; distribution; royalty; damages
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