Royalty Rate Determination in Patent Infringement Cases: The U.S. and China Compared

17 J. Intell. Prop. L. & Prac. __ (2022 Forthcoming)

Arizona Legal Studies Discussion Paper No. 21-08

21 Pages Posted: 11 May 2021

See all articles by Bashayer Almajed

Bashayer Almajed

Department of Communication Disorders Sciences

Bashar Malkawi

James E. Rogers College of Law

Date Written: May 10, 2021

Abstract

Intellectual Property is the cornerstone for a thriving economy. Indeed, intellectual property protection is a major determinant of economic growth. One important part of this legal and economic environment is patent. Licensing plays an important role in patent as it is one of the methods by which an intellectual property owner can reap the benefits of his labor.

This article will focus on determining royalty rates and damages in U.S. and China's patent cases. While the article focuses on court decisions, it also reviews the different laws to see the manner in which these laws have played in the development of methods for calculating royalty rates and damages. There are different factors that may not allow for the adherence to a one-size fits all recipes for calculation of royalty rates and damages. Each country adopts its own methods. The remainder of the article is organized as follows. Section II of this article examines the different methos employed in the U.S. legal system to facilitate royalty rate and damage calculations for patents. This section examines methods such the 25 percent rule, Georgia-Pacific factors, reasonable royalty rate, the analytical approach, and the smallest salable practicing patent unit (SSPPU) method. Section III of this article looks at the Chinese model for damage calculations. The section explores China’s shift from the traditional framework for calculating damages in cases of infringement relying on actual compensation to statutory and punitive damages and the key factors that played in this transition towards. Section IV provides a set of conclusions.

Keywords: Patent, licensing, valuation, royalty rate, damages, United States, China, damage calculations, intellectual property

Suggested Citation

Almajed, Bashayer and Malkawi, Bashar, Royalty Rate Determination in Patent Infringement Cases: The U.S. and China Compared (May 10, 2021). 17 J. Intell. Prop. L. & Prac. __ (2022 Forthcoming) , Arizona Legal Studies Discussion Paper No. 21-08, Available at SSRN: https://ssrn.com/abstract=3844103

Bashayer Almajed

Department of Communication Disorders Sciences ( email )

Safat, 13060
Kuwait

Bashar Malkawi (Contact Author)

James E. Rogers College of Law ( email )

P.O. Box 210176
Tucson, AZ 85721-0176
United States

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