The reasonable royalty analysis in patent infringement cases remains confusing to juries because of the numerous and arbitrary methods of calculation. The use of confusing methodologies, such as the Georgia-Pacific analysis, the Entire Market Value Rule, and the former 25 percent rule, increase the risk of overcompensating patentees in patent infringement cases. Without suitable changes to the reasonable royalty analysis, damages award amounts will continue to increasingly undermine the incentive for subsequent inventors to create new products. Although the courts have had some success in establishing new methods, Congress should create a more rigid and clear test for use in the courts. Clear and predictable patent damages rules created through the powers of the legislature and the judiciary will lead to fair damages awards and encourage innovation. This comment proposes a modern framework for determining reasonable royalty damages amounts to supplant outdated methodologies. This proposed framework includes a rule of apportionment, combined with strong judicial gatekeeping, to ensure that only reliable evidence based in sound economic and factual predicates is allowed to reach a jury.
Merritt J. Hasbrouck, Protecting the Gates of Reasonable Royalty: A Damages Framework for Patent Infringement Cases, 11 J. Marshall Rev. Intell. Prop. L. 192 (2011)