Page 82 - Intellectual Property Disputes

may not include the infringer, may be used in determining a reasonable royalty under the logic that the
parties to the hypothetical negotiation would be guided by the customary practice in the industry. fn 64
However, damages experts that chose to rely on these types of license agreements should proceed with
caution in light of the need to tie other licenses to the facts and circumstances of the present matter. In
addressing the consideration of Georgia-Pacific factor 12 ("looking at the portion of profit that may be
customarily allowed in the particular business for use of the invention or similar inventions"), the
Federal Circuit in Uniloc stated, "...[E]vidence purporting to apply to th[is], and any other factor, must
be tied to the relevant facts and circumstances of the particular case at issue and the hypothetical
negotiations that would have taken place in light of those facts and circumstances at the relevant time."
The district court in Multimedia Patent Trust v. Apple Inc. echoed the Federal Circuit’s requirements in
its rejection of Multimedia Patent Trust’s experts’ use of industry royalty data, stating, "this generic
industry data is not tethered to the relevant facts and circumstances of the present case. Indeed, in its
opposition, MPT fails to provide any explanation of how this industry data is related to the facts in this
case. Therefore, any damages testimony based on this industry data should be excluded." fn 65

The courts also have given "weight to any restrictive licensing policies of the patent owner. A formal
written policy does not have to exist; rather, the patent owner’s licensing policy can be established by
taking into account its prior licensing activities." fn 66 The rationale behind giving any consideration to
the patent owner’s licensing policies is that if the patent owner generally refuses to grant licenses to its
invention, a higher royalty would be justified in order to induce the hypothetical sale. fn 67 In addition,
irrespective of the patent owner’s licensing policy, if the patent owner demonstrates that it had the
requisite capacity to make the infringer’s sales, the patent owner may argue that it would not have
licensed the patent to the infringer without commensurate financial incentives. fn 68

fn 64 J.T. Thomas, D.A. Segal, and H.M. Lyon, Intellectual Property Law Damages and Remedies: Updated through Release 18,
Terence P. Ross, ed. (New York: Law Journal Press), 3-58.

fn 65 Multimedia Patent Trust v. Apple Inc., No. 10-CV-2618-H (KSC).

fn 66 Thomas, Segal, and Lyon, 3-58.

fn 67 Id.

fn 68 See, for example, the cases in the following four circuits:

• Second Circuit: Shamrock Techs., Inc. v. Medical Sterilization, Inc., 808 F. Supp. 932, 942 (E.D.N.Y 1992), aff’d,
28 U.S.P.Q.2d (BNA) 1693 (Fed. Cir. 1993) ("We . . . consider the use [the infringer] made of the [patented] process
in competing with [the patentee].")

• Third Circuit: Total Containment, Inc. v. Environ Prods., Inc., 921 F. Supp. 1355, 1401 (E.D. Pa. 1995), aff’d, 106
F.3d 427 (Fed. Cir. 1997); Mobil Oil Corp. v. Amoco Chemicals Corp., 915 F. Supp. 1333, 1359 (D. Del. 1994)
(parties "were not truly competitors")

• Sixth Circuit: Minco, Inc. v. Combustion Eng’g, Inc., 903 F. Supp. 1204, 1223–24 (E.D. Tenn. 1995), aff’d 95 F.3d
1109 (Fed. Cir. 1996) (20% royalty was appropriate because the patent owner "had a very high profitability rate"
(53%) and the infringer "had a strong need to gain the advantages of the patented" product)

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