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Reasonable Royalty Damages Calculation Key Issue In Senate Patent Reform Hearing

Publication Date: 
March 11, 2009
BNA's Patent, Trademark & Copyright Journal
Tony Dutra

Professor Mark A. Lemley is quoted in BNA's Patent, Trademark & Copyright Journal in an article about the issues still needing to be resolved concerning the Patent Reform Act of 2009:

Mark A. Lemley, professor at Stanford Law School, Stanford, Calif., said that “value actually contributed” is a good standard, but he insisted that the “entire market value,” or EMV, base­ available as an option in S. 515 “upon a showing to the satisfaction of the court that the claimed invention's specific contribution over the prior art is the predominant basis for market demand”­be eliminated from consideration under reasonable royalty calculations, and confined only to “lost profits” cases.

Lemley's written testimony identified abuses when courts use EMV for inventions “that relate not to an entire product, but to a small component of a larger product.” He said this judicial option “encourages patent owners in those component industries to seek and obtain damages or settlements that far exceed the actual contribution of the patent.”