About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

9 Colum. Sci. & Tech. L. Rev. 1 (2008)

handle is hein.journals/cstlr9 and id is 1 raw text is: The Columbia SCIENCE AND TECHNOLOGY LAW REVIEW www.stlr.org USING APPORTIONMENT TO REIN IN THE GEORGIA-PACIFIC FACTORS Eric E. Bensen & Danielle M. White' In a dramatic departure from well-established patent damages law, which would confine a reasonable royalty to a portion of the profit contributed by the infringed patent, current Federal Circuit precedent permits a reasonable royalty on an even relatively insignificant component to exceed not only the profit attributable to that component, but, in some cases, the entire profit on the product. That precedent ignores the history of the reasonable royalty award, which originated as merely a substitute for an established or market rate royalty for the patent. Just as the real- life negotiations leading to an established royalty would result in the licensor and licensee splitting the profit attributable to the licensed patent, a reasonable royalty should leave the infringer with a portion of the profit attributable to the patented invention as compensation for its labor, risk, and investment. The Federal Circuit's precedent also ignores long- standing apportionment principles, which, if properly applied, would not permit a patentee to derive a reasonable royalty from the unpatented features of an infringing product. Unbound as they are from their economic and legal foundations, royalty awards have, not surprisingly, become arbitrary and often punitive. This article argues that to rein in reasonable royalty awards, restore them to their historical role, and ensure that they are consistent with long- standing principles of patent damages law, (i) apportionment should be the threshold question in every reasonable royalty analysis, and (ii) only factors relevant to approximating a fair market price for the patent should Eric E. Bensen is co-author of Milgrim on Trade Secrets and Milgrim on Licensing and an attorney with Paul, Hastings, Janofsky & Walker LLP in New York, where he focuses his practice on intellectual property litigation, licensing and counseling. Danielle M. White is an attorney with Paul, Hastings, Janofsky & Walker LLP in New York, where she focuses her practice on intellectual property litigation and counseling. The views expressed in this article are solely those of the authors. 1

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most