You are a master at strategy. The cards in your hand show it. With a smile, you lay down your winning formula. "Gin!" you declare triumphantly. Your adversaries around the card table stare in disbelief. After a pause, one of them utters, ”But we’re playing poker, not gin rummy.”
Imagine now that you are at trial presenting damages to the jury. You explain that a common approach used to determine a reasonable royalty in patent infringement litigation employs a “hypothetical negotiation” construct whereby a willing patent owner and a willing potential licensee enter into an arms-length negotiation.1 You explain further that one of the means used to arrive at the outcome of the hypothetical negotiation is where the jury, typically assisted by experts, considers patent license agreements that are comparable to the hypothetical license at issue.2 You then carefully lay out your supporting license agreements like a winning hand of cards. At that point, you do not want the court to be like your poker friends and tell you that you have been playing the wrong game by relying on non-comparable license agreements.
January 15, 2013