At its most basic, a reasonable royalty analysis begins with one simple question: How much better off is the accused infringer for using the patented technology? Perhaps due to their directness in addressing that issue, the “analytical approach” and variant techniques have been attractive methods in reasonable royalty inquiries for some time.
So-called “excess return” analyses like the analytical approach offer distinct intuitive appeal and quantitative frankness, and, in light of Uniloc’s abolition of the 25% Rule, are almost necessarily taking on an increasingly prominent place in patent infringement damages analysis.1 Their relevance may be reinforced not only by legal prescription, however, but also by rapid innovation’s compression of product life-cycles.2 Hyphenated product life-cycles can yield special acuity as to the financial returns generated by an accused product and thus enable enhanced precision in measuring an accused infringer’s profit benefit due to patent use.
The following sections of this article describe one excess return methodology that may be progressively indicated in post-25% Rule reasonable royalty inquiries, particularly in the face of brisk innovation that may reduce product life-cycles.
May 07, 2013