Reconsidering the Georgia-Pacific Standard for Reasonable Royalty Patent Damages

Authors

Christopher B. Seaman, Washington and Lee University School of LawFollow

Document Type

Article

Publication Title

Brigham Young University Law Review

Publication Date

2010

Abstract

Determining damages for infringement is one of the most important and controversial issues in contemporary patent litigation. The current fifteen-factor Georgia-Pacific standard for determining a reasonable royalty has become increasingly difficult for juries to apply in patent disputes involving complex, high-technology products, resulting in unpredictable damage awards that tend to overcompensate patentees.

This Article proposes an alternative standard to Georgia-Pacific when an acceptable noninfringing substitute exists for the patented technology. Specifically, in a hypothetical bargain for a patent license, both economic and negotiation theory explain that a rational patent licensor would agree to pay only the costs it would incur to adopt and implement a noninfringing substitute technology, plus any lost benefits related to the substitute's use. Indeed, the Federal Circuit already has recognized an analogous limitation on damages in the context of lost profits, although it has defined the universe of alternatives too narrowly by refusing to consider imperfect substitutes for the patented technology.

Comments

BYU Law Digital Commons © 2010. Posted with permission from the copyright owner.

Recommended Citation

Christopher B. Seaman, Reconsidering the Georgia-Pacific Standard for Reasonable Royalty Patent Damages, 2010 BYU L. Rev. 1661.