Methodologies For Calculating FRAND Damages: Part 1 – 3

Koren Wong-Ervin, and Anne Layne-Farrar

9/02/2015
(Original Publish Date: 10/8/2014)

Several federal district courts have ruled on the appropriate methodology for calculating either a reasonable royalty rate or reasonable royalty damages on a standard-essential patent encumbered by a commitment to license on fair, reasonable and nondiscriminatory terms. Included in these decisions are determinations about hold-up, royalty stacking, the incremental value rule, the use of comparable licenses, and the appropriate base for royalty calculations. These issues have received a lot of attention, not just in the patent law community but also by foreign antitrust regulators in China and India, which have been pursing theories based on alleged “excessive” or “unreasonable” prices based on a patent holder’s practice of charging royalties as a percentage of the end-user product as opposed to a component product such as the chipset