Thought Leadership

Thought Leadership

Tips and Tactics for Drafting and Using Settlement Licenses in Litigation Post-“ResQnet”

An analysis of modern patent damages jurisprudence reveals a recent trend in the courts to reevaluate the methods and procedures that are used to determine the baseline reasonable royalty in patent infringement actions. Recognizing that “the purpose of compensatory [reasonable royalty] damages is not to punish the infringer, but to make the patentee whole,” the Federal Circuit began more actively scrutinizing and commenting on damages in 2009 with the Lucent decision, as well as the trial court in Cornell, where Judge Rader presided by designation. One specific trend relates to the discovery and admissibility of settlement licenses, which had historically been considered largely irrelevant to patent damages, but now are frequently being offered as evidence in connection with determining a reasonable royalty based on a hypothetical negotiation.

StoneTurn’s Alan Ratliff, in conjunction with Karen Weil of Knobbe Martens, Alan Albright of Bracewell Giuliani, and Chris Northcutt of Chevron prepared a paper for the 2012 IPO Annual Meeting, which provides an overview on the discoverability of settlement licenses and the admissibility of settlement licenses at trial.

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