Reasonable Royalty: Analytic Vs. Hypothetical Approach

Law360, New York (February 21, 2012, 1:46 PM EST) -- One of the more difficult legal questions presented in patent infringement actions is how best to determine a “reasonable royalty” under 35 U.S.C. § 284. Currently, the primary standard for determining a “reasonable royalty” is the “hypothetical negotiation” approach that arises from Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970), modified, 446 F.2d 295 (2d Cir. 1971).

Under this standard, the trier of fact "envision[s] the terms of a licensing agreement reached as the result of a supposed meeting between the patentee...
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