Smallest Salable Unit May Not Be A Viable Royalty Base

Law360, New York (November 5, 2013, 12:48 PM EST) -- Where small elements of a multicomponent product are accused of infringement, calculating a royalty using the price of the entire product as a royalty base “carries a considerable risk that the patentee will be improperly compensated for noninfringing components of that product.” LaserDynamics Inc. v. Quanta Computers, 694 F.3d 51, 67 (Fed. Cir. 2012).

Accordingly, in articulating the general rule for properly measuring a reasonable royalty in that situation, the Federal Circuit recently explained that “it is generally required that royalties be based not on the...
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