Determining a fair and reasonable royalty is often . . . a difficult chore, seeming often to involve more the talents of a conjurer than those of a judge.
Although consumer surveys have long been used in trademark, false advertising, and antitrust cases, the use of such surveys to demonstrate the value of patented technology in patent cases is a relatively recent phenomenon. This phenomenon has developed largely in response to the increased scrutiny that the Federal Circuit has placed on damage awards in patent infringement cases over the past few years—a trend illustrated by its recent decision in Uniloc USA, Inc. v. Microsoft Corp. As the Federal Circuit has explained, damage awards in patent infringement cases must be supported by sound economic theory and tied to the patented invention’s “footprint in the marketplace.” In addition, when a patent covers only one feature of an accused product, a patent holder wishing to present evidence regarding the overall profitability of the accused product must demonstrate that the patented feature creates consumer demand for the product or its components. A well-crafted consumer survey can provide powerful evidence of an invention’s value in the marketplace—or can be used to refute an unfounded damage claim. Counsel responsible for managing patent litigation should understand both the potential role of survey evidence and the common pitfalls associated with the use of such evidence at trial.
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Maximizing the Strength of Intellectual Property in Today’s Marketplace
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