U.S. Federal Court’s Damages Model for SEP Infringement Fails Apportionment Rules: Commonwealth Sci. & Indus. Research Organisation v. Cisco Sys.

Business Valuation Update
Business Valuation Australia
April 15, 2016


Apportionment is key to determining damages in all patent infringement cases. But apportionment in the context of patents that are essential to standardising technology, products, and services comes with its own rules. A guiding principle is that the royalty must only reflect the value of the patented technology’s superiority, not any value resulting from its being adopted due to standardisation. The U.S. Federal Circuit recently elaborated on this concept when it struck down a $16.2 million royalty award against Cisco, finding the trial court’s damages model failed to account for standardisation.