What license agreements are relevant to determine a reasonable royalty?


Auburn University v. IBM, Corp., No. 3:09-cv-694 (M.D. Ala. May 18, 2011) is instructive because the judge lays out what types of licenses may be considered in coming up with a reasonable royalty for calculating damages in patent litigation. Key points: the technology has to be the same and cross licenses have only “tenuous” relevance.”  In this case, date was no limitation, and “semiconductor testing” was narrow enough to designate the technology. The Finnegan firm offers an analysis.

Valuators should note particularly how broad the allowed technology category is. Many times analysts get frustrated trying to find exact comparables when none exist.  In ktMINE, for example, a search for “semiconductor testing” yields nearly 3,000 licenses.


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