In a cogent essay in Patently-O, Dennis Crouch takes on current judicial applications of the “entire market rule” in damages calculations, arguing that forbidding use of an “entire-product royalty base” removes an excellent starting point for calculating the incremental benefit of the patent infringed.
In fact, since apportionment is a product of multiplication, damages calculated as a royalty against the offending component should equal damages calculated as a royalty against the entire market … because the royalty rate is much smaller for the latter. “In the multi-component situation, what's wrong with allowing the defendant to make the (seemingly easy and intuitive) showing that the accused product is based on thousands of innovations and equally important underlying patents that each deserve (and have received) their share of royalties and that the stacking problem means that royalties for the particular invention in question certainly could not be above say 0.002%.”
Crouch acknowledges a cognitive bias may well exist, that a royalty rate of a micro-fraction of a percent (of the total market) may be difficult for a juror to comprehend, but concludes that is just a lawyering problem. “To avoid the small number bias problem, defendants can rescale their calculation to be something like $5 per thousand products sold.”