Sorry Ehwest established royalties have no bearing during industry wide infringement due to disrespect of a patent. (Please read bold)

P.S. I've provided a link why didn't you?

http://jolt.law.harvard.edu/articles/pdf/v05/05HarvJLTech095.pdf

A. Established Royalty

An established royalty is the prevailing royalty in the industry as evidenced

by prior licenses. In order to qualify as "established," these

licenses must have been:

1. Paid or secured before the alleged infringement;

2. Paid by such a number of persons as to indicate a general acquiescence

in their reasonableness;

3. Uniform in the region where issued; and

4. Not paid under threat of suit or in settlement of litigation. 167

Courts enjoy some discretion in the calculation of an established royalty.

For example, an established royalty is not necessarily viewed as a ceiling

for the royalty that may be assessed, 16s so a court does not abuse its dis-

163. ld. See also State Indus., Inc. v. Mor-Flo Indus., Inc., 883 F.2d 1573, 1578 (Fed.Cir. 1989), cert. denied, 110 U.S. 725 (1990); Fromson v. Western Litho Plate & Supply

Co., 853 F.2d 1568, 1574 (Fed. Cir. 1988).

164. The Federal Circuit in recent years has approved royalty awards as high as 30% of

pr~luct selling mice. Ned L. Conley, An Economic Approach to Patent Damages, 15

AIPLA QJ. 354, 376 (1987).

165. See Trans-World Mfg. Corp. v. Al Nyman & Sons, Inc., 633 E Supp. 1047, 1055

(D. Del. 1986). See also Zegers v. Zegers, Inc., 458 F.2d 726, 729 (7th Cir. 1972).

~66. Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075, 1078-79 (Fed. Cir. 1983);

Bandag, Inc. v. Gerrard Tire Co., 704 F.2d 1578, 1582 (Fed. Cir. 1983).

167. See Faulkner v. Gibbs, 199 F.2d 635, 638 (gth Cir. 1952).

168. Bio-Rad Labs. v. Nicolet Instrument Corp., 739 F.2d 604, 617 (Fed. Cir.), cert.

denied, 469 U.S. 1038 (1984).

Fall, 1991] Damages in Patent Infringement Actions 121

cretion by selecting a higher figure. 169 The court need not choose the

accounting method which provides for the lowest amount of damages:

"Simply because different accounting methods lead to different results

does not make an award at the higher end of a spectrum more than adequate.

''170

Several factors may lead a court to adjust an established royalty. For

instance, if the royalty was established during a period of industry-v,.ide

infringement, the licensing rate could be depressed due to this disrespect

for the patent. TM Therefore, an established royalty may be modified

upward or downward depending upon the circumstances.172 And under

certain conditions an established royalty may be disregarded, as when

the Federal Circuit held that the established royalty charged to a patent

holder's wholly owned subsidiary was not the proper basis for calculating

the amount of royalty owed. 173 It is worth noting that the kidustry

custom or licenses on comparable patents may not be given considerable

weight by the courts because of the often unique nature of the patented

product involved. TM Once an established royalty is determined, the total

award to the patent holder is obtained by multiplying the numberf of infringing

articles times the established royalty per article. Alternatively,

under some circumstances, a court may use a lump-sum royally as the

recovery award.175

In Minnesota Mining & Manufacturing Co. v. Berwick Indt~stries, 176

the court found that the award of a royalty per unit sold, based upon

prior licenses, would have greatly exceeded the amount of a lump-sum

royalty, under the circumstances. Therefore, the court held that the

169. TWM Mfg. Co., Inc. v. Dum Corp., 789 F.2d 895, 899 (Fed. Cir.), cen: denied,

479 U.S. 852 (1986).

170. Paper Converting Maeh. CO. v. Magna-Graphies, 745 F.2d 11, 21 (Fed. Cir. 1984).

171. See Tights, Inc. v. Kayser-Roth Corp., 442 F. Supp. 159, 165 (D.N.C. 1977); Seealso

Trio Process Corp. v. L. Goldstein's Sons, Inc., 612 F.2d 1353, 1359 (3d Cir.), cen'.

denied, 449 U.S. 827 (1980).172. Teklronix, Inc. v. United States, 552 F.2d 343, 348 (Ct. CI.),

modified on othergrounds, 557 F.2d 265 (Ct. CL 197"/), cert. denied, 439 U.S. 1048 (1978).

173. Allen Archery, Inc. v. Browning Mfg. CO., 898 F.2d 787, 790 (Fed. Cir. 1990).

174. See Austin-Western Road Math. Co. v. Disc Grader & Plow Co., 291 F. 301,305(Sth Cir. 1923),

cert. denied, 263 U.S, 717 (1924) (Royalties paid in more or less similar

situations would be consi~ ahhough the weight of such evidence in any particular case

might be slight.); Faulkner v. Gibbs, 199 F.2d 635, 639 (9th Cir, 1952) (Most other licen~

agreements are too dissimilar to use and contain too many uftcertainties,); Georgia-Pacific

Corp. v. United States Plywood Corp., 318 F. Supp. 1116, 1140 (S.D.N.Y. 1970), mod/f~d

on other grounds, 446 F.2d 295 (2d Cir.), cert. denied, 404 U.S. 870 (1971) (The relevance

of industry standards is superficial, inconclusive and not persuasive.).

175. Minnesota Mining & Mfg. Co. v. Berwick Indus., 393 F. Supp. 1230, 1245 (D. Pa.

1975), affd, 532 F.2d 330 (3rd Cir. 1976).

176. 393 F. Supp. 1230.

122 Harvard Journal of Law & Technology [Vol. 5

parties would never have agreed to a royalty per unit in lieu of a lump

sum royalty payment. If circumstances do not permit the award of an

established royalty, then a reasonable royalty is the appropriate award

and the floor below which an award for infringement may not fall