Established Royalty

  • BASICS: An established royalty establishes the measure of damages, without separately considering what a “reasonable royalty” is. “When the patentee has consistently licensed others to engage in conduct comparable to the defendant’s at a uniform royalty, that royalty is taken as established and indicates the terms upon which the patentee would have licensed the defendant’s use of the invention.” Monsanto (Fed. Cir. 05/24/07) (rejecting infringer’s argument for an established royalty rate). “Royalties paid by related parties have little probative value as to the patent’s value.” Warsaw I (Fed. Cir. 03/02/15).
  • License To Non-Competitor Less Relevant: royalty rate between inventor and his family does not conclusively establish royalty rate for license to a competitor. Minks (Fed. Cir. 10/17/08).
  • Established Royalties Are Rare: An established royalty is typically only present if there are many arms-length licenses with the same rate. However, actual licenses are still considered as part of the Georgia Pacific factors (Factor 1), and can be very persuasive in showing what a reasonable royalty would be.

License To Non-Competitor Less Relevant: royalty rate between inventor and his family does not conclusively establish royalty rate for license to a competitor. Minks (Fed. Cir. 10/17/08).