Ongoing royalties on Lost Profits case

Presidio Components Inc. v. American Technical Ceramics Corp. (3-08-cv-00335) CASD

The Court addressed the issue of ongoing royalties, but on a case where the underlying damages award was based on lost profits. The Court refused to award the royalty that the jury had awarded, holding that the lost profits award - if viewed as a royalty - would be far too high, at 140% of the operating profit. The Court also held that since the Georgia-Pacific analysis assumes the patent is valid and infringed, the bargaining positions of the parties was "substantially the same as they would have been at the time the infringement began."

For the actual Georgia-Pacific analysis, the Court set the hypothetical negotiation date as the date the Court upheld the jury verdict and denied the motion for a permanent injunction. The Court analyzed the various factors, and ended up agreeing with the Plaintiff's rate, finding that the Plaintiff was giving up a valuable business consideration in the form of not being able to exclusively license other companies.