CAFC in Patent Damages Case: "25% Rule" is Fundamentall Flawed


This is a brief alert reporting a 4 January 2011 decision of a Panel of the Federal Circuit.

In the decision, the Panel rejected use of the "25% Rule" as a basis for expert testimony relating to estimating damages in a patent infringement case. The Panel held that, at least without sound reasoning for applying the 25% Rule to the specific facts of a patent dispute, expert testimony applyint that rule lacks sufficient relevance to be admissible under the US Supreme Court's _Daubert_ test for admissibility.

As a consequence, the defendant was awarded a new trial on damages - thereby avoiding the $388 million verdict the jury had awarded the plaintiff.

The decision is significant for both patentees and potential licensees, whether presently involved in a patent infringement dispute or contemplating licensing.

Feel free to contact me to discuss the decision if you wish.



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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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