Patent Litigation Alert: What Kind of Bag Holds a $19B Cat? Uniloc v. Microsoft: Federal Circuit Rules on Reasonable Royalty Damages Issues

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On January 4, 2011 the Federal Circuit in Uniloc USA, Inc. v. Microsoft Corp. made two significant rulings on recurring issues in the area of patent damages:

- It eliminated the criticized 25% “rule of thumb” frequently used as a baseline for determining reasonable royalty damages, and

- It clarified that evidence of entire market value calculations—where the plaintiff attempts to tie the reasonable royalty to the full value of a product containing the patented invention—will not be permitted in absence of clear economic justifications.

Uniloc is another installment in the trend marked by the recent ResQNet.com v. Lansa decision where the Federal Circuit pronounced that plaintiffs in patent cases “must carefully tie proof of damages to the claimed invention’s footprint in the market place.”

Please see full alert below for more information.

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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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