This chapter addresses a special category of cases in which an asserted patent is, or has been declared to be, essential to the implementation of a collaboratively developed voluntary consensus standard, and the holder of that patent has agreed to license it to implementers of the standard on terms that are fair, reasonable, and nondiscriminatory (FRAND).This chapter explores how the existence of such a FRAND commitment may affect a patent holder’s entitlement to monetary damages and injunctive relief. In addition to issues of patent law, remedies law, and contracts law, we consider the effect of competition law on this issue.

This chapter describes the current state of, and normative basis for, the law of reasonable royalties among the leading jurisdictions for patent infringement litigation, as well as the principal arguments for and against various practices relating to the calculation of reasonable royalties; and for each of the major issues discussed, the chapter provides one or more recommendations.  The chapter’s principal recommendation is that, when applying a “bottom-up” approach to estimating reasonable royalties, courts should replace the Georgia-Pacific factors (and analogous factors used outside the United States) with a smaller list of considerations, specifically (1) calculating the incremental value of the invention and dividing it appropriately between the parties; (2) assessing market evidence, such as comparable licenses; and (3) where feasible and cost justified, using each of these first two considerations as a “check” on the accuracy of the other

This chapter discusses the law and policy of monetary awards — including exemplary damages and litigation cost recoveries — that go beyond the compensatory damages to which prevailing parties in patent litigation are normally entitled. Up to treble damages are authorized in the United States for knowing infringement, but attorney fees are awarded only in exceptional cases. The rest of the world tends toward the opposite: Attorney fees are awarded as a matter of course, but punitive damages are generally prohibited as against public policy.This chapter discusses the theory, law, and policy of enhanced damages and attorney fee awards in the United States, Europe, and Asia. While the availability of enhanced damages and fees can bring accused infringers that might otherwise “hold out” to the table, care must also be taken to ensure that it does not discourage productive learning from patents or challenges to overbroad and vague patents. Rather than endorse any single set of doctrinal rules, there is a recommendation for further research into a number of unanswered questions about current and potential future configurations, in order to inform future policymaking.

This chapter addresses two types of monetary remedies for patent infringement: (1) recovery of the patentee’s lost profits and (2) disgorgement of the infringer’s profits.  Both remedies make a comparison between what actually happened and a hypothetical “but for” world in which no infringement occurred. But the two remedies have substantially different objectives:  Lost profits are intended to compensate the patentee by restoring it to the position it would have occupied absent infringement, while disgorgement may serve other purposes, including deterrence, recapturing wrongful gains, and encouraging ex ante licensing of patented technology. Section 1 addresses several key issues regarding lost profits awards, including the availability and standard of proof, the role of noninfringing alternatives, potential recovery for the sale of related but unpatented goods, whether and how to apportion lost profits awards for complex products, and potential recovery for other infringement-related harms.  Section 2 describes the justifications for, and availability of, the disgorgement (accounting) remedy in major patent systems and, additionally, analyzes a number of questions related to calculating such awards. In both sections, recommendations are made and areas for further research are identified.

This chapter provides a critical review of the literature relating to remedies for patent infringement in the context of complex products, with a focus on the underlying theoretical issues of holdup, holdout, and royalty stacking. Issues considered here include: the conceptually appropriate benchmark for a fair return to a patentee; the theory of holdup and mechanisms by which holdup can be mitigated; placing the holdup debate within the context of property rules vs. liability rules; forcing patentees to accept lower royalties though holdout; and a review of empirical evidence related to holdup and royalty stacking.

Although competition law and IP law probably pursue complementary goals, competition laws can (1) affect remedies available for patent infringement; and/or otherwise (2) limit the conduct of patentees, particularly when transferring or licensing their patents. This chapter discusses the cases in which tensions between the protection of patents in complex products and the competition laws have arisen or may arise, particularly as regards the ability of owners of standard essential patents (SEPs) to monetize their patents either by seeking an injunction against implementers or by refusing to grant licenses complying with previously given commitments — generally, commitments to license on fair, reasonable, and nondiscriminatory (FRAND) terms. This chapter also examines potential competition law constraints on the pricing of patent licenses, other licensing terms, multilevel licensing and level discrimination, patent pools, sale of patent portfolios ,and patent acquisitions.