The arguments in this Article were first presented in Brief of Law Scholars as Amici Curiae, Bristol Myers Squibb v. Becerra & Janssen v. Becerra, Nos. 23-cv-3335 & 3:23-cv-3818 (D.N.J. Oct. 23, 2023). The authors thank S. Agrawal, Hannah Brennan, Austin DeRamus, Rebekah Glickman-Simon, Claudia Morera, Trudel Pare, Ameet Sarpatwari, and Stijn Talloen for their contributions researching and drafting the brief.Google Scholar

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Id. at 1374 (quoting 35 U.S.C. § 154(a)(1)).Google Scholar

Id. at 1375 (quoting 35 U.S.C. § 261) (emphasis added).Google Scholar

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See J. Adamczyk, A. Lewis, S. Morrison, and C. Morten, “§ 1498: A Guide to Government Patent Use, A Path to Licensing and Distributing Generic Drugs,” SSRN (2021), available at <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3882823> (“Courts have consistently found that a royalty of 10% or less represents ‘reasonable and entire compensation’ fair to both the patent holder and the government.”); A. Kapczynski and A. S. Kesselheim, “‘Government Patent Use’: A Legal Approach to Reducing Drug Spending,”Health Affairs 35 (2016) (“Royalties are commonly set at 10 percent of sales or less” in § 1498 cases); R. J. McGrath, “The Unauthorized Use of Patents by the United States Government or Its Contractors,” AIPLA Quarterly Journal 18 (1991) (“Historically, the highest royalty rate that the United States Claims Court has awarded is 10%.”).+(“Courts+have+consistently+found+that+a+royalty+of+10%+or+less+represents+‘reasonable+and+entire+compensation’+fair+to+both+the+patent+holder+and+the+government.”);+A.+Kapczynski+and+A.+S.+Kesselheim,+“‘Government+Patent+Use’:+A+Legal+Approach+to+Reducing+Drug+Spending,”Health+Affairs+35+(2016)+(“Royalties+are+commonly+set+at+10+percent+of+sales+or+less”+in+§+1498+cases);+R.+J.+McGrath,+“The+Unauthorized+Use+of+Patents+by+the+United+States+Government+or+Its+Contractors,”+AIPLA+Quarterly+Journal+18+(1991)+(“Historically,+the+highest+royalty+rate+that+the+United+States+Claims+Court+has+awarded+is+10%.”).>Google Scholar

See Tektronix, Inc. v. United States, 552 F.2d 343, 351 (Ct. Cl. 1977), (explaining that, under § 1498, the “goal of ‘complete justice’ implies that only a reasonable, not an excessive, royalty should be allowed where the United States is the user — even though the patentee, as a monopolist, might be able to exact excessive gains from private users”), opinion modified on denial of reh’g, 557 F.2d 265 (Ct. Cl. 1977).Google Scholar

28 U.S.C. § 1498(a) (2018); see Golden, 955 F.3d 981, 986.Google Scholar

Liberty Ammunition, Inc. v. United States, 119 Fed. Cl. 368, 386 (2014) (quoting Boeing Co. v. United States, 86 Fed. Cl. 303, 311 (2009), aff’d in part, 835 F.3d 1388 (Fed. Cir. 2016).Google Scholar

Decca Ltd. v. United States, 640 F.2d 1156, 1167 (Ct. Cl. 1980) (“Where (a) prior to the time as of which the license taken by the Government is to be valued, the patentee has licensed the infringed patent commercially and (b) the rights of such a commercial licensee are the same or substantially similar to the rights taken by the Government, the court uses, virtually without exception, the reasonable royalty method to value the license taken by the Government.”), cert. denied, 454 U.S. 819 (1981).Google Scholar

Tektronix, 552 F.2d at 349 n.7 (“This willing-buyer/willing-seller technique in determining a reasonable royalty has not been a stranger to the Court of Claims.”); Amerace Esna Corp. v. United States, 462 F.2d 1377, 1380 (Cl. Ct. 1972) (“In the absence of an existing royalty rate, courts often resort to a ‘willing seller-willing buyer’ approach to establish what a reasonable royalty should be under the particular facts with which they are faced”); Hughes Aircraft Co. v. United States, 86 F.3d 1566, 1569, 1573 (Fed. Cir. 1996), vacated on other grounds, 520 U.S. 1183 (1997).Google Scholar

Tektronix, 552 F.2d at 349 (explaining that lost profits will often amount “to excessive compensation, rather than the just compensation payable under the Fifth Amendment”); Decca, 640 F.2d at 1172 (“The reasonable royalty method is the preferred method of ascertaining the value of patent rights taken by the Government …. ”); see also Donald S. Chisum, 6A Chisum On Patents § 20.03 (2023) (noting that “[t]here is some doubt whether lost profits is a permissible basis for recovery against the United States” and listing awards under § 1498 since 1930 to show that there has not been a lost profits award); Brennan et al., supra n.145, at 313 (noting that in “every modern § 1498 case, then, the measure of royalties has not been lost profits but rather a ‘reasonable royalty’”).Google Scholar

Memorandum of Law in Support of Motion for Summary Judgment at 15, Bristol Myers Squibb v. Becerra, No. 23-3335 (D.N.J. Aug. 16, 2023); Memorandum of Law in Support of Motion for Summary Judgment at 4, Janssen v. Becerra, No. 3:23-cv-03818-ZNQ-JB (D.N.J. Aug. 16, 2023).Google Scholar