Royalty Under 35 USC § 284 Must Be Determined By Judge Or Jury

Case: Parental Guide of Texas, Inc. v. Thomson, Inc., Case No. 05-1493 (Fed. Cir. 4/21/06)

The One Sentence Summary: Provision of settlement agreement that referenced a royalty in accord with 35 U.S.C. § 284 referred to a reasonable royalty determined through the express application, by the judge or jury, of the Georgia Pacific factors.


What They Were Fighting About: The parties executed a settlement agreement whereby the alleged patent infringer agreed to pay an additional amount if the lawsuit subsequently terminated in favor of the plaintiff and a royalty was determined in accord with 35 U.S.C. § 284.

Federal Circuit Holdings:

• 35 U.S.C. § 284 provides that the court shall award a patent claimant compensatory damages, in no event less than a reasonable royalty.
• 35 U.S.C. § 284 contemplates that the amount of damages will be found by a jury or a judge through express application of the Georgia-Pacific factors.
• A settlement agreement provision that referenced a "Litigation Royalty" "in accordance with the law applicable to 35 U.S.C. § 284" applied only to a resonable royalty determined by a judge or jury applying Georgia-Pacific.
• No such determination of a royalty had occurred because the litigation had ended in settlements. Thus, no contingent payment of a "Litigation Royalty" was due to plaintiff.