Entire Market Value Rule
The entire market value rule states that damages can be based on the entire value of accused products only where the patented feature creates the basis for customer demand.
The entire market value rule allows a patentee to assess damages based on the entire market value of the accused product only where the patented feature creates the basis for customer demand or substantially creates the value of the component parts.
— Uniloc USA, Inc. v. Microsoft Corp., 632 F. 3d 1292, 1318 (Fed. Cir. 2011).
To invoke the entire market value rule, it is not enough to show that the patented feature is valuable, important, or even essential.
Thus, it is not enough to merely show that the patented feature is viewed as valuable, important, or even essential to the use of the overall product.
— VirnetX, Inc. v. Cisco Systems, Inc., 767 F. 3d 1308, 1327 (Fed. Cir. 2014).
The entire market value rule is related to, but distinct from, the apportionment principle.
While the entire market value rule does not apply to this case, the damages determination nonetheless requires a related inquiry. … [T]he court must determine how to account for the relative value of the patentee's invention in comparison to the value of the conventional elements recited in the claim, standing alone.
— Astrazeneca AB v. Apotex Corp., 782 F. 3d 1324, 1338 (Fed. Cir. 2015).
There is a legal principle underlying the entire market value rule: comparing a reasonable royalty to a large revenue base might distract the jury from focusing on the contribution of the patent at issue.
The disclosure that a company has made $19 billion dollars in revenue from an infringing product cannot help but skew the damages horizon for the jury, regardless of the contribution of the patented component to this revenue.
— Uniloc USA, Inc. v. Microsoft Corp., 632 F. 3d 1292, 1320 (Fed. Cir. 2011).
The legal principle underlying the entire market value rule may extend to other evidence. For example, the court may provide a cautionary jury when past licenses on multi-component products are used at trial.
When licenses based on the value of a multi-component product are admitted or referenced the court should give a cautionary instruction regarding the limited purposes for which such testimony is proffered.
— Ericsson, Inc. v. D-Link Systems, Inc., 773 F. 3d 1201, 1228 (Court of Appeals, Federal Circuit 2014).
The rule may not govern in cases where the patent covers the accused product as a whole.
This case does not fit the pattern in which the entire market value rule applies. … Astra's patents cover the infringing product as a whole, not a single component of a multi-component product. There is no unpatented or non-infringing feature in the product.
— Astrazeneca AB v. Apotex Corp., 782 F. 3d 1324, 1338 (Fed. Cir. 2015).