Book of Wisdom

Information that comes to light after the date of first infringement (the “book of wisdom”) may be informative to the amount of a reasonable royalty.

The use that has been made of the patented device is a legitimate aid to the appraisal of the value of the patent at the time of the breach. … Here is a book of wisdom that courts may not neglect. We find no rule of law that sets a clasp upon its pages, and forbids us to look within.

— Sinclair Rfg. Co. v. Jenkins Co., 289 US 689, 697-98 (S. Ct. 1933).

For example, ex-post data may reflect parties’ expectations about market conditions in hypothetical negotiation.

Consideration of evidence of usage after infringement started can, under appropriate circumstances, be helpful to the jury and the court in assessing whether a royalty is reasonable. Usage (or similar) data may provide information that the parties would frequently have estimated during the negotiation.

— Lucent Technologies, Inc. v. Gateway, Inc., 580 F. 3d 1301, 1333–1334 (Fed. Cir. 2009).

The book of wisdom may be informative even in cases where the information could not have been known to parties on the date of hypothetical negotiation.

[A hypothetical negotiation analysis] permits and often requires a court to look to events and facts that occurred thereafter and that could not have been known to or predicted by the hypothesized negotiators.

— Fromson v. Western Litho Plate & Supply Co., 853 F.2d 1568, 1575 (Fed.Cir.1988).

Evidence from the book of wisdom is not always determinative.

[The court] did err in treating the profits IPC actually earned during the period of infringement as a royalty cap. That treatment incorrectly replaces the hypothetical inquiry into what the parties would have anticipated, looking forward when negotiating, with a backward-looking inquiry into what turned out to have happened.

— Aqua Shield v. Inter Pool Cover Team, 774 F. 3d 766, 772 (Fed. Cir. 2014).