In this matter, Defendant sought to exclude evidence upon which Plaintiff’s damages expert relied for his reasonable royalty analysis.  Specifically, Defendant argued that lost profits should not be considered when conducting a reasonable royalty analysis.

The court, however, disagreed and offered a declarative view.

We have seen this Defendant’s argument floated numerous times over the years, and judges reliably explain that consideration of lost profits is rightfully relevant for the hypothetical negotiation construct.

It is relevant to Georgia Pacific Factor #5 (i.e., whether the licensor and licensee are competitors).

It is relevant to Georgia Pacific Factor #13 (i.e., the portion of the realizable profit that should be credited to the invention).

Last year, the Court of Appeals for the Federal Circuit ruled similarly in Asetek v. CMI:

Some subset of attorneys will likely continue to pursue the “No lost profits consideration!” line of attack.  We expect them to continue to encounter a judicial wall of adverse rulings that make pointless the time & effort.