Reasonable royalty

Upon finding for the claimant, the court shall award damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs fixed by the court. When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances (35 U.S.C. 284)¹. See Willful infringement on increased damages.

Other provisions limit what can be recovered. No recovery may be had for infringement committed more than six years before the complaint or counterclaim was filed, except as otherwise provided by law (35 U.S.C. 286)⁵. If a patentee fails to mark patented articles, damages are limited as 35 U.S.C. 287(a) provides (see Patent marking)⁴.

In a 2026 opinion the Federal Circuit says that for more than a hundred years courts have recognized a reasonable royalty as an accepted measure of patent infringement damages, a principle codified in 35 U.S.C. 284². Determining it requires a jury (or the court, where damages are not found by a jury¹) to find the royalty that would have been agreed to in a hypothetical negotiation between a willing licensee and willing licensors at the time infringement began². The negotiation is counterfactual, because it requires envisioning licensing terms the parties would have agreed to in a world where no such agreement occurred, and it is constructed on hypothetical assumptions². The court describes the goal as ascertaining the royalty upon which the parties would have agreed had they successfully negotiated an agreement just before infringement began². The Federal Circuit used the same description in Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009)⁶.

• Georgia-Pacific factors. The court says its precedent has tried to guide the hypothetical negotiation with the Georgia-Pacific factors, which do not provide a formula but a structured framework for evaluating economic and commercial considerations relevant to the negotiation, including the importance of the patented technology, comparable licensing practices and the advantages the invention provided over alternatives².
• Expert evidence. The court notes that Federal Rule of Evidence 702 gives district courts a gatekeeping role over the admissibility of expert testimony, which the Federal Circuit clarified in EcoFactor, Inc. v. Google LLC (2025)².
• Actual licenses. The court quotes its earlier statement that actual licenses to the patented technology are highly probative of a reasonable royalty because they most clearly reflect the economic value of the patented technology in the marketplace².
• Apportionment. A damages award under section 284 must reflect the value attributable to the infringing features of the product, and no more, so where an accused product has other components the expert must separate the value of the infringing features from the value of all other features².
• An informed estimate. The resulting royalty is not an exact measure but an informed estimate designed to reflect the economic value attributable to the patented invention. The record may support a range of reasonable outcomes rather than a single correct figure, and experts may reach different conclusions from the same facts².

A recent Federal Circuit decision describes the framework in an appeal from a jury trial on damages².

On appeal from the District of Minnesota, the court affirmed the denial of judgment as a matter of law of obviousness and of a new trial on damages. In doing so it set out how the hypothetical negotiation, the Georgia-Pacific factors and apportionment fit together2.