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Federal Circuit Tackles RAND Royalty Rates

By Matthew Siegal and Adam Sapper
December 31, 2014

The Court of Appeals for the Federal Circuit, on Dec. 4, 2014 in a case of first impression, ruled that when the patent at issue is a standard essential patent (SEP) and its owner is subject to an obligation to license that patent on reasonable and non-discriminatory (RAND) terms, the jury instructions must discuss the specific obligations of that patentee and not RAND commitments in general. Ericsson, Inc. v. D-Link Systems, Inc., 2014 WL 6804864, at 26 (Fed. Cir. 2014). Furthermore, the patentee must apportion out the value of the patent attributable to its RAND status from the value of the patented feature itself. Id. As a result, the Federal Circuit affirmed the district court's finding that D-Link Systems, Netgear, Dell and several other companies infringed two of Telefonaktiebolaget LM Ericsson's patents, but vacated the jury's monetary award and remanded because of inadequate instructions on the issue of damages. Id.

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