1. As readers of this blog may already be aware, last week Bernard Chao posted an essay on Patently-O titled Implementing Apportionment. The essay takes as its starting point the pending cert petition in Time Warner Cable, Inc. v. Sprint Communications Co., L.P., in which the petitioner is trying to overturn a patent damages award in the amount of $139 million. (For my post on the Federal Circuit decision, see here. The Scotus Blog page for the case is here. A Law360 article also discusses Intel's amicus brief in the case.) Professor Chao's thoughtful analysis notes that there are no easy solutions to the problem of apportioning the value attributable to the patented feature of a complex product, but along the way discusses conjoint analysis, the top-down approach, and other matters. Definitely worth a read!
2. Axel Gautier and Nicolas Petit have published a paper titled The Smallest Salable Patent Practicing Unit and Component Licensing: Why $1 Is Not $1, 15 J. Compet. L. & Econ. 690 (2019). Here is a link to the paper, and here is the abstract:
The smallest salable patent pricing unit (SSPPU) is a valuation method used as a preliminary step toward the calculation of fair, reasonable, and nondiscriminatory royalties for licenses over standard-essential patents (SEPs). Under SSPPU, royalties should reflect the value added to the smallest salable component implementing the patented invention. In this paper, we discuss policy-making proposals to convert SSPPU into a pricing rule that not only assists the assessment of SEPs’ added value but also forces the specification of royalties terms as a share of component costs in SEP licensing negotiations. We call this new rule SSPPU+ and we show that it distorts the distribution of surplus between SEP owners and implementers by laying down a revenue cap on standardized technologies. Therefore, a change in the royalty basis is not neutral and $1 is not $1. Furthermore, SSPPU+ imposes uniform pricing of SEPs across different industries and does not allow SEP owners to take advantage of complementarities between technologies. This pleads against a generalization of SSPPU+ at early standardization and negotiation stages.Update (September 26, 2019): On FOSS Patents, Florian Mueller has published an interesting post on Time Warner v. Sprint.
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