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Patent Infringement and Damages in Computer Hardware

Background

One of the largest suppliers of branded personal computers (PCs), laptops, and notebooks was sued for patent infringement. The patented technology at issue related to hardware utilized in advanced computer security functionalities present in some of the seller’s PCs, laptops, and notebooks.


Our Analysis

Intensity calculated reasonable royalty damages for the alleged patent infringement. Because the accused computer products embodied thousands of different hardware and software components, Intensity utilized a variety of metrics to calculate the extent to which the patented technology added value to the computer products at issue. This involved an analysis of what is known as the “entire market value rule” in patent damages, identification of the smallest saleable patent practicing unit, and an economic apportionment specific to the patented technology.

Intensity’s work involved an evaluation of data to inform on consumer demand and actual use of the patented invention in the marketplace. Intensity evaluated the competitive marketplace across many economic variables, including competing suppliers, profit margins, product differentiation, technological advances, and product obsolescence trends, among others.

Intensity determined and opined on an economically reasonable outcome of a hypothetical negotiation between the parties for a license to the patents that is consistent with the Georgia Pacific factors. As part of its work, Intensity evaluated licensing policies, licensing practices, and a variety of license agreements to inform on the hypothetical negotiation. Intensity also evaluated non-infringing alternatives that were available at the time of the hypothetical negotiation, including alternative software solutions, hardware emulation, smart cards, and biometric devices.