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Project: Royalty Analysis in the Biotechnology Industry

Background

Intensity determined the extent to which certain patents in the field of molecular diagnostics were unenforceable due to prosecution laches. Intensity also performed an analysis of damages relating to alleged infringement of patented technology by quantifying reasonable royalties.


Our Analysis

Intensity was retained to analyze the ongoing investments, marketing, and research in a biotechnology company specializing in molecular diagnostics. Intensity assessed the extent to which these were or were not sunk costs and the extent to which these costs precluded alternative research and investment spending. Intensity then determined a reasonable and market-based royalty for technology as part of molecular diagnostics testing kits, based on consideration of the market for these kits, the licensing policies and histories of both companies, product sales and profitability.

Intensity also performed an analysis of damages relating to alleged infringement of patented technology by quantifying reasonable royalties based on consideration of relevant licensing agreements, accused sales and profitability, and the unique contribution of the patented technology.

Economic issues include apportionment, licensing, and reasonable royalties.