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Royalty in Consumer Electronics

Background

A patent holding company sued a large number of well-known manufacturers and retailers of webcams for alleged unauthorized use of a camera clip patent. The patent generally relates to a technology for supporting webcams on computer monitors. The patent holder, as a non-practicing entity, sought a reasonably royalty as compensation for the alleged infringement.


Our Analysis

Intensity quantified economic damages for the alleged unauthorized use of the patent holder’s camera clip technology. Intensity determined an economically appropriate reasonable royalty and quantified the relative economic contribution of the patented camera clip technology relative to the accused webcam products.

As part of a reasonable royalty analysis, Intensity analyzed the economic aspects of contracts containing a license to the patent-in-suit. Intensity also calculated an economic apportionment between the patented feature and other features contributing to the economic value of a webcam product. This analysis involved quantification of the profits from a webcam that are attributable to a camera clip. As another layer to the analysis, Intensity calculated the profits from a camera clip that are attributable to the patented technology based upon case-specific economic factors.

Intensity performed an economic evaluation of the supply chain for webcams to identify the step in the supply chain where value from the camera clip technology was added. Intensity also analyzed economic substitution, marketplace competition, product differentiation, sales, profitability, and other economic considerations relating to a reasonable royalty.