August 03, 2017

Brattle Economists and Academic Advisors Publish Article in AIPLA Quarterly on Using Conjoint Analysis to Calculate Reasonable Royalty Damages

Brattle economists Lisa Cameron and Jeremy Verlinda and Academic Advisors Greg Allenby and Peter Rossi have recently contributed the article “Calculating Reasonable Royalty Damages Using Conjoint Analysis” to the American Intellectual Property Law Association Quarterly Journal.

The use of conjoint analysis has become increasingly popular in patent disputes. Because the method involves a number of highly technical analyses and calculations, the authors seek to provide a user-friendly primer on how to use this approach in the determination of reasonable royalty damages. In the article, the authors review the economic framework behind the calculation of reasonable royalty damages and explain how to implement two key methods of computing these damages—referred to as the Market Share Method (“MSM”) and the Equilibrium Profit Method (“EPM”).

These two methods are particularly useful because a recent court decision has been seen by some observers as an obstacle to the use of conjoint surveys in patent damages calculations. In the Visteon case, the court disallowed the conjoint expert’s damages calculation because it only measured consumer valuations of infringing features, not defendants’ profits from them. Yet both methods the authors outline sidestep Visteon’s criticisms, since they use conjoint survey data to determine how much the patented features would have increased the defendant’s profits. MSM and EPM thus remain powerful methods of leveraging conjoint surveys to compute patent infringement damages.

The full article can be downloaded using the link below.

Associated Experts
Cameron 063
Dr. Lisa Cameron is an economist with two decades of experience consulting to attorneys and companies involved in commercial litigation, regulatory proceedings, and other complex matters. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Greg allenby photo search
Academic Advisor
Professor Allenby is the Helen C. Kurtz Chair in Marketing at The Ohio State University’s Fisher College of Business, where he is also a Professor of Marketing and Professor of Statistics. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Academic Advisor
Peter E. Rossi is the James Collins Professor of Marketing, Economics and Statistics at UCLA’s Anderson School of Management, and is an influential and widely-cited expert in marketing, statistics, and econometrics. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Verlinda web
Senior Associate
Dr. Verlinda specializes in industrial organization, antitrust, econometrics, and statistics. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4