Background
A leading Japanese electronics company, known for its innovation and extensive patent portfolio, was preparing to license foundational technology to a major American technology firm. The patents in question were core to the licensee’s planned product offerings, and the scale of potential infringing revenues was substantial. Given the strategic importance of the portfolio, the licensor required a comprehensive and defensible approach to royalty rate determination.
Engagement
Ocean Tomo, a part of J.S. Held, was retained to conduct a multi-faceted royalty rate analysis to support the licensor in negotiations. Our team performed a rigorous evaluation that included analyses of comparable license agreements, profit split methodologies, litigation outcomes for similar patents, and a Georgia-Pacific factor analysis. This holistic approach ensured that all relevant economic and legal considerations were addressed, providing the licensor with a robust framework to support its royalty position.
Results
Armed with Ocean Tomo’s thorough analysis, the licensor entered negotiations with a strong position. The comprehensive royalty rate determination made it difficult for the licensee to argue for below-market rates, ensuring the licensor received appropriate compensation for its valuable intellectual property.
