The Case For Admitting Settlement License Agreements In A Reasonable Royalty Analysis

by Stephen J. Conroy, Robert Knudsen and Russell Mangum

Stephen J. Conroy

University of San Diego School of Business Administration, Professor San Diego, CA, USA

Robert Knudsen

Nathan Associates, Inc. Vice President Irvine, CA, USA

Russell Mangum

Nathan Associates, Inc. Senior Vice President Irvine, CA, USA

We conclude our analysis by providing a model to analyze the settlement process. We briefly examine how the model can be used to assess the influence that the cost of litigation may play in the outcome of negotiated licenses (either SLAs or NSLAs). In so doing we demonstrate that methods exist for taking into account one of the main objections to the use of SLAs (i.e. the cost of litigation) and that SLAs may indeed provide valuable and unique information important to reaching a reasonable royalty conclusion.

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