Reasonable Royalties and the Calculation of Patent Damages: Some Reflections and Recommendations for a Fair and Adequate Calculating Basis of Reasonable Royaltiesin Terms of Harmonization of China-Taiwan Regional Patent Laws

Abstract

Among the substantive issues of patent law, patent enforcement has received increasing focus in the global community. Owing to the intangibility of patents, and in view of the symmetry of exclusive rights with damages, courts and juries have difficulty calculating appropriate damages for patent infringement. Compared with the traditional calculation of patent damages, which rests upon the patentee’s losses or infringer’s profits, the basis of reasonable royalties provides a flexible concept for accommodating damages when the patentee cannot adequately prove damages, especially, when the patented or infringing products were not available in the market at the time of infringement. Until the amendment of Taiwan’s Patent Act in 2011, the authority of reasonable royalties as patent damages was not officially codified. China’s Patent Act had recognized the remedy of patent infringement subject to reasonable royalties since 2000. In light of the development of comparative patent laws and original jurisprudence guiding patent law, the provisions of Taiwan’s Patent Act and China’s Patent Act concerning reasonable royalties as patent damages still have room for refinement. Consequently, this article attempts to establish an optimal model for applying related provisions in future judicial practice. The proposed model could contribute a common guideline for the determination of reasonable royalties to the regional harmonization of patent laws in Taiwan and China.