- 30 -
must prove (1) materiality of prior art, (2) knowledge by the patent
applicant of prior art and its materiality, and (3) failure to
disclose the prior art to the U.S. Patent and Trademark Office with
intent to mislead or deceive. Applying the foregoing standard to
the facts of the instant case, Mr. Thomas concluded that the Amoco
patents could not be held unenforceable for inequitable conduct.
Finally, Mr. Thomas calculated a royalty rate applicable to the
licensing of the Amoco patents. He began by stating that the
license of the Amoco patents to Insta-Bulk in settlement of the
litigation with Powertex was evidence of what a reasonable royalty
would be in an arm's-length transaction. He then determined that a
higher royalty rate was justified under the Tri-Podd license
agreement because the rights granted therein did not restrict sales
to a single customer and because of the provision including all
improvement patents developed by the Podds.
Rather than analyzing the relevant factors identified in
section 1.482-2(d)(2)(iii), Income Tax Regs., Mr. Thomas next
proceeded to analyze 15 factors set forth in Georgia-Pacific Corp.
v. U.S. Plywood Corp., 318 F.Supp. 1116, 1120 (S.D.N.Y. 1970),
modified 446 F.2d 295 (2d Cir. 1971), which dealt with determination
of the amount of a reasonable royalty to be paid by an infringer to
the patent holder. Based on his analysis of such factors, he
concluded that Mr. Podd could command a royalty in an arm's-length
transaction of "greater than the 11% royalty for the restricted
license of Insta-Bulk, probably 15%".
Page: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 NextLast modified: May 25, 2011