Private Law Theory

ABSTRACT
Remedies represent the practical end of a legal right. While in most cases rights determine the nature of remedies, it is possible that in certain situations the examination of the remedies sheds light on the nature of the right. License fee damages or negotiating damages, as they are called in Anglo-Australian scholarship, are a good illustration of this. In the context of US intellectual property law these are called ‘reasonable royalty’ damages. This is an award of damages measured by a hypothetical license fee that the claimant could have required the defendant to pay in order for the claimant to permit the breach of the right at issue. Not all rights lend themselves to an award of license fee damages when breached. There must be something which the claimant is able to license, even if only hypothetically. And the ability to license a right in this context begs the question whether the right can be put to ‘use’.

This essay argues that a deeper examination of the remedy of license fee damages can prompt a conceptual analysis of the rights infringed, to reveal their nature and characteristics. English courts have granted license fee damages for the infringement of tangible property rights such as land and chattels, and of IP rights including confidential information. But the academic literature is sparse on the question of what unites tangible property rights with IP rights into a single category enabling the courts to award negotiating damages. It is important to answer this question because not all rights will fall neatly into the categories of tangible rights or IP rights. This is the question that this paper investigates: what, if anything, do license fee damages say about the nature of intellectual and other intangible property rights that make them eligible for the award of negotiating damages. To this end, this paper puts forward the idea of a spectrum along which property rights can be mapped by extrapolating conceptual similarity between these two seemingly divergent forms of rights-tangible and intangible. It goes on to assert that analyzing license fee damages in the more familiar context of IP rights could assist with cases in the future where intangible property rights that are more esoteric and unwieldy might be at the center of litigation.

Mysoor, Poorna, License Fee Damages and the Nature of IP Rights (June 14, 2024), Harvard Journal of Law and Technology, volume 38 (2024).