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The Federal Circuit’s recent decision in Uniloc USA, Inc. v. Microsoft Corp. continued the court’s trend toward increasing scrutiny over the award of damages in patent infringement cases. In Uniloc, the Federal Circuit held that, as a matter of law, the “25 percent rule” is a fundamentally flawed tool for determining a reasonable royalty. The court also clarified that the entire market value of an accused product may only be used to determine a reasonable royalty where the patented feature either creates the basis for customer demand or substantially creates the value of the component parts.

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