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Lewis R. Clayton and Eric Alan Stone

One important, recurring issue in calculating patent damages is the sale of products in which the patented invention is only one component among many. Some components might be central to the demand for the finished product, such as the processor chip in a computer or smartphone. Other components might be patentable—the design of a turn-signal lever for a car, or the cargo-retention straps in the trunk—but play little role in consumer demand for the entire car. Should the reasonable royalty for the turn-signal lever be a percentage of the sales price of the whole car? In that regard, does it matter whether the patent claim covers only the component, or is drawn to include the entire device, such as a claim to “a car comprising … [the novel turn-signal lever]”?

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