Monthly Archives: February 2014

A Futile Effort? Efforts to Clarify the Entire Market Value Rule

Company A owns a patent that tells the difference between CDs and DVDs. Company B infringes on A’s patent by incorporating A’s technology into the laptops B manufactures, which incorporates thousands of other patents. Generally in calculating damages, total royalties awarded equal the royalty base multiplied by the royalty rate. Should the proper royalty base be the value of all the infringing laptops sold or the value of all infringing disc-drives sold? Suppose there was some evidence customers were buying the infringing laptops because of A’s patent?   This hypothetical, based on LaserDynamics Inc. v. Quanta Computer, Inc., illustrates an area of patent reform subject to debate regarding the proper scope of the Entire Market Value Rule (EMVR). Company B may pay hundreds of millions more in damages in this multi-component patent case depending on whether EMVR applies yet the present case law describing when EMVR applies is murky. Despite efforts by the Federal Circuit to clarify EMVR’s application, uncertainties remain. This post reviews some of the present uncertainties and surveys commentary regarding EMVR.

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Advocacy and the Start-up Recording Artist

On February 8, 2014, California Lawyers for the Arts presented this year’s 31st annual Music Business Seminar at Berkeley Law School. Music industry professionals gathered around the theme theme, “21st Century Musician: Making a Living Making Music.” As the name suggests, the event included panels and breakout sessions that were designed to inform artists and legal professionals on how to navigate complicated statutes and processes in order to help recording artists financially benefit from their creative endeavors. Artists also had the opportunity to meet with a lawyer for a 20-minute consultation throughout the day. Several performers infused the event with live shows, including Real Vocal String Quartet, Jeffrey Lipinski, Steep Ravine Band, and The Northerlies.

Thomas Leavens delivered the keynote address by identifying several trends and forecasts in the music industry. Leavens observed that the digital age has provided a platform for consumers to express their desire for content. As a result, music consumption has changed. This includes the trend of having alternatives to file-sharing, such as streaming. As a result, music consumption has gone from ownership to access. Accordingly, Leavens speculated there will be a rise of questions surrounding whether consumers will acquire music through ownership or license. Proponents of ownership advocate for the right to resell digital music. In response, others say that the act of reselling is just making a digital copy. As the debate boils on, Leavens encouraged artists and lawyers to nevertheless ensure that digitized creative works’ metadata are complete and correct. As music consumption patterns evolve, precise metadata is essential for payment streams that will adequately compensate artists.

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