This chapter describes the current state of, and normative basis for, the law of reasonable royalties among the leading jurisdictions for patent infringement litigation, as well as the principal arguments for and against various practices relating to the calculation of reasonable royalties; and for each of the major issues discussed, the chapter provides one or more recommendations.  The chapter’s principal recommendation is that, when applying a “bottom-up” approach to estimating reasonable royalties, courts should replace the Georgia-Pacific factors (and analogous factors used outside the United States) with a smaller list of considerations, specifically (1) calculating the incremental value of the invention and dividing it appropriately between the parties; (2) assessing market evidence, such as comparable licenses; and (3) where feasible and cost justified, using each of these first two considerations as a “check” on the accuracy of the other

This chapter provides a critical review of the literature relating to remedies for patent infringement in the context of complex products, with a focus on the underlying theoretical issues of holdup, holdout, and royalty stacking. Issues considered here include: the conceptually appropriate benchmark for a fair return to a patentee; the theory of holdup and mechanisms by which holdup can be mitigated; placing the holdup debate within the context of property rules vs. liability rules; forcing patentees to accept lower royalties though holdout; and a review of empirical evidence related to holdup and royalty stacking.