Determined reasonable royalties in oil and gas industry patent disputes

Determined reasonable royalties in oil and gas industry patent disputes

In a Western District of Texas patent infringement lawsuit, Stout was retained by the plaintiff, a competitor of the defendant in the downhole oil well tool industry. The disputed patents covered setting tools and frac plugs, crucial components in oil well drilling and fracking.

Stout calculated a reasonable royalty, the hypothetical amount the defendant would have paid to license the technology had they not infringed. The analysis focused on the incremental value the defendant gained by using the patented technology, particularly in direct competition with the plaintiff. This incremental value considered factors like increased efficiency, reduced costs, and improved well performance.

By focusing on the competitive landscape and the specific benefits derived from the patented technology, Stout calculated a royalty that reflected the economic impact of the defendants infringement.