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It used hedonic regression as part of an attempt to determine how much of Intel’s profit on semiconductor chips could be attributed to those features. VLSI’s patents cover inventions that increase the speed and power of processors. The analysis also has been used to estimate how much a motor vehicle’s value is attributable to its fuel economy. The concept underlying hedonic regression is simple: Products can be made up of many parts, and it may be possible to tell how much consumers value any specific part by isolating that part and seeing how it affects the product’s price.Įconomists have used it, for example, to find a lack of attic space negatively affects home prices, while slanted roofs tend to raise the value. “It’s just the math telling us what the answer is.” “At least for a jury, it’s cold data being put into mathematical equations,” said Richard Kamprath, an attorney at McKool Smith PC.
#Hedonic damages trial#
Using the analysis to determine patent damages has a certain appeal for trial litigators: From a juror’s perspective, it relies on numbers and math, without the subjective opinions that can be a part of other types of damages calculations. Erin Crockett, a consultant at Kroll and economics professor at Chapman University, who is leaving teaching-at least for the time being-to consult full-time.
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“In fact I’m even betting my career on it, in a sense,” said B. Damages experts say they’re seeing the analysis being used in more patent cases, a trend some expect will continue. The jury verdict has sparked patent attorneys’ interest in hedonic regression, which can be used to isolate a specific product feature and estimate its value. District Court for the Western District of Texas. Deploying the analysis in a case over semiconductors, VLSI won $2.18 billion in March in U.S. was the first to successfully utilize the economics model, called hedonic regression, to calculate patent damages in an infringement case. Homes, Cars & IP: The Valuation Method Intriguing Patent LawyersĪ statistical tool used to value real estate and cars has caught the attention of patent litigators, after a unit of the hedge fund Fortress Investment Group used it to help secure more than $2 billion in a patent verdict against