Ericsson v D-Link (Fed. Cir., 773 F.3d 1201, 2014)

Dhenne Avocats · 11 October 2026

Our analysis

Summary

The Federal Circuit vacated a jury award of about $10 million to Ericsson for infringement of patents essential to the 802.11(n) Wi-Fi standard, because the jury had not been properly instructed on the RAND commitment (Part II.B.2). For the first time, it held that the royalty for a standard essential patent must be tied to the value of the invention, excluding the value of the standard as a whole and any value the invention gains from standardisation. It declined to lay down a set of factors specific to RAND-encumbered patents and required the jury to be told of the commitment actually given. The opinion remains a reference point in the US on SEP valuation and on the use of comparable licences based on the end product.

Facts and procedure

In September 2010 Ericsson sued several makers of Wi-Fi devices in the Eastern District of Texas, with Intel intervening as chip supplier, for infringement of nine patents said to be essential to the IEEE 802.11(n) standard (Part I.E). Ericsson had undertaken to the IEEE, by letters of assurance, to grant licences on reasonable and non-discriminatory terms, and it accepted that this commitment was binding (Part I.B). In June 2013 the jury found three patents infringed and awarded about $10 million, roughly 15 cents per device; the judge denied a new trial and treated that figure as the ongoing RAND rate (Part I.E).

The applicable law

A reasonable royalty under 35 U.S.C. § 284 measures the value of what was taken, that is, only the value added by the patented feature (Garretson v. Clark). The court distinguished that substantive rule from the evidentiary principle known as the entire market value rule (EMVR), which guards against misleading the jury by emphasising the value of the whole product (Part II.B.1). The Georgia-Pacific factors are commonly used to instruct juries on royalties (Part II.B.2.a).

Question

How should a jury be instructed when setting a royalty for standard essential patents subject to a RAND commitment, and may it hear evidence of licences calculated on the value of the end product?

Decision

Licences based on the end product are admissible where the expert explains the need to discount them to the value of the technology in suit; imperfect comparability goes to weight, and a cautionary instruction must be given if the defendant asks for one (Part II.B.1). The judge erred, however, in putting all fifteen Georgia-Pacific factors to the jury, several of which (4, 5, 8, 9 and 10) are irrelevant or misleading for RAND-encumbered patents, instead of explaining the commitment actually given (Part II.B.2.a). The royalty must be apportioned twice: between the patented feature and the rest of the standard, and between the value of the invention and the value added by its standardisation (Part II.B.2.b). No instruction on hold-up or royalty stacking is needed without actual evidence of either, which was lacking here (Part II.B.2.c). Taken together, the errors required the damages award and the ongoing royalty to be vacated and remanded. Infringement of two patents was affirmed, infringement of the third reversed, and Dell’s licence defence rejected (Parts II.A, II.C and III). Judge Taranto dissented on the construction of one patent.

Key points for practice

• A SEP royalty must reflect the technical contribution of the invention, not the value it acquires through adoption into the standard (Part II.B.2.b).
• There is no modified set of Georgia-Pacific factors for all RAND-encumbered patents: instructions depend on the record (Part II.B.2.a).
• Hold-up and royalty stacking must be proved before a specific instruction is warranted (Part II.B.2.c).
• Practical point: a defendant relying on a RAND commitment before a jury must adduce concrete evidence of the conduct and royalties it alleges, and request the appropriate cautionary instructions (Parts II.B.1 and II.B.2.c).

Provisions applied

National law

35 U.S.C. §§ 271(a), 281 and 284; 28 U.S.C. § 1295(a)(1); Federal Rules of Evidence, r 403; Federal Rules of Civil Procedure, rr 56(a) and 61

Licensing commitment

Ericsson’s RAND letters of assurance to the IEEE (802.11(n) standard)

Case law cited

Garretson v. Clark, 111 U.S. 120 (1884); Dowagiac v. Minnesota Moline Plow, 235 U.S. 641 (1915); Georgia-Pacific v. U.S. Plywood, 318 F. Supp. 1116 (S.D.N.Y. 1970); VirnetX v. Cisco, 767 F.3d 1308 (Fed. Cir. 2014); LaserDynamics v. Quanta, 694 F.3d 51 (Fed. Cir. 2012); Uniloc v. Microsoft, 632 F.3d 1292 (Fed. Cir. 2011); Apple v. Motorola, 757 F.3d 1286 (Fed. Cir. 2014); Microsoft v. Motorola (W.D. Wash. 2013); In re Innovatio IP Ventures (N.D. Ill. 2013); Realtek v. LSI (N.D. Cal. 2014); Phillips v. AWH, 415 F.3d 1303 (Fed. Cir. 2005)

Prepared by Dhenne Avocats from the text of the decision (WIPO Lex, converted English text, unofficial), consulted on 11 October 2026. Only the official text is authoritative.