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Holdup, Royalty Stacking, And The Presumption Of Injunctive Relief For Patent Infringement: A Reply To Lemley And Shapiro, J. Gregory Sidak

J. Gregory Sidak

Professors Mark Lemley and Carl Shapiro have presented a theoretical argument for weakening the presumption of injunctive relief in patent infringement cases. In this article, I evaluate the Lemley-Shapiro theoretical model of “patent holdup.” I dispute its main finding that the threat of an injunction inflates royalty payments in many cases relative to a hypothetical benchmark royalty rate. I also dispute the Lemley-Shapiro policy prescriptions for patent law reform, which would remove the presumption of injunctive relief in cases where the patented product is a component of a larger product or the patentee is a non-practicing entity. I conclude that …