Legal Definitions - Georgia-Pacific analysis

The Georgia-Pacific analysis is a 15-factor test used in patent infringement cases to determine a reasonable royalty. The test was established in the case of Georgia-Pacific Corp. v. U.S. Plywood Corp. in 1970.

The test takes into account various factors, including what a prudent licensee would have paid while still being able to earn a profit. Other factors include the commercial relationship between the parties, the nature of the patented invention, and the extent of the patent's use in the infringing product.

For example, let's say that Company A has a patent for a new type of smartphone screen. Company B produces smartphones that use this screen without obtaining a license from Company A. Company A sues Company B for patent infringement.

In determining a reasonable royalty, the court would use the Georgia-Pacific analysis. The court would consider factors such as the market value of the patented invention, the extent to which the patented invention is used in the infringing product, and the potential profits that Company B could earn from using the patented invention.

Based on these factors, the court would determine a reasonable royalty that Company B would have to pay to Company A for using their patented invention.