# ITT Corp. v. United States

> United States Court of Claims · April 6, 1989 · 17 Cl. Ct. 199

URL: https://www.frixlaw.com/law-library/cases/6826415

## Case

- **Full name:** ITT CORPORATION v. United States
- **Court:** United States Court of Claims
- **Decided:** April 6, 1989
- **Citations:** 17 Cl. Ct. 199; 11 U.S.P.Q. 2d (BNA) 1657; 1989 U.S. Claims LEXIS 56; 1989 WL 32688
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Nettesheim
- **Judges:** Nettesheim
- **Cited by:** 25 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/6826415

## How later opinions describe it (automated extraction)

- stating that “[f]ull compensation, then, requires that a [property owner] whose award has been delayed be compensated for his inability to utilize his money.”
- applying 52-week T-bill rates where compound interest was an allowable method of delay compensation

## Opinion text

OPINION
NETTESHEIM, Judge.
Before the court, after trial, is the accounting phase of this patent infringement litigation. Post-trial briefing on selected issues has been completed.
BACKGROUND
Plaintiff ITT Corporation (“plaintiff” or “ITT”) brought suit pursuant to 28 U.S.C. § 1498 (1982), claiming reasonable and entire compensation for the unlicensed use of three patents held by plaintiff as assignee. Since 1978 the United States has procured through Hughes Aircraft Company (“Hughes”) the accused fiber optic devices. Plaintiff charged that the devices infringed United States Patent No. 3,936,145 entitled *201 “Fiber Optic Alignment Sleeve” (the “ ’145 patent”), which disclosed an alignment sleeve; United States Patent No. 3,947,182 entitled “Fiber Optic Connector with Axial Tolerance Relief” (the “ ’182 patent”), which disclosed a termination pin assembly; and United States Patent No. 4,047,797 entitled “Fiber Optic Connector” (the “ ’797 patent”), which disclosed a strain relief. Trial held during March and April 1986 determined the validity of the patents and the charges of infringement.
The court held the ’182 and ’797 patents to be both valid and infringed; the ’145 patent was held valid, but not infringed. ITT Corp. v. United States, 10 Cl.Ct. 321 (1986). 1 Familiarity with this fact-intensive opinion is presumed.
In the liability phase, a principal question was whether the claimed patents disclosed merely existing electrical devices that were converted to fiber optic use or whether plaintiff’s inventions were pioneering. It was found that “marked similarities exist between electrical and fiber optics technolo-gy____” and that there was a “gradual evolution of fiber optics from electrical technology.” ITT Corp., 10 Cl.Ct. at 324 . However, plaintiff’s patents were designed to address problems peculiar to fiber optics and not encountered in the existing electrical art. Based on the testimony of plaintiff’s Leslie M. Borsuk, Director of Engineering for ITT-Cannon, and others, the court found six problems that the technology applicable to electrical connectors could not solve and that the technology applicable to fiber optics was applied to correct: 1) lateral misalignment; 2) gap misalignment (no significant gap can be present when two fiber optics are joined); 3) axial tipping or angular misalignment; 4) axial tolerance relief; 5) fragility of fibers; and 6) the manner of fastening optic fibers to a contact. Id. at 328 . The court concluded:
In short, the most significant difference between the technologies of fiber optics and electricity is the necessity in fiber optics to construct connectors in a manner which diminishes lateral, gap, and angular misalignment. These mechanical degrees of freedom are not part of the calculus employed in the construction of an electrical connector.
Id. at 329 (footnote omitted).
It was found that the '182 and ’797 patents addressed problems peculiar to fiber optics and that the ’145 patent supplemented the efforts of the ’182 patent. ITT Corp., 10 Cl.Ct. at 329-31 . Holding the three patents valid against defendant’s citations to the prior art, the court next looked to the accused devices to determine whether the ’182 and ’145 patents were infringed by the doctrine of equivalents, and whether the ’797 patent was infringed literally or by the doctrine of equivalents.
The accused device covered by one or more claims of the ’182 patent was depicted as PX-25, and those covered by one or more claims of the ’797 patent, as PX-28, 29, 31, and 32. The ’145 patent was alleged to be infringed by the accused devices depicted as PX-26 and 26A. Mr. Borsuk’s testimony about claim 1 of the ’182 patent, coupled with PX-25 and the physical exhibit of an accused device, was held to support a finding of infringement by the doctrine of equivalents, and Mr. Borsuk’s testimony on claim 2 established that the patent was infringed in the same manner. ITT Corp., 10 Cl.Ct. at 380-84 . Claims 1 and 13 of the ’145 patent and the Hughes sleeve depicted in PX-26 and 26A both accomplish alignment, but do so in different ways; therefore, the court found that the Hughes devices failed to satisfy the doctrine of equivalents. Id. at 384-87 . The court found that the accused devices depicted as PX-28, 29, 31, and 32 infringed the ’797 patent under the doctrine of equivalents. *202 However, claims 1, 6, 9, and 12 of the ’797 patent asserted against the accused devices depicted as PX-27, 30, and 33 did not infringe the ’797 patent either literally or by the doctrine of equivalents. Id. at 387-95 & n. 35.
DISCUSSION
I. Compensation Base
In the accounting phase of an action brought pursuant to 28 U.S.C. § 1498 (“section 1498”), the objective is to provide the patent holder with reasonable and entire compensation for the Government’s unlicensed use of plaintiff’s patents. A section 1498 action differs from an action brought against a private infringer under 35 U.S.C. § 281 (1982), since the former is treated as an “eminent domain taking of a patent license,” not a tort claim for patent infringement. Leesona Corp. v. United States, 220 Ct.Cl. 234, 247 , 599 F.2d 958, 966 , cert. denied, 444 U.S. 991 , 100 S.Ct. 522 , 62 L.Ed.2d 420 (1979). “[Ejquitable principles of fairness are the governing consideration in determining just compensation for an eminent domain taking____” Tektronix, Inc. v. United States, 213 Ct.Cl. 257, 265 , 552 F.2d 343, 347 (1977), cert. denied, 439 U.S. 1048 , 99 S.Ct. 724 , 58 L.Ed.2d 707 (1978); see also Calhoun v. United States, 197 Ct.Cl. 41, 51 , 453 F.2d 1385, 1391 (1972). Delay compensation has been held to inhere in the concept of reasonable and entire compensation. Decca, Ltd. v. United States, 225 Ct.Cl. 326, 337 , 640 F.2d 1156, 1168 (1980), cert. denied, 454 U.S. 819 , 102 S.Ct. 99 , 70 L.Ed.2d 89 (1981).
One approach to achieve this objective is for a court to determine an applicable compensation base and to apply a reasonable royalty rate to this figure. Leesona, 220 Ct.Cl. at 259 , 599 F.2d at 973 . The Court of Claims explained in Leesona:
The nature of the property taken by the government in a patent infringement suit has traditionally been a compulsory com-pensable license in the patent, and just compensation has in most cases been defined by a calculation of a “reasonable royalty” for that license, or, when a reasonable royalty cannot be ascertained, another method of estimating the value of the lost patent.
220 Ct.Cl. at 250 , 599 F.2d at 968 (citations omitted). In determining the compensation base and fixing a reasonable royalty rate, the court should focus on the date of the taking by the Government in order to capture the actual value of the patent. See Decca, 225 Ct.Cl. at 336 , 640 F.2d at 1167 .
“The proper measure in eminent domain is what the owner has lost, not what the taker has gained.” Leesona, 220 Ct.Cl. at 253 , 599 F.2d at 969 (citation omitted). Judge Colaianni in Dynamics Corp. of America v. United States, 5 Cl.Ct. 591 (1984), aff'd in part, rev’d in part, and remanded on other grounds, 766 F.2d 518 (Fed.Cir.1985), formulated this principle, as follows:
The ultimate goal in all accounting cases is to compensate the patent owner for what he has lost as a result of the in-fringer’s actions. In the Claims Court, the compensation to which a patent owner is entitled is evaluated from the point of view of the patentee and not from the view of the infringer____
5 Cl.Ct. at 605 .
The compensation base in combination with a reasonable royalty rate should derive entire, but not excessive, compensation. Bendix Corp. v. United States, 230 Ct.Cl. 247, 258 , 676 F.2d 606, 612 (1982); Tektronix, 213 Ct.Cl. at 272 , 552 F.2d at 351 . The rule that a patent holder bears the burden of proof on damages, Fromson v. Western Litho Plate & Supply Co., 853 F.2d 1568, 1574 (Fed.Cir.1988), applies to a section 1498 action against the Government. The evidence must be sufficient to support a fully informed and reasoned decision. Leesona, 220 Ct.Cl. at 269 , 599 F.2d at 979 .
1. Hughes’ sales data
The liability trial determined that the accused Hughes devices infringed plaintiff’s patents disclosing the termination pin assembly and the strain relief. ITT Corp., 10 Cl.Ct. at 382, 386 . This opinion issued on *203 July 25, 1986. The parties lumbered to trial on the accounting phase in late 1988. The accounting trial ascertained plaintiff’s entitlement under 28 U.S.C. § 1498 for the stipulated period of February 1,1978, when Hughes began selling fiber optic connectors, through July 22,1988, the most recent date for which Hughes supplied information of its sales to the Government. Since the ’182 and ’797 patents expire, respectively, in 1993 and 1994, the accounting phase must be extended.
Plaintiff and defendant advocated different methodologies for ascertaining the proper compensation base. Its own methodology, in each party’s view, ultimately would provide plaintiff with reasonable and entire compensation. The court found both approaches to be credible and helpful to the court’s determination. Plaintiff and defendant were faced with the task of using a third party’s sales information to compute the measure of plaintiff’s entitlement. Although the same sales information was provided to both parties, each encountered problems in reconciling it. As a result, plaintiff and defendant generated different total sales figures for Hughes’ sales.
Linda DiMatteo, a legal assistant to plaintiff's counsel, and Peggy Ann Stul-berg, counsel’s computer technologist, testified to a systematic approach for transferring the Hughes sales data to the law firm’s data base in order to calculate a total of all Hughes’ sales. 2 Maureen Asonevich, a legal assistant and Craig H. Ekholm, a data processing section manager, both of whom worked for defendant’s data analyst, CACI, Inc., testified to a similar process for capturing the Hughes sales information. However, defendant’s line item total and computed total differed from plaintiff’s. Defendant’s line item total and computed total were themselves inconsistent. The court does not find significant the disparity in the sales figures, both because the dollar amounts are not large and because the data developed by the parties substantially correspond. Both parties made a conscientious attempt to present the best evidence that they were capable of devining from the Hughes sales information. Since neither party was familiar with the manner in which Hughes utilized its own sales information to record its operations (despite having conducted multiple depositions to discover not only where Hughes’ sales information could be found, but how to interpret all save the latest iteration), plaintiff and defendant were confronted with the need to make limited judgment calls. Defendant also admitted through Mr. Ekholm that some double counting took place in its analysis. This was caused by inclusion of part numbers represented in two categories. According to Mr. Ekholm, the difference in the parties’ final total sales figures possibly could be explained by this misinclusion, although the court is unable to make a finding on point based on the several plausible explanations of record.
2. Categorization of fiber optic products and services sold by Hughes
In order to enable the court to establish a compensation base from the Hughes sales data, the parties established categories breaking down the various “fiber optic connector products” and services sold by Hughes. The total of the categories equaled Hughes’ total unit sales for fiber optic products and services.
The License Agreement dated August 1, 1985, entered into by plaintiff and Allied Corporation (the “ITT/Allied agreement”), and the License Agreement dated April 1, 1987, entered into by plaintiff and Hughes (the “ITT/Hughes agreement”), provide definitions that help explain the category breakdowns employed by the witnesses for each party. 3
*204 Article I, “Definitions,” of the ITT/Allied agreement defines “Licensed Patent” in section 1.1. as “any unexpired patent listed on Schedule A attached hereto and any reissues, reexaminations or extensions thereof, and any patents issuing from the applications listed on Schedule A and any reissues, reexaminations or extensions thereof.” The ITT/Hughes agreement adopts the same definition. Both license agreements also contain the same definition for “Fiber Optic Connector.” Section 1.2 provides: “ ‘Fiber Optic Connector’ shall mean a connecting device for joining or fastening together one or more optical fibers or cables. Such device shall include any device which in addition to joining together optical fibers or cables also performs some other connecting or other function.” Section 1.3 of the ITT/Allied agreement and section 1.4 of the ITT/Hughes agreement entitled “Components” differ only with respect to the last sentence of the definition. ITT/Allied’s section 1.3 states: “ ‘Components’ shall mean a part of a Fiber Optic Connector shipped separately and which is sold for assembly with other parts to form a Fiber Optic Connector coming within the scope of one or more claims of any Licensed Patent. Contacts shall be considered Components.” Section 1.4 of the ITT/Hughes agreement replaces the last sentence with “Components shall not include Contacts or single-slotted fiber optic contact alignment sleeves.”
Section 1.3 of the ITT/Hughes agreement defines “Contacts,” as follows:
“Contacts” shall mean a part to be either attached to an end of an optical fiber or cable, or to be inserted into a fiber optic connector to mate with a part attached to the end of an optical fiber or cable, and which is shipped separately and either (a) comes within the scope of one or more claims of any Licensed Patent or (b) is sold for assembly with other parts to form a Fiber Optic Connector coming within the scope of one or more claims of any Licensed Patent.
The ITT/Hughes agreement has a separate royalty rate for contacts. Section 1.3 of the ITT/Allied agreement treats contacts as components. Since a component bears a higher royalty rate in both agreements, plaintiff benefits if the ITT/Allied definition, but not the ITT/Allied rate, is applied. The ITT/Allied and ITT/Hughes agreements contain similar definitions for “Licensed Product.” Section 1.5 of the ITT/Allied agreement provides: “ ‘Licensed Product’ shall mean any Fiber Optic Connector which comes within the scope of one or more claims of any Licensed Patent or Component thereof.” The ITT/Hughes agreement breaks out contacts, since they are a separate category.
The starting point for both parties in assigning Hughes’ fiber optic connector sales to categories was DX-4700 entitled “METHODOLOGY USED BY ITT TO PREPARE CATEGORY LISTS OF PART NUMBERS FOR HUGHES FIBER OPTIC CONNECTOR PRODUCTS.” From this document the original categories were established. Thomas L. Peterson, Patent Counsel for ITT-Cannon, who prepared the exhibit, explained his method for identifying the part numbers of the infringing devices standing alone, used alone in Hughes’ connector devices, or used together in Hughes’ devices. The document also identified additional sales items, products, and services, which were part of Hughes’ total fiber optic sales to the Government.
Mr. Peterson testified to plaintiff’s methodology, which was primarily a categorization of the part numbers with attribution of sales dollars to the individual part numbers. PX-3142 represents Mr. Peterson’s “CHRONOLOGY OF ITT EFFORTS TO OBTAIN SALES INFORMATION FROM HUGHES.” Mr. Peterson testified that he *205 met with Hughes’ legal, engineering, and marketing representatives to develop the categories for fiber optic connector products. Plaintiff’s final categorization was established through this coordinated effort by plaintiff and Hughes.
Mr. Peterson described the approach that he took in establishing categories and classifying part numbers to categories. He explained that he was tasked with collecting documentation from Hughes in order to identify prices and sales numbers for Hughes fiber optic connector products. He also stated that he sought any other information that would enable him to categorize the part numbers. Based upon his meetings with Hughes personnel and the information they provided, Mr. Peterson began his categorization efforts.
Mr. Peterson explained his development of the original categories in conjunction with Hughes. He testified how the original categories were later reflected in PX-3117, his summary of Hughes’ sales by category, ás follows:
Category 1A, pin contacts. Category IB, jumper cables and pigtails that are using pin contacts. Category 2A, socket contacts. Category 2B, jumper cables that use only socket contacts. Category 3, connector halves which comprise the disassembled parts which accept pin contacts but do not use the infringing strain relief which is described in Category 4. Category 4 are connector halves with the infringing strain reliefs of PX 28, 29, 31, and 32.
Category 5, connector halves that combine both pin contacts and the infringing strain reliefs. Category 7A, which are connector halves containing socket inserts. That means they’re adapted to contain socket contacts and do not contain pin contacts or infringing strain reliefs. Category 11A, connector halves which are non-hermaphroditic, single-channel connectors which can receive either a pin or socket contact.
I’m not certain of Category 12 because Category 12 was not added at that time but it was added at a later time. Onto the second page, Category 6A, connector cable assemblies containing either pin contacts or the infringing strain reliefs. Category 6B, connector cables that use both pin contacts and infringing strain reliefs. Category 7B are connector cable assemblies that contain, adapted to contain socket contacts and do not contain pin contacts or infringing strain reliefs.
Category 11B, connector cable assemblies which are non-hermaphroditic, single-channel connectors on those cable assemblies that may receive either a pin or a socket contact. And then there were other categories, 8, 9, 10 that we had originally created that I — do not appear in their present form on this chart, and Category 8, I think, was special connectors and Categories 9 and 10 had to do with engineering and labor charges and as it turns out, I do not conclude that those categories were particularly meaningful and we set up some new categories here on this chart to try to cover that and some other subjects and products.
Mr. Peterson testified that Hughes supplied computer runs which were designed to pick up pin contacts, socket contacts, and the fiber optic connectors containing them. The computer runs provided the primary data that Mr. Peterson used to classify part numbers. Hughes also supplied drawings that enabled Mr. Peterson to “allocate the part numbers on the computer runs into these various categories.” In October 1988, during the deposition of Thelma M. Fowler, Hughes’ long-time head of Customer Service, Mr. Peterson discovered that a list of all the part numbers of the Hughes fiber optic connector products could be generated. Hughes generated a part number list for plaintiff’s use. Hughes also supplied a price list that was broken down by part numbers. The additional information enabled Mr. Peterson to categorize further the part numbers that appeared in Hughes’ sales recaps.
Mr. Peterson was able to classify an additional 300-400 part numbers based upon the information contained in the price list, parts numbers lists, and drawings that were provided by Hughes. Plaintiff allo *206 cated approximately 630 out of 800 part numbers to categories. Mr. Peterson later obtained additional drawings and engineering drawing lists that contained descriptions of parts for the remainder of the uncategorized part numbers. New categories were created by Mr. Peterson to classify the remaining part numbers. Plaintiffs final categorization captured all of the data for the part numbers in the Hughes sales recaps.
Mr. Peterson explained how he created the new categories. He placed all pin contacts, socket contacts, jumper cables, and pigtails in Categories 1 and 2. Category 5A included disassembled connector halves which could contain pin or socket contacts. Category 12 included dust covers sold apart from connectors. Category 14 included piece parts used in connector halves and connector cable assemblies. Category 15 included all undocumented part numbers. Category 16 included star couplers and electrical connector part numbers. Category 6C included connector cable assemblies which could not be identified as containing pin or socket contacts or infringing strain reliefs. Category 9T included tools and fixtures; 9F included fixtures alone; and 9E included custom developmental work. Category 10 included charges for special assembly, design, labor, lot, stocking, termination, and training charges. Mr. Peterson testified that part numbers were recategorized based upon the additional Hughes information until a final iteration was reached. PX-3117A reflects the final classification attempt by plaintiff of Hughes’ part numbers into Mr. Peterson’s categories.
On cross-examination Mr. Peterson was asked to review a number of drawings in order to enable an assessment of whether the corresponding part numbers were properly categorized. Defense counsel presented 14 drawings that Mr. Peterson agreed he had classified incorrectly. He admitted that he had classified many of the part numbers based on the information contained in the Hughes computer runs without verifying the information against the drawings identified by part numbers. Some of Mr. Peterson’s later classifications were based on drawings, but he did not undertake to classify all part numbers based .on drawings, nor did he verify with the drawings whether previously categorized part numbers were correctly categorized.
Defendant’s expert in fiber optic connectors, John A. Makuch, Vice President of Sales and Marketing for Lightwave Communications, testified to the methodology he followed in categorizing Hughes’ sales data for fiber optic connector products. As an inventor or co-inventor of seven patents for fiber optic devices, including a pin assembly (and a method for terminating it) and a fiber optic connector assembly, Mr. Makuch brought more cogent technical skill to his assignment than did Mr. Peterson. Mr. Makuch, who holds master’s degrees in business administration and physics, has specialized since 1975 in marketing fiber optic devices. The court does not disserve Mr. Peterson’s careful testimony by crediting Mr. Makuch, who was not affiliated with defendant beyond acting as its expert, with more accurate and compelling testimony. Indeed, as the court advised the parties at trial, Mr. Makuch was the most impressive witness in the accounting phase.
Mr. Makuch’s general, approach was similar to Mr. Peterson’s. Mr. Makuch began his inquiry with a review of the exhibits that depicted the '182 and '797 patents, along with Hughes’ engineering and sales drawings. 4 He also reviewed DX-4700, which Mr. Peterson testified broke down the part numbers into the categories that Hughes and Mr. Peterson had established. Mr. Makuch’s methodology involved a review of drawings prearranged to correspond with the categories in DX-4700. The drawings were used as a checklist against Mr. Peterson’s categorization and a basis for reclassifying incorrectly listed part numbers into alternative categories. Mr. Makuch, as had Mr. Peterson, created *207 a number of new categories. In large part, these new categories paralleled those created by Mr. Peterson. No part numbers that plaintiff included in its categorization were excluded in Mr. Makuch’s.
Mr. Makuch testified that he began with Mr. Peterson’s Category 1A. Mr. Makuch obtained the drawing that corresponded with the first part number appearing in the category. He attempted to identify features in the engineering and sales drawings that matched the features of the accused devices depicted in PX-25, 28, 29, 31, and 32. After reviewing each drawing, he noted whether it was categorized properly or if the part number should be designated into another category. If Mr. Makuch could not substantiate that a part number was categorized incorrectly based on a drawing or listing, the part number was left in Mr. Peterson’s original category. Drawing listings were sometimes used when there was no drawing available. Mr. Makuch’s final categorization of the Hughes engineering drawing and drawing listings was detailed in DX-4717.
Mr. Makuch testified that he engaged in an item-for-item investigation for all part numbers. He described a three-step process. He would look for the part number on DX-4700. He would find the drawing that corresponded to the part number. Finally, he would verify that the part number was categorized properly. Mr. Makuch demonstrated the process that he undertook with part number 1093201 and found this part number to be categorized properly. He testified that the process was performed sequentially throughout all categories.
Mr. Makuch also testified regarding the drawing depicted in DX-4705A. The drawing identified part number 1143932, which plaintiff had placed in Category 3. Category 3 included connector halves which accepted pin contacts and did not contain strain reliefs. A review of the drawing led Mr. Makuch to conclude that the device depicted was not a connector half. He concluded that it was a polishing tool. Therefore, in his opinion the part number had been miscategorized, and he transferred the part number to Category 13, which called for assembly tools.
Plaintiff subjected Mr. Makuch to a similar examination of his categorization of part numbers as that experienced by Mr. Peterson. He was shown to have miscate-gorized only two of the part numbers used by Mr. Peterson. Plaintiff elicited testimony that Hughes’ computer runs did not correspond to the drawings used by Mr. Makuch. Mr. Makuch also was able to categorize a list of part numbers that did not appear in DX-4700 using the drawings.
Mr. Makuch created categories in addition to those in Mr. Peterson’s DX-4700. His categories are similar to Mr. Peterson’s. Category 8 contains “Specials.” These, were prototypes, experimental devices, and engineering models of non-production items. Category 10 contains charges for labor only. This classification derived from the wording of the listing and included assembly, termination, training, premium, and repair charges. Category 13 contains assembly tooling for sale. Category 14 contains piece parts. Mr. Makuch identified Category 14 as a difficult category because it contains items that with further “finishing” could become part of a connector, pin contact, or strain relief. Category 15 contains electrical connectors or electrical contacts. This category also included optical couplers and SMA906 connectors which have no characteristics of the infringed patents.
Subsequent to Mr. Makuch’s initial classification effort, he received additional drawings which he classified in the same manner as the earlier part numbers, except that he did not begin with Mr. Peterson’s DX-4700. Mr. Makuch’s classification methodology included the categorization of words or definitions in the same manner as part numbers.
3. Entire market value rule
In TWM Manufacturing Co., Inc. v. Dura Corp., 789 F.2d 895, 901 (Fed.Cir.), cert. denied, 479 U.S. 852 , 107 S.Ct. 183 , 93 L.Ed.2d 117 (1986), the Federal Circuit stated: “The entire market value rule allows for the recovery of damages based on the *208 value of an entire apparatus containing several features, when the feature patented constitutes the basis for customer demand.” (Citations omitted.) The Court of Claims in Leesona articulated this principle, as follows:
Under the entire market value rule, it is not the physical joinder or separation of the contested items that determines their inclusion in or exclusion from the compensation base, so much as their financial and marketing dependence on the patented item under standard marketing procedures for the goods in question____
220 Ct.Cl. at 262 , 599 F.2d at 974 . In applying the entire market value rule, the court must determine what units qualify to be part of the compensation base, taking into account the patent holder’s expectations of selling unpatented items in conjunction with patented ones. See Tektro-nix, 213 Ct.Cl. at 272 , 552 F.2d at 351 .
Mr. Borsuk, plaintiff’s top employee in charge of developing fiber optic connectors, interpreted the ITT/Allied and ITT/Hughes definitions, quoted supra at p. 204, in the following manner. Mr. Bor-suk defined connectors in terms of connector cable assemblies. According to Mr. Borsuk, a connector cable assembly is a device having a connector on each end and fiber or cable in between them. He defined a connector cable assembly as “the assembly of a connector, of connector components, hardware, and a cable, [fiber optic] cable, as a final assembly. These are the kinds of things we produce and sell.” Mr. Borsuk described the types of connector cable assemblies produced by plaintiff. He defined a “hermaphroditic cable assembly” as a device with a long length of fiber cable with a connector at each end. A “jumper cable assembly” was defined as having a short length of cable with a connector on each end usually containing a plug on one end and a receptacle on the other. He defined a “pigtail assembly” as having a connector with individual fibers on one end with single channel plugs on the opposite end. A pigtail is used to attach a fiber to a light-emitting diode or to a photo-diode. A plug receptacle accepts pin or socket contacts. A hermaphroditic connector contains features of both the pin and socket contacts. Channel refers to the number of pins and sockets that a connector half will accept.
Norbert L. Moulin, Senior Scientist in Hughes’ Connecting Devices Division, who appeared during the liability trial, testified by deposition in this phase that the pin contact is “universally used” in Hughes’ connectors. Plaintiff contends that, in determining the application of the entire market value rule, the court should focus on connector cable assemblies. Plaintiff viewed all of its connector cable assemblies as integral to establishing a fiber optic system. Plaintiff posits, through Mr. Bor-suk, that “integral” means able to accomplish every task in the system. Plaintiff argued that the court’s starting point must be the connector cable assembly because it is the unit necessary for the termination pin assembly to function. Mr. Borsuk testified that the patented devices only function within an entire fiber optic system.
Plaintiff’s proof of the compensation base emphasized both its own and Hughes’ expectations to sell related products that they sold in conjunction with the patented and infringing devices, respectively. Plaintiff’s witnesses were Mr. Borsuk and Stacey T. Dollar, an associate of Mr. Borsuk’s at ITT-Cannon who formerly worked for Hughes. Mr. Borsuk’s testimony primarily was directed to describing related sales in connection with the sale of licensed products and characterizing these sales as integral. According to Mr. Borsuk, the significant related device that plaintiff sold was the connector cable assembly because it was integral to the patented devices; moreover, plaintiff asserted that it expected to experience additional related sales along with the sales of connector cable assemblies which were not themselves related to the patented items. Plaintiff argues that all related sales should be included in the compensation base.
Mr. Borsuk testified, as he did in the liability trial, about the driving factors behind the use of fiber optics. Among the advantages of fiber optics for military applications, Mr. Borsuk cited the extremely *209 high band width or information carrying capacity; the size and weight of a fiber in contrast to the larger and heavier electrical equivalent; the dielectric nature of fiber optics, i.e., the fibers do not conduct electricity; the elimination of cross-talk; and the elimination of electronic bugging.
Mr. Borsuk also refreshed the record as to specific problems unique to fiber optics. Mating alignment is required to obtain the proper fiber-to-fiber link necessary for the transmission of data. Cable retention, or strain relief, is necessary because of the fragile nature of glass fibers. The connectors must be rugged in order to handle tactical application. It was Mr. Borsuk’s opinion that a pin contact’s utility derives from its ability to form a mated pair. This ability, he concluded, can only be created in a connector shell environment.
Plaintiff’s counsel elicited testimony from Mr. Borsuk about the value of a connector half standing alone. The witness viewed connector halves as having no stand-alone value. Connector halves were also incompatible with non-ITT-Cannon products such as Hughes or American Telegraph & Telephone Company (“AT & T”) devices, i.e., they could not form a mated pair. However, Mr. Borsuk noted that Hughes produced parallel products to those manufactured by plaintiff.
Mr. Borsuk prepared a drawing in connection with his testimony on a “military fiber to fiber, system to system operation.” The drawing is indicative of the tactical uses of connector cable assemblies. Mr. Borsuk described how the various devices produced by plaintiff are used in a field operation. A system-to-system operation, as described by the witness, would employ jumper cable assemblies, hermaphroditic long-length cable assemblies, as well as pigtail assemblies. Pigtail assemblies connect directly to transmitter/receivers. Mr. Borsuk stated that hermaphroditic connector cable assemblies are used because the nature of tactical field application requires that a connection be made to a matching connector half in the field, “so that no matter which end of the cable you start with you can plug it in.” Mr. Borsuk also testified that the connector cable assemblies can be adapted to contain a plug with all male pin contacts that mates with a receptacle containing all female socket contacts.
Mr. Borsuk demonstrated an ITT Fiber Optic Multi-Channel (“FOMC”) connector cable assembly, containing a plug on each end, which he referred to as a jumper cable assembly. The device included two dust caps tethered to each end of the assembly by a short wire. According to Mr. Borsuk, the dust caps always were sold tethered in this manner. The dust covers, like the connector halves, were capable of mating themselves to form a sealed unit.
Connector cable assemblies were sold either assembled or as components. The components were usually sold to Original Equipment Manufacturers (“OEM’s”), which themselves assembled the devices. Mr. Borsuk stated that the OEM’s had to be trained in order to assemble plaintiff’s devices. OEM’s could obtain catalogues from plaintiff which explained the connector assembly procedures.
Mr. Borsuk described all the parts comprising the FOMC connector as necessary to the function of the termination pin assembly. In his view the ’182 patent, which the court found to be infringed, had no stand-alone function. Mr. Borsuk responded to a question by plaintiff’s counsel regarding the parts necessary for a pin contact to function, as follows:
Q. What does it need to perform the function of mating two fibers?
A. It needs the remainder of connector components assembled about it, such that the two opposing connectors will mate two opposing fibers. Otherwise, they won’t stay together, they won’t line up, they won’t perform.
Mr. Borsuk also demonstrated how the ’797 strain relief works in conjunction with other parts of a connector half. He described a cylindrical crimp sleeve crimped to the end of the cable which holds in place the fiber that extends out from the cable housing. The termination pin assembly is epoxied to the fiber after the fiber passes through the pin assembly. Next, *210 the end of the fiber is cleaved or scribed to make it flush with the end of the pin assembly. The end of the pin assembly is then placed in a polishing fixture for the fiber to be ground and polished. The strain relief, which is in a hexagonal shape, fits into a hole and is locked in place when the rear portion of the connector shell is attached to its front locking mechanism. Extending from this rear portion is a yoke in which the contacts are snapped into place by the retention clip. The yoke is sealed by an outer shell which locks everything in place. Mr. Borsuk used a wrench to lock the subparts in place. In demonstrating how a connector half is assembled, Mr. Borsuk conceded that the closing tool was an Allen wrench, a standard hardware tool, even though he had previously identified the closing tool as being “unique.” PX-3126F explains the procedure Mr. Bor-suk followed in his demonstration during trial.
Plaintiff introduced evidence pertaining to items that plaintiff sold in connection with its fiber optic business. The items were not part of either a connector half or a completed connector cable assembly. Mr. Borsuk testified that unique dust covers were designed for plaintiffs connector cable assemblies. They could not be used with any other manufacturer’s connectors. He also stated that government specifications for connectors required dust covers. He regarded dust covers as integral, since they were always sold tethered to a completed connector cable assembly. When asked by counsel to define his understanding of the word “integral,” Mr. Bor-suk responded: “To me it means that they work in cooperation together and they can’t be used alone. And they have no function alone, they won’t perform alone or perform individually unless the two are used together.”
Mr. Borsuk also testified regarding tools sold in connection with plaintiff’s fiber optic business. 5 There were tools and fixtures of unique design that were used in conjunction with the connector cable assemblies. The items he included in these categories were insertion/extraction tools used to insert and remove the pin contacts from the connector cavity. He also included a grinding and polishing tool which was used to prepare the face of the fiber for mating with another fiber. Other tools, such as the crimping tool, were used to prepare the cable for attachment of the strain relief.
According to Mr. Borsuk, because of the unique dimensions of the ITT and Hughes connectors, different unique tools were necessary to prepare and assemble connector cable assemblies. He stated that the AT & T and Hughes connectors, and therefore their tools, were completely incompatible with plaintiff’s. In addition, Mr. Bor-suk identified special tools used for bonding, crimping, and closing connector shells. He stated that all of the tools he described had no use other than their applications to plaintiff’s fiber optic connectors. Mr. Bor-suk did discuss a contact termination kit that was partially unique to MIL-C-38999, which could be used with either electrical or fiber optic contacts. Mr. Peterson’s category part number listing identifies tools generally, without identifying tools that are unique.
Mr. Dollar, in the early to mid-1980’s, worked for Hughes as a pricing analyst and later as a program administrator in Hughes’ fiber optic business. He testified that some of the tools sold by Hughes to its customers were unique to Hughes’ products and not compatible with ITT-Cannon or AT & T connectors. Mr. Dollar identified the tools that he considered specialized:
Cure fixtures, grinding/polishing fixtures, certain wrenches, some of the crimp tools. The jaws were set up for specific dimensions on the connector. I would say that the epoxies which were in there, although they could be available [through] ... a different number of manufacturers, they would be chosen by *211 Hughes or by us or by whoever because they worked best with those particular connector styles.
According to Mr. Dollar, the specialized tools were sold for the most part in tool kits; however, his testimony revealed that these kits contained many fungible items. Plaintiff did not break out the price of specialized tools from its tool category. Plaintiff included the total price of the tool kits and all of the individual part numbers for tools, regardless whether they were standard or sold separately. Category 13, the assembly tool category, contains many different part numbers. Mr. Dollar testified that the majority of the cost of tool kits could be attributed to the specialized items. The court inquired of the witness about the grinding/polishing tools used with the Hughes contacts. Mr. Dollar’s statements made it clear that the fixture, the device used to hold a contact in place when grinding and polishing, was specific to the dimensions of the contact, but the remainder of the apparatus had a utility apart from the Hughes contact.
Mr. Makuch also addressed the utility and fungibility of items sold by Hughes in connection with its sales of fiber optic connectors, components, and contacts. He identified cable as having a utility apart from the infringed connectors. 6 According to Mr. Makuch, a lot of other non-Hughes connectors would accept the cable, and cable could also be used with mechanical or fusion splices.
Mr. Makuch noted that assembly labor and termination labor charges appearing in the Hughes data could not be specifically applied against the infringed connectors. 7 Cooling, engineering, and fixturing charges were not provided just for the connectors containing the infringing devices. Mr. Ma-kuch was asked on direct examination to testify whether assembly tooling “of the type in Category 13 of DX-4717 [was] only functional with [fiber optic] connectors as depicted in PX-25, 29, 31 and 32.” He testified that certain termination tooling and polishing fixtures may have been designed for use with the Hughes pin contacts. Mr. Makuch reviewed the items listed in the Hughes assembly tool kit to identify the tools of special design.
Mr. Makuch prefaced his testimony on assembly tools by identifying tools that he considered to be common to the industry. He identified as standard tools a cable stripper, hex wrench, exacto knife, carbide knife, lubricant, containers, and solvent and epoxy kits. These were items he classified as “not unique to the assembly of any product.” Additional common items included screwdrivers, gauze pads, heat gun, cotton tip applicators, shears, and torque wrenches. He stated that the insertion tool “insofar as the Hughes contact is equivalent to a common electrical size of their other contacts that very likely could be used____” Other standard items included an optical microscope and phenalic and diamond polishing laps. The three devices were used in finishing the ends of fibers for mating. He considered polishing discs to be standard items.
Next, Mr. Makuch identified items that he considered possibly unique to the Hughes fiber optic connectors: contact broaches, connector tools for the different channel connectors, the alignment sleeve insertion/removal tool, and curing and polishing fixtures. Spare parts were classified as unique, as they were not identified specifically. He also viewed the polishing calibration tool as critical and unique to a particular polishing tool.
Mr. Makuch proved to be a more credible and persuasive witness than Mr. Borsuk on the issue of related sales. Mr. Borsuk, who, it will be recalled, provided key testimony in plaintiff’s favor during the liability trial two and one-half years earlier, was *212 evasive on cross-examination and failed in this trial to provide testimony as detailed and systematic as Mr. Makuch’s. Mr. Bor-suk attempted to portray all of the tools as unique, even though there existed a clear demarcation between unique and standard. Moreover, Mr. Dollar’s testimony on this subject was not inconsistent with Mr. Ma-kuch’s.
Mr. Borsuk also testified concerning market conditions existing for fiber optic connectors during the period 1978 to 1984 and plaintiff’s expectations for sales during this period. He stated that plaintiff expected “exponential growth” in the sale of its fiber optic products. He noted that his research indicated a compound annual growth rate of 50 percent for fiber optics. This opinion was based upon the predictions of research firms and articles he reviewed on the subject.
Mr. Dollar informed the court about plaintiff’s and Hughes’ expectations for sales and their marketing strategies. He also testified about Hughes’ actual practices in the sales of its connector cable assemblies and related fiber optic connector products. In his capacity with Hughes as a pricing analyst for the products concerned, Mr. Dollar would perform “the pricing exercises to come up with the unit price for those assemblies or components.” According to Mr. Dollar, Hughes sought a profit margin of 20 percent for its fiber optic connector products. He stated that Hughes sold comparable, although not compatible, products to plaintiff. He viewed Hughes’ expectations for connected sales along with fiber optic connectors and components as similar to plaintiff’s. Hughes, Mr. Dollar testified, also expected to sell dust covers, as well as related tooling, as part of its connector sales. However, Hughes’ sales catalogue identifies dust covers and tools as optional items. Jack J. Maranto, Hughes’ Marketing Manager for Fiber Optics, testified on deposition that Hughes sold connectors without dust covers and that there were applications for the Government in which dust covers were not used.
Shirley Ann Lawrence, a market research analyst at ITT-Cannon since 1978, presented plaintiff’s forecast of the fiber optic market. Based on the actual growth rate of 1977-1978, she projected a 40 percent compounded annual growth rate for fiber optic connectors for 1978-1979 and projected similar growth over a five-year period. She repeated this analysis in 1981 yielding a projected growth rate “a cut above” the 1978-1979 rate. She made a retrospective analysis from 1987-1979 revealing a compound growth rate in fiber optic sales in all markets of 33 percent. The usefulness of this testimony was limited since the witness’ analysis took the form of oral reports; there were no formal reports of her data; and the studies included the entire fiber optics market.
Plaintiff’s projections are not consistent with Hughes’ actual experience. The Hughes sales data showed a leveling off in the later years. Hughes experienced growth in sales after 1980 of approximately $500,000 per year until 1984. In 1984 sales increased in excess of $1,000,000. Thereafter, sales leveled off, with only small increases. In 1987 sales declined from the previous year. In 1988 the sales up to July 2 were substantially behind previous year totals. Finally, defendant’s James H. Davis, Director of the Fiber Optics Programs Office of the Naval Sea Systems Command, who also testified in the liability trial, and whose responsibilities since 1986 have expanded to include participation in a tri-service fiber optics management panel, predicted a future decrease in fiber optics connector sales to the military due to economic and technological reasons.
Given the conflicting evidence on related sales, guidance must be sought from the case law as to what sales come within the entire market value rule. The infringed patents in Tektronix were directed to oscilloscopes and their electronic circuitry. The oscilloscopes had unpatented plug-ins that were required in order for the scopes to function, although they were not part of the scopes themselves. The plug-ins were dependent on the role of the scopes to create a market. The Court of Claims engaged in a three-part inquiry to determine *213 whether the “unpatented components” should be included in the compensation base. First, the court focused upon the interdependence of the scopes to the plug-ins, stating: “[I]t appears that the plug-ins are useless without the scopes and that the scopes require a plug-in before they have any utility____” 213 Ct.Cl. at 272 , 552 F.2d at 351 . Second, the court looked to whether the patented items created a market for the unpatented items. Finally, the court considered the activities engaged in by the seller to sell the unpatented items along with the patented device. The court concluded: “Plaintiffs patents were of such paramount importance that they substantially created the value of the plug-ins, and therefore the ‘entire market value rule’ applies.” 213 Ct.Cl. at 273 , 552 F.2d at 352 (citations omitted).
The machine in Paper Converting Machine Co. v. Magna-Graphics Corp., 745 F.2d 11 (Fed.Cir.1984), was a mechanism for transferring paper products, e.g., toilet paper, paper towels, from a “parent roll or bedroll ... onto paperboard cores to form individual consumer products.” 745 F.2d at 13 . The auxiliary equipment included a rewinder, which incorporated the patented item, and three auxiliary units. “[T]he mechanism for the high speed manufacture of paper rolls comprises several components, only one of which incorporates the invention claimed in the ’353 patent____” Id. at 23 . However, none of the auxiliary units were integral parts of the rewinder; they each had separate usage. The unpat-ented machines were included in the compensation base because they operated together to complete the process of creating finished consumer products.
Plaintiff's theory of related sales goes beyond the inclusion of “unpatented components” referred to in Tektronix and Paper Converting. Plaintiff relies on Paper Converting to support its view that the compensation base should include unpatented items that are not part of the actual physical hardware of the unit connected with the patented item. Plaintiff contends, in effect, that any item that is sold in conjunction with the patented item should be included in the compensation base. Although Paper Converting included separate unpatented units in the compensation base, plaintiff, in seeking inclusion of all Hughes’ fiber optic connector products and services, distends the Federal Circuit’s reasoning. An unpatented item (for example, a tool) must have some functional relationship to the patented item (for example, a termination pin assembly) other than being sold in conjunction with an includable un-patented item (for example, a connector shell) that incorporates the patented item. The connection cannot be too attenuated. It is insufficient nexus to expect inclusion of a product that is related only to the integral unpatented item, but has no functional relationship to the patented item.
The Court of Claims expressed the view that limitations should be placed on the extension of unpatented items to be included in the compensation base. In Bendix the patent involved was a fuel metering control system. The patented device was attached to a “fuel control system,” which, in turn, was attached to an engine to be installed in an airplane. The court determined that the unit for compensation base purposes would be the fuel control system, as installed, because it “is more nearly related to the value of the Mock invention [patented device] than the market value of the engines in which they were installed....” 230 Ct.Cl. at 255-56 , 676 F.2d at 611 . In order to avoid an excessive award, the court was concerned with the monetary impact of extending the unpatented items to be included in the compensation base. See also Leesona, 220 Ct.Cl. at 263-64 , 599 F.2d at 975-76 (anodes, cathodes, and covers sold along with batteries as part of original procurement included in compensation base, but not when purchased as spare parts).
Defendant concedes plaintiff’s entitlement to a compensation base inclusive of more than the sales price of the patented items. Defendant’s category breakdown includes fiber optic connectors that contain the infringing devices and not merely the devices infringing the ’182 and ’797 patents standing alone. However, defendant asserts that the “patented/unpatented” unit *214 to be included in the compensation base begins with one half of a mated pair of a connector cable assembly containing pin contacts or an infringing strain relief. According to defendant, the inquiry should focus on plaintiffs licensing practices. Defendant argues that plaintiff should be limited to what plaintiff actually sought when exploiting its patents, since plaintiff, in exploiting its patents, did not seek to capture related sales. For example, unlicensed products and all of the services do not fall within the ITT/Hughes or ITT/Allied licensing agreements. Defendant thereby would limit plaintiff to no more than it actually bargained for in its license agreements with Allied and Hughes.
Defendant’s position rests upon the assumption that plaintiff is entitled to obtain in the compensation base no more than what it actually licensed. Defendant does not rely only on the ITT/ Allied and ITT/Hughes agreements as manifesting plaintiff’s expectations for exploiting its patents. For example, defendant points to the fact that in an August 15,1983 License Agreement between Hughes and Elco (the “Hughes/Elco agreement”) and in another License Agreement of the same date between Hughes and Bendix (the “Hughes/Bendix agreement”) — both covering comparable patents — finishing tool patents were listed as separately licensed patents. Therefore, defendant asserts that if plaintiff expected to receive royalty payments for tools, it should have included them in its licensing agreements, as it did its connectors.
Mr. Makuch testified convincingly as to defendant’s approach. He identified the categories that would be includable if the parameters of the licensing agreements were used. Defendant presents a logical proposition, but it is unclear whether it would accomplish the objectives of the entire market value rule. The case law on the entire market value rule does not instruct that a patent holder’s licensing agreements determine the parameters of the includable unpatented items. Instead, the law focuses upon the patent holder’s sales and marketing expectations. The cases require a court to decide the degree to which the patented items will be extended to include unpatented ones based on a showing by the patent holder of its actual expectations. Consequently, this court views the licensing agreements only as a factor in determining which categories would be includable.
Paper Converting included in the compensation base auxiliary units that were separate unpatented components, but were expected to be sold with the patented item as auxiliary equipment. In so holding, the court gave decisive weight to the patent holder’s marketing expectations. The Federal Circuit explained:'
The deciding factor ... is whether “[njormally the patentee (or its licensee) can anticipate sale of such unpatented components as well as of patented” ones. Tektronix, Inc. v. United States [ 213 Ct.Cl. 257 ], 552 F.2d 343, 351 , 193 USPQ 385, 393 (Ct.Cl.1977). If in all reasonable probability the patent owner would have made the sales which the infringer has made, what the patent owner in reasonable probability would have netted from the sales denied to him is the measure of his loss, and the infringer is liable for that.
745 F.2d at 23 (citation omitted).
The issue in the case at bar is whether items such as dust covers, tools, and services fall within the definition of “unpatented components” as intended in Tektronix and Paper Converting. This court does not read either case to require inclusion of these items. The cases as a whole extend the inquiry to those unpatented items necessary to make the patented device function, i.e., give it value. Thus, the inquiry attempts to add to an apparatus those elements necessary to the patent’s market value that the patent holder has an expectation of selling along with the patented items. Plaintiff’s expectation of additional sales must relate back to the two patents and not to the unpatented sales. The inquiry should not extend to the universe of every item, no matter how attenuated its relationship to the patented item, simply because a patent holder can establish that it experienced related sales. If *215 the unpatented items are to be includable under the Tektronix and Paper Converting standard, the patent holder must establish its expectation of compensation for the additional items in marketing the patented ones.
Mr. Makuch provided an opinion about the meaning of the definitions contained in the ITT/Allied agreement. Mr. Makuch was familiar with the definitions. Based upon his review of the definitions and an assumption that the terms in the agreement referred to the ’182 and ’797 patents, he was asked whether the fiber optic connectors, components, and contacts contained in his part number analysis, DX-4717, were licensed products.
Mr. Makuch reviewed each category opining whether the category definitions were consistent with the ITT/Allied agreement definitions. If so, he was asked to identify what type of licensed product the given category would encompass — a fiber optic connector, a component, or a contact. Mr. Makuch gave specific reasons for his inclusion or exclusion of categories from the definition of licensed products. The following list reflects Mr. Makuch’s judgments for all of defendant’s categories:
LICENSED
CATEGORY PRODUCT TYPE
1A Yes Contact
IB Yes Component
2A Yes Contact
2B Yes Component
3 Yes Component
4 Yes Component
5 Yes Component
6A Yes Connector
6B Yes Connector
7A No
7B No
8 No
9 No
10 No
11A Yes Component
11B Yes Connector
12 No
13 No
14 No
15 No
Contains no features of the ’182 or ’797 patents
Labor charges/no hardware involved
*** Dust covers sold separately
**** Tooling
Although Mr. Makuch adopted plaintiff’s definition of licensed products as the measure of plaintiff’s expectations, he also addressed, plaintiff’s marketing expectations for selling related products. He segregated categories according to licensed products, concluding that if a category did not identify a licensed product applying the definition in the ITT/Allied agreement, it was not included in the compensation base. Mr. Makuch testified that Categories 1A, IB, 2A, 2B, 3, 4, 5, 6A, 6B, 11 A, and 11B were the only categories containing items that qualified as includable in the compensation base.
Mr. Borsuk testified to the value of connector halves standing alone. He stated that the goal in fiber optics was to establish a fiber-to-fiber link and this could be accomplished only with two halves of a mated pair. Defendant maintained that a connector half was the unit on which the court should focus. The court found Mr. Borsuk’s testimony persuasive on this point. Although Mr. Borsuk’s definitions are contrary to the testimony of every other witness (given Mr. Peterson’s deposition testimony), the court finds that it is necessary to its function that the patented device is capable of mating. Moreover, defendant has conceded that more than the value of the ’182 and ’797 patents can be included in the compensation base.
The court agrees that plaintiff would expect to sell the entire unit that results in a fiber-to-fiber link. Categories 7A and 7B, although unpatented items, would be included in the compensation base because they are connector halves and connector cable assemblies built to mate with fiber optic connectors containing patented items. This is in accordance with both plaintiff’s and Hughes’ expectations reflected in a June 22, 1988 letter from Mr. Peterson to Mr. Szabo. The letter stated that the agreement “includes sales of both plug and receptacle connector halves, pin and socket contacts, and cable assemblies.” Category 7A identifies connector halves containing socket inserts, which do not have features of Categories 3, 4, or 5, but which mate *216 with connector halves identified in Categories 3, 4, or 5. Category 7B identifies cable assemblies with the same characteristics.
Defendant’s Category 12 identifies dust covers sold separately, which plaintiff claims should be included in the compensation base. Mr. Borsuk testified that dust covers always were sold in conjunction with plaintiff’s connectors. Defendant agreed that to the extent dust covers were sold attached to connectors containing patented items, they should be included in the compensation base. However, dust covers sold separately should not be included.
Plaintiff’s expectation was that it would sometimes sell the dust cover tethered to its fiber optic connectors. Mr. Dollar conceded on cross-examination that dust covers were not always sold this way. The ITT Assembly Products catalogues also identify dust covers as optional items. Dust covers were not indispensable to the function of all the items containing devices that embodied one or more of plaintiff’s patents. Plaintiff’s marketing expectation was that dust covers ordinarily would be sold in conjunction with its connectors; to the extent this expectation was realized, dust covers are included in the compensation base. Dust covers sold separately as “spare parts” or “replacements” are not included. Although Hughes did experience actual sales of additional dust covers, plaintiff did not establish that it expected to sell dust covers with every connector assembly. Defendant demonstrated that it was not always necessary or customary for dust covers to be purchased.
Defendant’s Categories 9 and 13 identify, respectively, “Non-Recurring Charges for Tooling, Engineering, and Fixturing” and “Assembly Tooling for Sale.” A great deal of trial time was spent on the subject of tools. Plaintiff’s witnesses Messrs. Borsuk and Dollar viewed plaintiff’s and Hughes’ tools as unique. The tools were necessary for the assembly and termination of their respective fiber optic connector components. The uniqueness of the tools is not the most important factor, except to the extent that uniqueness contributes to plaintiff's expectation that it would sell tools along with its fiber optic connector components. That plaintiff would have experienced Hughes’ actual sales is not relevant to this inquiry. It is plaintiff’s expectations and not Hughes’ actual experience on which the court should focus. Tektronix, 213 Ct.Cl. at 272 , 552 F.2d at 351 .
Mr. Borsuk testified that plaintiff expected to sell its unique tools because the tools were necessary to those companies and contractors that purchased components. Mr. Borsuk specifically considered certain tools unique to plaintiff’s connectors. He identified certain unique tools on direct examination. On cross-examination Mr. Bor-suk retracted his testimony as to two of these tools, namely, the epoxy which he admitted was common, and a closing mechanism, which he conceded was a standard Allen wrench.
Mr. Dollar testified that Hughes’ expectation was to sell assembly tool kits that included both unique and standard items. He stated that the “big ticket” items were the unique tools. However, on eross-exam-ination, he admitted that items he identified as unique, in fact, were standard. For example, Mr. Dollar conceded that only the polishing fixture, and not the more expensive polishing tool, was unique. The Hughes catalogue supports this view, identifying only the fixture as a patented item.
Uniqueness is not the qualifying feature, but the court is troubled by plaintiff's attempts to bootstrap unpatented standard items into the compensation base. Plaintiff must demonstrate that it expected to sell assembly tool kits with its fiber optic connector component packages. Plaintiff’s catalogue breaks out the different tools offered for sale; therefore, its expectation was not to always sell entire tool kits. Defense witness Makuch testified that many of the items in the tool kit were fungible, making it unnecessary to purchase the entire kit from plaintiff. Category 9 was a testing category. Category 13 identifies assembly tooling. Mr. Makuch testified as to the tools in plaintiff's tool kits that he considered unique. He identified a number of tools. However, three factors detracted from the inclusion of *217 tools or tool kits in the compensation base. Mr. Makuch testified that in his experience a company would not expect to make a profit on the sale of tools. Instead, a company would look to break even when selling its tools. Second, the tools were identified as being sold separately in Hughes’ sales catalogues. Specifically, PX-4302, under the heading “Assembly Tools and Kit” contains the following: “All tools are available from stock and are sold independently.” Finally, some tools that were identified by Mr. Borsuk as unique were useful only to items unrelated to patented devices. For example, plaintiff sought to include in the compensation base an insertion/extraction tool used with the alignment sleeve, i.e., the ’145 patent, which the court found not to be infringed.
A number of other factors detracts from plaintiff’s position. The fact that the military requirements of the Defense Logistics Agency specify only insertion tool, removal tool, alignment sleeve tool, and polishing fixture tool, with specific part numbers provided for these devices, prompts the finding that plaintiff could not have the expectation of selling all of the tools and that its category is overinclusive. Category 13 covering assembly tools also includes many part numbers that could have been traced back to each part number’s corresponding devices. Hughes “C-21 Environmental Connectors” sales catalogue and its “Engineering and Production Data Control Part Master Data Report” identify tools for sale by individual part number. Plaintiff’s “FOSC [Fiber Optic Single Channel] Plug Termination/Assembly Procedure” also identifies individual tools to part numbers and represents that tools may be purchased separately or as a contact termination kit. The kit is sold under a specific part number. The court notes that plaintiff's assembly procedure catalogue for hybrid contacts identifies tools that meet standards in the MIL-C series of government specifications. One of the few tools that was not identified as meeting military standards was the insertion/extraction tool. However, this was only called for in plaintiff’s “FOMC 6 and 8 Channel Optical Contact Termination and Connector Assembly Procedure.”
The evidence supports the finding that plaintiff may have had an expectation of selling some tools in conjunction with the sale of its fiber optic connector components. However, plaintiff has failed to meet its burden by establishing its actual expectations. Plaintiff cannot lump all tools into a single category and expect to receive the benefit of their total inclusion.
Plaintiff bears the burden of establishing its entitlement. See Bendix, 230 Ct.Cl. at 257 , 676 F.2d at 611 (“[T]he compensation base cannot be increased to accommodate a speculative and unproven amount____”). Plaintiff has engaged in a tactic of overin-clusion, which runs the risk of the exclusion of possibly legitimate items, since the court cannot attribute a dollar value to these items. Plaintiff, in its approach, did not argue that it legitimately expected to sell all of its tools, but instead argued for unique tools, which of necessity were sold with its fiber optic connector products. However, plaintiff made no attempt to segregate these unique items, establish their relationship to the patented devices, and then attribute a dollar value to them. Plaintiff did create three tool Categories 9T, 9E, and 9F, but there was no segregation of unique items within these categories. Instead, plaintiff relied on Mr. Dollar’s bare assertion that the unique tools were the big ticket items, a point refuted by defendant on cross-examination and by the direct testimony of Mr. Makuch.
Defendant also excluded Category 8 covering prototypes and experimental devices. Mr. Makuch excluded these devices from the compensation base because they were not shown to contain any features of the ’182 or ’797 patents. This is significant, not only because the category would be excluded under the ITT/Allied definition, but also since plaintiff’s expectation could not be to link the sale of these remote items to the sale of its patented products.
Category 10 was captioned “Labor Only” charges. Mr. Makuch was of a view that these charges should be excluded, because *218 they were not actual hardware. Mr. Peterson testified that he assumed that Hughes had merely broken out its charge for assembling connectors in some instances. Since a charge for assembly was ordinarily included in the price of connectors, he included the labor costs in the compensation base.
On cross-examination Mr. Peterson admitted that termination charges were for cancellations and not specifically identified to a product. The court finds that these charges should be excluded because plaintiff has failed to meet its burden of proof of tying these charges into the sale of its patented items. A seller does not ordinarily expect to incur a monetary benefit from cancellations. Plaintiff would expect only to recoup the money spent on its effort and to exact a penalty on the purchaser. It would not expect to obtain a profit from a cancellation. To the extent that there may have been includable items, the court has no means for breaking them out.
Plaintiffs representation by counsel that sometimes labor was included in the charge for connectors and sometimes it was not is not evidence. Mr. Peterson, plaintiffs witness, could not explain why these charges were split out. Plaintiff made no attempt to present evidence, through use of the part numbers and price lists, to explain how this phenomenon was reflected in lower charges for certain connectors. Instead, plaintiff relied on an assumption that this labor was associated with patented products and was broken out of the price for certain connectors. The court has insufficient basis for accepting plaintiffs representations. Therefore, Category 10 is properly excluded from the compensation base.
Category 14 is entitled “Piece Parts.” Mr. Makuch excluded these items because on his review they did not contain the ’182 or ’797 patents. They would not be includable under the ITT/Allied agreement. He also stated that they were not ready to be sold or to be assembled into fiber optic connectors. The court views this piece part category as spare parts, from which plaintiff would not expect sales in conjunction with the patented items. Subsequently experienced sales do not identify plaintiff’s expectations. Therefore, Category 14 is excluded from the compensation base.
Category 15 is designated “Electrical Connectors, Couplers, SMA-SMA Assembly, Non-Hughes Devices and Other Miscellaneous Items.” Mr. Borsuk testified that these electrical devices were adapted to be used for fiber optic products. Mr. Makuch was particularly persuasive on this category. He stated that the ’182 and ’797 patents were not identified as being included in these items. Mr. Peterson stated on cross-examination that electrical connectors should not be included, since only C-21 environmental connectors would accept optical contacts. He did not know if he had included other electrical connectors in this category. Mr. Peterson also stated that he did not know personally whether “T” and “Star Couplers” accepted pin contacts. On cross-examination plaintiff attempted to elicit testimony from Mr. Makuch that its “T” and “Star Couplers” were for fiber optic use. Mr. Makuch disagreed, asserting that the items were for electrical use.
Plaintiff’s witnesses were not persuasive on this subject. Although its methodology attempted to capture all of Hughes’ fiber optic sales, plaintiff did not present sufficient evidence to support the includability of particular items in the compensation base under the legal standard requiring sales of unpatented items be tied into expectations for sales of items containing devices that infringed the ’182 or ’797 patents. Instead, Messrs. Borsuk and Dollar testified generally about plaintiff’s and Hughes’ fiber optic marketing practices and sales history. The statement in deposition of Hughes’ engineer Mr. Moulin that the '182 termination pin assembly is universally used in Hughes’ connectors does not forge the linkage requirements of the case law. The court appreciates the difficulty plaintiff confronted in using a third party’s sales information. However, this does not relieve plaintiff from justifying its marketing expectations with evidence, especially when it is vying for the inclusion of associated sales.
*219 4. Hughes’ total sales
Plaintiff urges that Hughes’ total sales for government end use of fiber optic connector products for the years 1978 to 1988 should be the compensation base that the court adopts. 8 Plaintiff views this as only a partial measurement of the entire value of its connector products as installed. Plaintiff’s base reflects sales by Hughes of fiber optic connectors, components, and contacts, as well as related products and services. According to plaintiff, the related products and services were “integral” to Hughes’ fiber optics market sales. Therefore, under plaintiff’s interpretation of the entire market value rule, all Hughes’ sales for government end use are includable in the compensation base.
According to plaintiff, Hughes’ sales for its fiber optic products during the period 1978-1988 totaled $19,480,550.00. The total figure reflects $200,000 in sales for the years 1978-1979, which amount is unsubstantiated, but plaintiff claims was represented to be the figure set by Hughes in the settlement agreement between plaintiff and Hughes of January 1, 1987, following the July 25, 1986 liability decision in this case. $334,676.41 for the year 1980 is reflected in the Hughes monthly income statements. $18,945,873.59 for the years 1981-1988 is substantiated by the Hughes sales recaps. No sales recaps exist for the years 1978-80. From this total figure plaintiff culled $200,000 for commercial sales made prior to January 1,1987. $346,-556.09 was deducted for commercial sales for the period April 1, 1987, through June 30, 1988. This amount was derived from Hughes’ royalty reports to plaintiff. Sales to plaintiff and its licensees also were deducted. These sales totaled $2,250,675.40. Plaintiff contended that the applicable compensation base, after the above reductions, was $16,683,319. The figure represented the total sales by Hughes to the Government of Hughes’ fiber optic connector products and services, less commercial sales and sales to plaintiff and its licensees.
Ms. DiMatteo, the legal assistant to plaintiff’s counsel, testified that the Summary Chart, PX-3114, was formulated through a comparison of the Hughes sales recaps to plaintiff’s computer printout. Plaintiff’s computer printout came within a few dollars of the Hughes sales recaps. The exception was for the year 1981, which showed a $6,000 disparity. Ms. DiMatteo reconciled the disparity by adding the subtotals that .appeared in the Hughes sales recaps for 1981. The total that Ms. DiMat-teo obtained came within a few dollars, satisfying her that the error had taken place in calculating the subtotals.
Ms. Stulberg, the computer manager for plaintiff’s counsel, testified that she supervised the input of the Hughes sales data into the firm’s computer so that a calculation could be made. After the input was completed, Ms. Stulberg testified that Mr. Peterson’s category listing was used to obtain subtotals and totals for each category. The part number list was also used to identify sales to plaintiff and Bendix Corporation. The totals were then subtracted from the Hughes sales data to obtain the total sales base for government end use.
Mr. Ekholm, who managed this data processing project for defendant’s contractor, was asked to testify about the data bases that he created for defendant. Mr. Ekholm was tasked with creating a data base that would capture the sales information provided by the Hughes sales recaps. Two data bases were created from the information provided. Mr. Ekholm referred to one as the “recap data base.” A second “bookings data base” was created from Hughes’ sales orders. Mr. Ekholm testified that, based upon defense counsel’s instructions, he only attempted to capture part numbers, descriptions, unit prices, quantity amount as listed, and customers’ names. The data bases were designed to perform a root search that would pick up anything following the original part number. Part numbers were standardized before they were input.
*220 Mr. Ekholm testified to the process he engaged in to ensure the accuracy of defendant’s data base:
A. We went through a multi-step process whereby a key manual was developed to instruct the keyers how to pick up information off of the forms, exactly what information to pick up and what not to pick up. The information was keyed. Printouts were generated.
Printouts were taken and a one hundred percent quality control check was done by an independent group. Corrections were noted on the printouts, sent back to keying shop, subsequently corrected. A new printout was generated from which corrections were checked. Once corrections were made and finalized, a magnetic tape was generated.
And then the whole process began again. We double keyed and we went through the entire process once again. And in this way, we insured, once we got two magnetic tapes.
We loaded that data onto the Justice computer and we ran comparison programs which checked character by character does it look exactly like what’s on the other set of data.
And when we had resolved all of the discrepancies, we loaded our [data base].
Mr. Ekholm stated that his objective was to ensure that the information was as accurate as possible. This was accomplished by accepting at face value the information that he was attempting to capture. No attempt was made to reconcile the information that was picked up with the “summed numbers” appearing on the reports. He stated that the structure of the data base was kept simple and objective. Subjective decisions were avoided.
In an attempt to refute plaintiff’s contention that it expected to sell all of its fiber optic connector products together, Mr. Ek-holm performed a “frequency search” of the Hughes bookings data base. A frequency search is used to determine the number of times a particular part number appeared in the bookings data base. He testified that he would not be able to accomplish the same task on the sales data base. The search was used to determine the number of times the part numbers for pin contacts appeared alone or with other part numbers. The same type of search was performed for socket contacts and dust covers. Mr. Ekholm testified that pin contacts and socket contacts appeared alone roughly one third of the time. Dust covers were shown to be sold alone about half of the time. Defense counsel stated that because of the proximity to trial when this task was begun, Mr. Ekholm was unable to complete the frequency search for all of the fiber optic products.
Mr. Ekholm testified regarding the summaries that were created from the Hughes sales data. A summary from the bookings data was used for 1978-1980. Mr. Ekholm testified that two totals appeared in the documents, a line item total and a computed total. He viewed the computer total as more accurate because it reflected the quantity of the part number sold multiplied by the unit price. The sales total captured the totals as they appeared in Hughes’ sales data. Bookings to plaintiff’s divisions and licensees were deducted from the total of all Hughes’ sales bookings.
Mr. Ekholm’s report was broken down by categories containing part numbers with dollar values attributed to the part numbers. A cover page was created reflecting yearly totals from net bookings contained in the underlying data. A similar task was accomplished for the years 1981-1988, save that the Hughes sales recaps were used. The report reflected Hughes’ total sales. Sales to plaintiff’s divisions and licensees were deducted to reach a Hughes net sales figure. A computed value reflecting the same information was also obtained. The computed value was $1,104,794 less than the listed sales value, with the largest disparity occurring in 1984. Mr. Ekholm attempted to ascertain the reason for the disparity. He testified that the discrepancy had been thought to have come from a negative quantity having been multiplied by a positive unit price to yield a positive line total.
Upon review of defendant’s data base, Mr. Ekholm believed that double account *221 ing was also a cause. It was discovered that some part numbers appeared in more than one category causing the category totals to be higher than the computed total for all categories produced by the computer. The computer would only pick up the part number and calculate it once on its running total for all categories. The category totals were independent of the running total. Mr. Ekholm stated that the totals for the sales categories in DX-4835-4836 were reflected in the sales column in DX-4837A. This exhibit was used by Mr. Ekholm to calculate the total sales multiplied by the royalty rates.
The court had great difficulty in identifying the most correct Hughes sales figure to provide a starting point. Both plaintiff and defendant attempted to capture the same data, but each came to a different result. Defendant’s own calculations wrought different results for total sales and computed total sales. Defendant’s total for Hughes’ sales for government end use is $16,801,-327. Plaintiff’s total sales figure for government end use is $16,683,319. The problem lies not with the disparity in the amounts, but in the parties’ presentations of their respective figures, since plaintiff does not provide a breakout by category per year as does defendant. A second problem inheres in the fact that plaintiff attributes more sales than does defendant to the years 1978-1980, which is significant if prejudgment interest is to be compounded. The court will examine each problem separately.
5. Adjustment to compensation base
Mr. Makuch proved to be an unflappable witness. He identified a systematic approach to the classification of part numbers. Plaintiff’s inability to undermine his categorization methodology leads the court to find that DX-4717 reflects the most accurate classification of part numbers available. Plaintiff’s over-reliance on the data in the Hughes computer runs and defense counsel’s ability to undermine Mr. Peterson’s effort requires that plaintiff’s part number listing not be adopted. Defendant’s cross-examination of Mr. Peterson underscored two points. First, it became obvious from the comparison of drawings with the corresponding part numbers that the computer-generated information was not always accurate. Second, it established the foundations of Mr. Makuch’s methodology and approach as fundamentally sound. The court has great confidence in Mr. Peterson’s abilities and finds that he made a genuine effort to categorize accurately the information. However, defendant availed itself of additional information, thereby instilling greater confidence in defendant’s final part number listing.
With respect to the first problem, PX-3114 entitled “Summary Chart of Hughes Sales” presents only yearly total sales figures. PX-3117 entitled “Summary of Hughes 1981-1988 Invoice Sales by Category” displays total sales for each of the categories in Mr. Peterson’s analysis. The former exhibit is inadequate, since it does not identify the amounts to categories that comprise the yearly sales. The latter exhibit is also inadequate, since it provides no means for disallowing categories. Plaintiff takes the position that the court could eliminate in PX-3117 categories that do not qualify for inclusion in the compensation base; but this approach would not attribute dollars within each category to years, i.e., it does not provide category totals broken down by year. Therefore, compound interest could only be on a total base for all the years in suit or to total sales by category not assigned to years. Either alternative is an unacceptable solution.
The second problem concerns the Hughes sales for 1978-1980. Defendant’s evidence was presented broken down by year and category. DX-4835 and 4836 display the total sales figures that defendant proposes. Defendant used the Hughes bookings data base (sales orders) to derive its total sales figure for the years 1978-1980. Defense counsel proffered that Hughes could have no more sales than it had bookings. In addition, defendant asserted that to the extent that bookings were not converted into sales between 1978-1980, plaintiff would receive the benefit of double-counting in the later years on the actual sales of the booked items. Defendant’s assessment *222 makes sense. However, no evidence was presented reflecting this trend.
Plaintiff argued that Hughes had represented that it had experienced $200,000 in sales for the years 1978-1979. Hughes had sales of $334,676 for 1980, which were reflected in Hughes’ 1980 income statement. Defendant’s figure for 1980, based upon Hughes’ bookings, is $159,119.
In order to reconcile the dollar differential between plaintiff and defendant’s sales data, the court has made adjustments to the figures. Neither plaintiff’s or defendant’s sales figures are adopted. A court is not required “to accept as dogma one of the parties’ figures or the others, but can use them as perimeters for [its] ultimate determination.” Leesona, 220 Ct.Cl. at 258 , 599 F.2d at 972 (citations omitted). The court accepts plaintiff’s representation that the years 1978-1980 accounted for more sales than defendant included in its breakdown. This is justified by the deposition testimony of Hughes’ legal, sales, marketing, and engineering personnel, who support plaintiff’s contention that plaintiff expended great effort in trying to extract from Hughes the most cogent sales information. However, plaintiff presented no category breakdown for these sales. In order to capture the dollar value in the earlier years attributable to includable categories, the following formula was adopted:
Formula: A = C% X D = E B
Table
A. Defendant’s yearly total for individual category.
B. Defendant’s total figure for all categories for 1978-1980 ($390,704). For the years 1981-1988 ($16,410,623).
C. Percentage of category to total of all categories’ sales.
D. Plaintiff’s total sales figure for 1978-1980 ($534,676). For the years 1981-1988 ($16,149,319).
E. Total value of plaintiff’s sales per category.
This formula gives plaintiff more dollar value included in the earlier years’ total sales base, but retains defendant’s breakdown of part numbers to particular categories. Plaintiff's failure to present its evidence in a manner enabling assignment of sales to categories necessitates that defendant’s part number breakdown be. used. No determination has been made whether plaintiff would receive more dollars for later years if the adjustment were not made.
To offset the increase to plaintiff’s compensation base for 1978-1980, an adjustment was required for the years 1981-1988. To accomplish this result, $534,000 was subtracted from $16,683,319, which were Hughes’ total sales for government end use. The resulting $16,149,319 was then used to fix the ratio of sales in the later years to defendant’s part number/category breakdown. The same formula for 1978-1980 was utilized. Appendix I to this opinion shows how the adjustment was made, as an example, to Category 1A.
The percentages, which the court will refer to as the “adjustment factor,” retain the same part-number-to-dollar-value that defendant created, except to the extent that sales dollars have been moved to earlier years. However, to the extent that sales dollars that were moved are not reflected in categories included in the compensation base, they were eliminated. Plaintiff is not entitled to inclusion of all of the earlier sales dollars in the compensation base. Plaintiff had the burden of presenting its evidence in a manner that can be used by the court. Plaintiff’s presentation, in a year-by-year fashion without the corresponding category breakdown by year, prevents the court from adopting any of plaintiff’s iterations. Plaintiff knew pri- or to trial that categories could be excluded from the compensation base. Therefore, plaintiff should have been aware that its presentation did not accommodate any yearly adjustments.
The court has great confidence in defendant’s part number categorization. The court has made an adjustment to defendant’s presentation only because defendant could not disprove plaintiff’s assertion that Hughes experienced the amount of sales that plaintiff claims in the earlier years. *223 Given that plaintiff and defendant submitted conflicting evidence of equal probative value, the changes are justified since plaintiff was not responsible for the Hughes sales information. However, adoption of defendant’s part number breakdown is the only way to accomplish a fair accounting. The part numbers for 1978-1980, even though derived from bookings, are the best evidence of the percentages of sales dollars attributable to individual categories.
The court has devised the fairest method for providing plaintiff the value it seeks in the earlier years without giving plaintiff a windfall. Plaintiff should not benefit from its own lack of specific proof when there is evidence in the record on the nature of Hughes’ sales during the years 1978-1980, which could have enabled plaintiff to break out sales and charges that are not includa-ble in the compensation base. See Dynamics, 5 Cl.Ct. at 616 (sales unsupported by evidence not includable in accounting).
II. Royalty rate
In determining the royalty rate to be applied to the compensation base in a section 1498 setting, “the court is attempting to establish a royalty which will adequately compensate the patentee for his loss____” Dynamics Corp. of America v. United States, 5 Cl.Ct. 591, 606 (1984), aff'd in part, rev’d in part, and remanded on other grounds, 766 F.2d 518 (Fed.Cir.1985). The focus of this inquiry is on the date when the infringement began. Decca, Ltd. v. United States, 225 Ct.Cl. 326, 336 , 640 F.2d 1156, 1167 (1980), cert. denied, 454 U.S. 819 , 102 S.Ct. 99 , 70 L.Ed.2d 89 (1981). A court should look to existing licensing agreements. Calhoun v. United States, 197 Ct.Cl. 41, 55-56 , 453 F.2d 1385, 1393-94 (1972). The Court of Claims stated in Tektronix, Inc. v. United States, 213 Ct.Cl. 257, 265 , 552 F.2d 343, 347 (1977), cert. denied, 439 U.S. 1048 , 99 S.Ct. 724 , 58 L.Ed.2d 707 (1978), “Where an established royalty rate for the patented invention is shown to exist, that rate will usually be adopted as the best measure of reasonable and entire compensation.” (Citation omitted.) However, “where no such royalty is shown, alternative methods must be employed.” Id. The royalty comparison approach is the preferred methodology. Leesona Corp. v. United States, 220 Ct.Cl. 234, 259 , 599 F.2d 958, 973 , cert. denied, 444 U.S. 991 , 100 S.Ct. 522 , 62 L.Ed.2d 420 (1979). To accomplish this task, a hypothetical negotiation between a “willing buyer and willing seller” may be used, TWM Manufacturing Co. v. Dura Corp., 789 F.2d 895 (Fed.Cir.), cert. denied, 479 U.S. 852 , 107 S.Ct. 183 , 93 L.Ed.2d 117 (1986), centering on the date the infringement began. Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075 (Fed.Cir.1983); Dynamics Corp., 5 Cl.Ct. at 606 . However, this analysis “permits and often requires a court to look to events and facts that occurred thereafter and that could not have been known or predicted by the hypothesized negotiators.” Fromson v. Western Litho Plate & Supply Co., 853 F.2d 1568, 1575 (Fed.Cir.1988).
1. Licensing agreements covering the patents in suit or comparable patents
Mr. Peterson discussed plaintiff’s licensing history and practices. He read into the record the definitions of the compensable products under the ITT/Hughes agreement. These definitions, which were quoted supra at p. 207, cover fiber optic connectors, components, and contacts, as the licensed products to which the royalty rate is to be applied. Under the ITT/Hughes agreement, fiber optic connectors bear a 5 percent royalty rate; components, 10 percent; and contacts, 8.5 percent. Mr. Peterson was the proponent for royalty rates reflecting the ITT/Hughes rates, but he offered no analysis beyond identifying the ITT/Hughes agreement for the established rates. He took the position that the ITT/Hughes rates should apply to connector cable assemblies.
According to Mr. Peterson, under the ITT/Allied agreement, which also covered the ’182, ’797, and ’145 patents, Allied made royalty payments for connector cable assemblies. As the agreement defined a fiber optic connector as a “connecting device *224 for joining or fastening together one or more optical fibers or cables,” including “any device which in addition to joining together optical fibers also performs some other connecting or other function,” Mr. Peterson testified on deposition by defendant that a connector would include a connector half, as well as two mating halves sold together for mating with each other. His trial testimony equated a connector half with a connector.
Defendant contended that the applicable royalty rates should be the rates in the »ITT/Allied agreement. The ITT/Allied agreement contained a royalty rate of 2.5 percent for the ’182 patent used alone, a rate of 2 percent for the ’797 patent used alone, and a rate of 3 percent when the ’182 and ’797 patents were used together. The rate would be doubled if the patents were sold as components. Defense witness Paul M. Enlow, who was qualified as an expert in patent licensing, posited that the ITT/Allied agreement represented the only license agreement that was freely and willingly negotiated. As noted above, see also supra note 3, this agreement, effective on August 1, 1985, was consummated several months before the liability trial. The ITT/Allied agreement sublicensed, through Allied, Bendix Connector Operations; Am-phenol Products, a division of BunkerRa-mo-Eltra Corporation; and three other named fiber optic licensees of Allied. Indeed, plaintiff touted the ITT/Allied agreement in the liability trial as evidence of its patents’ commercial success. See ITT Corp., 10 Cl.Ct. at 379 . Mr. Makuch viewed licensed products under the ITT/Allied agreement as restricted to products including a pin contact or strain relief. Mr. Enlow’s analysis applied the ITT/Allied rates accordingly.
Mr. Enlow explained his approach in rendering his opinions on the applicable royalty rates. He reviewed the infringed patents along with deposition testimony. He also applied his knowledge of the status of fiber optics when the taking began in 1978. He reviewed the licensing activities of plaintiff in this area by looking at several agreements and proposals. Mr. Enlow considered the ITT/Allied and ITT/Hughes agreements, as well as licenses and proposals by both plaintiff and Hughes covering comparable patents. Mr. Enlow prepared a chart entitled “Summary of Royalty Rates Re Fiber Optic Connectors and Components,” DX-4838, listing seven agreements or proposals by Hughes or plaintiff, three of which dated from 1983 and the most recent, the ITT/Hughes agreement, entered into in 1987. Based upon all of the information he reviewed, he concluded that a reasonable royalty rate would be in the 2-3 percent range consistent with the ITT/Allied agreement.
Mr. Enlow, a patent attorney who holds a master’s degree in business administration, formed his opinion partially on his personal experiences. He served for 16 years as a patent attorney for AT & T, ultimately as Vice President and Assistant General Counsel, participating in more than 1,000 licensing agreements, some of which were in the fiber optics area. He worked for three other major corporations as a patent attorney. Since 1985 he has consulted, inter alia, as an expert witness.
Mr. Enlow testified that it was the practice of AT & T and other corporations, including plaintiff, to renegotiate licensing contracts after a short period of time. Renegotiation is driven by “[cjhanges in various industries, changes in the importance of them, changes in the patents that people held____” Initially, Mr. Enlow in referring to a patent holder stated: “[Y]ou have no idea what the value of the patents are, and then as the industry matures, you begin to realize that some of the patents you have do have some value____”
The ITT/Allied agreement, in his view, was the best indicator of established royalty rates:
Well, as I mentioned before, it was freely entered into by both sides. It started from a request by Bendix to IT & T for a license and this is what culminated from it. It also is useful for the royalty rates it states, and it’s also useful for the fact that the definitions in the agreement were in fact drafted by IT & T, so it seems to me they would be *225 definitions which in this proceeding, IT & T would be happy to adopt.
In April 1983 plaintiff made its first proposal to Hughes involving the patents in suit. Plaintiff’s 1983 proposal called for a royalty rate of 10 percent for the use of three patents, 7.5 percent for the use of two patents, and 5 percent for the use of one patent. The proposal had no provision for doubling the rates if devices covered by the patents were sold as components. Mr. Enlow testified that in his experience the proposed rates were high given that connectors were a “commodity item.” A letter of April 29, 1983, to plaintiff from Hughes’ patent counsel Joseph E. Szabo indicates that Hughes had reservations about entering into an agreement, but not specifically about the proposed royalty rates.
Mr. Enlow discussed the royalty rates that Hughes obtained for two licenses granted on August 15, 1983, to the Elco Corporation (“Elco”) and to Bendix Corporation (“Bendix”). The agreements were entered into to provide second sources for the Hughes connectors and to transfer technical information. Both agreements contained royalty rates of 6 percent for hermaphroditic connectors and 4 percent of the net selling price for all other connectors. Mr. Enlow considered that the primary purpose of the agreements was to transfer technical information. Therefore, he attributed one half of the royalty to the patents. He concluded that the resulting rate would be in the 2-3 percent range. According to Mr. Enlow, the transfer of technical information exacts a higher royalty rate. Comparatively, he viewed the Hughes, Elco, and Bendix agreements as in the same “ball park” as the ITT/Allied agreement.
A January 10, 1984 proposal from plaintiff to Hughes provided for a 3 percent royalty rate for use of fewer than three patents. A 20 percent discount was included for sales for government end use. Therefore, the effective rate would be 2.4 percent for the ’182 and ’797 patents. Plaintiff's proposal was not accepted. Again, Mr. Enlow stated that the rates were significant because they were in the same “ball park” as the ITT/Allied agreement.
On March 29, 1984, plaintiff made a proposal to Bendix setting forth a royalty rate of 3.5 percent for use of fewer than three patents and a 10 percent rate for contacts standing alone. Plaintiff’s proposal to Bendix also contained a 20 percent reduction for government end use, yielding effective royalty rates of 2.8 percent and 8 percent, respectively. Mr. Enlow’s opinion was the same as with respect to the prior agreements. Plaintiff’s proposal to Bendix eventually was negotiated into the ITT/Allied agreement. Although Bendix had approached plaintiff seeking a license, plaintiff ultimately was responsible for the terms of the proposal, according to the deposition of Michael J. Cronin, plaintiff’s Director of North America Licensing & Litigation, who negotiated the agreement for plaintiff.
The final royalty rates that Mr. Enlow considered were the rates contained in the ITT/Hughes agreement of September 1, 1987, providing for rates of 5 percent for connectors, 8.5 percent for contacts standing alone, and 10 percent for components. However, he discarded the ITT/Hughes agreement for two reasons. First, it was late in time relative to the 1978 taking date. Second, Mr. Enlow viewed the ITT/Hughes agreement as having been entered into under threats from plaintiff. 9 He referred to a letter dated May 30, 1986, from Mr. Cronin to Mr. Szabo, stating: “To continue naked violation of our patents will subject Hughes to triple damages and attorney fees under the Patent Act.”
Based upon the information Mr. Enlow reviewed, he assigned the royalty rates to be applied in fixing a reasonable royalty to the specific categories Mr. Makuch had included in the compensation base. Mr. En-low concurred in Mr. Makuch’s application of the definitions in the ITT/Allied agreement. However, he confined his review to the categories Mr. Makuch included in the *226 compensation base and not Mr. Peterson’s categorization. Mr. Enlow assigned the following royalty rates, adjusted for the type of products and combination of patents, as stipulated in the ITT/Allied agreement:
CATEGORY
TYPE OF LICENSED PRODUCT
ENLOW ROYALTY RATES
1A Contact 5%*
IB Component 5%*
2A Contact 5%*
2B Component 5%*
3 Component 5%*
4 Component 4%*
5 Component 6%*
6A Connector 2.25%
6B Connector 3%
11A Component 5%*
11B Connector 2.5%
* 3%, 2%, 2.5% rates doubled for contact and component sales.
Mr. Enlow explained how he applied specific royalty rates to categories. Category 1A was 2.5 percent doubled, because it contained the ’182 patent sold alone. Contacts were treated as components under the ITT/Allied agreement. Category IB similarly was classified and carried the same 5 percent rate. 10 Mr. Enlow testified that categories 2A and 2B could contain the ’182 and ’797 patent individually or in combination. Since both categories required a doubling of the royalty rate, Mr. Enlow concluded that the value of individual patents created a possible 4-6 percent range under the Allied definitions. Therefore, he adopted 5 percent, which was a middle value.
Mr. Enlow concluded that Category 3 required a 5 percent rate since it included components containing the ’182 patent standing alone. Category 4 was for strain reliefs standing alone or sold in connector components, and a rate of 4 percent was applied. Category 5 called for the ’182 pin contacts and ’797 strain reliefs used in combination and sold as components. Mr. En-low applied a 6 percent royalty rate (3 percent doubled).
Categories 6A and 6B were identified by Mr. Makuch as connectors. 6A connectors could contain either ’182 or ’797 patents, but not both. Mr. Enlow again applied a middle value between 2 and 2.5 percent, arriving at 2.25 percent for category 6A. Category 6B identified connectors that contained both the 182 and '797 patents. He concluded that a 3 percent royalty rate was applicable.
The final categories that Mr. Enlow addressed were HA and 11B. Category 11A included components using only the 182 patent. Therefore, a rate of 2.5 percent doubled, or 5 percent applied. Category 11B covered connectors using the 182 patent, so that a rate of 2 percent was applicable.
2. Analysis of ITT/Allied and ITT/Hughes royalty rates
The court is confronted with two “established” licensing agreements, representing divergent royalty rates. It must determine if either is probative of an established royalty rate. However, in contrast to defendant, plaintiff did not present its proof by way of expert analysis. Plaintiff’s Mr. Peterson testified in support of the 1987 ITT/Hughes agreement, and counsel urged that these royalty rates be viewed only as a minimum. Mr. Enlow’s endorsement of the ITT/Allied rates derived from an analysis of Hughes’ and plaintiff’s licensing activities for comparable patents from 1983 through 1987.
Defendant argues that the ITT/Allied agreement should be adopted as representing the true value of the ’182 and ’797 patents at the time of the taking. Since no license agreements had been entered into at the time of the taking in 1978, the court, defendant argues, should look to plaintiff’s first exploitation of the patents which oc *227 curred in 1985. Defendant views the ITT/Allied agreement as representing an established royalty. Alternatively, defendant argues that the ITT/ Allied agreement is highly probative of the fair market value of the patents and in line with license rates proposed by plaintiff and entered into by Hughes for comparable patents.
Plaintiff, on the other hand, claims that the ITT/Hughes licensing agreement royalty rates are only a starting point. Plaintiff believes it is entitled to some increased factor above the Hughes rate, citing Panduit Corp. v. Stahlin Brothers Fibre Work, Inc., 575 F.2d 1152, 1158 (6th Cir.1978). Panduit is inapplicable since its adjustment considerations have no bearing on a section 1498 action. Plaintiff believes that the ITT/Allied agreement and earlier licensing proposals should not control, given that they were made at a time when the validity of the patents was not established. Plaintiff relies on Studiengesellschaft Kohle, m.b.H. v. Dart Industries, 862 F.2d 1564, 1572 (Fed.Cir.1988) (“Kohle”). Kohle does not stand for this proposition; rather, it supports the proposition that a court should look to as many facts as possible in reaching a proper royalty rate. Id. at 1573 . Although a licensing agreement reached after a finding of validity may be “highly probative of a reasonable royalty,” the trial court took the position that other circumstances may discount its probative value. Studiengesellschaft Kohle, m.b.H. v. Dart Indus., 666 F.Supp. 674, 682 (D.Del.1987) (citing Devex Corp. v. G.M. Corp., 494 F.Supp. 1369 (D.Del.1980), aff'd, 667 F.2d 347 (3d Cir.1981), aff'd, 461 U.S. 648 , 103 S.Ct. 2058 , 76 L.Ed.2d 211 (1983)), aff'd, 862 F.2d 1564, 1572 (Fed.Cir.1988). The Federal Circuit in Kohle approved the trial court’s approach, but based its affirmance on its own review of the circumstances surrounding the parties’ settlement, finding it highly probative, even though the infringer faced a permanent injunction, which would close down its operation, and an accounting trial. Kohle, 862 F.2d at 1572 .
Kohle is distinguishable from the case at bar in that at the time of the ITT/Hughes agreement, plaintiff and Hughes already had settled the question of Hughes’ commercial sales by an agreement dated January 1, 1987. Hughes was not facing the prospect of an accounting trial. No injunction could be sought against Hughes for continuing commercial sales, unless Hughes were to violate the settlement agreement in the future. In addition, Hughes could not be enjoined from continued government sales. Decca, 225 Ct.Cl. at 335 , 640 F.2d at 1166 .
The ITT/Hughes agreement cannot be ignored, but its probative value will be determined based upon the circumstances in which it was entered, and a determination of whether it is an indicator of an established royalty rate. As Chief Judge Markey has cautioned, “cases should not be cited for mere words.” Kohle, 862 F.2d at 1572 (citation omitted). The language of a case must be supported by the backdrop of its facts.
Mr. Enlow, defendant’s licensing expert, gave substantial testimony pertaining to the royalty rates that should be applied. Contrary to plaintiffs assertion that “the underpinning of Mr. Enlow’s opinion was wrong as a matter of law,” Plf’s Br. filed Feb. 10, 1989, at 17, because the witness failed to appreciate that the ITT/Allied agreement allegedly was entered into under threat of litigation, the case law would not disregard completely the ITT/Allied agreement on this ground. Moreover, Mr. Enlow did not ignore the ITT/Hughes agreement, as plaintiff contends, in his analysis:
Q Now looking at the license agreement between ITT and Hughes, did you consider this agreement in your evaluation of the reasonable royalty payable by the government for its use of the 182 and 797 patents?
A Well, I did consider the agreement, but I discarded it from my consideration for the reason that it is so late in time compared to 1978. And further—
THE COURT: Compared to 1978? Yes, okay. Go ahead.
THE WITNESS: 1978 being the time of the initial taking. And I further re *228 jected it as — for the reason that it obviously was done under threats from Mr. Cronin or Mr. Peterson, I’m not sure which one threatened them, but they did threaten them with alleged infringement, threatened them with treble damages, willful infringement, and attorney’s fees. And also, if they didn’t take the license that they would shut down Hughes’ commercial business.
So based on the fact that it was an agreement under duress I did not feel it fitted into the usual considerations that negotiations used to point to a reasonable royalty.
Although Mr. Enlow may have been mistaken about the threat of treble damages and the shutting down of Hughes’ commercial business as motivating factors, he did not ignore the ITT/Hughes agreement. Mr. Enlow did cite a letter from plaintiff to Hughes stating that Hughes would be subject to treble damages. In addition, Mr. Szabo’s deposition testimony on this subject indicates that he felt pressured to enter into the licensing agreement with plaintiff, if for no other reason than that Hughes desired to resume its commercial sales and could not do so without a license.
The court agrees with plaintiff that Mr. Enlow gave insufficient consideration to the ITT/Hughes agreement, since he placed so much emphasis on the threat of litigation over what were minor commercial sales that plaintiff had forgiven and did not pursue. The inquiry shifts to whether there is independent evidence that favors or detracts from the applicability of the royalty rates in the ITT/Hughes agreement. The fact that the ITT/Hughes agreement was reached after this court held the patents valid is probative, as in Kohle, but Kohle does not require adoption of royalty rates in an agreement entered into incident to a determination of validity. Rather, Kohle requires analysis of all factors that may bear on the reasonableness of a royalty.
Several factors bode against adoption of the ITT/Hughes royalty rates: First, Mr. Szabo’s impression, even if unfounded, that Hughes was under threat of suit and would lose its commercial business if it did not enter into an agreement with plaintiff; second, Mr. Szabo’s belief that plaintiff represented that the ITT/Allied agreement contained a “most favored nations” clause requiring that Hughes not be given a more favorable rate, although Mr. Szabo said that plaintiff showed some flexibility in going below what he understood to be the ITT/Allied rates; third, Mr. Szabo’s belief that Hughes was receiving rates comparable to the ITT/Allied rates; and fourth, the remote time frame in which the ITT/Hughes negotiations took place in relationship to the taking. In addition, if the Hughes royalty rates for Hughes’ commercial sales are to be adopted, a 20 percent reduction for government end use would be applied. Plaintiff’s 1984 proposal to Hughes, which covered both commercial and sales for government end use, included this reduction for government end use sales. The ITT/Hughes agreement was solely for commercial sales.
It should be pointed out that Mr. Szabo testified by deposition and that this testimony was impressionistic, although he repeatedly made the same points. Mr. Peterson was Mr. Szabo’s counterpart in the negotiations, and he was certain that Mr. Szabo was certain that the threat of litigation was illusory and that no most-favored-nations clause was on the table. However, the Szabo deposition is in evidence and cannot be ignored. Plaintiff could have called Mr. Szabo and clarified these matters at trial.
The ITT/ Allied agreement also has drawbacks. It was negotiated at a time when the validity of plaintiff’s patents was in question. Allied was cognizant of this lawsuit. Allied recognized that if this court found plaintiff’s patents valid, it was faced with the possibility of paying a higher royalty, set by the court, to continue using the patents. A May 10, 1985 memorandum from Roger H. Criss, who conducted the negotiations for Allied, supports this view:
The primary benefit to the Bendix Connector Operation would be to obtain a license under the 38999 Series III fiber optic connector patents at a running royalty rate which is relatively small and at *229 a small downpayment. The alternative would be to await the outcome of the pending litigation brought by ITT against the U.S. and Hughes; if the ITT patents were held valid, most likely the court would set a much higher royalty rate as the measure of damages. If the ITT patents are held invalid, then we would not have to pay any royalties.
One of the factors favoring adoption of the royalty rates in the ITT/Allied agreement was that they were proposed by plaintiff at a time when Allied was aware of a potential liability for infringement. Mr. Criss’ memorandum continues:
The license under the alignment mechanism patent relates to the 4 pin approach used in the 906 series connector. The royalty rate of 1% is considered very reasonable, and our past exposure could have been as high as $50K. As now proposed, we would not have to account for any sales prior to July 1, 1985____
However, plaintiff had not threatened Allied with litigation at the time the ITT/Allied agreement was consummated.
The court also found helpful Mr. Enlow’s application of the 15 Georgia-Pacific factors to the ITT/Allied agreement. Georgia-Pacific Corp. v. United States Plywood Corp., 318 F.Supp. 1116, 1120 (S.D.N.Y.1970), modified and aff'd, 446 F.2d 295 (2d Cir.), cert. denied, 404 U.S. 870 , 92 S.Ct. 105 , 30 L.Ed.2d 114 (1971). 11 Mr. Enlow explained each factor that he considered applicable. In response to his review of the first factor, “[t]he royalties received by the patentee for the licensing of the patent in suit, proving or tending to prove an established royalty,” Mr. Enlow stated that he considered the ITT/Allied agreement the closest to an established royalty because the agreement was entered into freely; it was finalized prior to trial of this lawsuit; it was the culmination of an agreement initiated by Allied’s predecessor; and it gave Allied the right to enter into sublicenses. Allied exercised this right by sublicensing to eight or nine companies.
The second Georgia-Pacific factor applies to rates paid for comparable patents: “[t]he rates paid by the licensee for the use of other patents comparable to the patent in suit.” 318 F.Supp. at 1120 . Mr. Enlow testified that he looked at the August 1983 rates of the Hughes/Elco and Hughes/Bendix agreements because the agreements involved comparable patents entered into at a time proximate to the taking. He viewed these Hughes agreements as useful to determining the value to be placed on the infringed patents. The court views the agreements as indicative of the value Hughes placed upon the infringed patents, since Hughes was licensing the same patents, in the same time frame, and at similar rates as plaintiff proposed and obtained in the ITT/Allied agreement.
The third Georgia-Pacific factor applies to the exclusiveness of the license. Little time was spent on this factor as the ITT/Allied agreement, and the proposals were non-exclusive. The fourth Georgia-Pacific factor involves the patent holder’s marketing practices. Does the patent holder expect “to maintain his patent monopoly by not licensing others to use the invention or by granting licenses under special conditions designed to preserve that monopoly?” 318 F.Supp. at 1120 . Mr. Enlow testified that plaintiff willingly licensed its patents. This would have a tendency to lower royalty rates.
The fifth Georgia-Pacific factor applies to the commercial relationship between li-censor and licensee. Mr. Enlow testified that since the Government was not a competitor of plaintiff the royalty rate would be lower. According to Mr. Enlow, this principle was reflected in several of plaintiff's proposals, which called for a 20 percent reduction for government end use.
The sixth Georgia-Pacific factor is “[t]he effect of selling the patented specialty in promoting sales of other products of the licensee; the existing value of the in *230 vention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales.” 318 F.Supp. at 1120 . Mr. Enlow believed the first part of this factor was inapplicable since the Government was not in the fiber optics business. Mr. Enlow stated that connectors are commodity items and a licensor would not normally expect convoyed sales.
Mr. Enlow further characterized that the seventh Georgia-Pacific factor — duration of the patent — was neutral. The eighth Georgia-Pacific factor reads: “The established profitability of the product made under the patent; its commercial success; and its current popularity.” 318 F.Supp. at 1120 . Mr. Enlow noted that at the time of the taking the product had demonstrated very little profitability. Plaintiff was not yet commercially producing fiber optics products. Currently the market looks to the availability of commercial alternatives. This assertion was supported by the testimony of Mr. Davis. The court also notes the decrease in Hughes’ sales for 1987 and 1988.
The ninth Georgia-Pacific factor is directed to the utility of the patented property. Mr. Enlow opined that connectors had limited utility. They were a commodity item, purchasers had a choice of alternatives, and plaintiff’s product was not pioneering. In his opinion these factors would have a tendency to push the royalty rate down.
The tenth Georgia-Pacific factor applies to the commercial use of the patent as “produced by the licensor” and “the benefits to those that have used the invention.” 318 F.Supp. at 1120 . Mr. Enlow stated that there was little early commercial use of the patent. The patented item itself was not the driving factor behind the purchase of the non-patented connectors. The infringed patents had no special value to the customers. Mr. Enlow found the eleventh factor difficult to assess, but not particularly significant.
The twelfth Georgia-Pacific factor addresses the portions of the profit or selling price which is customarily exacted for use of the invention or analogous inventions. Mr. Enlow testified that the royalty rate is usually keyed to the selling price of the items, as was reflected in the agreements and proposals, and not a percentage of profit. He stated that all of the agreements he reviewed for his testimony related to the selling prices of the connectors. He believed that the ITT/Allied agreement because of its proximity in time to the commercialization of the patents and an established payment history was the best indicator of an established royalty.
The thirteenth Georgia-Pacific factor is “the portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer.” 318 F.Supp. at 1120 . Mr. Enlow testified that the portion of the realizable profit for the patented items would be small, since the patents are only small parts of the connector device. The court agrees with Mr. Enlow’s assertion. The value of the connector with the patented items installed is the best indicator of the marketing value of the patents. See Bendix Corp. v. United States, 230 Ct.Cl. 247, 255-56 , 676 F.2d 606, 611 (1982).
The fourteenth Georgia-Pacifi

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/6826415. Public record. Not legal advice.