The proposed change from the current law: 35 U.S.C. § 284; H.R. 1908, the House version of the Patent Reform Act of 2007, p. 22: "Relationship of Damages to Contributions over Prior Art" -

In a reasonable royalty analysis, the court shall identify all factors relevant to the determination of a reasonable royalty under this subsection, and the court or the jury, as the case may be, shall consider only those factors in making the determination. The court shall exclude from the analysis the economic value properly attributable to the prior art, and other features or improvements, whether or not themselves patented, that contribute economic value to the infringing product or process.

Turning back the clock, the House introduced patent reform legislation in September 1945; particularly, a statute devised to move from fiendishly difficult apportionment calculations required at the time, quite like those now proposed, to a simpler reasonable royalty scheme, which is the current law. Following fact finding hearings and refinements, 35 U.S.C. § 284 was enacted a year later, 1946, and has not been altered substantially since. A look back.... from the 1946 hearings -

On January 4, 1929, Mr. Huxley wrote on behalf of the American Bar Association; correspondence 17 years later brought to the attention of the House committee holding hearings.

Absolutely artificial and unsound rules have been invented to solve the impossible problem of how to apportion profits. The result is that there is a complete failure of justice in almost every case in which supposed profits are recovered or recoverable. The only solution of the difficulty is to eliminate the recovery of profits which as been allowed purely because of a series of historical accidents. The only sound principle is to have the plaintiff recover the damages he can prove.

Wisconsin Congressman Robert Henry:

When the court enters a decree finding infringement, the practice is to make reference to a master to take an accounting for the profits derived from the infringement. The inquiry that then ensues grows into a very intricate prolonged and expensive investigation... Testimony to show a reasonable royalty as a basis for granting damages does not become admissible until a showing is made that profits cannot be ascertained. The present bill eliminates an accounting for profits, and makes evidence at once admissible to show reasonable royalty as a basis for general damages.

George Folk, Patent Advisor to the National Association of Manufacturers:

[P]atent litigation is unduly expensive and one of the principal reasons for that is the delay and cost of accounting proceedings.

Edwin Tower of the Milwaukee Patent Bar Association:

The great evil that has grown up around the patent system in accounting is the apportionment of damages and the apportionment of profits that comes from the devices of a complex nature.

I think everyone here probably knows that many of these [patent lawsuits] run from 10 to 20 years, [...] and others I have known have gone on for 20 years. Some now are running that have been running 20 years and all the people that started in the accounting are dead.

Mr. Conder Henry, Assistant Commissioner of Patents:

Frequently a suit for patent infringement involves the infringement of only an improvement in a complex machine, and it is impossible to apportion profits due to the improvement. In such circumstances the proceedings before masters, which are conducted in accordance with highly technical rules and are always expensive, are often protracted for decades and in many cases result in a complete failure of justice.

Mr. Casper Ooms, Patent Commissioner:

What I would like to provide this committee with before it reports is a list of probably a dozen or twenty patent cases showing how long some of them have taken... Many of these cases not only go through a protracted accounting, but if there is any error in the application of the principle, many frequently, upon review in the court of appeals, go back to the district court for a new trial upon the principles announced in the appeal. The result has been that because of some obscurity in the applicable principles, which this statute will largely eliminate, and because of the emphasis in the statute as it is now written upon the availability of profits as a measure of damages, we have had these protracted accountings.

I would like to insert the clipping from The New York Times at this place in the record.

I think it is one of the sorest spots in the enforcement of the law in the United States. It should be rectified and this bill will do a great deal toward eliminating, I think, one of the most notorious cases of the denial of justice because of the delay of justice.

At § 284, the Patent Reform Act of 2007 takes us back to where we never want to go.

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Based upon research of the legislative history of 35 U.S.C. § 284, the patent compensation statute. A hat tip of thanks to David Vandagriff of Helius.