1.    The Royalties Paid For The Use Of Another’s Intellectual Property Rights

The fees that are paid for intellectual property rights (IPR) are termed “royalties” because historically they were property granted to inventors under royal charters. As often as not, today they are called “license fees” because the IPR is more commonly rented as opposed to being sold outright (alienated completely).
When “royalty” is used as an adjective, for example in “royalty” rates, a more complicated concept is expressed regarding a more sophisticated kind of business relationship. The term “rates” refers to something that may change as a function of time and/or quantity. Consequently, “royalty rates” can refer and apply to many different situations, each of with having significant advantages as well as inevitable disadvantages.

In real-life, “royalty rates” are often based upon some kind of economic valuation of an IPR asset and the price that is paid for its de facto rent. To make such an economic “valuation” there are numerous methods for attempting such an estimate as well as for calculating one. Elsewhere on this website, the basic definitions of these important concepts as well as the methods of IPR valuation are explained plus links to other resources are given.

2.    How Much, Is A Question Everyone Wants The Answer To
 
The “royalty rates” paid for the use of the IPR of others are principally a product of pragmatic bargaining by business people in the economic marketplace. In relatively few markets are transactions either open and transparent. Prudently most parties keep their bargained conditions confidential. Thus the primary sources from which one might obtain answers about actual prices that are paid is hidden.

Just as Mother Nature is said to abhor a vacuum, a “free” market (which is not the same thing as an “open” market) reacts creatively to the secrecy of others. There have arisen commercial, fee-for-service databases that search-out, compile the particulars of many actual transactions, license conditions, plus the royalty rates paid and share such information with their paying customers.

An inferior source, in terms of where one may “find” quantified data about “royalty rates,” are court cases where they sometimes arise as subjects in heated contention. Right now we look at the contemporary American experience. Although there exist pure contract disputes where royalty rates (e.g., their ambiguity) may be litigated in state courts (see the interesting and significant story about Asahi Kasei Pharma infra), most often “royalty rate” matters are heard in the federal courts, which have exclusive jurisdiction over IPR, and it is in the Federal Circuit, U.S. Court of Appeals where those appeals merge and by-in-large receive a final judicial determination.

So life is much more about what can be experienced in practice rather than what either logic or theory would predict. We focus on some court decisions made during 2011 and 2012, five consider changing royalty rates concepts and ongoing intellectual property right controversies.

Those court decisions plus thoughtful analyses are widely available including on-line, via the Internet e.g., (http://www.findlaw.com & http:/law.justia.com). Also, the American University Law Review (http://www.aulawreview.org/) devotes one of its six issues every year to the decisions of that Federal Circuit in the area of IPR and astutely culls, dissects, and analyzes those opinions for what is important and what is not.

3.    Five Examples Of Royalty Rate Concepts Involved In Recent Judicial Decision-Making

Logically the most direct route to determining damages when a patent infringement dispute arises is evidence of “lost-profits” as a measure of the damages. This has been what Apple has pursued in its notorious and substantially successful litigation against Samsung regarding the patents involved in their respective smartphones and tablet computers.

However proof of “lost profits” is difficult at best and so a great many patentees resort instead to seeking a reasonable “royalty rate.”

One widely talked about as well as often misunderstood patent valuation method used in licensing is what is confusingly referred to as “the twenty-five percent rule.” The confusion begins with the matter of “25%” of “what.” In short, but only slightly more intelligible is the explanation that it is “25%” of the expected profit from the economic realization of the product that incorporates the patent being licensed. However, take note please, of the unknowns contained in the adjective “expected” and the noun “profits.” Frustratingly but as a matter of fact, in our modern world there, unfortunately, exists no agreement about a harmonized and unitary system of financial accounting, much less, regarding when there is and what is “profit.” Still, in an imperfect world, this has been a widely employed guideline for and methodology used in the valuation of IPR.

Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 98 U.S.P.Q.2d (BNA) 1203 (Fed. Cir. 2011), reh'g en banc denied, 420 F. App'x 992 (Fed. Cir. 2011).

At trial, the district court had found that Microsoft’s “product activation” feature infringed upon Uniloc USA, Inc. and Uniloc Singapore Private Limited’s U.S. Patent No. 5,490,216. Specifically, the jury, after hearing testimony from Uniloc’s expert applying the “25 percent” rule and indicating that the entire market value was $19 billion, returned a verdict awarding to Uniloc $388 million in damages.

Microsoft successfully challenged this outcome before a three judge panel (that included Chief Judge Rader) of the Court of Appeals. And it is important to note that Uniloc’s subsequent petition for a rehearing en banc (i.e., before all of the judges on that court) was denied.
Notably, the Federal Circuit rejected both the “25%” rule and the Uniloc expert’s application of another IPR valuation concept–“the entire market value” rule. The former seemingly nullifies all future use of “25%” rule as an IPR valuation method. The latter rejects the Uniloc expert’s invocation of “the entire market value” rule on the facts of this case and in addition, spurns Uniloc’s argument that the $19 billion was not offered as proof of the “entire market value” but as a merely comparative check on the “25%” rule valuation.

The “entire market value” rule requires that the patented feature or component creates the basis for customer demand or substantially creates the value of the component parts. In the Uniloc case, it was clear both that the accused “product activation” key was not the reason that customers purchased MS-Office or MS-Windows and that Uniloc did not base its proposed royalty on the “entire market value” rule (i.e., Uniloc characterized the $19 billion in revenue figure as being offered only as a comparative “check”). The Circuit concluded that the use of this approach, even as a mere “check,” was prejudicial and improper.
Regarding the “25%” rule the three judges strongly disparaged the “25%” rule of thumb as a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation. They condemned it as an abstract and largely theoretical construct failing to satisfy the fundamental requirement of providing a factual basis to associate the royalty rates used in prior licenses with the particular hypothetical negotiation at issue.

Rather than starting with an arbitrary number derived via the “25%” rule, the Federal Circuit explained that evidence of a reasonable royalty must always be tied to the relevant facts and circumstances of the particular case, such as the specific technology, industry, or party.

Some undoubtedly will ask which other IPR valuation methodology is less abstract and theoretical. Because the U.S. Constitution limits American federal courts to actual cases and live controversies, the Federal Circuit neither offered alternatives nor pronounced some other methodology as being superior. Certainly, the problem will arise again but the options of infringed upon patent holders to attempt to prove damages have been narrowed and made more difficult.

Spectralytics, Inc. v. Cordis Corp., 649 F.3d 1336, 99 U.S.P.Q.2d (BNA) 1012 (Fed. Cir. 2011), reh'g en banc denied, No. 2009-1564, 2011 U.S. App. LEXIS 17784 (Fed. Cir. 12 Aug. 2011)

In Spectralytics, Inc. v. Cordis Corp., the Federal Circuit faced a question of what were reasonable royalties and affirmed the district court’s determination that defendants Cordis Corporation and Norman Noble, Inc. willfully infringed Spectralytics, Inc.’s U.S. Patent No. 5,852,277 plus that a 5 percent royalty should apply to Noble’s infringing sales.

During trial, expert testimony established that a 20 percent royalty was reasonable and appropriate in light of the practices in the trade and given that Spectralytics did not appeal the jury’s 5 percent royalty rate, it was concluded that the jury’s choice of a 5 percent royalty rate was not “outrageously high” and therefore not excessive. The Circuit affirmed holding that the 5 percent royalty awarded by the jury to Spectralytics was not excessive with the explanation that a party challenging a jury damages verdict “must show that the award is, in view of all the evidence, either so outrageously high or so outrageously low as to be unsupportable as an estimation of a reasonable royalty.” It observed that, in accordance with 35 U.S.Code §284, the damages should be “in no event less than a ‘reasonable royalty’ for the use made of the invention by the infringer.”

Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 100 U.S.P.Q.2d (BNA) 1742 (Fed. Cir. 2011), reh'g en banc denied, No. 2010-1409, 2012 U.S. App. LEXIS 4876 (Fed. Cir. 10 Feb. 2012)

In Powell v. Home Depot U.S.A., Inc., the Federal Circuit affirmed, along with several other things, the district court’s denial of Home Depot U.S.A., Inc.’s challenges to the calculation of a “reasonable royalty.”

First, the Circuit explained that a “reasonable royalty” could be larger than Powell’s expected profits had the saw guards been sold to Home Depot because (1) a reasonable royalty is based on a hypothetical negotiation as of the time of infringement, whereas the potential sale of the guards would have occurred several years prior; and (2) “[w]hile either the infringer's or the patentee's profit expectation may be considered in the overall ‘reasonable royalty’ analysis, neither is an absolute limit to the amount of the ‘reasonable royalty” that may be awarded upon a reasoned hypothetical negotiation analysis under the Georgia-Pacific factors.”  
[Georgia-Pacific is shorthand for the name of a famous 1970 court decision–Georgia-Pacific versus U.S. Plywood Corporation, 318 F. Supp. 1116–where a Southern District of New York judge listed 15 factors as determinative of what monetary award would compensate for infringing upon someone else’s IPR. While not the only method for determining a “reasonable royalty,” these factors are perhaps the most common framework used by CPA and damage experts for analyzing the licensor’s and licensee’s respective positions. The factors are at (http://www.journalofaccountancy.com/Issues/2008/Sep/How+Reasonable+Is+Your+Royalty.htm).]

Second, the Circuit reasoned that the jury’s “reasonable royalty” calculation was supported by substantial evidence because it fell within the range proposed by Powell’s damages expert. The court reiterated that “[t] he jury was entitled to choose a damages award within the amounts advocated by the opposing parties.” Thus, the Federal Circuit concluded that the damages award was not “so outrageously high. . . as to be unsupportable as an estimation of a reasonably royalty.”

LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51 (Fed.Cir., 2012)

In LaserDynamics, Inc. v. Quanta Computer, Inc., the Federal Circuit looked at several aspects of computing a “reasonable royalty.” One aspect of its computation is
the proper date of the “hypothetical negotiation.” Despite the clear rule that “the date of the hypothetical negotiation is the date that the infringement began,” the district court set the date as August, 2006, the date the lawsuit was filed. The lower court had reasoned that August 2006 was the proper date because Quanta was not aware of the patent until that date and Quanta was accused of active inducement, which requires knowledge of the patent.

The Federal Circuit clarified the difference between when infringement began versus when Quanta first became liable for infringement. In particular, it identified 2003 as the hypothetical negotiation date and reasoned that, “to permit a later notice date to serve as the hypothetical negotiation date, the damages analysis would be skewed because, as a legal construct, we seek to pin down how the prospective infringement might have been avoided via an out-of-court business solution.”

The Circuit also addressed when the “entire market value” rule applies. The short answer is that it does not apply very often. When a patented feature is part of a larger product, the “entire market value rule” applies only when “the demand for the entire product is attributable to the patented feature.” Here, the LaserDynamics patented feature relating to optical drives was not shown to be the force behind the demand for laptop computers. It was held that it was not enough to show that the patented feature was “valuable, important, or even essential to the use of the laptop computer.” Indeed, if that were sufficient, “a plethora of features of a laptop computer could be deemed to drive demand for the entire product.”

Instead of using the “entire market value,” the court applied the “smallest salable patent-practicing unit” standard. Here, the patented feature applies to an optical disk drive and so the smallest salable patent-practicing unit was an optical disk drive. The “commodity-type” disk drives provided by Quanta were the proper royalty base, not laptop computers with optical drives.

The Circuit also looked at what types of existing licenses are most probative for making a royalty rate calculation. First, licenses entered as part of settlement agreements to terminate litigation are typically not probative. In this case, LaserDynamics focused on one specific settlement agreement that was entered by a defendant facing a “severe legal and procedural disadvantage given the numerous harsh sanctions imposed on it by the district court.” The Circuit referred to this license as “the least reliable license by a wide margin.”

A key criterion for identifying reliable (and therefore comparable) license agreements is their relevance to the patented technology. In particular, actual licenses for the asserted patent are highly probative because they “reflect the economic value of the patented technology in the marketplace.” In contrast, licenses with a “vague comparability” are not probative.

Finally, the Circuit rejected LaserDynamics’ proposal to prove a “royalty rate” based on two other DVD-related patent licensing programs, because there was insufficient evidence to show they were comparable. These unrelated patent licenses were held to be particularly irrelevant because LaserDynamics had multiple license agreements for the actual patented technology.

ePlus, Inc. v. Lawson Software, Inc., 700 F.3d 509 (Fed. Cir. 2012) –

In ePlus, Inc. v. Lawson Software, Inc., the Federal Circuit provides a warning to litigators about damages experts. Any expert who conveys a lopsided view may be excluded as unreliable. ePlus had previously entered into five settlement agreements, each of which could have been relevant to an appropriate “royalty rate” in the immediate case. The licensing arrangements in these settlements were vastly different yet ePlus's expert essentially ignored three involving small sums. That was one of the reasons that the district court found the analytical methods of ePlus's expert to be “flawed and unreliable.” In addition, the licenses were obtained during litigation, and included lump sums for multiple patents. Under an abuse of discretion standard, the Federal Circuit had adequate evidence to affirm the district court's exclusion of the expert.”

In addition to excluding ePlus's only damages expert, the district court also precluded ePlus from presenting any evidence of damages during trial. It had been concerned that last-minute additions of damages evidence could cause an unacceptable delay and expose Lawson to prejudice. The Circuit affirmed this ruling as well, under the same abuse of discretion standard.

4.    Licenses–Where are they happening–What is being licensed–Who are the parties –What terms are being offered and used–What royalty rates are inventors receiving


Each reader of this site has his or her individual and special interests. Thus before offering any examples of recent or notable licenses, it is important to recommend where and how each of you can search on your own for useful information. This is possible as well as necessary as no one knows better than you the questions and topics of greatest interest and highest priority to you.

Internet search engines are where you should begin and we commend starting with Google as the one having indubitably superior search algorithms. In addition, the usual and repeated information website resources to go to include (but are not limited to) governmental agencies, bodies, commissions, departments, and organs where periodic registration is legally obligatory (e.g., see the U.S. Securities & Exchange Commission’s EDGAR database see [http://www.sec.gov/edgar.shtml]. Then there are non-governmental private sector business resources engaged in the gathering, compilation, and on a fee-for-service basis sale of information (e.g., on credit-worthiness see Dun & Bradstreet [http://www.dnb.com] & Hoovers [http://www.hoovers.com].

Specific to the topic of licenses, there are at least four commercial, fee-for-service companies that dig for and offer for sale information about IPR licensing transactions. Alphabetically, they are
(a) Consor® [<http://www.consor.com>];
(b) Financial Valuation Group [<http://www.fvginternational.com>];
(c) ktMINE [http://ktMINE.com ];
(d) RoyaltySource [<http://www.royaltysource.com>].

Even without your spending any money, several of them offer explanatory materials as well as examples of their work product that can almost certainly improve your understanding of this complex subject.

For example, Consor has on its staff–Weston Anson who has written extensively on traditional as well as alternative IPR valuation methods. He is an authority on this essential subject, and members and website readers would be wise to consult his writings directly (http://consor.com/intellectual-property-advice/putting-a-price-on-trademarks.html; http://consor.com/intellectual-property-advice/traditional-intangible-assets-valuation-techniques.ht...; http://consor.com/intellectual-property-advice/valuation-approaches.html; http://consor.com/intellectual-property-advice/alternative-ip-valuation-methodologies.html) and his Fundamentals of Intellectual Property Valuation: A Primer for Identifying & Determining Value (American Bar Association, 2005].

5.    SDOs–SEPs–FRAND–RAND

Within the realm of IPR licensing, the world of high technology, and the domain of the Internet there are acronyms galore. The inter-operability of the hardware and software that we all use and take for granted is dependent upon an endless stream of scientific advances being transformed into perfectly seamless and compatible devices and programs. More fundamentally, it requires formal consensus about the standards (e.g., the H.264 video coding standard; WiFi [IEEE-802.11], USB [1.x; 2.0; 3.0; 3.1], and the pervasive 3G, 4G, plus 5G International Telecommunications Union [ITU]) that allow things as well as people to work together see generally (http://www.pijip.org/standards-essential-patents-and-frand-licensing/).

SDOs are the standards organizations that meld industrial, academic, plus governmental perspectives and requisites into a compatible and functioning framework and hierarchy. Most of these standardized products involve patentable and patented technical solutions.

SEPs are standard-essential patents that is IPR, being that is essential to the harmonious operation of our modern way of life.

It is licensed on what are termed “fair, reasonable, and non-discriminatory” (FRAND) terms and conditions. RAND is at the core of FRAND i.e., without the “fair” part.
The question of how such qualitative criteria can be translated into market prices has been deeply analyzed in Microsoft Corporation v. Motorola, Incorporated, No. C10-1823, 2013 WL 2111217 (W.D. Wash. 25 April 2013). Although, there is still no definitive methodology for calculating answers, among the cogent common questions are when and how is the royalty associated with a particular patented technology commensurate with the actual value that that technology adds to the overall standard as well as to the product in which it is implemented? This lead Judge Robart to adopt a modified set of the fifteen Georgia-Pacific factors tailored to the determination of a RAND rate, along with three steps “which provide a framework for any court attempting to determine a RAND licensing rate for a given portfolio:”
(1) the importance of the patent portfolio to the standard,
(2) the importance of the patent portfolio as a whole to the alleged infringer’s accused products, and
(3) other licenses for comparable patents.

Other courts have since followed Judge Robart’s lead see In re Innovatio IP Ventures, LLC Patent Litigation (Northern District of Illinois, Eastern Division, MDL Docket No. 2303, Case No. 11 C 9308), Memorandum Opinion, Findings, & Order dated 17 October 2013 http://www.kslaw.com/library/newsletters/ITCSection337Update/2013/October_17/Decision.pdf).


6.    News About The Licensing-Oriented Times In Which We Live


People – Qualcomm has named the former head of its technology licensing group as its new president, a move that could serve it well in the wireless industry’s current litigious environment. Derek Aberle was a central to the negotiating of licenses for Qualcomm with Samsung, Nokia, and Motorola. He also helped to craft the “legal and business strategies” that resolved several of the company’s licensing disputes.

Aberle reports to Steve Mollenkopf, who recently became CEO after serving as Qualcomm’s president and chief operating officer. Aberle’s appointment likely brings to a close the latest executive shuffle at the top of Qualcomm. Those changes began in December when rumors surfaced that Mollenkopf was being considered for the Microsoft CEO job. Qualcomm reacted swiftly to the rumors and named Mollenkopf as its next CEO, replacing Paul Jacobs, who was made executive chairman. Mollenkopf has been seen as critical to Qualcomm’s achieving success in mobile and wireless. Aberle’s new role makes him responsible for overseeing all business divisions. He is also charged with coming up with strategies to diversify and grow the company.

Companies & licensing agreement litigation in American state courts – Previously, the evolving conceptions about royalties in the Federal Circuit, U.S. Court of Appeals were reviewed. In so doing, it was noted that contractual disputes about licenses are regularly litigated in the state court systems of America’s 50 states plus the District of Columbia.

Recently, a relatively obscure pharmaceutical lawsuit and California Court of Appeal decision (18 December 2013, <http://www.courts.ca.gov/opinions/documents/A133927.PDF>) have put many of the so-called technology titans “on edge” involving a licensing agreement gone contractually “wrong.”

In 2006, Asahi Kasei Pharma entered into a licensing arrangement with CoTherix, a California “startup.” CoTherix agreed to develop an Asahi angina drug called fasudil, which still needed testing and approval from the U.S. Food and Drug Administration. In 2007, CoTherix was acquired by Actelion, a Swiss drug company that was intensely interested in another CoTherix product that had already received FDA approval. The new corporate parent, Actelion, ordered its new subsidiary to stop developing fasudil, citing the risks of dangerous side effects.

Asahi got back its rights to develop fasudil and pursued arbitration against CoTherix, alleging the breach of the licensing agreement. Asahi prevailed and CoTherix paid about $90 million in contract damages, interest, plus attorneys’ fees.

Although that was the end of the contractual claim for breach of the licensing agreement, it did not foreclose a tort action for Actelion’s alleged illegal interference with the licensing agreement between Asahi Kaesi and Cotherix. In 2011, Asahi sued in San Mateo superior court and a California jury awarded it several hundreds of millions of dollars for the lost profit potential of fasudil had it been taken to market plus in punitive damages. After a reduction made by the trial judge. the damage award came to about $400 million. In a 79-page slip opinion, the First Appellate, Division Five, affirmed that result.

There are two issues germane to licensing deals around the world that had many clamoring for the California Supreme Court to use its discretionary review and hear Acetelion’s appeal. Firstly, companies that grow by serial acquisition fear the Actelion precedent can expose them to open-ended liability over licensing disputes involving smaller new-technology companies. While those engaged in corporate takeovers can make a decent estimate of the contract claim costs of reneging on a subsidiary’s licensing agreement, the tort of interference with another’s contract rights  is much more expansive, e.g., allowing a jury to make a guess at the magnitude of damages caused. Secondly, companies are angered about the manner in which the Actelion jury was allowed to estimate Asahi Kaesi’s lost profits. Because fasudil had not yet received the FDA’s safety approvals, Actelion protests that there is no way that a jury could have rationally decided that there had been several hundred million dollars in lost profits. But on 12 March 2014, those California justices unanimously denied review of Actelion’s appeal.


7.    Patent Auctions

So far, we have reviewed a variety of approaches to the pricing of the right to use the intellectual property of another viz., the empirical specifics of prior deals involving similar IPR; theoretical methodologies that have evolved over time (e.g., the so-called “25%” rule); standards-related IPR where FRAND principles to constrain costs apply. Yet another approach of relatively recent implementation in practice is the mechanism of the auction.

Today, just as there are a bounty of IPR financial information databases, there are also several companies engaged in the business of convening and managing patent auctions e.g.,
[i] (http://www.patentauction.com/);
[ii] (http://www.ipofferings.com/patent-auction.html);
[iii] (http://icappatentbrokerage.com/auction);
[iv] (http://www.ipauctions.com/);
[v] (http://www.ebay.com/sch/Patents-Trademarks-/50973/i.html);
[vi] (http://www.oceantomo.com/auctions.html);
[vii] (http://www.newsobserver.com/2014/02/18/3632990/royalty-exchange-moves-into-patent.html).

In general these involve organized bidding for national patents that have completed their prosecution and been granted. Some others involve a combination of more narrow (e.g., Royalty Exchanges will focus upon entertainment and patent royalties whereas icappatentbrokerage emphasizes the use of sealed bids) and others yet more broadly envisioned auctions (e.g., ipofferings promises to auction specific and focused patent marketing packages together with an associated marketing program for that specific patent or portfolio).

Together, these firms tout that they have conducted many auctions and generated quite considerable income. But no substantial evaluations are as yet in hand i.e., some quantification of the degree of satisfaction on the part of inventors as well as IPR licensees and buyers.  


8.    Governmental Regulators As IPR Licensing Gate-Keepers – The Example of the U.S. Food & Drug Administration (FDA)


As was seen in the Asahi Kasei Pharma licensing agreement litigation, a major gate-keeping function is served by the American federal government regulator responsible for the safety of the food and drugs that it allows to compete in this economically attractive and affluent marketplace.

While each nation has similar regulatory bodies, the FDA has a distinctive history of being thorough in the performance of its work, which includes a categorical non-recognition of the prior regulatory approvals granted by the foreign regulatory organs of other countries (see., <http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/ImportingandExportingDevices/ucm050126....

The first delineation made by the FDA is as (see http://www.fda.gov/default.htm) between:
(a) food,
(b) drugs,
(c) medical devices,
(d) radiation-emitting products,
(e) vaccines, blood, and biologics,
(f) animal and veterinary,
(g) cosmetics, plus
(h) tobacco products.

Thus begins a venerable legal “game” of how to “characterize” something including questions regarding:
(i)    what the constituent identifying elements are,
(ii)    who get the right to make the initial “characterization,” and
(iii)    what evidentiary credibility does that “characterization” receive.

Generally the characterized categories of drugs and medical devices face somewhat less onerous scrutiny than that of medical devices and products emitting radiation.
Owing to the extensive FDA labyrinth of categories and sub-categories, the example case of a radiation-emitting medical device for the application of therapeutic treatment in the sphere of wound healing is summarized.

The specific framework of federal statutes and regulations that govern devices and products that do emit radiation is found at (http://www.fda.gov/Radiation-EmittingProducts/ElectronicProductRadiationControlProgram/LawsandRegula.... Those normative provisions further critically delineate between the
(a) ionizing,
(b) optical,
(c) radio frequency/microwave, and
(d) acoustic regions of the electromagnetic spectrum
(see http://www.fda.gov/downloads/Radiation-EmittingProducts/ElectronicProductRadiationControlProgram/Law...) with the first two groups being more scrupulously regulated owing to their greater hazard. In parallel, those provisions (using the matrix set forth in the immediately preceding URL), differentiate between the intended uses of those devices viz.,
(1) medical-diagnostic;
(2) medical-therapeutic;
(3) medical-surgical;
(4) medical-other;
(5) scientific-other;
(6) industrial;
(7) security-business/commercial;
(8) consumer.

Remarkably, the FDA provides a so-called industry-assistance “walk-through” (http://www.fda.gov/Radiation-EmittingProducts/ElectronicProductRadiationControlProgram/GettingaProdu...) that is intended to help those manufacturing radiation-emitting products (both non-medical and medical) to get guidance plus access to FDA’s policies, procedures, and reporting documents all at one place. In seven detailed questions, it elaborates just where and how to start.