Maximizing Recovery/Limiting Exposure
The intellectual property law attorneys of WHGC, advise and represent clients in patent disputes involving many of the leading information technology and technology-related institutions around the world. Our ability to effectively litigate and negotiate patent disputes has enabled us to preserve the interests of our clients, whether prosecuting or defending our clients’ rights. Contact us to arrange an initial consultation.
Richard F. Cauley (1955-2011), former firm partner and former member of our intellectual property litigation team, authored the book: Winning the Patent Damages Case, A Litigator’s Guide to Economic Models and Other Damage Strategies. Clients of WHGC, benefit from his depth of experience and comprehensive knowledge of the law.
In patent infringement litigation, plaintiffs can generally recover for lost profits and for price erosion, or in some cases, for reasonable royalty:
- Lost profits through lost sales: Recovery for lost sales is determined based upon an analysis of the defendant’s profits derived from the infringed product, the plaintiff’s profit margin, and the plaintiff’s market share to such profits (based upon the number of competitors in the market).
- Lost profits through price erosion: Recovery for price erosion is based upon the reduction of profit margins endured by the plaintiff in order to compete with the market (as a result of the defendant’s infringement).
- Reasonable royalty: When the plaintiff cannot demonstrate lost profits, the plaintiff can recover a reasonable royalty as determined by the jury based upon a hypothetical negotiation. Due to the challenges associated with demonstrating profit losses in patent infringement litigation — even when the plaintiff actively practices the patent — many cases apply the reasonable royalty remedy in determining patent damages.
When only a component of a product is infringed upon, how are patent damages allocated? Allocation of patent damages is a critical issue that can significantly influence the overall recovery in patent infringement disputes. Allocation is a highly debatable issue that is currently an issue of discussion and controversy in the courts. Did the patent holder lose sales due to the infringement of the product component? What is the significance of the patented technology to the product and the marketability of the product? Such issues can be critical elements that are weighed in determining whether the full market share value of a product or royalty base should be used in determining the patent damages award.
Contact an Intellectual Property Law Attorney
Our patent litigation attorneys can help clients maximize their recovery or limit their exposure to costly patent damages in infringement disputes in the United States and abroad. Contact WHGC, for fierce protection of your intellectual property rights and your business interests in the U.S., Asia, Europe, or elsewhere. All legal consultations are conducted in strict confidentiality.