Law and Economics of Calculating Patent Damages
The fight over damages at the conclusion of a patent infringement trial is always contested, and one issue lost can easily skew the math dramatically. Factor in compounding pre-judgment and post-judgment interest, as well as a potential enhancement multiplier for willful infringement under 35 U.S.C. 285, and parties fight over everything relating to damages.
Apportionment remains the general rule, and debate constantly centers on the smallest sellable patentable unit (SSPU). Still, there remains a viable entire market value rule that will compensate the patent owner based on the entire sale price without apportionment when the patented features were the sole driver of consumer demand.
And lost profits as a form of damages instead of a reasonable royalty (which are always a possibility) may become more commonplace if the industry does see the predicted rise in competitor versus competitor patent infringement lawsuits driven by C-suite executives looking to monetization their patent portfolios to make up for lost revenues elsewhere.
These and other issues will no doubt come into focus as the Federal Circuit inevitably considers the several recent billion-dollar infringement awards and patent litigation funders are beginning to flood the market with new money, which means more patent infringement cases.
Amidst all of this, our panel will examine current U.S. damages law, various economic methods and models for calculating damages, under what circumstances the entire market value rule is viable, trends relating to enhanced damages, and how to present damages evidence at trial.