Just like the years-long process of applying for and receiving a patent from the USPTO, a patent infringement case can also last several years while you continue to lose money. Infringement disputes are often settled out of court for this and other reasons. Because of the complexity of markets and existing patent laws, calculating damages in these cases are often reached after testimony from expert witnesses. Judges may also award damages not specifically laid out in patent law, which adds to the complexity. There are a few common types of damages awarded in infringement cases, which are explained below.
Injunction
While not considered damages in the classical sense, an injunction is a court order mandating that the defendant must cease the behaviors that are perceived to be infringing an existing patent. Preliminary injunctions are merely temporary orders that last during the trial itself. If the defendant is found to have committed infringement, then a preliminary injunction can become a permanent injunction.
Reasonable Royalties
The two conventional avenues for judges or juries to award damages to victims of infringement cases are the “reasonable royalties” and “lost profits” classes. The court will calculate the fair market value of an otherwise-legally purchased license and apply it to the patent in question to determine the amount the patent owner would have received. This amount is known as the “reasonable royalty.” Existing patent law states that plaintiffs in infringement cases should not be awarded less than the reasonable royalty amount.
Lost Profits
This class of damages is less likely to be awarded to plaintiffs due to the difficulty in showing that hypothetical profits were actually lost. To be awarded damages pursuant to lost profits, you must show that your business entity missed out on profits related to your patent. This is often done by showing that the defendant received income based on the sales of products that used your patent.
Sec. 284 and Punitive Damages
The specific section of U.S. Patent Law that deals with damages in infringement cases is 35 U.S. Code Sec. 284. As was explained earlier, a plaintiff that is successful in litigating a patent infringement case should not be awarded less than the reasonable royalty amount. However, the section goes on to state that damages awarded to the plaintiff may be up to three times the amount originally assessed. This amount is commonly referred to as “treble” damages. If the court finds that the defendant acted willfully and intentionally in the infringement, then punitive damages may be tacked on to the assessed amount.
Conclusion
Patent infringement cases are complex and can be a significant drain on time and resources. However, proper registration and upkeep of your patent can protect you in the event that an outside party engages in patent infringement. To make sure your intellectual property stands up to rigorous scrutiny, reach out to Van Court & Aldridge today at (347) 470-6620.
Van Court & Aldridge LLP
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