Patent Infringement Damages
Patent infringement attorneys have different forms of monetary damages that they can seek on behalf of a patent owner. The minimum monetary damage available to a patent infringement plaintiff who prevails is a reasonable royalty. In the words of the patent statute, a patentee is entitled to “damages adequate to compensate for the infringement, but in no event less than a reasonable royalty.” 35 U.S.C. § 284.
However, the patent infringement lawyer may also pursue a recovery of lost profits on behalf of a patent holder. To establish lost profits, the patent owner must show that there is a reasonable probability that but for the infringement, it would have made the infringer sales.
In proving reasonable royalty damages for patent infringement, the patent infringement attorney usually has to consider and address the following Georgia-Pacific factors:
- The royalties received by the patentee for the licensing of the patent in suit, proving or tending to prove an established royalty.
- The rates paid by the licensee for the use of other patents comparable to the patent in suit.
- The nature and scope of the license, as exclusive, non-exclusive, restricted or non-restricted in terms of territory or with respect to whom the manufactured product may be sold.
- The patentee’s established policy and marketing program to maintain his patent monopoly by not licensing others to use the invention or by getting licenses under special conditions designed to preserve that monopoly.
- The commercial relationship between the patentee and licensee, such as, whether they are competitors in the same territory in the same line of business, or whether they are inventor and promoter.
- The effect of selling the patented specialty in promoting sales of other products of the licensee; the existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or conveyed sales.
- The duration of the patent and the term of the license.
- The established profitability of the product made under the patent; its commercial success, and its current popularity.
- The utility and advantages of the patent property over the old modes or devices, if any, that had been used for working out similar results.
- The nature of the patented invention; the character of the commercial embodiment of it as owned and produced by the licensor; and the benefits to those who have used the invention.
- The extent to which the infringer has made use of the invention; and any evidence probative of the value of that use.
- The portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions.
- The portion of the realizable profit attributable to the invention as distinguished from non-patented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer.
- The opinion testimony of qualified experts.
- Outcome from hypothetical arm’s length negotiation at the time of infringement.
These facts were set forth in Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116, 1119-20 (S.D.N.Y. 1970), modified and aff’d, 446 F.2d 295 (2d Cir.).
The patent infringement attorney may be able to recover enhanced damages on behalf of a patent owner if the infringement is found to be willful. Once a finding of willful or bad faith in regards to the infringement has been made, the district court judge has the discretion to enhance damages by up to three times (3x) the amount of actual damages awarded to the patent owner.
Pre-judgment Interest for Patent Infringement
Pre-judgment interest running from the date of the infringement to the date of the judgment is a common remedy awarded to the patent owner who prevails. Regarding the rate at which pre-judgment interest is calculated, the district court has the discretion to determine whether to use the prime rate, the prime rate plus a percentage, the U.S. treasury rate or some other rate. However, the court may not deny pre-judgment interest simply because the calculation of such interest would be difficult.
Post-judgment Interest for Patent Infringement
Patent infringement attorneys may also recover post-judgment interest on behalf of patent holders who prevail on an infringement. Unlike the trial court’s discretion with respect to pre-judgment interest, there is very little discretion associated with awarding a post-judgment interest. Under federal statute, post-judgment interest is to be paid in every civil action in the federal courts. The post-judgment interest rate is to be calculated from the date of the entry of the judgment, at a rate equal to the weekly average one-year maturity treasury yield as published by the board of governors for the Federal Reserve system.
In exceptional cases, the patent infringement lawyer may recover reasonable attorney’s fees on behalf of the patent owner who prevails on patent infringement claims. The types of conduct by the infringer that may support a showing of exceptional circumstances resulting in an award of attorney’s fees include litigation misconduct and willful infringement.