What are Patent Infringement Damages? A Quick Overview
What are Patent Infringement Damages?
Patent infringement damages are those monetary rewards available to patent owners and licensees whose patented/licensed invention is used, made, or sold in an unauthorized manner. The two main forms of patent infringement damages are reasonable royalties and lost profits. Treble damages and attorneys’ fees are also available in cases of willful infringement.
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A patent is a form of intellectual property which gives an inventor the right to exclude others from making, using, offering for sale, selling, or importing an invention—for a limited time. Patents are infringed through the “unauthorized making, using, offering for sale, or selling any patented invention within the United States, or importing into the United States any patented invention during its term.” See Managing a patent, United States Patent and Trademark Office. Once a patent has been infringed, certain monetary damages become available to the patent owner, as prescribed by both courts and the Patent Act.
Patent Infringement Damages under the Patent Act
35 U.S.C.A. § 284, the “Damages” section of the Patent Act, does not explicitly enumerate the possible types of damages, however, federal courts have distilled their discretion into two main forms of patent infringement damages—reasonable royalties and lost profits—with reasonable royalties setting the floor.
Reasonable royalties are the fair market value of any license that an infringer would have purchased from the patent owner, who would receive royalties for the use of the invention. The Patent Act provides that courts may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances. Further, a court might calculate the fair market value of a license for one infringing item and then multiply that value by the number of items that infringed.
Lost profits are the profits the patent owner would have made but for the defendant’s infringement of the patent. The wrinkle with lost profits is that, to make them available, the patent owner must show they suffered losses specifically because of the patent infringement. This essentially boils down to proving that your improperly used, patented invention distinguished the infringer’s products from others’, such that consumers choose the infringer’s products because of the improperly used invention.
Treble Damages & Attorneys’ Fees
Treble damages refer to money damages three times the amount of determined actual damages. Such a powerful remedy is only available where the patent owner shows the infringement was willful. This is done by showing the defendant knew of the patent and either copied the patent or tried to design around it. If these things are proven, attorneys’ fees may also be available to the patent owner.
A patent owner seeking to protect the incredible value associated with their intellectual property should be knowledgeable about the potential damages recoverable following any infringement and seek qualified counsel to aid in the process.
For more information on patents and intellectual property in general, see our patent services and intellectual property practice pages.
Klemchuk PLLC is a leading IP law firm based in Dallas, Texas, focusing on litigation, anti-counterfeiting, trademarks, patents, and business law. Our experienced attorneys assist clients in safeguarding innovation and expanding market share through strategic investments in intellectual property.
This article is provided for informational purposes only and does not constitute legal advice. For guidance on specific legal matters under federal, state, or local laws, please consult with our IP Lawyers.
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