Patent Infringement Damages

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 What Is a Patent?

A patent for an invention is a grant of property rights to the inventor. The United States Patent Trademark Office issues patents. A patent term is usually 20 years from the application’s filing. A patent is only effective within the United States.

Patenting is a lengthy process that can take up to five years to complete. An application for a patent is filed with the U.S. Patent and Trademark Office, paying the appropriate fees, and responding to office actions.

If someone infringes on your patent, you should be able to prevail in a patent infringement suit. Usually, however, the patent owner and the alleged infringer settle instead of going to trial. If your case goes to trial and you are found guilty of infringement, you will likely get damages to compensate you for the losses caused by the infringement. The court may also award injunctive relief.

Patent infringement actions are governed by section 284 of the Patent Act. They are available only if the patent owner defeats any defenses raised by the alleged infringer, such as arguments regarding the patent’s validity or the extent to which the infringer’s product or process complies with a patent claim. If a jury does not hear the case, a judge will decide damages.

Damages should be sufficient to compensate for the infringement and should at least correspond to a reasonable royalty for the infringer’s use of the patented invention. It is also possible for the court to award up to three times the actual damages incurred if the judge believes that the situation warrants it.

Why Do I Need a Patent?

Patents are filed to prevent others from stealing their ideas and making money off them after they patent that idea. If you want to patent an idea, you should first research it to ensure it isn’t infringing on anyone else’s patent. This will ensure your idea hasn’t already been patented.

What Happens If a Patent is Violated?

If a patent were to be violated, it would be called patent infringement. A patent infringement is a serious offense that usually leads to a civil lawsuit. This is generally filed by the patent owner against a company or person who uses the patent invention without their permission. A party liable for patent infringement may have to pay damages to the patent holder for any business losses caused by the violation.

The liable party may also need to forfeit any unauthorized items to local enforcement authorities. Criminal charges can sometimes arise in very serious cases, especially related to white-collar crimes.

What Is Patent Infringement?

An infringement of a patent involves the unauthorized use, production, sale, or offer for sale of the subject matter of another’s patent. Patents come in many forms, including utility patents, design patents, and plant patents. Patent infringement, on the other hand, refers to the act of an unauthorized party using a patent in some way without the owner’s consent.

In determining whether infringement has occurred, a court typically compares the subject matter covered by the patent with the subject matter used by the “infringer.”

A violation occurs when the violator uses the same exact subject matter as the patented material. However, in many cases, infringement may occur if the subject matter is very similar to the patented item or design.

What Types of Damages Are Available in a Patent Infringement Lawsuit?

Patent infringement lawsuits can result in higher damages awards than other types of lawsuits. Certain statutes, such as the Patent Act, allow plaintiffs to recover damages that are not normally available in tort actions (namely, triple damages).

Patent infringement claims are usually settled by a “reasonable” royalty paid by the defendant to the plaintiff for the unauthorized use. The amount is calculated based on different factors, such as the fair market value of the patent at the time of the violation.

Patent infringement damages may also include:

  • Treble damages: As mentioned, these are damages that are worth triple the amount of the losses actually caused by the infringement. A treble damages award of $30,000, for example, can be awarded if the infringement caused $10,000 in losses.
  • Profits: The plaintiff can sometimes recover the profits that the defendant would have received from selling the patent
  • Punitive damages: Punitive damages are normally not awarded unless the defendant acted knowledgeably and willfully in the infringement. As part of the treble damages award, punitive damages may sometimes be included; this is called “enhanced damages.”
  • Other costs: In severe cases, the defendant may be ordered to pay additional costs such as attorney’s fees, court costs, and interest rates associated with the patent
  • Injunctions: While not technically a form of damages, an injunction can be issued to order the defendant to cease the infringing conduct

In the event of a patent violation, the injured party can recover substantial damages.

What Are “Indirect” Patent Infringement Damages?

Patent infringement claims are also notable for the concept of “indirect damages”. These are damages not directly caused by the infringement but are still reasonably related to the infringement.

Imagine that a patent covers a device with multiple features. If the defendant infringes on only one of the features, the plaintiff may be able to recover losses associated with the entire device, not just the infringed features. This is known as the “entire market value” rule.

Reasonable Royalties and Lost Profits

In patent infringement actions, the two main types of damages are reasonable royalties and lost profits. It is important to note that the Patent Act does not limit damages to certain types, so a judge can award appropriate damages under the circumstances.) A reasonable royalty is the fair market value of a license the infringer would have purchased from the patent owner, who would receive royalties for the invention’s use. The court might calculate the fair market value of a license for one infringing item and then multiply it by the number of infringing items.

Furthermore, damages for lost profits compensate the patent owner for any money they would have made if the infringement had not occurred. Your business must prove that it suffered losses as a result of the infringement in order to claim damages. You might be able to prove that your invention separated your products from those of your competitors so that consumers chose your products. If your competitor steals your invention, then more consumers buy their products because your invention has improved them, you may be able to argue that those profits should have been yours.

Courts frequently consider expert testimony when determining the amount of reasonable royalties and lost profits. In this case, juries and judges will likely not be familiar with the industry in which the patent owner and the infringer operate. In addition, they may not be aware of the market value of a certain product or process. To support your argument for damages, your patent attorney can help you hire an expert and present other industry evidence. In addition, the defendant may retain an expert and present conflicting evidence to support a lesser award.

Do I Need a Lawyer for Patent Infringement Damages?

The law covering patent infringement damages is very comprehensive and can sometimes be confusing. There are many factors for a court to consider when awarding damages for patent infringement, as you can see. Suppose you need assistance with patent infringement damages.

In that case, a patent lawyer in your area can represent your interests in court so that you can recover the full amount of damages available to you.


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