Lost Profits in Intellectual Property Cases
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Stanley P. Stephenson
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Gauri Prakash-Canjels
Abstract
Much has been written about various remedies in litigation involving intellectual property (“IP”) infringements, some economic and other non-economic. A common remedy across different types of IP is lost profits. This paper explores similarities and differences among different types of IP infringement: patent, copyright, trademark, and trade secrets. Common elements needed in any lost profits claim, especially causality, are presented and along with damages implications for plaintiff and infringer by type of IP. These are a few of issues considered along with brief discussion of key statutes, cases, and the alternative of damages based on reasonable royalty rates.
Appendix
A The 15 Georgia Pacific Factors used to determine a Reasonable Royalty Rate under the construct of Hypothetical Negotiation in estimation of IP Reasonable Royalty Damages
IP Experts often rely on the factors listed below to estimate reasonable royalty damages. One is advised to look at other factors as well that may impact a hypothetical licensing negotiation between the IP owner and the infringer. The hypothetical negotiation is assumed to occur sometime before the infringement began.
| 1. Royalties paid for the patents | 9. Advantages of the patent |
| 2. Royalties for similar patents | 10. Benefits to the user |
| 3. Scope of thelicense | 11. Evidence probative of value |
| 4. Established licensingpolicies | 12. Customary industry practices |
| 5. Relationship of the parties | 13. Profits attributable to patents |
| 6. Collateral or convoyed sales | 14. Expert opinions |
| 7. Duration of the license | 15. Construction of a hypothetical negotiation |
| 8. Established profitablility |
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