Patent Infringement Damage Calculation In The United States

Hypothetical Negotiation standard comes from the matter of Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970) and its used by the court to calculate reasonable royalties. This is due to the “legal fiction” that an infringer and patent holder had a license agreement in place before an infringement occurred. In Georgia-Pacific Corp. v. United States Plywood Corp., 15 criteria were established, and they are still in use today. 

The 15 criteria are as under: 

1. Proven royalties as evidenced by earlier patent licences. 
2. The licensee pays the cost of other licences for comparable patents. 
3. The form and parameters of the licence (e.g., limitations? exclusivity?). 
4. The patent holder’s present marketing and policy, as well as the degree of monopoly it upholds as a result of its licencing tactics. 
5. How do the parties’ business dealings stand? Are they opponents? 
6. Sales of non-patented goods are priced according to the patented good’s worth. taken into account for both parties. 
7. The term of the licence and the patent. 
8. The commercial success, present appeal, and proven profitability of the patented items. 
9. The patented property’s advantages and usefulness in comparison to earlier technologies that produce equivalent effects. 
10. The nature, the commercial viability, and the user advantages of the innovation. 
11. How extensively did the infringer exploit the invention? Is there proof that its use has been beneficial? 
12. Amount of sales or profit that is typical for the company in issue or comparable brands. 
13. What percentage of the earnings is attributable to the patent as opposed to unpatentable features? Were there commercial risks, production expenses, or substantial upgrades/features the infringer added? 
14. Expert testimony, 
15. What sum would the parties have agreed upon if they had entered into a voluntary and reasonable agreement? 

 By using the approach, a royalty rate percentage is decided based on 15 criteria, then multiple dollar amounts with the infringed product sale amount to calculate the reasonable royalty damages amount.   

This is another way to figure out patent damages. The court examines all the evidence to determine the profits earned by the accuser or infringer from the time since infringing started. The prospective expenditures and expenses are also considered as they might have an impact on profitability. The appropriate royalty damages are calculated by multiplying the percentage of the patent owner by the actual infringing sales’ dollar sales. When all the necessary details and evidence are determined, a decision is made on the profit percentage assigned to the patented technology. 

 In many cases, when a patent is registered then only the patent infringement damages can be recovered. But due to the 1999 changes to the Patent act, some solutions become accessible before a patent is granted.  

The owner may be entitled to fair royalties if it can be demonstrated that (1) the infringing party had “actual notice” of a published application and (2) the ultimately issued patent is “substantially identical” to the published application. This holds true for any infringement that takes place between the patent’s publication and the issue. 

 One another approach to determine the lost profits are the Panduit factors. The Panduit factors has been used previously by the Federal Circuit in the courts to determine awards. An accuser may be eligible for compensation based on actual profit losses by indicating the following factors: 

• How popular is the patented product at the present time? 
• What would have been the profit made by the product?  
• Evidence that there were no suitable alternatives that were not infringing 
• Marketing and production capacity existed to meet the demand.