A new PWC study shows reasonable royalties are the most frequent kind of damages awards in patent cases and comprise a greater share with each passing year, while seeking recovery of lost profits can be costly and complex.
In order to determine lost profits, without data on specific sales taken by an alleged infringer from the patent holder, an assessment of particular facts and circumstances in a "but for" situation must be made. This assessment examines whether there is:
-demand for the product tied to the patent’s claims; and
-an absence of acceptable alternate substitutes.
In addition, the assessment determines:
-if the patent holder has adequate manufacturing and marketing capabilities;
-if there is sufficient financial information to complete the quantification; and
-market share data to fairly allocate the infringer’s sales, if needed.
BVR offers ktMINE for practitioners seeking a reasonable royalty rate solution, plus Nancy Fannon’s 2011 guide to Calculating Lost Profit in IP and Patent Infringement Cases will be ready for shipment in December.