When the exclusive rights of an invention that is federally protected are violated, the patent owner may be eligible for damages. Any awarded damages are set to reimburse owners for the losses faced as a result of the patent infringement.
Under certain conditions, the damages may be nominal and filing a patent claim may be pointless. In these situations, it may be best to draft a patent cease and desist letter, which may prove to be successful at stopping the infringement from continuing. If you have suffered substantial damages as a result of these violations or the possibility for such an outcome exists, patent litigation may be the best recourse. Michael Ahmadshahi is a patent attorney serving San Diego and Southern California with nearly 20 years of experience with patent application and litigation.
Filing a Lawsuit Over an Invention
Before patent infringement damages can be received, it is necessary to patent your invention. By patenting the invention at the United States Patent and Trademark Office (USPTO), you will be providing the general public a notice of your rights as an inventor. Simultaneously, you will be securing your ability to collect damages related to the infringement. Failing to patent your invention will result in your competitor’s ability to capitalize on your creative work without any concern.
In some situations, you may have a hybrid device comprising of patented parts and parts that include trade secrets. In order to qualify as a trade secret, certain requirements must be fulfilled:
- A monetary value must be procured from maintaining the trade secret.
- The invention must not be easily ascertainable or readily known.
- Reasonable efforts should be made to maintain the invention’s secrecy.
It should be noted that a patentable item could also qualify as a trade secret. This will offer the opportunity to protect the item though patent and secrecy.
Available Damages Following a Patent Infringement
Following an infringement on your invention, there are multiple avenues to obtain financial compensation from the infringing party. Infringement damages are usually collected when there is a loss of profits but they can also include attorney fees and court costs. The following are common damages sought:
Reasonable Royalties – The most commonly sought after damages in patent infringement cases are referred to as reasonable royalties. When a party has been found to have infringed upon a patent, the court will be tasked with deciding the license’s fair market value. Usually done by establishing a “legal fiction”, the court will determine the license’s fair market value by assuming the parties involved have willingly entered into a licensing agreement before use.
When assessing the fictional agreement, the court will then focus on the time at which the infringement began. This process is largely evidence-based, and in many cases, experts will be brought in to testify. Generally, the court will calculate the license’s fair market value on a single item. Then it will multiply the determined calculation by the amount of times the patent was infringed upon.
A Loss of Profits – A court can also grant an award that is based on the actual profits that were lost as a result of the infringement. A ruling over lost profits may be challenging to obtain as a result of elevated evidentiary standards. Nonetheless, in many cases, it can result in a higher degree of compensation.
To demonstrate a loss of profits, the plaintiff will need to demonstrate a correlation between the losses of his or her business and the infringement. This can be difficult to ascertain as defendants may claim the invention is not the sole factor consumers consider when purchasing.
Damages for Design Patent Infringement – A plaintiff in a design patent infringement case may also be eligible for lost profits or reasonable royalties. When analyzing the loss of earnings, there are many market factors that could make it challenging to prove that a certain loss was directly attributed to the infringement.
Intellectual property laws recognize that the development of a product will affect the patentee’s profits from the product. Infringers are not usually burdened by development costs, and it is likely that they will make a higher profit while also entering the market at much lower prices.
Willful Damages – A patent infringement will not always be intentional or malicious in nature. When a court has determined that a violation was made in a deliberate manner, the infringer will likely face willful damages. When willful damages are awarded, it is likely an infringer will also be obligated to pay for the patentee’s attorney fees and court costs.
Contact the Legal Support of a Proficient Intellectual Property Attorney serving San Diego
Following a patent infringement, the ability to recover financial compensation may be possible. Speak to a qualified attorney to discuss your legal options.
At Michael Ahmadshahi, PhD, Law Offices, the firm’s priority rests on helping their client’s defend their intellectual property, including patent litigation. Michael Ahmadshahi, PhD, Law Offices understand the severity a patent infringement can have on a company. As a consequence, the firm will work tirelessly to ensure maximum damages are recoverable. Consider contacting Michael Ahmadshahi, PhD, Law Offices today for a no-obligation consultation.