Intellectual property (IP) often is among the most valuable assets of a business. IP encompasses patents, copyrights, trademarks/trade packaging, and trade secrets. Damages claims may be brought by companies or individuals who are patent holders, have copyrighted works or hold other IP that they believe has been infringed. TEG economic experts use forensic economics to quantify economic damages from patent, copyright, and trademark infringement, in individual and class action suits. These losses are grounded in lost profits and/or reasonable royalties.
Brief Review of the Scope of IP Litigation
When quantifying lost profits in a patent infringement matter, the parties to the lawsuit typically consider the four-part test set forth in Panduit Corp v Stahlin Bros Fibre Works, 575 F2d 1152 (6th Cir 1978), i.e., demonstrating a demand for the patented product, the absence of non-infringing alternatives, the existence of sufficient manufacturing and marketing capacity on the part of the plaintiff, and the plaintiff’s ability to quantify lost profits.
Should lost profits arising from lost sales not be recoverable, the plaintiff will typically present a damages demand based on the award of a reasonable royalty. This requires consideration of a hypothetical negotiation between the patent holder and the infringer prior to the date of the first alleged infringement. Such an analysis is generally conducted through consideration of the 15 factors set forth in a seminal case, Georgia-Pacific Corp v United States Plywood Corp, 318 F Supp 1116, 1120 (SDNY 1970).
Economic Analysis Provided by the Tinari Economics Group
Laws prohibit business practices that unreasonably restrain trade and deprive consumers of the benefits of competition. Courts often rely on economic analysis in formulating their decisions in IP cases, typically including product and geographic markets, market structure, and the competitive environment. At TEG, we understand the impact of market pressures and competitive practices on business. We analyze the impact of price-fixing, mergers, horizontal and vertical restraints of trade, monopolization, abuse of dominant position, price discrimination, exclusionary behavior, and predation.
Please contact our forensic economists or give us a call at (973) 992-1800 to discuss your case.