A presentation on brief summary of rules for the damage calculations in USA were done as part of class assignment for the IP in Asia Module of IPKM course to compare it with rules for damage calculations in similar patent infringement cases in China and Europe. *For Educational purpose only. The contents of the presentation is a compilation and summary taken from different sources in public domain and any relevance to rights violation are deemed not intentional and for personal use only.

1. Rules For Damage Calculation
in Patent Infringement
In United States
Ravi Teja Chittipotu (I6099735)

2. The United States
of America

3. 35 U.S.C 284
Damage awarded must be "adequate to
compensate for the infringement, but in no
event less than a reasonable royalty for
the use made of the invention by the
infringer, together with interest and costs
as fixed by the court."

4. I. Lost Profits
Lost profits are awarded only if the
patentee can show causation in fact,
establishing that ‘but for’ the infringement,
the patentee would have made additional
profits.
A. "But For" Causation and the Panduit
Test
B. Compensable Losses

5. A. "But For" Causation and the Panduit Test:
(Panduit Corp. v. Stahlin Bros. Fibre Works,
575 F.2d 1152, 1156 (6th Cir.1978)).
To qualify, patentee need to establish:
(1) demand for the patented product;
(2) absence of acceptable non-infringing
substitutes;
(3) manufacturing and marketing capability to
exploit the demand;
(4) the amount of the profit the patentee would
have made.

6. B. Compensable Losses
After a determination is made that the patentee is
entitled to an award of lost profits, the court must
determine the amount of lost profits to which the
patentee is entitled.
1. Patented Product
2. Unpatented Products
3. Unpatented Components and the Entire
Market Value Rule
4. Price Erosion
5. Future Lost Profits
6. Lost Profits for Pre-infringement Conduct

7. II. Reasonable Royalty
If the patentee cannot establish "but for"
causation for an award of lost profits, he is
entitled to a reasonable royalty award.
A reasonable royalty is the amount that a
hypothetical licensee would be willing to pay the
patentee for a license to make, use, or sell the
patented product while still earning a reasonable
profit on that product.
- Georgia-Pacific Corp. v. United States Plywood
Corp., 318 F.Supp. 1116, 1120 (S.D.N.Y. 1970)

8. III. Limitations on Damages
The patent statute imposes only two limitations on
the patentee's entitlement to damages.
A. The Six Year Limitation
B. The Notice Limitation

9. A. The Six Year Limitation
Section 286 Paragraph 1 provides that "no
recovery shall be had for any infringement
committed more than six years prior to the
filing of the complaint or counterclaim for
infringement in the action."
This limits the period during which damages
may be recovered.

10. B. The Notice Limitation
1. Actual notice
2. Constructive notice

11. IV. Willfulness and Enhancement of Damages
-35 U.S.C. 284 Paragraph 2 provides that the
court may increase the damages up to three
times the amount found or assessed.
-the infringement must be found, by clear and
convincing evidence, to be willful.
- Corp. v. Portec, Inc., 970 F.2d 816, 826, 23
U.S.P.Q.2d 1426, 1435 (Fed. Cir. 1992)

12. V. Other Awards
A. Attorney Fees
- Section 285 allows in cases involving willful
infringement, inequitable conduct before the
USPTO, misconduct during litigation, and
vexatious or unjustified litigation or frivolous suit.
- Beckman Instruments, Inc. v. LKB Produkter
AB

13. B. Pre- Judgment Interest
- In 1983, the United States Supreme Court
construed that "prejudgment interest should be
awarded under section 284 incase of absence of
justification for withholding such an award.
- award of prejudgment interest is necessary to
ensure that the patent owner is placed in as good
a position as he would have been had the
infringer not infringed.

14. C. Costs
Rule 54(d)(1) of the Federal Rules of Civil
Procedure
(1) clerk and marshal fees;
(2) court reporter fees;
(3) printing and witness fees;
(4) copying fees;
(5) docket fees; and
(6) compensation for court-appointed experts,
interpreters, and special interpretation services.

15. Conclusion
In U.S, the purpose of the damage can be
compensative as well as punitive, in case of
willful infringements.
The patentees can choose to prove his lost profits
or other compensatory loss or apply for the
reasonable royalty.
However if patentee cannot prove the lost profits,
the court can calculate the damages through the
latter approach.

16. THANK YOU