Intellectual Property: Valuation, Exploitation and Infringement Damages 2013 Cumulative Supplement, 11th Edition

CHAPTER 45

NEW MEASURE OF INFRINGEMENT DAMAGES—FUTURE DAMAGES (NEW)

  45.1 ROYALTY RATE FOR FUTURE DAMAGES

  45.2 WHAT ABOUT FUTURE LOST PROFITS?

Patent infringement damages have traditionally been measured by lost profits, a reasonable royalty, or price erosion. In some cases only one measure is appropriate. Sometimes damages are calculated as a combination of two or more of these measures. If a judge's discretion to increase damages for willful infringement by a defendant is counted, then four measures of damages exist. In July 2008, U.S. District Judge Ron Clark, in the U.S. District Court for the Eastern District of Texas, who sits in Beaumont, Texas, sent an order to lawyers in several Eastern District cases, saying that “under some circumstances, the court may award an ongoing royalty for patent infringement in lieu of injunctive relief.” Damages awards may now include future damages. A fifth measure of damages has been born as a substitute for gaining a permanent injunction against the infringing defendant.

In 2006, the U.S. Supreme Court decision in eBay Inc. v. MercExchange, 547 U.S. 388, said that lower courts should not be automatically issuing injunctions in patent cases. According to the Court, to obtain a permanent injunction against a defendant,

the plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance ...