Patent Remedies and Damages Dictionary
Below are terms of art in patent remedies and damages law defined in the court’s own words, a glossary of sorts.
| Term | Category | Definition |
| A | ||
| Acceptable Non-Infringing Alternatives | Lost Profits | “Under this factor, if there is a noninfringing alternative which any given purchaser would have found acceptable and bought, then the patentee cannot obtain lost profits for that particular sale. For example, if the customer would have bought the infringing product without the patented feature or with a different, non-infringing alternative to the patented feature, then the patentee cannot establish entitlement to lost profits for that particular sale. And this determination is made on a customer-by-customer basis.” Mentor Graphics v. Eve-USA |
| Actual Notice | Marking and Notice | “To serve as actual notice, a letter must be sufficiently specific to support an objective understanding that the recipient may be an infringer. The letter must communicate a charge of infringement of specific patents by a specific product or group of products. However, when the threshold specificity is met, the ensuing discovery of other models and related products may bring those products within the scope of the notice.” Funai Electric v. Daewoo Electronics |
| Apportionment | Lost Profits, Reasonable Royalty | “[A]pportionment is an important component of damages law generally, and… it is necessary in both reasonable royalty and lost profits analysis.…[A] patentee must take care to seek only those damages attributable to the infringing features…. [Apportionment] ensures that damages are commensurate with the value of the patented features.” Mentor Graphis v. Eve-USA |
| Article of Manufacture | Design Patent Total Profits | “Arriving at a damages award under § 289 thus involves two steps. First, identify the article of manufacture to which the infringed design has been applied. Second, calculate the infringer’s total profit made on that article of manufacture…. The term ‘article of manufacture,’ as used in § 289, encompasses both a product sold to a consumer and a component of that product.” Samsung v. Apple |
| Attorney Fees | Attorney Fees | “The Patent Act’s fee-shifting provision authorizes district courts to award attorney’s fees to prevailing parties in exceptional cases.” Octane Fitness v. Icon Health |
| B | ||
| Balance of Hardships | Injunctions | “[T]he balance of hardships assesses the relative effect of granting or denying an injunction on the parties.” I4i v. Microsoft |
| But-For Materiality | Inequitable Conduct | “As a general matter, the materiality required to establish inequitable conduct is but-for materiality. A prior art reference is but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed prior art. In determining the materiality of a reference, the court applies the preponderance of the evidence standard and gives claims their broadest reasonable construction…. A reference is not but-for material, however, if it is merely cumulative.” Regeneron v. Merus |
| C | ||
| Case or Controversy | Declaratory Judgment | “[A] case or controversy must be based on a real and immediate injury or threat of future injury that is caused by the defendant[]—an objective standard that cannot be met by a purely subjective or speculative fear of future harm…. [Declaratory jurisdiction] generally will not arise merely on the basis that a party learns of the existence of a patent owned by another or even perceives such a patent to pose a risk of infringement, without some affirmative act by the patentee.” Asia Vital v. Asetek Danmark |
| Causal Nexus | Injunctions | “[T]he causal-nexus requirement just means that there must be proof that the infringement causes the harm that the patentee alleges is irreparable…. [P]roving a causal nexus requires the patentee to show some connection between the patented features and the demand for the infringing products.” Genband US v. Metaswitch |
| Colorably Different | Injunctions | “In evaluating whether an injunction against continued infringement has been violated by a newly accused product, courts must follow [a] two-step test…. First, a party seeking to enforce an injunction must show that the newly accused product is not more than colorably different from the product found to infringe. The analysis should focus on those aspects of the accused product that were previously alleged to be, and were a basis for, the prior finding of infringement, and the modified features of the newly accused product.
Where one or more of the elements previously found to infringe has been modified or removed, the court must determine whether that modificationis significant. If so, the newly accused product is more than colorably different from the infringing product, and contempt is not the appropriate remedy. Instead, a new infringement action must be brought regarding the newly accused product. If, however, the court concludes that the differences are not more than colorable, the court must then go on to the second step and determine whether the newly accused product in fact infringes the relevant claims.” Proveris v. InnovaSystems |
| Convoyed Sales | Lost Profits | “To be entitled to lost profits for convoyed sales, the related products …must be functionally related to the patented product and losses must be reasonably foreseeable. Being sold together merely for “convenience or business advantage” is not enough. If the convoyed sale has a use independent of the patented device, that suggests a non-functional relationship.” Warsaw Orthopedic v. NuVasive |
| Cost Savings | Reasonable Royalty | “[The] requirement for valuing the patented technology can be met if the patentee adequately shows that the defendant’s infringement allowed it to avoid taking a different, more costly course of action. A price for a hypothetical license may appropriately be based on consideration of the costs and availability of non-infringing alternatives and the potential infringer’s cost savings.” Prism Techs. v. Sprint Spectrum |
| D | ||
| Demand For The Patented Product | Lost Profits | “All that the first factor states, and thus requires, is demand for the patented product. This factor does not require any allocation of consumer demand among the various limitations recited in a patent claim. Instead, the first Panduit factor simply asks whether demand existed for the patented product, i.e., a product that is covered by the patent in suit” or that directly competes with the infringing device.” Depuy Spine, Inc. v. Medtronic Sofamor Danek |
| E | ||
| Enhanced Damages | Willfulness and Enhancement | “[D]istrict courts have discretion to increase damages up to three times the amount found or assessed. Enhanced damages are generally only appropriate in egregious cases of misconduct, such as willful, wanton, or malicious behavior. But an award of enhanced damages does not necessarily flow from a willfulness finding. Discretion remains with the court to determine whether the conduct is sufficiently egregious to warrant enhanced damages.” Presidio v. American Technical Ceramics |
| Entire Market Value Rule | Reasonable Royalty and Lost Profits | (EMVR) “When a patentee seeks damages on unpatented components sold with a patented apparatus, courts have applied a formulation known as the entire market value rule to determine whether such components should be included in the damage computation, whether for reasonable royalty purposes or for lost profits purpose.” The EMVR applies for “the entire apparatus containing several features when the patent-related feature is the basis for customer demand…. [T]he unpatented components must function together with the patented component in some manner so as to produce a desired end product or result. All the components together must be analogous to components of a single assembly of be parts of a complete machine, or they must constitute a functional unit.” Rite-Hite v. Kelley |
| Equitable Estoppel | Equitable Estoppel | “Three elements are required for equitable estoppel to bar a patentee’s suit: (1) the patentee, through misleading conduct (or silence), leads the alleged infringer to reasonably infer that the patentee does not intend to enforce its patent against the alleged infringer; (2) the alleged infringer relies on that conduct; and (3) the alleged infringer will be materially prejudiced if the patentee is allowed to proceed with its claim.” Radio Systems v. Lalor |
| Exceptional Case | Attorney Fees | “[A]n exceptional case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is exceptional in the case-by-case exercise of their discretion, considering the totality of the circumstances.” Octane Fitness v. Icon |
| G | ||
| Georgia Pacific Factors | Reasonable Royalty | “[T]he factors include:
(1) royalties the patentee has received for licensing the patent to others; (2) rates paid by the licensee for the use of comparable patents; (3) the nature and scope of the license (exclusive or nonexclusive, restricted or nonrestricted by territory or product type); (4) any established policies or marketing programs by the licensor to maintain its patent monopoly by not licensing others to use the invention or granting licenses under special conditions to maintain the monopoly; (5) the commercial relationship between the licensor and licensee, such as whether they are competitors; (6) the effect of selling the patented specialty in promoting sales of other products of the licensee; (7) the duration of the patent and license term; (8) the established profitability of the product made under the patent, including its commercial success and current popularity; (9) the utility and advantages of the patent property over old modes or devices; (10) the nature of the patented invention and the benefits to those who have used the invention; (11) the extent to which the infringer has used the invention and the value of that use; (12) the portion of profit or of the selling price that may be customary in that particular business to allow for use of the invention or analogous inventions; (13) the portion of the realizable profit that should be credited to the invention as opposed to its non-patented elements; (14) the opinion testimony of qualified experts; and (15) the results of a hypothetical negotiation between the licensor and licensee…. [The Federal Circuit does] not require that witnesses use any or all of the Georgia–Pacific factors when testifying about damages in patent cases. If they choose to use them, however, reciting each factor and making a conclusory remark about its impact on the damages calculation before moving on does no more than tell the jury what factors a damages analysis could take into consideration. Expert witnesses should concentrate on fully analyzing the applicable factors, not cursorily reciting all fifteen. And, while mathematical precision is not required, some explanation of both why and generally to what extent the particular factor impacts the royalty calculation is needed.” Whitserve v. Computer Packages |
| I | ||
| Inequitable Conduct | Inequitable Conduct | “To prevail on the defense of inequitable conduct, the accused infringer must prove that the applicant misrepresented or omitted material information with the specific intent to deceive the PTO. The accused infringer must prove both elements — intent and materiality — by clear and convincing evidence. If the accused infringer meets its burden, then the district court must weigh the equities to determine whether the applicant’s conduct before the PTO warrants rendering the entire patent unenforceable.” Therasense v. Becton Dickinson |
| Irreparable Harm | Injunctions | “Evidence of potential lost sales alone does not demonstrate irreparable harm. However,… loss of revenue, goodwill, and market position are evidence of irreparable harm. Where the injury cannot be quantified, no amount of money damages is calculable, and therefore the harm cannot be adequately compensated and is irreparable.” LEGO v. Zuru |
| L | ||
| Laches | Laches | “[I]n order to assert the defense of laches, the defendant must prove two essential elements: (1) unreasonable and inexcusable delay in the assertion of the claim; and (2) material prejudice to the defendant resulting from this delay, but the longer the delay, the less need there is to show specific prejudice…. Because of the 6-year limitation in section 286, therefore, a 6-year delay is presumptively an unreasonable one for filing a patent infringement suit.” Leinoff v. Louis Milona Sons |
| Likelihood of Success | Injunctions | “To establish a likelihood of success on the merits, a patentee must show that it will likely prove infringement of the asserted claims and that its infringement claim will likely withstand the alleged infringer’s challenges to patent validity and enforceability. A preliminary injunction should not issue if the accused infringer raises a substantial question concerning either infringement or validity.” Metalcraft of Mayville v. Toro |
| Lodestar Method | Attorney Fees | “In calculating an attorney fee award, a district court usually applies the lodestar method, which provides a presumptively reasonable fee amount, by multiplying a reasonable hourly rate by the reasonable number of hours required to litigate a comparable case.” Lumen View v. Findthebest.com |
| Lost Profits | Lost Profits | “Full compensation [for patent infringement] includes any foreseeable lost profits the patent owner can prove. To recover lost profits, the patent owner must show ‘causation in fact,’ establishing that ‘but for’ the infringement, he would have made additional profits. When basing the alleged lost profits on lost sales, the patent owner has an initial burden to show a reasonable probability that he would have made the asserted sales ‘but for’ the infringement. Once the patent owner establishes a reasonable probability of ‘but for’ causation, “the burden then shifts to the accused infringer to show that the patent owner’s ‘but for’ causation claim is unreasonable for some or all of the lost sales.” Rite-Hite v. Kelley
Panduit v. Stahlin Bros. Fibre Works, “articulated a four-factor test that has since been accepted as a useful, but non-exclusive, way for a patentee to prove entitlement to lost profits damages.” Rite-Hite v. Kelley |
| M | ||
| Marking Requirement | Marking and Notice | “The patentee bears the burden of pleading and proving he complied with § 287(a)’s marking requirement.… If a patentee who makes, sells, offers for sale, or imports his patented articles has not given notice of his right by marking his articles pursuant to the marking statute, he is not entitled to damages before the date of actual notice.… A patentee’s licensees must also comply with § 287…. [A]n alleged infringer who challenges the patentee’s compliance with § 287 bears an initial burden of production to articulate the products it believes are unmarked patented articles subject to § 287. …Once the alleged infringer meets its burden of production, however, the patentee bears the burden to prove the products identified do not practice the patented invention.” Arctic Cat v. Bombardier Recreational |
| O | ||
| Ongoing Royalty | Reasonable Royalty | “Under some circumstances, awarding an ongoing royalty for patent infringement in lieu of an injunction may be appropriate. … In most cases, where the district court determines that a permanent injunction is not warranted, the district court may wish to allow the parties to negotiate a license amongst themselves regarding future use of a patented invention before imposing an ongoing royalty. Should the parties fail to come to an agreement, the district court could step in to assess a reasonable royalty in light of the ongoing infringement.” Paice v. Toyota Motor |
| P | ||
| Panduit Factors | Lost Profits | “Under the Panduit test, a patentee is entitled to lost profit damages if it can establish four things: (1) demand for the patented product; (2) absence of acceptable non-infringing alternatives; (3) manufacturing and marketing capability to exploit the demand; and (4) the amount of profit it would have made.” Mentor Graphis v. Eve-USA |
| Patent Exhaustion | Patent Exhaustion | “When a patentee sells one of its products,… the patentee can no longer control that item through the patent laws—its patent rights are said to exhaust. The purchaser and all subsequent owners are free to use or resell the product just like any other item of personal property, without fear of an infringement lawsuit…. [P]atent exhaustion is uniform and automatic. Once a patentee decides to sell—whether on its own or through a licensee—that sale exhausts its patent rights, regardless of any post-sale restrictions the patentee purports to impose, either directly or through a license.” Impression Products v. Lexmark International |
| Permanent Injunction | Injunctions | “[A] plaintiff seeking a permanent injunction… 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 of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” Ebay v. MercExchange |
| Preliminary Injunction | Injunctions | “A plaintiff seeking a preliminary injunction must establish that it is likely to succeed on the merits, that it is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in its favor, and that an injunction is in the public interest.” Astrazeneca v. Apotex |
| Prevailing Party | Attorney Fees | “To be the prevailing party, [the courts] require: (1) that the party received at least some relief on the merits, and (2) that relief must materially alter the legal relationship between the parties by modifying one party’s behavior in a way that directly benefits the opposing party.” SSL Services v. Citrix Systems |
| Price Erosion | Lost Profits | “To recover lost profits on a theory of price erosion, a patentee must show that but for infringement, it would have sold its product at a higher price. The patentee must also present evidence of the (presumably reduced) amount of product the patentee would have sold at the higher price. Moreover, the patentee’s price erosion theory must account for the nature, or definition, of the market, similarities between any benchmark market and the market in which price erosion is alleged, and the effect of the hypothetically increased price on the likely number of sales at that price in the market.” Ericsson, Inc. v. Harris |
| R | ||
| Read Factors | Willfulness and Enhancement | “When deciding how much to award in enhanced damages, district courts often apply the non-exclusive factors articulated in Read Corp. v. Portec….
The Read factors consider (1) whether the infringer deliberately copied the ideas of another; (2) whether the infringer, when he knew of the other’s patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed; (3) the infringer’s behavior as a party to the litigation; (4) the defendant’s size and financial condition; (5) the closeness of the case; (6) the duration of the defendant’s misconduct; (7) remedial action by the defendant; (8) the defendant’s motivation for harm”; and (9) whether the defendant attempted to conceal its misconduct.” Georgetown Rail v. Holland |
| Reasonable Royalty | Reasonable Royalty | “A patent owner, having prevailed on liability, may receive a reasonable royalty or lost profits, but not both for the same infringing units. There is no dispute … about the propriety of using the common hypothetical-negotiation approach to calculating a reasonable royalty, under which the finder of fact attempts to ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agreement just before infringement began. The amount of damages presents a fact question, reviewed for substantial evidence in a jury-tried case, and the underlying methodology is reviewed for an abuse of discretion, including consistency with governing legal principles.” Asetek Danmark A/S v. CMI USA |
| S | ||
| Section 283 | Injunctions | “The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.” 35 U.S. C. § 283 |
| Section 284 | Reasonable Royalty; Lost Profits; Enhancement | “Upon finding for the claimant the court shall award the claimant damages 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.
When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed.” 35 U.S. C. § 284 |
| Section 285 | Attorney Fees | “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. § 285 |
| Section 286 | Limitation on Damages | “Except as otherwise provided by law, 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.” 35 U.S. C. § 286 |
| Section 287 | Marking and Notice | “Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented…. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.” 35 U.S. C. § 287 |
| Section 289 | Design Patent Total Profits | “Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250….
Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement.” 35 U.S. C. § 289 |
| Section 292 | False Marking | “(a)Whoever, without the consent of the patentee, marks upon, or affixes to, or uses in advertising in connection with anything made, used, offered for sale, or sold by such person within the United States, or imported by the person into the United States, the name or any imitation of the name of the patentee, the patent number, or the words ‘patent,’ ‘patentee,’ or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; or
Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word ‘patent’ or any word or number importing that the same is patented, for the purpose of deceiving the public; or Whoever marks upon, or affixes to, or uses in advertising in connection with any article, the words ‘patent applied for,’ ‘patent pending,’ or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public— Shall be fined not more than $500 for every such offense. Only the United States may sue for the penalty authorized by this subsection.
(b)A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.
(c)The marking of a product, in a manner described in subsection (a), with matter relating to a patent that covered that product but has expired is not a violation of this section.” 35 U.S. C. § 292 |
| Section 298 | Willfulness and Enhancement | “The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.” 35 U.S. C. § 298 |
| Smallest Salable Patent-Practicing Unit | Reasonable Royalty | (SSPPU) “[W]here multi-component products are accused of infringement, the royalty base should not be larger than the smallest salable unit embodying the patented invention…. Where small elements of multi-component products are accused of infringement, calculating a royalty on the entire product carries a considerable risk that the patentee will be improperly compensated for non-infringing components of that product…. Even when a damages theory relies on the smallest salable unit as the basis for calculating the royalty, the patentee must estimate what portion of that smallest salable unit is attributable to the patented technology when the smallest salable unit itself contains several non-infringing features.” Power Integrations v. Fairchild Semiconductor International |
| Specific Intent | Inequitable Conduct | “To prevail on a claim of inequitable conduct, the accused infringer must prove that the patentee acted with the specific intent to deceive the PTO. A finding that the misrepresentation or omission amounts to gross negligence or negligence under a ‘should have known’ standard does not satisfy this intent requirement. In a case involving nondisclosure of information,… the accused infringer must prove by clear and convincing evidence that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it…. Because direct evidence of deceptive intent is rare, a district court may infer intent from indirect and circumstantial evidence. However,… the specific intent to deceive must be the single most reasonable inference able to be drawn from the evidence.” Therasense v. Becton Dickinson |
| Subjective Willfulness | Willfulness and Enhancement | “[S]ubjective willfulness alone—i.e., proof that the defendant acted despite a risk of infringement that was either known or so obvious that it should have been known to the accused infringer—can support an award of enhanced damages. The subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.” WesternGeco v. ION |
| Substantially Identical | Intervening Rights | A patentee of a patent that survives reexamination or reissue “is only entitled to infringement damages for the time period between the date of issuance of the original claims and the date of issuance of the reexamined [or reissued] claims if the original and the reexamined claims are substantially identical. If, on the other hand, a substantive change has been made to the original claims during reexamination [or reissue], the patentee is entitled to infringement damages only for the time period following issuance” or the reexamined or reissued patent. R+L Carriers v. Qualcomm “To determine whether substantive changes have been made, [the courts] consider whether the scope of the claims are identical, not merely whether different words are used.” R+L Carriers v. Qualcomm |
| W | ||
| Walker Process Claim | Antitrust | “In order to prevail on a Walker Process claim, the antitrust-plaintiff must show two things: first, that the antitrust-defendant obtained the patent by knowing and willful fraud on the patent office and maintained and enforced the patent with knowledge of the fraudulent procurement; and second, all the other elements necessary to establish a Sherman Act monopolization claim.” Transweb v. 3M |
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