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Influence of Lost Profits Damages In Patent Cases
The Patent Act provides for damages "in no event less than a reasonable royalty." 35 U.S.C. §284. In many patent cases, that royalty ends up being the measure of damages: a percentage of the infringer's revenues from the infringing sales.
In some cases, however, the patent owner may instead seek to recover the profits that it lost as a result of the infringement. To recover lost profits, the patent owner must prove that its own products compete with the infringing products, that the infringer's sales displaced sales that the patent owner otherwise would and could have made, and that there was no non-infringing alternative in the market to which consumers would have turned instead in the absence of the infringer's sales.
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