Osteonics and Mahurkar: Two Steps Forward in the Calculation of Patent Damages
1 September 1995
By Dr. Marion Stewart
Two issues that often arise in the damages phase of patent litigation are price erosion and convoyed sales. A claim of price erosion, of course, is a claim that but for the infringer's sales, the patent holder would not only have made more sales but would have been able to charge a higher price for the sales it made. A claim for lost profits on convoyed sales is a claim that but for the infringement the plaintiff would have sold more of what economists ususally call complementary goods -- products not covered by the patent but for one reason or another generally sold with or following the patented product. Dr. Stewart's reading of the Mahurkar and Osteonics decisions -- which he mentions as a disclaimer that he testified on behalf of the plaintiff in the Osteonics matter and may therefore not have a completely unbiased view of that case -- leads him to believe that in each instance there is something approaching a high-water mark in the application of sensible economic analysis to the calculation of patent damages.
