What Is Your Patent Case Worth: Economic Principles of Intellectual Property Damages Calculations
6 October 1999
By Dr. Phillip Beutel
It is not uncommon for the client, counsel, and sometimes even the experts to get wrapped-up in litigation strategy, in the details of a case's liability arguments, or simply in the emotion surrounding infringement. It is important to remember that your case is about money; it's about winning in the marketplace.
When you reach the damages phase of your case -- or when you are evaluating possible financial outcomes -- your objective is to have a damages theory that is credible and can stand up under hostile cross-examination, but that will also be understood by and will persuade the jury, judge, or in-house decision-makers. Regardless of which side you represent, an effective damages presentation is not just about bean counting.
Only damages calculations that follow certain basic economic rules can accomplish your objective. This paper discusses four such rules:
:: Market Conditions Are Important
:: Only Incremental Costs Matter
:: Higher Prices Mean Lower Sales
:: Time Is Money
