Intellectual Property

Patent Damages

In a patent infringement lawsuit, if a patent holder is able to demonstrate its patent is valid and infringed by another party, the patent holder is entitled to collect monetary damages from the infringing party. In this phase of a patent infringement lawsuit, QES is retained to opine on the amount of monetary damages caused by the alleged infringement. To reach such an opinion, QES will often construct what is known as a "but for" world where everything is the same as the real world except for the infringement of the patent. The reliable construction of such a world may require an in depth and highly quantitative market analysis which will serve as the basis for recreating what would have happened in the given market if the infringement had never occurred. Damages in such a case may fall into the categories of lost profits on lost sales, lost profits due to price erosion, and/or reasonable royalty damages.

Commercial Success

In order to receive damages for patent infringement, the patent holder must demonstrate that its patent is both valid and infringed. Validity requires that the patented invention be non-obvious. One type of evidence that an invention is non-obvious is if the product embodying the patented invention is commercially successful and there is a causal nexus between characteristics of the product that are attributable to the patented invention and its success. QES is often asked to opine on the commercial success of patented products. Such cases involve an assessment of market sales of a product and an analysis of the drivers of those sales.

Irreparable Harm

When a product is initially accused of infringing a patent, there is the recognition that the litigation process may take a significant amount of time before the matter is adjudicated by the finder of fact. If the relevant patent is eventually found to be valid and infringed, the infringing party will have enjoyed a period of time selling its product when it should not have been able to do so. In cases such as these, the patent holder may file for a "preliminary injunction" to hold the accused product off the market during the pendency of the litigation. One element that the patent holder must prove is a likelihood of "irreparable harm" – that is, harm that cannot simply be quantified and paid back via a damages award if the injunction is not granted. In such cases, QES has been asked to evaluate the likelihood of irreparable harm. To reach an opinion, QES may perform market research, including an analysis of publicly available information and a review of deposition testimony and/or conversations with industry players, and various quantitative analyses.

Trade Secrets

Companies frequently choose to maintain valuable information such as production processes as a trade secret rather than seek a patent, which requires the patented invention to be publicly disclosed.  Trade secret litigation typically arises after a knowledgeable employee joins a competitor or companies share confidential information while discussing a potential business relationship.  Similar to cases involving alleged patent infringement, those involving an allegation of trade secret misappropriation call for a calculation of damages based on the economic harm caused to plaintiffs due to the misappropriation. In addition, plaintiffs may be entitled to a damages award based on defendants’ “unjust enrichment” as a result of the misappropriation. QES has been called on to calculate both types of damages in such cases, as well as reasonable royalty damages which may apply under certain conditions.  Trade secret cases also frequently include claims for breach of contract and claims concerning patents related to the trade secrets, which QES may be asked to evaluate.