Lost Profits and Disgorgement

Forthcoming in Patent Remedies and Complex Products: Toward a Global Consensus, Ch. 2 (Brad Biddle, Jorge L. Contreras, Brian J. Love, and Norman V. Siebrasse, eds., Cambridge University Press)

94 Pages Posted: 17 Sep 2018  

Christopher B. Seaman

Washington and Lee University School of Law

Thomas F. Cotter

University of Minnesota Law School

Brian J. Love

Santa Clara University School of Law

Norman Siebrasse

University of New Brunswick - Fredericton - Faculty of Law

Masabumi Suzuki

Graduate School, Nagoya University

Date Written: September 14, 2018

Abstract

This book chapter addresses two types of monetary remedies for patent infringement: (1) recovery of the patentee’s lost profits and (2) disgorgement of the infringer’s profits. Both remedies make a comparison between what actually happened and a hypothetical “but for” world in which no infringement occurred. But the two remedies have substantially different objectives: lost profits are intended to compensate the patentee by restoring it to the position it would have occupied absent infringement, while disgorgement may serve other purposes, including deterrence, recapturing wrongful gains, and encouraging ex ante licensing of patented technology.

Part II addresses several key issues regarding lost profits awards, including the availability and standard of proof, the role of non-infringing alternatives, potential recovery for the sale of related but unpatented goods, whether and how to apportion lost profits awards for complex products, and potential recovery for other infringement-related harms. Part III describes the justifications for, and availability of, the disgorgement (accounting) remedy in major patent systems and, additionally, analyzes a number of questions related to calculating such awards. In both sections, we make recommendations and identify areas for further research.

Keywords: patent, infringement, remedies, lost profits, disgorgement, restitution, apportionment, price erosion, non-infringing alternatives, entire market value rule, convoyed sales, collateral sales, loss of goodwill, comparative patent law, China, Japan, EU, UK, Canada, Australia, France, Germany, India

JEL Classification: K00, K29, K33, O31, O34

Suggested Citation

Seaman, Christopher B. and Cotter, Thomas F. and Love, Brian J. and Siebrasse, Norman and Suzuki, Masabumi, Lost Profits and Disgorgement (September 14, 2018). Forthcoming in Patent Remedies and Complex Products: Toward a Global Consensus, Ch. 2 (Brad Biddle, Jorge L. Contreras, Brian J. Love, and Norman V. Siebrasse, eds., Cambridge University Press) . Available at SSRN: https://ssrn.com/abstract=3249528

Christopher B. Seaman (Contact Author)

Washington and Lee University School of Law ( email )

Lexington, VA 24450
United States
540-458-8520 (Phone)

Thomas F. Cotter

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-624-7527 (Phone)

Brian J. Love

Santa Clara University School of Law ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

Norman Siebrasse

University of New Brunswick - Fredericton - Faculty of Law ( email )

P.O. Box 4400
Fredericton, New Brunswick E3B 5A3
Canada
506-453-4725 (Phone)
506-453-4548 (Fax)

Masabumi Suzuki

Graduate School, Nagoya University ( email )

Furo-cho, Chikusa-ku
Nagoya-City, 4648601
Japan
+81-52-789-4576 (Phone)
+81-52-789-4576 (Fax)

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