Economics and Key Patent Damages Cases

28 Pages Posted: 14 Nov 2002


This paper traces the economic evolution of patent damages from the early cases beginning with Aro through Panduit and on to Grain Processing. It argues that Grain Processing provides a generalized model of patent damages and that Panduit describes an unique situation within that model. It discusses the difficulties courts have had with economic topics such as substitute products, market shares and collateral sales. An economic case is made for not putting the patent holder in a better position in court than in the marketplace. Infringer's royalties and the simultaneous award of lost profits and reasonable royalties are shown to be inappropriate. Finally, the economics of the recent cases on convoyed goods and collateral sales, Rite-Hite and King Instruments, are reviewed.

Keywords: patent, damages, infringement, Aro, Panduit, Rite Hite, King Instruments, Mor-Flo, Mahurkar, BIC Leisure, Grain Processing, reasonable royalty, Windsurfing

JEL Classification: K0, K1

Suggested Citation

O'Brien, Vincent E., Economics and Key Patent Damages Cases. Available at SSRN: or

Vincent E. O'Brien (Contact Author)

LECG, LLC ( email )

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