Technology: A damages primer for tech companies

The Federal Circuit continues to demand a new level of rigorous analysis from damages experts in patent cases

Technology companies are a prime target of nonpracticing entities (NPEs), also known as patent trolls. Because NPEs have no products or services in the marketplace, they do not qualify for lost profits under the patent statute and often cannot obtain injunctions against infringement. The statute does provide NPEs with one remedy—the “reasonable royalty.” 

The “reasonable royalty” acts as a floor for damages. Typically, based on expert testimony from both sides, the jury determines a royalty and then applies this rate to the royalty base (i.e., the number of infringing units). Many tech companies have been hit hard by jury awards in the past decade and have called into question the “reasonableness” of experts’ damages theories, permitted by the courts and awarded by juries.

Contributing Author

author image

Gregory Novak

Gregory V. Novak is the Chief Executive Officer and Managing Partner of Novak Druce Connolly Bove + Quigg. Mr. Novak serves as national intellectual...

Bio and more articles

Contributing Author

author image

Aaron M. Levine

Aaron M. Levine is a partner in the Litigation and Patent Reexaminations Group and Co-Chair of Novak Druce Connolly Bove + Quigg LLP’s New...

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.