Influence of Lost Profits Damages In Patent Cases

In some cases, however, the patent owner may instead seek to recover the profits that it lost as a result of the infringement. To recover lost profits, the patent owner must prove that its own products compete with the infringing products, that the infringer's sales displaced sales that the patent owner otherwise would and could have made, and that there was no non-infringing alternative in the market to which consumers would have turned instead in the absence of the infringer's sales.

In two recent decisions, the Federal Circuit and a Delaware district court took account of the underlying economic conditions that permit and prevent awards of lost profits, and looked at the implications of those conditions on otherwise unrelated areas of law. In September, the Federal Circuit ordered a transfer of a case from the Western District of Texas to the Northern District of California, holding that the longer time to trial in the transferee venue did not weigh against transfer because the plaintiff patent assertion entity could not seek lost profits. In re Juniper Networks, 14 F.4th 1313 (Fed. Cir. 2021). Last year, a Delaware district court granted a permanent injunction based in large part on the jury's award of lost profits damages related to one of the infringing products, while denying injunctive relief as to the other infringing products that were not the subject of the jury's lost profits award. f'real Foods v. Hamilton Beach Brands, No. 16-41-CFC, 2020 WL 4015481 (D. Del. July 16, 2020).