What is Damages Modeling?
Providing market, financial and legal analysis to forecast potential patent infringement damages. In patent infringement cases, plaintiffs can be awarded damages in the form of lost profits, reasonable royalties, or a combination of the two. A damages modeling assessment provides an estimated range of damages which may be awarded to a successful plaintiff, and takes into account various factors such as market research and known licensing rate data or comparables.
When is Damage Modeling Useful?
For a patent holder, when there is a large pool of third-party infringement, conducting a damage model for prospective defendants can facilitate the selection of who to sue, when, and in what order to embark on an enforcement campaign against multiple defendants. For parties facing an infringement suit, or those which have received an unfavorable judgment in an infringement case, damage modeling can be used to counter the plaintiff’s damages request.In addition, damages modeling can be used as a valuation method in instances where there is no licensing and/or litigation revenue tied to the patent assets. Conducting a damages model – appropriately discounted to present day value – provides a patent owner and potential investors/buyers of litigation insight as to the enforcement potential of a patent portfolio.
Why Envision IP?
Conducting damages model assessments for parties involved in litigation and patent transactions is routine for us. We employ a combination of in-depth financial and market research to determine appropriate royalty bases and rates. In addition, we follow case law closely in this evolving area to understand how courts are currently addressing damage calculations and methodologies.