When a person or company reproduces, uses, or exploits someone else's guarded creations without legal permission, this activity may be considered intellectual property (IP) infringement. In cases of such infringement, the rightful IP holder may be able to seek monetary damages to cover the costs of their losses. Depending on the circumstances, litigants may also seek punitive damages to penalize the infringing party and ensure that they do not unfairly benefit from their actions. If you are interested in learning more about how to recover damages in IP litigation or the specific financial remedies you can pursue, contact Sullivan & Carter, LLP today by calling us at (929) 724-7529 to schedule your consultation.

The Different Types of Financial Damages

In intellectual property infringement cases, numerous types of monetary damages may be available, depending on the circumstances of the case. The types of damages sought in IP infringement cases can generally be divided into actual or compensatory damages, which aim to cover the plaintiff’s losses, and punitive damages, which are designed instead specifically to penalize the defendant in an effort to discourage future acts of infringement (from the defendant or others).

Actual Damages

Compensatory damages, also known as “actual” damages, are designed to provide financial recovery to an intellectual property rights holder for their economic losses that directly result from an infringement. These losses may include quantifiable monetary damages such as lost sales and profits.

Lost Profits

​​Lost profits are among the most straightforward compensatory damages, although arriving at an appropriate number may sometimes involve complex calculations. If an individual or company infringes on a trademark, the holder of the trademark may be able to claim damages for lost profits that they would have earned if the infringement had not taken place. However, to convince a court to award these damages, the trademark holder would need to establish that their business’s potential earning power was reduced due to the infringement.

At their core, lost profits generally try to evaluate the profit an individual or company would have made had the wrongdoer not committed the alleged wrongful act.Factors often considered in calculating lost profits for any type of IP infringement case include price erosion and increased costs associated with alleviating the consequences of the violation.

Reasonable Royalties

When it is challenging to assess the exact amount of monetary damages available, courts may grant reasonable royalties as a means of financial recovery. Reasonable royalties refer to the sum that the wrongful party would have paid the intellectual property rights holder if they had agreed upon a license agreement for using the intellectual property in question.

Courts often rely on expert testimony to determine reasonable royalties and lost profits in trademark or copyright infringement cases. This is because juries and judges may not have sufficient knowledge about the industry in which the trademark holder or copyright owner and the infringer operate, and they may need help to understand the likely extent of damages the IP owner has incurred as a result of the infringement.

Punitive Damages

Punitive damages are meant to punish a person who has willfully or maliciously infringed on another person's rights. According to the Legal Information Institute, these damages aim to stop others from engaging in the same type of conduct.

Punitive damages may not be available in every case. To find out more about whether to pursue punitive damages in your trademark or copyright infringement case, reach out to Sullivan & Carter, LLP to learn more about IP litigation and the legal remedies available for individuals and businesses impacted by the infringement of their intellectual property rights.

Statutory Damages

According to Title 17 the United States Code, which governs copyright law, statutory damages are a type of compensation that may be awarded as a substitute for actual damages or reasonable royalties. These damages are predetermined amounts set by law and are typically offered when calculating actual damages or reasonable royalties is prohibitively difficult. Statutory damages are commonly applied in cases involving copyright infringement, but may also be a recourse in some instances of trademark infringement, particularly when these concern the use of counterfeit marks and other forms of misrepresentation, under 15 U.S.C.A. § 1117.

Additional Damages

Additional compensation may be awarded in intellectual property litigation cases depending on certain factors. Examples of additional damages may include:

• Attorney fees
• Enhanced damages
• The costs of additional advertising to redress consumer confusion caused by the violation
• Disgorgement of profits, which takes all the unfairly earned profits away from the wrongful party and then given to the plaintiff

Find Out What Financial Damages You May Be Able To Pursue

The amount of financial damages in IP litigation can vary depending on the type of intellectual property involved, the severity of the violation. To get a better understanding of the potential damages that may be available in your case, consider reviewing your legal claim with an experienced intellectual property attorney in the Chicago area.

How Can an Experienced Intellectual Property Attorney Help You Fight for the Damages You Deserve?

Proving financial damages in IP litigation cases can be difficult for various reasons. Some of these may include:

• Quantifying the losses accurately: Estimating the monetary damages resulting from an infringement can be challenging, particularly when considering elements such as price erosion and lost sales.
• Determining causation: The intellectual property rights holder has to establish a connection between the violation and the monetary losses incurred; given that the losses are often based on the width of the estimated gap between what the IP holder’s actual profits vs. those they might have achieved in the absence of infringement, the IP owner is often in the position of having to present a compelling dollar amount they would have achieved, but also to argue persuasively that the alleged infringement is responsible for the difference in actual and achieved profits.

An experienced intellectual property lawyer may be able to provide you with the help you need to overcome these challenges. For instance, these lawyers may be able to:

• Hire experts to analyze the impact of the violation and determine the total amount of incurred damages
• Obtain evidence, including market reports, records of sales, and other materials to prove actual damages
• Pursue alternative methods of calculating damages if determining actual damages is too complex

Contact an Intellectual Property Law Firm Today To Learn More

​​Sullivan & Carter, LLP (SCIP) is a Chicago boutique intellectual property law firm. Founded by two experienced and dedicated intellectual property attorneys, SCIP has represented individuals, multinational corporations, and entrepreneurs at all levels. Our legal team is dedicated to assisting our clients in developing, monetizing, and protecting their intellectual property. Due to this work and guidance, we have established a reputation for excellence, creativity, dependability, and trust. Our services are also tailored to each client's needs and include advice on IP creation, portfolio strategy and management, registration and renewal processes, and cost-effective protection and litigation efforts. To learn more about IP litigation or to discuss your case in more detail, contact​​ our office today by calling (929) 724-7529.