Economic Damages for Intellectual Property
Expert Witness Services
We provide expert reports, analysis, and testimony for economic damages for intellectual property disputes including trademarks, copyrights, breach of contract, trade secrets, as well as Rights of Publicity. Acclimation Group specializes in economic damages for intellectual property, offering precise valuations to support IP disputes and litigation.
Our Economic Damages for Intellectual Property services provide rigorous, data-driven analysis to assess financial impacts in IP disputes. We specialize in calculating damages related to trademarks, patents, and copyrights, offering reliable support for litigation and settlement processes. With our expertise, clients gain clarity on complex IP valuations, ensuring robust financial assessments.
The “Acclimated” Approach to Calculating Economic Damages
At Acclimation Group, we know the rules and we play by the rules to deliver the highest quality expert report and testimony. Acclimation Group's expertise ensures compliance with the unique monetary recovery requirements of all 11 U.S. Circuit Courts.
Actual Damages
Lost Profits
Lost profits are the most common type of actual damages in intellectual property disputes. Calculating lost profits requires demonstrating the profits the plaintiff would have earned but-for the infringement. This often involves a “before-and-after” analysis, comparing the plaintiff’s actual earnings (As-Is) during the infringement period to a projection of their earnings without the infringement (But-For). The difference represents the lost profits.
Reasonable Royalties
Reasonable royalties represent the hypothetical licensing fee a defendant should have paid to use the plaintiff’s intellectual property instead of infringing. While often applied in trademark disputes, recovering reasonable royalties can be challenging. The requirement by some courts to prove a prior licensing intention or history makes it difficult to recover these damages if the plaintiff lacks such evidence.
Corrective Advertising
Corrective Advertising requires the plaintiff to run ads that correct any false or misleading claim made by the defendant. This approach is common in trademark disputes if individuals believe that the origin of Defendant’s products is Plaintiff. In this instance, the plaintiff would spend money on advertising to correct the false association between the brands. When calculating corrective advertising it is first important to identify the target audience (i.e number of people who clicked defendant’s website by searching plaintiffs trademark) and then selecting the appropriate medium of advertisements. This could be Google Ads, YouTube, Radio, etc.
Harm to Goodwill
Harm to goodwill represents the reduction in a company’s brand value due to reputational damage. One method of calculating harm to goodwill involves estimating the cost of a reputational repair campaign necessary to restore the company’s image and customer loyalty. This approach assesses the expenses associated with restoring the company’s reputation to its pre-damage level.
Competitive Price Erosion
Competitive price erosion is when an infringer undercuts prices, forcing the intellectual property holder to lower their prices to stay competitive. Expert economic analysis is used to isolate the infringer’s impact on the price and accurately calculate the resulting losses.
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Profits Subject to Disgorgement
Disgorgement of profits, or unjust enrichment, represents the economic benefit (usually profits) the infringing party obtained from using a plaintiff’s IP. In order to receive a disgorgement of a defendant’s profits, there must be a causal nexus between the defendant’s unauthorized use of the IP and the profits it generated. This means it is the burden of the plaintiff to show that defendant’s unauthorized use of the IP contributed to its financial performance. This can be done be reviewing the infringing products sold, consumer survey’s, social media analysis, and website analytics.
Once the Plaintiff has established that a causal nexus exists between the infringement and the profits gained, the next step is to identify the infringing sales. The burden then shifts to the defendant, who must account for and deduct the costs incurred in generating those sales, followed by a process of profit apportionment.
Different circuit courts in the U.S. permit varying degrees of cost deductions, but generally, expenses can be deducted if they were directly incurred to produce the revenues in question.
Profit Apportionment
Pricing Differential Factor
A pricing differential factor apportions an infringer's profits attributable to the infringed IP by comparing the infringer's price to the price of a non-infringing equivalent. The difference in price is analyzed to isolate the value attributable to the protected technology. This value is then applied as a percentage to the infringer's profits to calculate the amount subject to disgorgement.
A Comparative Analysis Use Google Ads and Conversion Ratios
Analyzes the defendant’s conversion ratios (via Google Ads) as a key performance indicator. If the conversion ratio is higher for the paid keywords incorporating a disputed trademark, it suggests a contribution to incremental profits attributable to the infringement. The apportionment percentage reflects the difference in conversion rates between paid keywords with and without the disputed mark.
Protect your IP rights with our Economic Damages for Intellectual Property services—contact us to support your case with precise financial analysis.