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Damages - Intellectual Property Law

When intellectual property rights have been infringed, the IP rights holder may seek compensation - this compensation is referred to as 'damages'. Intellectual property disputes seek to recover damages for the 'claimant' (the rights holder) by assessing what profits were lost by the claimant as a direct result of the infringement. There are a few factors to consider when making this calculation:

  • Where appropriate, damages can be calculated on the basis of the royalties the defendant would have paid, had they been granted a licence to exploit the claimant's invention, design or process. 
  • An assessment is made of how much business the claimant lost as a direct result of the infringement. 
  • An assessment is made of any potential damage that was made to claimant's reputation as a direct result of the infringement.

In some cases, where a claimant does not normally grant licences to utilise their IP assets, damages will be assessed by considering what price could the claimant reasonably have been charged for permission to carry out the infringing acts. A negotiation follows between the parties which results in them entering into a hypothetical licencing agreement. The hypothetical licence fee will be the amount of damages awarded.

 

 

Return to intellectual property law glossary here.