Definition
Lost profits are damages that compensate a patent owner for the additional profit it would have earned but for the infringer’s sales.
Why It Matters Legally
Lost profits often yield larger awards than a reasonable royalty, but they require proof that the owner would have made the sales. Establishing this is demanding and central to high-value cases.
Example Use Case
A patent owner proves customers would have bought its product instead of the infringer’s and recovers its lost profits as damages.
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Related Terms
Damages, Reasonable Royalty, Enhanced Damages, Willful Infringement, Patent Litigation