Damages for patent infringement

Damages for patent infringement compensate the harm caused to the patent holder. Article L. 615-7 of the Intellectual Property Code, which transposes Article 13 of Directive 2004/48 of 29 April 2004, requires the court to take into account three separate heads of loss or, at the injured party's request, to award a lump sum.

The three heads of damages

The first head covers the negative economic consequences of the infringement, namely the patent holder's lost profits and losses incurred. The second compensates non-material harm, reflected in damage to the image of the patent and the trivialisation of the invention. The third takes into account the profits made by the infringer, including savings in intellectual, material and promotional investment. These three heads are cumulative, provided each is established by evidence and not by mere assertion.

The lump-sum alternative

The patent holder may claim a lump sum higher than the royalties that would have been due had the infringer requested a licence. This option is useful when volumes remain unknown or when the patent holder does not exploit the patent itself. In practice it caps compensation, so it is best exercised only after trying to obtain the accounting documents through a saisie-contrefaçon or through a disclosure order.

Limits on compensation

A person who offers, puts on the market, uses or holds an infringing product without being its manufacturer is liable only if acting knowingly, under Article L. 615-1, paragraph 3, of the same Code, as explained in the entry on good faith in infringement. Before the Unified Patent Court, Article 68 of the Agreement provides for compensation of the harm actually suffered, together with the power to order the surrender of profits, for all the territories covered by the decision.

Key points

Damages are prepared before the writ is served: proving lost profits requires evidence of margins, production capacity and the substitutability of the products. The royalty-based lump sum is a fallback, not a goal. Finally, compensation covers only the period not time-barred and, for resellers, the period after they were put on notice.

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This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats litigates patent disputes before the Paris Judicial Court, the Paris Court of Appeal and the Unified Patent Court. Where the question arises in a real case, the useful moment is almost always before proceedings are issued.

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