Reasonable royalty, apportionment, head start, price erosion: intellectual property grew its own damages machinery, with named frameworks and specialized failure modes. Using it well is a discipline of its own.
Start a conversation with Cournot, the Institute’s damages concierge, already scoped to intellectual property. Select a subject area to prompt it, or describe the dispute directly.
Intellectual property damages are different in kind, not merely in subject. The law built dedicated structures here that exist nowhere else: a floor measure in the reasonable royalty, a formalized counterfactual in the hypothetical negotiation, an apportionment requirement that forces the value of the patented feature to be separated from the value of everything around it, and trade secret measures, head start and avoided development cost among them, that have no analogue in a contract dispute. The result is a field where methodology is argued by name and where the standard attacks are known in advance: the comparable licenses were not comparable, the royalty base swallowed the whole product, the apportionment was asserted rather than derived. That maturity cuts both ways. There is more established structure to build on than anywhere else in damages, and less room for improvisation, because the fact-finder has usually seen the framework before and knows where the shortcuts hide. This area covers the royalty machinery, the trade secret measures, and the lost profits family including price erosion. Which of these a given claim permits is a question of law for counsel; what each one demands in evidence is what follows.
Three bodies of machinery, each with its own failure modes.
The hypothetical negotiation, the Georgia-Pacific framework, comparable licenses, and the apportionment fight that decides the size of the base.
investigateHead start, avoided development cost, unjust enrichment and royalty: the widest menu in IP damages, and the reconstruction problem behind all of it.
investigateLost sales, eroded prices and convoyed revenue: the patent lost-profits family, organized by the Panduit framework and disciplined by elasticity.
investigateHow the Institute approaches an IP damages question.
Because in patent law it is the measure available even when nothing else is: the statute contemplates damages adequate to compensate, in no event less than a reasonable royalty. A patent holder who cannot prove lost profits, because it does not practice the patent, lacked capacity, or cannot connect specific lost sales to the infringement, can still pursue the royalty a willing licensor and willing licensee would have negotiated. That is why royalty analysis appears in nearly every patent case while lost profits appears in a minority. The floor is not a formality, though: the royalty still has to be built from evidence about the hypothetical negotiation, and royalty opinions are excluded with regularity when they are not.
Apportionment is the requirement that damages reflect the value of the patented invention rather than the value of the whole product it sits inside. A phone contains thousands of patented technologies; a royalty computed on the phone's entire price, for one of them, claims value the invention did not create. The doctrine grew teeth as products became more complex, and it now shapes everything: the choice of royalty base, the derivation of the rate, which licenses count as comparable, and the survey and regression evidence used to isolate the feature's contribution to demand. It dominates because it is where the money is: the difference between a royalty on a component and a royalty on a system is often the entire dispute.
The measures are broader and the counterfactual is different. Trade secret law generally permits actual loss, the defendant's unjust enrichment to the extent it is not already counted, and in some circumstances a reasonable royalty, which gives counsel a wider menu than patent law offers. Two concepts are distinctive. Head start measures the advantage of arriving in the market earlier than lawful development would have allowed: the secret shortened the defendant's path, and the damages window is that saved time. Avoided cost measures what the defendant did not have to spend on its own development because it took the secret instead. Both require reconstructing what independent development would have cost and how long it would have taken, which becomes the central factual fight.
Whenever the theory has layers that belong to different disciplines, which in modern IP litigation is often. A lost profits claim in a two-supplier market may need an economist for market definition and elasticity alongside an accountant for the incremental cost analysis. An apportionment fight may add a survey expert for conjoint or consumer research, with the damages economist building on that foundation. A trade secret head start case may need a technical expert to establish the lawful development timeline before the economist can value it. The architecture question, which disciplines, in what sequence, relying on whose assumptions, is a choice worth making deliberately, because a chain of experts is only as strong as its weakest handoff.
Describe the IP and the conduct. The Institute will help you see which measures the facts could support and what each demands.