The infringer took sales, and made the sales you kept worth less. Proving either means reconstructing the market without the infringer in it.
Start a conversation with Cournot, the Institute’s damages concierge, already scoped to price erosion & patent lost profits. Pick a starting point, or describe the dispute directly.
Where the patent holder practices its own invention, infringement does its damage twice. The visible harm is diverted sales: units the infringer sold that the patent holder would have captured. The quieter harm is price: competition from the infringer forced prices down, or held them down, on every unit the patent holder did sell, and that erosion often exceeds the diverted-sales loss because it applies across the entire volume. The conventional organizing structure for the lost sales claim is the Panduit framework: demand for the patented product, the absence of acceptable non-infringing substitutes, capacity to exploit the demand, and a quantification of the profit lost. Each factor is a live fight, and the second is usually the main event, because a market with acceptable alternatives means the infringer's customers had somewhere lawful to go. The price erosion claim adds a discipline that undoes careless analyses: elasticity. A but-for world with higher prices is a world with lower volume, and a claim that raises the price while keeping every sale contradicts itself in a way any competent rebuttal will exploit. Convoyed and derivative sales, the razors-and-blades revenue that travels with the patented product, complete the family, with their own functional-relationship requirements that counsel will know. Market reconstruction, done with elasticity and the alternatives honestly handled, is among the most demanding exercises in commercial damages, and among the most scrutinized.
A market reconstructed without the infringer, with the economics kept honest.
Demand, no acceptable non-infringing alternatives, capacity, and quantification. The conventional test for capturing the infringer’s sales.
The pivotal factor. An acceptable, available substitute reroutes the infringer’s customers away from the patent holder in the but-for world.
In multi-competitor markets: reallocating the infringer’s sales among survivors in proportion to the market that remains.
The price path without infringing competition, against the price path that happened, applied across all units sold.
Higher but-for prices mean fewer but-for units. The internal consistency check that separates serious models from advocacy.
Unpatented products and consumables sold with the patented item. Recoverable in defined circumstances that counsel will frame.
How the Institute approaches a patent lost-profits question.
The difference between royalty-only damages and a lost-profits case is usually a multiple.
The classic defective claim raises the but-for price and keeps the actual volume. Real demand curves do not work that way, and every competent rebuttal says so. An erosion model that shows fewer units at the higher price, and still shows a loss, is the one that survives.
Because they determine where the infringer's customers go in the but-for world. If an acceptable substitute existed and was available, removing the infringer sends its customers to that substitute, or to a lower-priced lawful version of it, rather than to the patent holder at the patent holder's price, and both the diverted-sales and the erosion claims deflate accordingly. The fight is over "acceptable" and "available": whether the alternative delivered what the relevant customers actually valued, whether it could have been supplied in the period, and at what cost and delay. This is simultaneously a technical question, an evidentiary question about customer preferences, and an economic question, which is why it consumes more expert attention than any other element of the framework.
By reallocating the infringer's sales among the remaining suppliers in proportion to the market that would have existed without it, rather than assuming the patent holder inherits everything. In its usual form, the patent holder claims lost profits on its proportionate share of the infringer's sales and, where the governing law permits, a reasonable royalty on the remainder, so the claim structure acknowledges that some diverted customers would have chosen a lawful competitor. The reallocation itself has to be defended: shares can be adjusted for product positioning, price tiers, channel presence and capacity, and a reconstruction that quietly inflates the patent holder's share does the same damage to credibility as any other overreach.
Evidence that prices moved with the infringement, and a disciplined account of what they would have done without it. The strong patterns are chronological and documentary: prices falling when the infringer entered or discounted, internal pricing documents citing the infringing competition as the reason for cuts or for shelved increases, won-loss records showing deals lost or repriced against the infringer, and recovery of prices after the infringement stopped, where that happened. The analysis then has to survive its own logic: an erosion model prices the but-for world higher, so it must also volume the but-for world lower, with the elasticity estimated from data rather than assumed away. Erosion done honestly is powerful precisely because it applies to every unit sold, not only the diverted ones.
Revenue that travels with the patented product: consumables, accessories, service contracts, the unpatented items customers buy alongside or because of the patented one. Where the infringement diverted the product sale, it usually diverted this attached revenue too, and the economics of including it are straightforward once the attachment is demonstrated with sales data. The legal boundary is narrower than the economic one: recovery generally requires a functional relationship between the patented and unpatented items rather than mere marketing convenience, and where that line sits in a given case is counsel's question. The expert's job is the factual predicate, showing attachment rates and margins from records, and a claim that sweeps in loosely related revenue without that predicate invites a cut that could have been avoided.
Describe the market and the infringement. The Institute will help you see whether a lost-profits case is there.