John Paul
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP

D. Brian Kacedon
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP

Warsaw Orthopedic, Inc. v. NuVasive, Inc.
Patent Owner Cannot Recover Lost Profits Based on Lost Sales of Products Not Func-tionally Related to Patented Product, Lost Royalty Payments, or Lost Payments from Inter-Company Transfer-Pricing Agreements

By statute, damages in a patent-infringement litigation consist of at least a reasonable royalty award, and in some cases, a patent owner can prove that it is entitled to a higher measure of damages, such as the profits lost because of lower sales due to the infringement.

In a recent case, Warsaw Orthopedic, Inc. v. NuVasive, Inc., the U.S. Court of Appeals for the Federal Circuit re-versed a district court’s award of lost profits, finding that none of the revenue streams on which the patent holder relied was eligible as lost profits. Because, however, the patent holder was entitled to at least a reasonable royalty, the court remanded the action to the district court for a new damages trial to determine a reasonable royalty.