How Monetary Damages Are Calculated In Courts In Intellectual Property Infringement Lawsuits?

When an author, entertainer, or business creates a work, product, or entity, the resulting production becomes known as Intellectual Property (IP), which may then be freely marketed to the public. However, on certain occasions, particularly if it is well-known, met with commercial success, or was born out of a common idea, the IP may be stolen or used without the creator’s permission. This legal infraction is known as Intellectual Property Infringement. 

This brief piece examines the concept of IP Infringement, how IP creators and owners can protect themselves, and the laws that protect them. 


What Happens When Intellectual Property Infringement Occurs?

IP Infringement lawsuits occur at a frequency that can keep a business lawyer, startup lawyer, and their clients busy. Misappropriating a registered IP is often a civil crime, but can also be adjudicated in a criminal court. Most often, misappropriation takes place when offending individuals or entities copy and/or use the established service or product for financial gain. 

In response, IP owners have the legal recourse to initiate a lawsuit. Where and how such a legal action will be handled is usually contingent upon factors including the specific type of IP being misappropriated, the jurisdiction within which the violation occurred, and the nature of the violation. 

How Can IP Owners Guard Against Misappropriations?

The most effective action an IP owner can take is to ensure that his, her, or their work is fully registered. The type of registration necessary depends upon the specific IP created. For example, if the work was created by an author, screenwriter, playwright or songwriter, registration with an official copyright entity such as the United States Copyright Office would be necessary. In the cases of inventors building inventions or a business or startup producing a symbol, logo, or a corporate entity, patent and trademark registration are required, respectively. Patents and Trademarks can be registered with the United States Patent and Trademark Office.  

The registration process is fairly direct and can typically be done either online or through the mail and costs a nominal fee. Above all, this provides the IP owner legal protection and makes an IP lawsuit much easier to win. 


IP Infringement Lawsuits Made With And Without Proper Registration of the IP

If an IP owner believes his, her, or their work was stolen or used inappropriately and this IP was properly registered, the owner can bring a lawsuit to the federal court and seek punitive and statutory damages in addition to actual damages and their legal fees and costs. This is a big advantage over unregistered IP. It may be difficult in some cases to prove actual damages (the amount of money an IP owner actually lost due to the infringement), but the threat of statutory damages may scare off potential infringers. The amount of statutory damages can run from $30,000 for unintentional violation up to $100,000 and more if bad intent is proven regardless of whether the IP owner suffered any actual damages, such as loss of profits, for example, or not.

An IP owner lacking proper registration is able to sue for the theft as well, but the burden is on the plaintiff to prove that he is a true owner of the IP. This can be a tedious process, subject to time limitations in addition to the IP owner being responsible for all legal fees and costs he incurs while prosecuting the case.

Besides monetary compensation, the court can use restraining and special performance orders to legally enforce the rights of the party.

The judge or a jury settles monetary damages, or compensation, during trial. After having the facts analyzed and taking both sides into consideration, the damages are calculated by the jury or a judge if the trial does not call for a jury. 

 

If you are an entertainer, startup business, or any other entity that might own an Intellectual Property, and have questions or seek consultation from an experienced startup lawyer, we invite you to contact us. More information is available on our website. 

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