Intellectual property damages analysis applied to partnership and shareholder dispute litigation: methodology, deliverables, and case-specific considerations.
In an owner dispute the intellectual property question is usually who took what: a departing partner, member, or shareholder who used the company's trade secrets, customer information, or technology in a competing venture, or a controlling owner who moved the company's patents, marks, or software into an entity the owner holds separately. The economist measures the company's actual loss from the diverted sales and customers, the competing venture's profits attributable to the information, and, where those are hard to isolate, a reasonable royalty for the use, net of any overlap, and coordinates the measure with any valuation of an owner's interest, so the same lost earnings are not counted both as damages and as a reduction in the value of the interest.
Economic analysis and expert testimony on damages in patent, trademark, copyright, and trade secret cases and in license and royalty disputes, for the patentee or the accused infringer and for either side of every other claim. The work measures each remedy the governing statute allows: a reasonable royalty and the patentee's lost profits, including price erosion, apportioned to the patented feature; the defendant's profits, the owner's actual damages, and corrective advertising in a trademark case; actual damages and the infringer's profits in a copyright case, where the infringer carries the burden of its deductible expenses and of the profit owed to other factors; and actual loss, unjust enrichment, or a reasonable royalty for a misappropriated trade secret.
Depending on the claim, the analysis consists of the fair value or fair market value of the ownership interest as of the relevant date, the difference between what the departing owner received and what the interest was worth, distributions or profits diverted through excess compensation, related-party transactions, or unrecorded revenue, and lost profits to the business or to the owner when the conduct at issue reduced earnings. The drivers are the operating agreement or shareholder agreement and its buyout terms, historical financial statements and tax returns, the general ledger, compensation and distribution records, and documentation of transactions with related entities.
We issue the final report on the disclosure schedule and provide deposition and trial testimony, critique of the opposing damages analysis, and updated calculations as the court construes any patent claims and the record develops.
Each state page adds the courts, the expert standard, and the damages framework the report is built around in that venue.
The same way as against any other party accused of misappropriation: the company's actual loss from the customers and sales it lost because its information was used, the profits the competing venture earned from that use that the loss does not already capture, or a reasonable royalty in their place, each limited to the period the information stayed secret plus any head start. The analysis separates the effect of the information from the departing owner's general skill and knowledge, which the trade secret claim does not reach.
It can. If the misappropriation reduced the company's earnings, a valuation of the interest at a later date may already reflect the loss, so the damages and the valuation are built from the same projections and dated consistently, and the report shows how each figure changes if the other is adopted, so the lost earnings are counted once.
Request a consultation on IP Damages or call (201) 343-0700. Plaintiff and defense counsel.