This project was completed by Intensity. Intensity joined Secretariat on February 1, 2023.

Background

A manufacturer of aircraft systems asserted claims of patent infringement and remedies of lost profits, reasonable royalties, and irreparable harm against a competitor. The claimed technology at issue related to aircraft interior systems. The patent holder alleged that the competitor improperly earned profit and market share through the alleged infringement and irreparably damaged the patent holder’s ability to compete in the marketplace.

Our Analysis

Intensity evaluated the damages set forth by the patent holder and found a number of factors that led to the estimate being inappropriately high. Our work included evaluation of the patented feature’s value as a differentiator in contract awards, analysis of the relative contribution of the patented feature to sales and profits, and determination of a realistic upper bound on lost profits and reasonable royalty damages stemming from alleged patent infringement.

As part of its analysis, Intensity evaluated recent contract awards by the major aircraft manufacturers and airlines and determined that other factors besides the patented feature were the primary differentiators in contract awards. Intensity also evaluated the role of non-infringing alternatives along with the relative cost to design and implement the alternatives and their impact on demand, and used multiple approaches to calculate an upper bound on reasonable royalties for the patents-in-suit that was far less than determined by the patent holder.

Intensity also analyzed the marketplace for aircraft interior systems and determined that there was no irreparable harm, based on lack of demonstrated price erosion, successful competition in winning new contracts by the patent holder, and lack of demonstrated damage to the patent holder’s corporate image.