Calculation Of Compensation For Patent Infringement

The Article65of Chinese patent law defines how to calculate the amount ofcompensation for the damage caused by the infringement of the patent right. Basically,there are four methods: the compensation on the basis of the actual loss suffered bythe right holder because of the infringement, where it is difficult to determine theactual losses, the amount may be assessed on the basis of the profits the infringer hasearned because of the infringement. Where it is difficult to determine the losses theright holder has suffered or the profits the infringer has earned, the amount may beassessed by reference to the appropriate multiple of the amount of the exploitation feeof that patent under a contractual license. Where it is difficult to calculate the amountof compensation according to the above three method, the people’s court may awardthe damage of not less than RMB10000Yuan and not more than RMB1000000Yuanin light of such factors, as the type of the patent right, the nature and thecircumstances of the infringing act. However, there are some problems with each ofthe methods above to calculation the compensation for the damage of patentinfringement in the practices of the law.This article start from the purpose of the patent law and system to make clear theimportance to calculate the compensation of the patent infringement accurately, andthen analysis the problems happened in practice of the article65of the patent law,next introduce some relevant theories and practices in the developed countries, suchas United States, Germany, Japan, and TRIPS, finally raise some suggests to improve the methods of calculation in China.China shall refer to the good experience of USA and Japan in this field to achieve amore reasonable and scientific calculation methods for compensation of the damagecaused by patent infringement in order to protect the legitimate rights of the patentee,to encourage invention&creation and to promote the progress of science andtechnology. Generally,1. For the calculating the compensation based on the actual losses suffered by theright holder or the profits earned by the infringers, it is important to identify thecontribution of the profit of patented features to the whole infringing productdepending on various causal relation of the infringing product and the patent right.The Entire Market Value Rule or market share analysis can be used to determinethe appropriate measure of a lost profits award.2. For the reasonable royalty, the fifteen factors mentioned in the case ofGeorgia-Pacific could be referred to determine the royalty.3. For the statutory damages, it is always as a last choice; moreover, try to have areasonable amount based on the consideration of the important factors to thepatent value.4. Chinese court shall introduce the expert witness to calculate the compensationmore precisely owning to the expert’s professional ability in technology andeconomy.