Prejudgment Interest
The court may award interest to the patentee, in addition to damages, upon finding a patent is both valid and infringed.
Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.
— 35 U. S. C. § 284.
Interest serves to compensate the patentee.
The standard governing the award of prejudgment interest under § 284 should be consistent with Congress' overriding purpose of affording patent owners complete compensation[.]
— General Motors Corp. v. Devex Corp., 461 US 648, 655 (S.Ct. 1983).
Interest is not punitive.
Prejudgment interest has no punitive, but only compensatory, purposes. Interest compensates the patent owner for the use of its money between the date of injury and the date of judgment.
— Oiness v. Walgreen Co., 88 F.3d 1025, 1033 (Fed.Cir. 1996).
Prejudgement interest is typically awarded in patent cases.
[P]rejudgment interest should ordinarily be awarded. In the typical case an award of prejudgment interest is necessary to ensure that the patent owner is placed in as good a position as he would have been in had the infringer entered into a reasonable royalty agreement.
— General Motors Corp. v. Devex Corp., 461 US 648, 655 (S.Ct. 1983).
Prejudgement interest is available to both practicing and non-practicing entities.
NLG cites no case law suggesting that prevailing non-practicing entities are not entitled to prejudgment interest. We decline to create such a statutory exception.
— DdR Holdings, LLC v. Hotels. Com, LP, 773 F. 3d 1245, 1263 (Fed. Cir. 2014).
The court is not required to award prejudgment interest.
We do not construe § 284 as requiring the award of prejudgment interest whenever infringement is found. That provision states that interest shall be fixed by the court, and in our view it leaves the court some discretion in awarding prejudgment interest.
— General Motors Corp. v. Devex Corp., 461 US 648, 656–57 (S.Ct. 1983).
For example, prejudgement interest may be limited when a court finds undue delay on the part of the patentee.
Crystal's two year delay in initiating the present suit caused the damages owed by TriTech and OPTi to escalate. The record contains sufficient evidence for the district court to determine that Crystal's delay was self-serving and resulted in prejudice to the defendants. Thus, the district court acted within its discretion in denying Crystal prejudgment interest.
— Crystal Semiconductor v. Tritech Microelectronics, 246 F. 3d 1336, 1362 (Fed. Cir. 2001).
An analysis of prejudgment interest should reflect past damages only.
The trial court abused its discretion by awarding prejudgment interest on Oiness' entire damages award, including the projection of future damages. By awarding interest on projected lost profits, the trial court compensated Oiness for losses it had not yet suffered. In other words, the court granted Oiness interest for the use of its money when Oiness' money had not been used. This award violates the compensatory purpose of prejudgment interest.
— Oiness v. Walgreen Co., 88 F. 3d 1025, 1033 (Fed. Cir. 1996).