Challenges in damages quantification involving early-stage intellectual property

The valuation of intellectual property is frequently a significant issue in the damages phase of disputes between companies in innovative industries. The selection of appropriate valuation methods, and the application of those methods to the specific facts of the dispute, present challenges to the damages expert and to the finder of fact (whether this is a judge, jury or arbitral tribunal). These challenges may be especially acute in disputes involving intellectual property assets that have not been incorporated in a commercialized product as of the date of the conduct at issue. In this article, we review some of the sources of these difficulties and methods that may be considered to value early-stage intellectual property.