There is no greater proof of the value of intellectual property than the amounts awarded in litigation concerning IPR violation. And as some of the recent verdicts demonstrate, it seems the bigger the brand, the bigger the damages.

The reason is simple. Today's top business names have invested millions – perhaps even hundreds of millions – of dollars in building and protecting their brands. And the courts recognize this, as evidenced by some of the biggest verdicts awarded recently in intellectual property cases.

Take patent litigation.

With trial successes at their highest level in history and with the amounts in damages awarded reaching the stratosphere, two things are clear. One, patent litigation today serves not just as an IP protection tool for patent holders, but also an effective way to monetize brands. Two, the courts are clearly on the side of patent holders who can prove the validity, enforceability and infringement of their patents.

PriceWaterhouseCoopers' recent 2008 Patent Litigation Study: Damages awards, success rates and time-to-trial documents current trends and developments. According to the report:

• The annual median damages award since 1995, when adjusted for inflation, remained relatively the same - $3.9 million.
• Telecommunications and medical devices have been the top patent litigation winners – with telecommunications having the highest average damages award ($31.3 million) and automotive brands garnering the lowest ($34,108).
• Judge or jury? More and more patent litigators think juries would be more sympathetic to their cause, with juries recently (since 2000) awarding greater damages than judges ($8.6 million vs. $900,000)
• The types of damages awarded have changed from the '80s and '90s when lost profits were the main form of damages. Today, reasonable royalties are the predominant measure of damages awards.
• Patent holders have succeeded in litigation 37 percent of the time. While they have a measly 19 percent success rate in summary judgment, they win 57 percent of the time (and growing) at trials.

Here's one of the latest examples of the huge awards impacting top brands involved in patent litigation. A U.S. judge recently upheld a jury's ruling for $368 million in damages against Microsoft Corp. for violating patents held by Alcatel-Lucent. Furthermore, the judge said that Microsoft owes Alcatel-Lucent a total of $512 million, which includes interest on the original award.

Trademark and copyright infringement: smaller awards but in the millions as well.

Here are just three instances of infringement litigation  that yielded verdicts of at least $1 million, as discussed in past BPCouncil articles.

Louis Vuitton Malletier SA and Louis Vuitton Canada Inc. vs. Wynnie Lee, Jacqueline Lee, and Francisca Hung-Yee Ngan - $1 million for Louis Vuitton

Louis Vuitton has always been frustrated by the light sentences imposed on counterfeiters in Canada – where counterfeiting law mandates light sentences for first-time offenders and heavier ones for unrepentant repeaters. But recently, the French fashion house had reason to celebrate. The luxury brand company sued a Canadian business owner, Wynnie Lee, and her sister and daughter for trademark infringement selling fake Louis Vuitton items in the various fashion stores they owned. The British Columbia (BC) Supreme Court agreed and, in a landmark decision, handed down the largest award against counterfeiting in Canada – more than $1 million in damages and court costs

Lucky Break Wishbone  vs. Sears and Young & Rubicam  - $1.7 million for Lucky Break

Retail giant Sears and advertising titan Young & Rubicam – both losing a copyright infringement lawsuit to a tiny Auburn, Washington-based company making plastic wishbones, of all things. But there it is. According to a press release by the plaintiff’s attorneys, law firm Darby & Darby, “A Seattle jury in the District Court for the Western District of Washington returned a verdict of copyright infringement on two copyright registrations, finding that Sears used Lucky Break’s wishbone design without permission in a national advertising campaign before Thanksgiving 2005. Both Sears and Y&R were found liable for infringing Lucky Break’s registered product warning.” The verdict in actual damages and profits for the plaintiff – $1.7 million.

Adidas AG vs. Payless Shoe Stores - $305 million for Adidas

Are the three stripes in Adidas’ logo for Adidas and Adidas alone to use? Or are they a common design that everyone should have access to? This question was effectively decided when a jury in Portland, Oregon found shoe store Payless guilty of trademark infringement, trademark dilution, injury to business reputation and unfair and deceptive trade practices through its use of two stripes and four stripes in its products. The jury awarded Adidas a total of $304.6 million: $30.6 million in actual damages, $137 million in punitive damages (for willful infringement) and $137 million as an account of profits. The award is subject to appeal and adjustment by the judge.

A lesson for those who would violate the IP rights of brands big or small: Counterfeiters may sometimes get away but, eventually, counterfeiters do pay and, if they decide to mess with the big guys, pay big…really big.