Enhanced damages

Discretionary damages of up to three times the compensatory award available in patent infringement cases where the defendant engaged in willful or egregious infringement, codified in 35 U.S.C. § 284. Enhanced damages are not automatic upon a willfulness finding — courts apply a multi-factor analysis examining the infringer's behavior, degree of culpability, closeness of the case, duration of the misconduct, and remedial actions taken. In funded patent cases, the prospect of enhanced damages creates upside beyond the base damages model and strengthens the plaintiff's negotiating leverage by exposing the defendant to worst-case exposure multiples. Funders building return models typically apply probability-weighted enhancement scenarios rather than assuming full trebling, consistent with courts' variable and discretionary application.

Because courts apply a discretionary, multi-factor analysis rather than automatic trebling, funders model enhanced damages as a probability-weighted addition to the base royalty or lost-profits figure — applying a fractional multiplier reflecting historical enhancement rates for comparable culpability fact patterns — rather than assuming full 3x exposure. The prospect of enhancement is priced primarily for its settlement-leverage effect: a defendant facing a credible enhancement theory has stronger incentive to resolve before a willfulness finding is made, which shortens expected case duration and improves the funder's realized return.