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Introduction
The assessment of damages following a finding of patent infringement is governed by the fundamental principle that damages must compensate for actual loss. An important factor limiting recovery is the availability of non-infringing alternatives. Both English and American courts recognise this concept, but the doctrinal approaches diverge.
This article examines the role of non-infringing alternatives in the UK patent damages framework, referencing the leading authorities, and contrasts the position with the structured approach adopted in the United States.
The UK Approach: Causation and Mitigation
Under English law, damages must place the claimant in the position they would have been in but for the infringement. This requirement anchors the analysis firmly in causation principles.
In Gerber Garment Technology Inc v Lectra Systems Ltd [1997] RPC 443 (CA), the Court of Appeal emphasised that damages are compensatory and causally linked to the infringement. Losses unconnected to the defendant’s wrongdoing are not recoverable. A defendant may, therefore, argue that the claimant would not have captured the sales in question because customers would have opted for available non-infringing substitutes.
The decision in General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1976] RPC 197 (HL) reinforces this view. The House of Lords held that the patentee bears the burden of proving a real, non-speculative loss. The presence of acceptable alternatives, if established, may break the chain of causation and negate claims for lost sales or profits.
Further clarification was provided in Hollister Inc v Medik Ostomy Supplies Ltd [2012] EWCA Civ 1419, where the Court of Appeal reaffirmed that mitigation principles apply. The claimant cannot recover losses that could reasonably have been avoided through the availability of other products.
Thus, English law does not isolate “acceptable non-infringing alternatives” as a distinct element, but considers their existence as part of the broader causation and mitigation inquiry.
The US Approach: Structured Application under the Panduit Test
By contrast, the United States has developed a structured four-part framework for assessing lost profits, established in Panduit Corp v Stahlin Bros Fibre Works Inc 575 F.2d 1152 (6th Cir. 1978). One of the Panduit factors requires proof of the “absence of acceptable non-infringing substitutes.”
In Grain Processing Corp v American Maize-Products Co 185 F.3d 1341 (Fed. Cir. 1999), the Federal Circuit clarified that a defendant may defeat a lost profits claim by demonstrating that it could have offered a non-infringing substitute at the time of infringement without undue cost or effort. Crucially, the alternative need not have been commercially available at the relevant time; it suffices that it could have been readily developed.
SmithKline Diagnostics Inc v Helena Laboratories Corp 926 F.2d 1161 (Fed. Cir. 1991) further held that the acceptability of the substitute must be assessed from the perspective of the customer, not the manufacturer.
Thus, the US approach formalises non-infringing alternatives as a discrete, mandatory consideration, placing a clear burden on defendants to adduce concrete evidence of availability and market acceptability.
Comparative Analysis
| Aspect | United Kingdom | United States |
| Framework | General principles of causation and mitigation | Structured Panduit Test |
| Focus | Whether infringement caused the loss | Existence and acceptability of substitutes |
| Defendant’s Argument | Break in causation chain | Defeat of lost profits claim through substitutes |
| Alternative Availability | Must exist or be reasonably achievable at time of loss | May be existing or readily achievable without undue burden |
| Key Authorities | Gerber Garment, General Tire, Hollister | Panduit, Grain Processing, SmithKline |
While the substantive outcome — limiting damages where substitutes are available — is broadly similar, the means by which it is achieved differ markedly. English law permits a flexible, case-by-case analysis rooted in causation. In contrast, US law imposes a rigid evidential framework under the Panduit factors.
Conclusion
The principle that non-infringing alternatives constrain recoverable damages is well recognised on both sides of the Atlantic. However, practitioners must be mindful that in the UK, the analysis will focus on causation and mitigation within the general compensatory framework, whereas in the US, a defendant must specifically and affirmatively satisfy the structured requirements of the Panduit test. Understanding these differences is critical for effectively advancing or defending damages claims in patent litigation.
For expert legal advice on patent disputes, contact Lawdit Solicitors at info@lawdit.co.uk.
