The direct assistance  method: Is  a  variant of   the differential cost method. Under the direct assistance method cost that directly assisted in the production of the infringing goods are also allowed. Under this method, certain elements of  overhead and general administration are permitted as deductions.   Fully allocated  cost method: Sometimes referred to as the full absorption  approach,  is the most beneficial to the infringer.  Under this method, all  expense items properly allocated  under generally  accepted accounting  principles related  to the production of the infringing goods  are allowed.   After  determining  the infringer’s  profit  under one of  the three aforementioned methods, the infringer is permitted to apportion that profit to other assets that have contributed to profitability, but are not related to the infringement, such as other intellectual property, business  reputation, and the cost of capital. To avoid a duplicate award, the unit sales utilized in the determination  of the infringer’s profit cannot  be used when calculating lost profits of the owner. Reasonable Royalty In the case where  the plaintiff has minimal lost profits, and the infringer’s profits also result in a minimal amount, the courts have discretion to award the owner a reasonable  royalty based upon market transactions.  One must be extremely careful in reading royalty agreements to make sure that they are comparable and relevant to the owner’s products.   Corrective Advertising In addition  to damages stated above, the owner can also be awarded damages in the form of corrective advertising in order to compensate and assist in the reversal  of any negative  associations  resulting from the alleged  infringing actions.   Augmented Punitive Damages   The Lanham Act  gives the court discretion  to increase damages  under  certain circumstances. “In    assessing damages, the court may enter judgment   according to the circumstances of the case for any sum above the amount found as actual damages, not exceeding three times the amount.  If the court shall  find the recovery based on profits is either inadequate or excessive,  the court in its discretion enters judgment for such sum as the court shall find to be just according to the circumstances of the case.” This provision provides the court with substantial  discretion in awarding monetary damages.  It is therefore  essential to be aware  of the relevant case law in the circuit in which the case in being tried.   Statutory Damages Statutory damages are only provided in cases involving the use of counterfeit marks. The court has discretion to award the owner not less than a $1,000 per mark, but no more than $200,000 per mark, per type of goods or services sold, offered, or distributed. When the court deems that the use of the counterfeit mark is willful, the $200,000 ceiling per mark is raised  to $2 million dollars. An owner may elect to recover statutory damages at any time before judgment is rendered by the court.  Legal Fees Legal fees can be  awarded to the prevailing  party in exceptional circumstances. These circumstances exist when the prevailing parties’ claims are groundless, unreasonable, or pursued in bad faith.   The analysis of trademarks and related infringement damages is an intriguing and complex area of the law and requires the expertise  of skilled financial  professionals  to assist counsel in calculating  the appropriate amount of  damages under varying scenarios.  Calculating these damages appropriately can make an enormous difference to the value and profits of a firm’s. Written by Alan Schachter © CITRIN COOPERMAN & COMPANY, LLP CONNECTICUT | MARYLAND | NEW JERSEY | NEW YORK | PENNSYLVANIA | CAYMAN .