Ex Ante v Ex Post

One of the key components of calculating damages is the date used to calculate the damage. In most cases it is the date that the wrongdoing occurred. Often though, months or years later, the case goes to court. It is obvious that after a few years of the wrongdoing it is easier to see how the damages are actually being incurred, if any. In some cases, it is useful to use all the available information through the date of trial, but often we are limited to utilizing information up to the date of the wrongdoing.

Two terms used to describe the two methodologies for calculating damages based on a specific date are Ex Ante, which is Latin for “from before” and Ex Post which is Latin for “from after.” 

Which approach to use, the Ex Ante or Ex Post is usually based on:

1. Case law
2. The facts of the case
3. The expert’s view

When using the Ex Ante method we use estimates for future income and expenses before the actual results are known.

With Ex Post we have a lot more precision and accuracy because we know the actual results.

Michael Dunbar, noted expert describes the two methodologies as follows:

A pure Ex Ante analysis would use information only if it were available at the time of the unlawful act to calculate the damages incurred at the time of the act. Practitioners base the analysis, therefore, as though they were to analyze the damages caused by the act contemporaneously with the occurrence of the act.

A pure Ex Post analysis uses all the information available up to the date of analysis. Such an outcome based analysis accounts for facts that became known after the unlawful act.

Situations do arise where experts have a choice between both methodologies. For example, if a business was damaged and unable to continue, and the owner had planned to sell the business within the next year the obvious choice would be to use the Ex Post method. However, if they plan to continue to run the business you would use the Ex Ante Method.

In the case of Sinclair Refining Co. v. Jenkins Petroleum Process Co, the calculation of damages would typically follow the legal principles relevant at the time, which generally involves considering the reasonable royalties or lost profits that could have been earned due to the infringement.

Ex Ante vs. Ex Post

• Ex Ante: This approach calculates damages based on the anticipated benefits and costs known or expected at the time the infringement began. It involves estimating the value of a patent based on the forecasted profits or royalties from the patented technology before the infringement occurs.
• Ex Post: This approach calculates damages based on information and developments that occur after the infringement has started. It often takes into account the actual profits made by the infringer and the actual losses incurred by the patent holder.

Damages in Patent Infringement Cases

• In many patent infringement cases, including this one, damages are typically calculated based on the royalty that would have been reasonable at the time the infringement began (an Ex Ante assessment). The idea is to compensate the patent holder for what they would have reasonably charged for a license to use the patented technology before any infringement occurred.

The judge in this case ruled that it was appropriate to use Ex Post data which would help calculate lost patent revenue based on solid data. This is a landmark ruling.