Legal Definitions - Panduit test

The Panduit test is a four-factor test used to measure profits lost due to patent infringement. In order to prove patent infringement, the patentee must demonstrate the following:

1. There was a demand for the product
2. The patentee had the manufacturing and marketing capacity to meet that demand
3. There were no acceptable noninfringing alternatives on the market
4. How much was lost in profits

For example, if a company has a patent on a new type of phone case and another company begins producing and selling a similar phone case, the patentee would need to prove that there was a demand for the phone case, they had the ability to manufacture and market the phone case, there were no other noninfringing alternatives available, and how much profit was lost due to the infringement.

The Panduit test was established in the case of Panduit Corp. v. Stahlin Bros. Fibre Works, Inc. in 1978 by the Sixth Circuit Court of Appeals.