Market-share theory is a method used to quantify the financial impact on a company due to another company’s misconduct. It involves comparing the company’s market share before and after the misconduct occurred. This theory is also applicable in patent infringement cases, where it is assumed that the original patent holder would have maintained the same market share if the infringement had not occurred.
The market-share theory is a method used in antitrust and patent cases to determine damages for lost profits. It involves calculating the impact of the defendant’s violation on the plaintiff’s output or market share. This theory assumes that the percentage of the market that the plaintiff holds is equivalent to the percentage of the defendant’s market that the plaintiff would have captured if there was no violation. For instance, if a company is found guilty of antitrust violations and causes another company to lose 10% of its market share, the damages awarded to the plaintiff would be based on the assumption that the plaintiff would have captured that 10% of the market if there was no violation. Similarly, in patent cases where the patentee and the infringer share the market with a noninfringing competitor, the court assumes that the percentage of the market that the patentee holds is the same as the percentage of the infringer’s market that the patentee would have captured if there was no infringement. For example, if a company infringes on a patent and causes the patentee to lose 5% of its market share, the damages awarded to the patentee would be based on the assumption that the patentee would have captured that 5% of the infringer’s market if there was no infringement.
Market-share theory is a legal concept used in certain types of lawsuits, particularly in product liability cases. It allows plaintiffs to hold multiple defendants liable for damages based on their respective market shares, even if the specific defendant responsible for the harm cannot be identified.
Under market-share theory, each defendant’s liability is determined based on their share of the relevant market at the time the product was sold. This means that defendants are held responsible for the proportionate amount of damages based on their market share, regardless of whether they can be individually identified as the cause of the harm.
Market-share theory is commonly used in cases involving defective products, such as pharmaceutical drugs or asbestos-related illnesses, where it is difficult to pinpoint the exact manufacturer responsible for the harm.
One advantage of market-share theory is that it allows plaintiffs to seek compensation from multiple defendants, increasing their chances of recovering damages. It also promotes fairness by distributing liability among all potentially responsible parties based on their market share.
Yes, there are limitations to market-share theory. It may not be applicable in all jurisdictions or for all types of cases. Additionally, it requires the plaintiff to prove that the defendants’ products were substantially similar and that they collectively caused the harm.
Market-share theory is primarily used in product liability cases. However, it may not be applicable in cases involving non-product-related harm, such as medical malpractice or personal injury claims.
Market share is typically determined by analyzing historical sales data, industry reports, and expert testimony. The court will consider various factors, such as the defendant’s market presence, advertising efforts, and overall sales volume, to determine their proportionate share of the market.
In some cases, a defendant may be able to escape liability under market-share theory if they can prove that their market share was negligible or non-existent at the relevant time. However, this defence is often difficult to establish.
Yes, there are alternative theories to market-share liability, such as alternative liability and concert of action. These theories may be used in cases where market-share theory is not applicable or does not provide a satisfactory legal basis for holding defendants liable.
No, market-share theory is not universally recognized in all jurisdictions. Its acceptance and application may vary depending on the specific legal system and the court’s interpretation of relevant laws. It is important to consult with a legal professional to determine the applicability of market-share theory in a particular jurisdiction.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/market-share-theory/
- Modern Language Association (MLA):Market-Share Theory. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/market-share-theory/.
- Chicago Manual of Style (CMS):Market-Share Theory. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/market-share-theory/ (accessed: May 09 2024).
- American Psychological Association (APA):Market-Share Theory. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/market-share-theory/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts