Marathon Digital Holdings Inc (MARA)

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Northland: MARA (Outperform) - Damages Assessment in Apple Case

 

Marathon Patent Group (MARA)

 

 

Damages Assessment in Apple Case

 

 

Outperform
Price: $1.55
Price Target: $8.00

 

 

The court made public its SJ rulings in the MARA (Renselear)/Apple case. MARA's expert witness assessed damages at several hundred mil dollars excluding future royalties. Apple tried to exclude the expert testimony from trial. MARA/Renselear is asserting Apple Siri infringes a natural language processing patent. The next step in the litigation will be setting a trial date, which is expected later this year.

 

As reported previously, the court denied key Apple summary judgment motions. Hence, the case will go to trial unless settled first. Apple has also tried to have IPRs instituted on numerous occasions, and the PTAB rejected all attempts.

 

As part of the SJ rulings, the court made public various assertions and facts. An interesting part of the ruling was the expert witness analysis. A few findings include:

·       The expert assessed the profit value of Siri to Apple at $1.287 bil for the period Oct. 2011 to Sept. 2014. The witness said the patent represented 1/3 of the value of Siri, and thus damages amounted to $429 mil. These damages do not include future royalties related to the period Oct. 2014 through 2021 when the patent expires.

·       A separate "hypothetical" approach to damages analysis assumes a hypothetical negotiation of a license fee prior to any infringement. This approach, which takes into account numerous variables, suggested Apple would pay $175-$200 mil in royalties through Sept. 2014. Additional royalties would be required for future time.

 

The jury will determine whether the analyses are correct or unfounded, but the court found substantial grounds to include the expert testimony. We'd also note the case will be presented to the jury as patents developed by professors at Renselear Polytechnic Institute v. Apple. The court hearing the case is in the jurisdiction where Renselear is located.