"Lawsuits aren't like wine; they don't improve with age."
An important law to consider is the U.S. Patent Act, specifically 35 U.S.C. § 286, which says:
"Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action."
Given the 6-year rule, here's a few important dates:
Mar 30, 2006 - Earliest infringement damages (6 years prior to filing complaint) Mar 30, 2012 - Worlds sued Activision Sep 24, 2013 - Certificates of correction issued Nov 12, 2016 - Worlds' patent chain expired (20 years after patent application) Nov 12, 2022 - Statute of limitations is up (6 years after patent chain expiration)
If the court determines Worlds' patents were valid during the precorrection period, then Worlds will be entitled to the “normal” period of infringement damages, starting 6 years prior to the date of filing their lawsuit (Mar 30, 2006) till patent expiration (Nov 12, 2016), or a total of 10 years, 7 months, and 14 days of damages.
If the court concludes Worlds' patents were invalid during the precorrection period (which is the way things currently stand), the period of infringement damages starts when the certificates of correction were issued (Sep 24, 2013) till patent expiration (Nov 12, 2016), or a total of 3 years, 1 month, and 20 days of damages.
So yes, I am being conservative at the moment with the potential damages Activision faces. If a future ruling determines Worlds' patents were valid during the precorrection period, then the damage period could be 338% longer.
Note that in both cases, once the patent chain expired (Nov 12, 2016), Worlds has no further rights to damages after that date. Any revenue Activision (or another company) generates using Worlds' technology after expiration (Nov 12, 2016) cannot be "tacked on" to a damages calculation.
As an example, imagine Worlds sues a new infringer today (Mar 1, 2019). Since the patent chain expired (Nov 12, 2016) and they can only recover damages for the prior six years, Worlds will miss out on 2 years, 3 months, and 18 days (38%) of potential damages. It will only get worse, until Nov 12, 2022 when the statute of limitations is up and Worlds can no longer recover any damages from anyone.
Given that the clock is ticking, I just updated an additional assumption: "Average infringing revenue" from $1.3B to $800M. This brings the fair value down to about $6.50 per share.
