Shareholders do not control the damages calculation or the amount awarded. It is mediated between the patent-holder and the infringer by the court - all subject to Title U.S.Code § 284 (2014).
============================================================
Patent Act Title U.S.Code §284. Damages
Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.
When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154(d).
The court (Judge Albright) may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.
========================================================
Judge Albright has not arrived a fair market value. A lot of calculations.
Hypothetical question to you - would you refuse to sell if it comes out higher than $2 or 3/sh? How can one run a business without any idea of what their patents are worth?
Review VPLM calculations for APPLE below. Note similar Apple cases are compared.
(Similar Excel worksheets can be set up for other infringers and get a ball-park idea.)
Apple, Inc. (Case No. 2:16-CV-00260)
Document 1-11 Filed 02/09/16 2016 1. APPLE ROYALTY MONETIZATION ANALYSIS OVERVIEW
apportioned profits from infringing products and services sold by Apple beginning FY 2010 to Feb 2016 (6 yrs 2 mo) methodologies of recent court cases including VirnetX v. Apple, Summit 6 v. Samsung and others in which a reasonable royalty rate is applied to apportioned profits (those specific to infringing features) on devices and services that are found to have infringed.
1.25% royalty rate (applied to apportioned profit) based upon our analysis of ten (10) recent major patent infringement court decisions. The weighted average court award (or settlement) as a percentage of apportioned profits in the analyzed cases is, by our calculations, 9.88%. As such, we believe that a 1.25% royalty rate on apportioned profits (which is 87% less than this weighted average) is reasonable if not conservative, particularly considering the very foundational nature of the VPLM patents.
1.25% royalty rate is almost twice the amount awarded in the recent VirnetX litigation. [ The basis for this difference is the relative frequency of use of the VPLM classification and routing patents as compared to the four VirnetX patents, which deal with creating a Virtual Private Network (VPN), which is typically used in the Apple Products for a video chat or some other secure communication. The data that was available on the usage of the VPN patents suggested that they would be used approximately one fourth as often as the Voice-Pal classification and routing patents, which are used with almost all cellular and WiFi voice and message communications.
Apple’s estimated historical profit from its iPhone, iPad and Mac devices (for conservatism, we have excluded any figures from sales of iPod, Watch or Apple TV, and iTunes/App Store). Average sale price is calculated as historical sales value divided by unit sales, by device, over the period. An estimated profit margin percentage is then applied for each device, based upon best available public information and research. An apportionment percentage rate is then applied as follows, based upon estimated end consumer usage of key infringing features for each device, including iMessage, voice calling, WiFi calling and Facetime: ?iPhone – 55% apportionment ?iPad – 35% apportionment ?Mac – 10% apportionment. This results in an estimated apportioned profit per device. The 1.25% royalty rate is then applied to such apportioned profits to arrive at a royalty figure per device, and this figure is multiplied by units sold for each device to arrive at total royalties.
2016 For Period Beginning FY 2010 (Jan 2010 through Feb 2016 - 6 years 2 months)
=========== iPhone === ======= iPad ============ Mac =======TOTAL
Sales ($)==$549,815,000,000==$147,645,000,000==$140,262,000,000= $837,722,000,000
Sales (Units)==853,801,000=====308,150,000======109,701,000=====1,271,652,000
Aver Selling Price= $643.96======= $479.13 ====== $1,278.58 ========$658.77
Est. Average Profit Margin (%)
====== =========65.00% ======== 52.00%====== 25.00% ========58.40%
Est. Aver Profit($)= $418.57=========$249.15=======$319.65========$384.71
Apportionment==55.00%========35.00%=======10.00%========46.27%
Apportioned Profit Per Device
=================$230.22========$87.20========$31.96========$178.01
Royalty Rate on Apportioned Profit
================1.25%===========1.25%=========1.25%========1.25%
Royalty per Device
=================$2.88============$1.09========$0.40=========$2.23
TOTAL ROYALTIES
==============$2,456,985,781=====$335,892,375===$43,831,875==$2,836,710,031
(Total about $2,8 billion 6 yrs, 2 mos)
Analysis: This analysis does not reflect any amounts for royalties that may be owed to VPLM by Apple for iPod, Watch, Apple TV, and iTunes and App Store revenues. As an overall methodology note, we have applied these apportionments and rates to Apple figures on a global basis, based upon (i) the place of device invention/design and (ii) the location of company data centers that handle various data communications. In terms of invention and design, all of Apple’s devices are designed in Cupertino, California (notably Apple’s headquarters is in close proximity to the Silicon Valley USPTO). As far as data center locations, all of Apple’s data centers are located within the United States Maiden, NC; Newark, Cupertino, and Santa Clara, CA; Reno, NV; and Prineville, OR.
APPLE - 2016 ADDENDUM
RECENT PATENT INFRINGEMENT CASES ANALYSIS DETAIL
B. Case Analysis
1. VirnetX v. Apple, Inc. (6:12-CV-00855 (E.D. Texas))
2. Wisconsin Alumni Research Facility (WARF) v. Apple (14-CV-0062 (W.D. Wis.))
3. Microsoft Corp. v. i4i Ltd. P'ship, 131 S. Ct. 2238, 180 L. Ed. 2d 131 (2011)
4. VirnetX v. Microsoft (6:07-cv-00080 (E.D. Texas))
5. Wisconsin Alumni Research Facility (WARF) v. Intel (08-C-78-C (W.D. Wis.))
6. Apple Inc. v. Samsung Electronics Ltd., Inc. (12-CV-00630-LHK (N.D. Cal))
7. Apple Inc. v. Samsung Electronics Ltd., Inc. (11-CV-01846-LHK (N.D. Cal))
8. Carnegie Mellon University v. Marvell Technology Group, Ltd. (09-CV-00290-NBF (W.D. Pa.))
9. Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283 (Fed. Cir. 2015)
10. ActiveVideo Networks v. Verizon Communications (10-CV-0248 (E.D. Va.))
C. Conclusion
the weighted average damage award as a percentage of court award or settlement amount the ten (10) cases analyzed is 9.88%. Comparatively, Voip-Pal has utilized a modest royalty rate of just 1.25% in its Royalty Monetization analyses, which represents an 87.3% discount to this weighted average figure.
Document 1-12 Filed 02/09/16
