The Patent Value Guide: General Principle I – Lack of Intrinsic Value

The Patent Value Guide launched today, initially covering some of the principles that are key to understanding why (some) patents have value. It is the beginning of a eBook that will serve as a valuation guide for business executives and investors.

Re: the Debate over ‘Reasonable Royalties’ on Litigated Patents

By: Fernando Torres, MScChief Economist, IPmetrics LLC

It is always important to take the pulse of your industry at the end of the year, delving deeper into important topics that were not urgent during the year but that gradually help shape your business practice.   That is why we are glad to see IMS Expert Services’ December issue of BullsEye reviewing the top ten cases of the year relating to expert witness testimony.

In this post we highlight another intellectual property infringement damages expert witness case, this time in the context of patent litigation.  The law is not precise enough when it comes to the calculation of reasonable royalties as a measure of damages for patent infringement.  In our experience, this is an area where the choice of expert witness is definitive and the multitude of factors and case-specific considerations combine to challenge the damages calculation and the presentation of the expert’s testimony.

As BullsEye points out, “…The heat got turned up even higher this year when the Federal Circuit Court of Appeals overturned a $500,000 reasonable-royalty award, ruling that the expert testimony on which it was based was speculative and unreliable.

“Because the district court’s award relied on speculative and unreliable evidence divorced from proof of economic harm linked to the claimed invention and is inconsistent with sound damages jurisprudence, this court vacates the damages award and remands,” the Federal Circuit said…”

Read more at: IMS BullsEye December 2010.

Case: ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860 (Fed. Cir. 2010)
Originally published on the IPmetrics Blog.

IP finance: Meet the Trademark Troll

The interesting article at "IP finance: Meet the Trademark Troll" poses the question of how to determine the value of defending a trademark opposition (the low cost option) vis-a-vis pursuing a civil litigation strategy (the high cost option).
From a theoretical economics perspective, one would expect not to see the "Trademark Troll" business model very often.  The main reason is that the choice of trademarks is very wide and flexible, compared to the situation in patents and technology (a necessary and sufficient condition to having a product).  If faced with an opposition, abandoning the mark is often an easy choice, leaving the Troll empty handed.
But it bears considering that Apple Inc. has, in the past few years, barged into this territory head on by branding new products and services using the "i" prefix, regardless of the pre-existence of trademarks for iPhones (like in the case with Cisco), iPads (as in the case with Fujitsu), or iAds (like in the Innovate Media case) to name the most prominent.
So, is Apple reverse-trolling trademarks? And, if so, is this an inexpensive strategy as the rumored $1 million settlement leaked by a consultant despite the confidentiality of the settlement? or is it as expensive as the potential $10 million also hinted at in the confidential settlement breach? (Did Apple pay big bucks in iAds settlement?)