What We Know
Proof of commercial success has been allowed by courts to be used to bolster non-obviousness assertions in patent litigation. Additionally, it is often a key economic variable in many ITC patent infringement matters. While elements such as profitability, market share, unit sales, and revenue, among others, can be important components of a commercial success analysis, commercial success must ultimately be tied to the demand for the patented feature. These calculations often demand very sophisticated economic and financial analyses, as well as a thorough understanding of the patented feature. Our experts possess the required combination of skill and experience to make accurate and supportable quantitative assessments of commercial success.
The proliferation of the Internet and web-based products and services has increased the ease for disseminating copyrighted material, bringing greater attention to the economic value of creative works. FSG’s experts are adept at quantifying the economic value of copyrighted works as well as determining the impact of alleged wrongdoing on value.
As intellectual property assets become drivers of a company’s profitability, it is crucial to ensure their optimal potential. FSG personnel can help companies identify their assets, measure their profitability, share best practices and develop strategies to extract maximum value from these assets. Our experience includes conducting inventory studies and developing IP management systems. Additionally, we are able to help clients identify risks to their IP assets and develop strategies to manage these risks. We have also helped negotiate licenses and sales.
FSG’s experts have literally written the book on valuation. We have extensive experience in valuing intellectual property for strategic decision making, tax matters, disputes, financial reporting, and compliance needs. Our opinions are based on a thorough research of the company, industry and asset in question, as well as rigorous financial analyses and modeling.
Patent suits at the International Trade Commission (ITC) have become increasingly more prevalent in recent years and the stakes are often do-or-die for the parties involved. As such, these cases typically require sophisticated economic analyses on issues such as the nature and scope of appropriate remedies, anti-competitive behavior, proof of commercial success, and bond issues, among others. Our economists and intellectual property experts are uniquely qualified to address these topics and have significant experience providing testimony in ITC matters
FSG experts have quantified and testified to lost profit calculations in numerous matters. We rely on sophisticated statistical, accounting and economic expertise, as well as the application of the most current case law to calculate and quantify reliable and supportable lost profit damages.
Patent litigation requires a thorough understanding of the industry and market conditions, as well as applicable precedents and current case law. Our experts have the requisite experience and knowledge-base to provide sophisticated, clear and reliable analyses in patent infringement matters. Our opinions are based on sound economic analyses and thorough research of the industry and past transactions for similar patent rights. As a result, our opinions are persuasive and have held up under the intense scrutiny of high-stakes litigation.
Additionally, our intellectual property experts also work closely with our antitrust experts to provide specialized expertise on the antitrust issues that frequently arise in patent litigation.
Reasonable royalty calculations are an essential part of patent damages analyses, yet they are often times the most difficult damages component to accurately quantify. Our experts are knowledgeable on the most current case law and methods related to these calculations, and they are skilled at employing them to derive accurate and reliable quantitative results.
Errors in royalty reporting can occur for a number of reasons, including calculation errors, poor internal controls and a lack of understanding of often complex agreements. FSG’s experts can assist clients with royalty audits utilizing licensed CPA’s who have held leadership positions at the big 4 accounting firms and are recognized experts in Generally Accepted Auditing Standards and GAAP. We can also assist clients in developing efficient and effective monitoring systems.
Trade Secret Litigation
Misappropriation of trade secrets present unique challenges at it is often governed by state law. Having testified in multiple jurisdictions, FSG’s experts have the experience to quantify damages using flexible models that account for all case facts. Our opinions are always presented clearly and concisely, even when issues in the case are highly complex.
Litigation can often involve claims or trademark and trade dress infringement, as well as false or misleading advertising. Our experts have been involved in cases in which the trier of fact is asked to determine if such allegations are true, and if so, what the impact of it was. Our team of experts has designed, commissioned and analyzed survey tools that help juries to understand how a trademark, trade dress or any other form of brand infringement might impact customer understanding and valuation of a product or brand. We can provide quantitative rigor in this area, which is all too often left to subjective conjecture. This approach provides a solid foundation for our damage opinions. Additionally, our experts are adept at identifying weaknesses in surveys that have been designed or administered by less rigorous practitioners.
Practice Area Contact: Marc Vellrath, Ph.D., CFA, or Terry Lloyd, CPA, CFA
What We’ve Done
- Calculated lost profits damages for a company in the cardiac rhythm management business.
- Calculated damages in a misappropriation of trade secrets dispute between two computer software firms.
- Assessed reasonable royalty and lost profits claims involving a baseball training product
- Determined reasonable royalties due to patent infringement in the prepaid wireless telecommunications industry.
- Analyzed the commercial success of patented improvements in a medical device by comparing the pricing, quantities sold, and profitability of relevant products before and after the introduction of the patented improvements.
- Assessed liability and quantified damages in a misappropriation of trade secrets dispute between two drilling fluids firms.
- Computed reasonable royalties and lost profits damages arising from alleged infringement of a patent disclosing an improvement in coding technology used in garage door openers
- Assessed the amount of reasonable royalties due to patent infringement involving two air-jet weaving machine patents. Critiqued lost profits and reasonable royalties claimed by plaintiff.
- Provided business strategy and licensing assistance to the owner of an internet patent portfolio.
- Computed patent infringement damages for a defendant in a matter involving computer hardware technology.
- Assisted an international agribusiness company in its defense against patent infringement charges pertaining to its meat processing and packaging division.
- Assessed lost profits and the diminution of business value claims involving a misappropriation of trade secrets dispute between a start-up biotechnology firm and a nationally renowned research institution.
- Calculated damages in a patent infringement case involving two oil field services companies.