Who is Hybrid Audio LLC? Who are the owners and managers? How much did they settle for with the seven defendants? What is Aware's arrangement with Hybrid? How much did Hybrid Audio keep of the total settlement? How much did McKool Smith get paid? I can guarantee that the lawyers made substantially more than the $1.1 million that Aware received. Management at Aware has a legal duty to disclose the details of the fiasco to the shareholders. Based on what has transpired we now have to wait for Daphimo-Intellectual Ventures to file settle their lawsuits-stick licensing. That could be two years away. Futhermore whatever money gets paid has to be split with Daphimo, Intellectual Ventures and the Attorneys. There is NO good reason why Aware keeps transferring company owned patents to third party entities. The rationale on Hybrid was that Aware was afraid a countersuit could bankrupt them. If they only received $1.1 million as their percentage then the whole lawsuit could not have been worth more than $10 million to begin with so what was the point of Hybrid Audio LLC? Management owes us Full Disclosure.
“Where Apple can respond to injunction with a relatively cheap and effective design-around (ex. issuing a software update to change infringing code), the injunction threat makes for a relatively weak bargaining chip. These lawsuits presumably settle for amounts close to the values the inventions would have commanded ex ante.
“But what about cases in which Apple cannot easily design around the patent? Consider Kodak’s ongoing lawsuit against Apple. In early 2010, Kodak filed suit against Apple in the ITC, alleging that the iPhone infringed a number of its patents. The key patent in the case roughly covers image previewing in digital cameras.
“Before bringing its action against Apple, Kodak sued Samsung and LG for infringing the same patent. After Kodak won an initial victory in the ITC, Samsung and LG—now staring at the very real risk of an importation ban on their cell phones—settled with Kodak for $550 million and $414 million, respectively. These outsized settlements were paid for one feature of the phones’ digital camera. … The fact that such a relatively minor and ancillary component was able to command such outsized royalties is a sobering illustration of the leverage an injunction can afford patentees in ex post negotiations.
“And now Kodak is asking the ITC to ban the importation of iPhones into the United States. Can the infringement of one patent really lead to an importation ban on iPhones—a device covered by hundreds of other patents, a device that Apple has invested hundreds of millions of dollars in…? There can be little doubt that Apple, if faced with an importation ban on its iPhones, would (begrudgingly) write Kodak a very large check to license the camera technology—regardless of what the technology might have commanded ex ante. Kodak is well aware of its tremendous leverage: ... estimated that the royalties from Apple and RIM may well exceed $1 billion.”
Nicholas P. Chan. 59 UCLA L. Rev. 746 (2012) p. 771-2.
And that's without treble damages
Two questions regarding your precedential case.
1) when did Kodak shareholders realize there was a material settlement in their favor?
2) Does the 1 year plus waiting period , warranted by such a large sum of money, suggest the HA settlement would be of similar magnitude?
Kodak-Samsung/LG settled in late 2009 / early 2010 - similar to HA in 2012/2013.
Kodak 4Q10 CC says it received $629 million in IP payments in 2010 (settlement was $964 million plus royalty payments) and "had the Samsung receivable running throughout the year."
FWIW. If Hybrid Audio had the "industry essential patent" they would not get much relief from the ITC. IMHO.
As far as I know, the ITC can't award monetary damages but they can ban the import--powerful. They wont ban the import of the "industry standard". I think most plaintiffs file in federal district and the ITC for non-industry essential IP.
More conjecture . . .
Based on the complete bust that Hybrid Audio LLC turned out to be I fully expected the stock to take a major hit to the cash in the company, value of the building and $1 for biometrics despite better than expected earnings. That is exactly where we are today. I relied on Privet Funds due diligence on Hybrid Audio LLC when they said the settlement was worth $100 million and that Aware could expect $30 million (30%) and even if they cut that in half no worse that $15 million. Would like to know where Ryan Levenson and Cliff Orr got their information from?