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VirnetX Holding Corp Message Board

peterrbrady 2 posts  |  Last Activity: Mar 25, 2014 9:18 AM Member since: Mar 28, 2004
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  • peterrbrady by peterrbrady Mar 25, 2014 9:18 AM Flag

    Had a chance to read appeal transcripts and Jeff's article. The issues are somewhat muddled as Rader's questions are misleading, but I know what he's getting at.

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    Both Apple and the judges are saying VHC used the entire market value rule, which was improper. At least, according to them, they used it from a practical point of view. So what is the issue with the smallest saleable unit? This is Rader's unarticulated issue. In the Uniloc case the court concluded "the use of a saleable unit that is greater than the patented feature is going to induce Uniloc error." This is why Rader (with Apple's prodding) were questioning the value of VHC's patent in regards to the value of the total product. This is why he emphasizes that it looks like VHC's product is video conferencing itself and not a part of it.

    The legal issue presented, and not yet resolved to the satisfaction of the appeals court at least, is what is the worth of an application that is part of a product that has many applications.

    The court, particularly Rader, says the entire market value is unavailable to VHC and the smallest saleable unit is inappropriate because they used a saleable unit that was greater than the patented feature. The Nash Bargaining Solution is discounted as unhelpful theory and not appropriate also.

    One of the last things Rader says is "Before you sit down I just want to hear one more time. Weinstein starts with the price of the iPhone. How does he claim any right to start there in his equation, when the claimed invention is only a security application for two of hundreds of applications that can appear on that iPhone?" It's clear where he is headed in the opinion.

    He is clearly discounting the three theories VHC has presented, in my opinion anyway.

    Earlier in the hearing, Rader was asking Jakes about why the invention was worth 29 cents in the Mac and 6.49 in the iPhone. The simple answer is that each different product has a different "smallest saleable unit." Why he did't seem to grasp that is beyond me.

    What is the most irritating part is that the appeals court has offered no direction on this. JLD and the lower court would be accomodating to anything that was clarified by the appeals court. The task is to find a reasonable royalty. The lower court did its best to apply the law but the appeals court has offered no direction. Just dissatisfaction.

    I expect the case to be remanded to recalculate the issue. I appreciate JWW's article but disagree with how he thinks the case will play out at the appeals level.

    I am an attorney and have been long VHC for about 4 years. Hopefully this damages issue can be expeditiously settled.



  • Reply to

    Great New Article from Jeff on Seeking Alpha

    by willie7 Mar 24, 2014 2:22 PM
    peterrbrady peterrbrady Mar 25, 2014 5:24 AM Flag

    Can't get page 2 of JWW's article (for a host of reasons) Can post?

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