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September 08, 2008


Ad Trader

Joe - How do you think this will play out? Everyone settles for big/small dollars with PA?

Joe Mullin

Ad trader,

Thanks for your comment.

Something like 99% of patent cases settle before trial. So it is likely everyone will settle sooner or later. I'm too aware of my own limits to get into the game of guessing which cases will be in the 1% that goes to trial.

It's rare to find out how much the parties settle for. If it’s a big settlement and a public company, it might show up in an SEC filing. That's very unlikely to happen here, since a company as big as Google or Yahoo would only have to report a settlement that's “materially significant” (massive.)

We do know that it costs $4-5 million for a defendant to go to trial, even if they win. Often a patent-holding company will want to settle for just less than that amount. In this case, we have a plaintiff who has shown he is ready and able to take a case to trial, and win. (Orion IP got $34 million in damages from Hyundai back in 2004.) The lawsuit is in a district where defendants are very unlikely to win on summary judgment. We also know that the same plaintiff settled with a major car company, DaimlerChrysler, for $2.3 million... (although that was a few years ago.) It would make sense to me that a tough plaintiff facing a large defendant, as we have here, would be shooting for a settlement at least in the $2 million to $4 million range. That’s pure guesswork though. He could be aiming much higher...

I’m sure I have some readers who would know a lot better than I do… Maybe someone will see fit to enlighten us.

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