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Tag: Patent Valuation

Lynn’s Picks: Foresight’s Patent of the Week – US Granted Patent 9,601,033: Pop-Up Greeting Card with Tab Support of a Laser-Cut, Slice-From Pop-Up Element (LovePop)

Posted on Modified on by Lynn Dudinsky

Disclaimer: This blog was created for informational purposes only and does not represent Foresight’s or the author’s opinion regarding the validity, quality or enforceability of any particular patent covered in this blog.  Foresight is not a law firm and no portion of the information contained in this blog was intended to serve as legal opinion.

In honor of Valentine’s Day, the patent pick of the week is related to a trusted method of expressing your love and admiration to that special someone or secret admirer. This method of expression is rarely viewed through a technical, nor patent, lens; however, the use of written Valentine’s messages dates back to 1415 when the oldest known valentine poem was written by Charles, Duke of Orleans, to his wife while he was imprisoned in the Tower of London. Fast forward to 2024 and many of us view Valentine’s Day cards as an exercise of searching through rows of cards at the local grocery store in the hopes of finding one that captures a moment or provides a laugh, but what does this have to do with patents? This week’s pick is from a company that got its big break in 2015 when LovePop was selected to appear on Shark Tank and managed to secure an investment from Kevin O’Leary (aka Mr. Wonderful), who invested $300,000 for a 15% of the company. Since that investment, LovePop has sold over 55 million cards.

While you may not recognize the LovePop name, you will likely have seen their cards on display for every major holiday. The images below should refresh your memory of the unique design of these cards.

LovePop has built its business around 3 dimensional fold-flat cards, with designs covering every major holiday, event and even custom designs for large brands such as Marvel, Star Wars and even The Office. While LovePop can attribute some of its success to the exposure generated from Shark Tank, the reality of their lasting success and the reason you do not see an abundance of similar 3D cards is due to the intellectual property portfolio held by LovePop. The first application filed by LovePop occurred the same year as their Shark Tank debut, and since that date, the company has grown their portfolio annually with multiple applications filed and granted every year since 2015 for a total of 31 granted US patents as of the writing of this article. The patent that started it all for LovePop is the pick for this week, patent number 9,601,033. This patent was granted in 2017 from the 2015 filing mentioned above and is titled “Pop-up greeting car with tab support of a laser-cut, slide-form pop-up element.”

As seen in the images below, the patent relates to the process and article of creating and combining slice forms (combining 2D slices of an object to form a 3D final product) in a manner that would allow the card to lay flat when folded and open into the desired design when unfolded. The patent claims are primarily focused on the use of multiple slice forms, arranged in such a way and coupled to the card in such a way to create the 3D final form when unfolded.

This seemingly simple process has morphed into blank canvas onto which the only limitation is the creativity of the designer and the tolerances of the laser cutting machine. Next time you find yourself pacing the card aisle in the desperate, usually last minute, search for the perfect card, think about the combination of intellectual property on display. From patented pop-up cards, to trademarked cards from companies like Hallmark and copyrighted material from movies or famous artists, this relatively non-technical space found in every grocery store is a microcosm of intellectual property protection and monetization.

Have you come across any interesting patents you would like us to feature in future blogs or did you invent a technology you would like featured? Please send us an email at media@foresightvaluation.com or call our office at (650) 561-3374.

Damages Expert Blog: Let the Jury Select the Royalty Rate

Posted on Modified on by Lynn Dudinsky

 

In this blog, we are discussing the United States Court of Appeals for the Federal Circuit’s March 2021 decision in the Bayer v. Baxalta case and the discretion is provided the jury in selection a reasonable royalty rate for damages calculations. The details of the case involve the Federal Circuit affirming the District Court’s ruling that a treatment for Hemophilia sold by Baxalta infringed claims owned by Bayer. The purpose of this blog is to highlight the Federal Circuit’s opinion as to Bayer’s damages expert and his methodology of determining, or allowing the jury, to determine the appropriate damages.

Bayer’s damages expert submitted an expert report in which he opined that Beyer was entitled to a royalty rate of 23.75%. He determined this royalty rate based on it being the midpoint of a rather large bargaining rate of 5.1% to 42.4%. This midpoint opinion was based on the Nash Bargaining Solution which was developed by the Nobel Prize winning mathematician who made fundamental contributions to game theory and was memorialized in the popular 2001 film A Beautiful Mind. The damages expert’s opinion that a reasonable royalty is the mid-point of the bargaining range was initially excluded by the District Court on a Daubert Order because the District Court concluded that the expert failed to tie his 50/50 split to the facts of the case. The District Court denied Baxalta’s request to prohibit the expert from testifying on the bargaining range of 5.1% to 42.4% and the jury returned a verdict for damages based on a 17.78% royalty rate and the ruling was appealed.

The Federal Circuit addressed the issue of damages on appeal to determine whether the District Court erred in permitting the jury to pick a royalty rate within the range of feasible rates presented by Bayer’s damages expert. In its opinion, the Federal Circuit explained that there is no precedent that requires an expert to provide a single proposed royalty rate and that there is existing precedent entitling juries to choose an award within the amounts advocated by the opposing parties, in a manner that is not bound to accepting a specific rate proffered by one party’s expert. The opinion highlights the main requirement that the expert must adhere to the use of a reliable methodology in determining the range of hypothetical negotiation royalty rates. In discussing the methodology utilized by Bayer’s expert, the opinion describes how the expert’s testimony demonstrated that he considered and discussed the appropriate Georgia-Pacific factors that were used in the determination of the minimum and maximum royalty rates that Baxalta should have expected during licensing negotiations.

An easy take away from this case is that a damages expert has fulfilled his or her obligations by stating, as Bayer’s expert stated, that “as a matter of economics, any of these royalty rates (between 5.1% and 42.4%) would be feasible outcomes” and the “reasonable royalty is the likely outcome within that range”. However, the Federal Circuit made it clear that such a statement is only permissible when supported by reliable methodologies that adhere to established precedents and only then can the expert leave the final determination of the exact royalty rate to be used to calculate damages to the discretion of the jury. Ultimately, the Federal Circuit affirmed the decision of the jury in selecting a royalty rate of 17.78%, a rate within the range outlined by Beyer’s expert and higher than the 1% royalty opined on by Baxalta’s expert.

Oil States Energy v. Green’s Energy: Implications for the Patent Market

Posted on Modified on by Efrat Kasznik

World IP Day 2018 coincides with a highly anticipated, landmark decision by the US Supreme Court in the case of OIL STATES ENERGY SERVICES, LLC v. GREENE’S ENERGY GROUP, LLC, ET AL. which relates to the process known as inter partes review (IPR).

Inter Partes Review Process

The IPR process, as introduced by the America Invents Act of 2011, allows any person (other than the patent owner) to file a petition with the USPTO with request for cancellation of one or more claims of a previously issued patent on the grounds that the claim fails the novelty or non-obviousness standards for patentability. Before the USPTO Director can institute an IPR, the Director must determine that there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged. Once instituted, the PTAB examines the patent’s validity. The petitioner has the burden of proving unpatentability by a preponderance of the evidence. If there is no agreement between the patent owner and the petitioner to settle the case, the PTAB must issue a written final decision no later than a year after it notices the institution of inter partes review. If the Board’s decision becomes final, the Director must issue and publish a certificate. The certificate cancels patent claims finally determined to be unpatentable, confirms patent claims determined to be patentable, and incorporates into the patent any new or amended claim determined to be patentable. If a party is dissatisfied with the Board’s decision, they can seek judicial review in the Court of Appeals for the Federal Circuit. When reviewing the Board’s decision, the Federal Circuit assess the Board’s compliance with governing legal standards de novo (i.e., without reference to any legal conclusions made by the PTAB) and its underlying factual determinations for substantial evidence.

Oil States Case Overview

Oil States Energy Services and Greene’s Energy Group are both oilfield services companies. Oil States obtained a patent in 2001 relating to an apparatus and method for protecting wellhead equipment used in hydraulic fracturing and in 2012 sued Greene’s Energy for infringing the patent. Greene responded by challenging the patent’s validity and also petitioned the USPTO to institute inter partes review. The USPTO found that Greene had established a reasonable likelihood that the two challenged claims were unpatentable and, thus, instituted inter partes review. Both proceedings progressed in parallel with the District Court ruling in favor of Oil States and then the USPTO issuing a final written decision concluding that the claims were unpatentable. Oil States sought review in the Federal Circuit challenging the Board’s decision as well as challenging the constitutionality of inter partes review.  The Federal Court affirmed the Board’s decision in favor of Greene that the claims were unpatentable.  Oil States, in challenging the constitutionality of inter partes review, argued before the Supreme Court that actions to revoke a patent must be tried in an Article III court before a jury.  Oil States wanted the Court to recognize patent rights as the private property of the patentee which would bring it into the domain of Article III Courts.  Article III vests the judicial power of the United States in one Supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. Consequently, Congress cannot confer the Government’s judicial power on entities outside Article III. When determining whether a proceeding involves an exercise of Article III judicial power, the Court’s precedents have distinguished between public rights and private rights. Those precedents have given Congress significant latitude to assign adjudication of public rights to entities other than Article III Courts.

Supreme Court Oil States’ Decision

The Supreme Court held that the determination to grant a patent is a matter involving public rights and need not be adjudicated in Article III court.  By issuing patents, the USPTO takes from the public rights of immense value, and bestows them upon the patentee. Specifically, patents are public franchises that the government grants to the inventors of new and useful improvements. The franchise gives the patent owner the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States. Additionally, granting patents is one of the constitutional functions that can be carried out by the executive or legislative departments without judicial determination. When the USPTO adjudicates the patentability of inventions, it is exercising the executive power. Inter partes review involves the same basic matter as the grant of a patent, and it therefore falls on the public rights side of the line. Like the initial review, the Board’s inter partes review protects the public’s paramount interest in seeing that patent monopolies are kept within their legitimate scope.

Foresight’s Commentary on the Oil States decision

The Oil States makes clear the power of Congress to provide the USPTO with broad post-issuance authority. In other words, the status quo remains in the US patent market. From a patent valuation perspective, IPRs have already negatively impacted the value of patents due the uncertainty coupled to these proceedings. The Oil States decision reinforces the constitutionality of IPR proceedings and may further complicate the processes by which patent owners monetize their assets and would add Oil States to the list of cases such as Alice and Mayo that reinforce the uncertainty in the market regarding the patentability of cutting edge inventions.

While the Supreme Court’s Oil States decision has been largely anticipated by the IP community, one should review it in conjunction with Andrei Iancu’s recent public statements, which might arguably be the more interesting development this week. Director Iancu’s statement that “human-made algorithms that are cooked up, invented as a result of human ingenuity are different from discoveries and mathematical representations of those discoveries” might signal an effort by the Director to push for changes in validity considerations that would include these algorithms that can be distinguished from mathematical representations of discoveries. This statement may signal the emergence of a market for patents claiming algorithms, a market that currently resides behind NDAs and trade secret protection.

** Foresight’s commentary to Oil States, along with the commentary of other industry leaders, was published by IPWatchdog.

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