A patent report by PA Consulting Group has provided central input into the determination of the appropriate RAND royalty rate for Innovatio IP Ventures, LLC’s WiFi-essential patent portfolio. The patent report was presented in a landmark trial in the Northern District of Illinois (Chicago) before Judge James F. Holderman.
Innovatio has undertaken a widespread licensing and litigation campaign against thousands of entities – including restaurants, coffee shops, hotels, grocery stores – alleging infringement of their patents, which Innovatio claimed to be crucial or central to the 802.11 WiFi standard. Several WiFi equipment suppliers - Cisco, Hewlett Packard, and Netgear - stepped in and brought declaratory judgment actions against Innovatio.
In a bench trial in September 2013, both Innovatio and the WiFi equipment suppliers presented evidence on what constituted an appropriate royalty rate for Innovatio’s WiFi portfolio. An independent report by PA Consulting Group on the WiFi patent landscape was included in this evidence.
Judge Holderman determined that PA’s independent IEEE 802.11 (WiFi) report was admissible as a market report, and determined that the report offered a credible account of the number of potentially standard-essential patents (SEPs). Judge Holderman used a “Top Down” valuation approach to determine the RAND royalty rate for the Innovatio portfolio in question as 9.56 cents per WiFi chip. PA’s patent report provided the estimation of the overall SEP landscape; a central input into this determination. This decision is significant as it is only the second district court decision to provide judicial guidance on assessing what constitutes RAND.
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