News

Managing Principal Keith R. Ugone Testifies on Damages in Personal Audio v. Apple

July 14, 2011

Analysis Group was retained by Fish & Richardson, PC, in a patent infringement lawsuit on behalf of our client, Apple Inc., in the Eastern District of Texas (Lufkin Division). Personal Audio, LLC, accused 16 generations of the iPod, three generations of the iPhone, and the iPad of infringing two patents related to navigable playlists. The Court ordered that the case be adjudicated in two separate trials, with the first trial covering the iPod classic, iPod mini, and iPod nano; and the second trial covering the iPod touch, iPhone, and iPad.

Personal Audio sought per-unit royalty rates and claimed royalty damages totaling $84.4 million associated with the accused products in the first trial. The Analysis Group case team, led by Managing Principal Keith R. Ugone and Manager Minh Doan, conducted an independent evaluation of Personal Audio’s claimed damages and prepared rebuttal reports. Dr. Ugone testified at deposition and at trial that, if infringement were found, claimed damages should be significantly less than the amount sought by Personal Audio and should be in the form of a freedom-to-operate lump-sum license covering past and future sales of Apple products. The factors Dr. Ugone considered included Apple’s license agreements related to comparable technologies, Apple’s innovations and contributions to the commercial success of the accused products, the limited claimed benefits of the patents-in-suit over existing technologies, and real-world licensing offers for the patents-in-suit.

At the conclusion of the first trial, the jury found the patents-in-suit to be valid and infringed. However, the jury awarded Personal Audio a lump-sum amount of $8 million, rather than the $84.4 million requested by Personal Audio. Consistent with Dr. Ugone’s testimony, the damages award was a lump-sum payment instead of per-unit royalty rates. With a lump-sum award, the judge determined that there would be no second trial for the iPod touch, iPhone, and iPad.