Introduction

I will start quoting, MultiChannel article that describes the genesis of this dispute..

Stingray and Music Choice have a long history. In 2015, Music Choice sued Stingray for patent infringement after AT&T U-verse dropped Music Choice in favor of the Canadian company. Music Choice had claimed that Stingray’s service included digital audio music and video-on-demand features that infringed on its patents, features that Stingray enhanced after getting access to confidential information during talks about possibly buying Music Choice in 2015. Stingray counter-sued, asserting “claims of unfair competition, defamation, trade libel, tortious interference with existing and prospective contractual relationships, and unfair competition.” (Source: Multichannel)

It was very interesting that in 2017, Stingray made a $120M offer to Music Choice, that was, rejected, not publicly, simply ignored. The offer was sweet basically no strings attached, and likely this case in dispute completely dismissed.

“Canadian digital and music video company Stingray Digital Group said it has made an unsolicited offer to purchase pay TV stalwart Music Choice for $120 million. (Id) “

As  consequence of this lawsuit, multiple other litigation steps have followed this case: IPR,  Counter Claims, Daubert challenges, and much more. I have been tracking this case I have a portfolio in the same are as “Music Choice” & “Stingray Digital”

Now all my observations resulted accurate, and in other words, the analysis of this cases that I made in 2017 is now a reality.

In summary, I concluded, and you can confirm at [1]. [2]. [3]. and at edwinhernandez.com  that:

• ♠ Stingray IPRs was not going to be super successful, as the PTAB judges were not fully convinced with the arguments.
• ♠ I still believe that Music Choice’s slashed patents by PTAB might have some light in appeal.
• ♠ Damages Report, challenged by Stingray, with a multi-million dollar award was going to be accepted by the court
• ♠ Alice defenses were futile by Stingray
• ♠ Trial was going to be conducted and all other defenses denied

Now this case is scheduled for trial  Dec 9th, 2019 in Marshall, TX.

Opinions

Several rulings have gone unfavorable to Stingray Digital, which includes adoption of the Magistrate judge opinions followed by  an order denying the Daubert challenge made to Dr. Keith Ugone. What this means is that Mr. Ugone’s damages report is safe and sound, in other words the damages expert, Dr. Ugon representing Music Choice,  will be able to tell the jury his story about this case.

Clearly, this was a big reverse to Stingray ,specially when Dr. Ugone has testified that a “non-infringing alternative” presented by Stingray was not suitable and hence, the damages model was at least $23M from the numbers released in a court ruling.

Dr. Ugone’s testified that in absence of a non-infringement alternative, loss profits need to be used to compute damages, instead of a reasonable royalty. Assuming $23M in loss profits, that means revenues could have been $75M. If, an expert applies a royalty of 10% that’s $7M and 1%, 700k in reasonable royalties.  Potentially saving $23M in loss profits, or even higher at $75M for treble damages, if the judge considers necessary to punish Stingray.

As you know, already, I completely disagree as my patents when in use in Cable TV systems are a non-infringing alternative to Music Choice’s.

 For that reason and the other reasons stated within the Order, the Court agrees with the conclusion reached within the Order. The Magistrate Judge’s Recommendation is therefore ADOPTED. 

On second adverse ruling, Judge Payne has provided to Judge Gilstrap its report and recommendations regarding the Alice challenge that Stingray has made against Music Choice, Inc patents. The adverse ruling indicates that as a matter of law, Alice Step One, fails and there is no need to conduct any further steps,

The Court concludes that each of the remaining asserted claims are not directed to an abstract idea at Alice Step One. Because the Court resolves the Alice inquiry at Step One, the Court need not proceed to Alice Step Two. Thus, the Court recommends that Music Choice’s cross-motion be GRANTED and that Stingray’s motion for judgment on the pleadings be DENIED. 

As jury selection is due December 9th, 2019, clearly Stingray has a low chance of surviving a trial, and in my opinion, Stingray has increase its chances to be found guilty of infringement and pay a hefty amount, likely a multi-million dollar judgment and a potential injunction relief favorable to stingray.

What will happen?

Stingray digital has to find a way to now settle this case or, maybe even better, Stingay can discuss a way to present a license to my patents and technology. My patents and technologiss are clearly as a non-infringing alternative to Music Choice, and my patents are new, and will last for a longer time as a protection.

Either way, this is not good to be in this position for Stingray.

Stingray could take a license to my portfolio and present it to Music Choice and the court, and avoid all infringement claims.

Besides that, Stingray Digital made an offer for $120M to purchase Music Choice, and Music Choice rejected the offer, risked a trial and now their position has been getting more solid day after day.  I would assume that it will have to make an offer around that to settle? That means that Stingray’s revenues in the US, which totals $9M per Quarter or $36M/year are now at risk.

The current damages report shows a $23M loss profits made by Music Choice as of this date, however a full report is only REDACTED and unavailable to the public.

 

“Revenues in the United States increased 12.2% to $9.4 million (12.9% of total revenues) and in Other Countries, revenues increased by 31.3% to $16.1 million (22.1% of total revenues)” (Source: Globenewswire).

Greenberg and Trauig is defending Stingray and Dechert Law, LLP is Music Choice’s plaintiff.

Licensing of My Patent Portfolio

There are several ways to find out about my portfolio of patents and software implementation, you can contact me via email to sales@eglacorp.com or call me.   My innovations are covered by US Patents 10,123,074 and 10,524,002 and other continuation patents, including European Patent filings, plus the technology and software platform:

• First,  this site contains some of that information  and clicking under  Patent Portfolio and  MVPD Licensing
• Or visit cloudtocable.com for additional information on the technology or the portfolio
• or Eglacomm.net search “CloudtoCable” or Patents

This analysis only works when Panduit testfails for a computation of loss profits and only works for a reasonable royalty damagers model.

I personally submitted a damages report in a the case: Mobility Workx, LLC vs Cellco Partnership aka Verizon Wireless in the E.D. Texas, and Judge Mazzant ordered me to present it to a jury which means a Daubert challenge was made and survived..

The model I created for damages can be used for many technology disputes where “Key Performance Indicators” are measured to map a business performance, and how and what intellectual property maps to the revenues generated by a business and its performance.

My report mapped, KPIs from ETSI Specification “TS 32.451 Version 8.0.0 Release 8”  describing the following subcategories:

• Accessibility
• Retainability
• Integrity
• Availability
• Mobility

Judge Mazzant accepted my report due to my experience at Motorola and all my overall resume working with startups, licensing deals, and being part of multiple patent and technology licensing agreements that involved companies like Qualcomm, Google, and many others.

For example, TS 32.451 contain several KPIs for LTE Systems or E-UTRAN and you can map an Intellectual Property piece to one or several subcategories, and then from that category you can then establish the proper proportion of what an intellectual property maps to, which means that clearly a percentage of the revenues that a company generates can be mapped to a certain technology.

Key performance Indicators are part of not only 4G LTE systems but are found in most technological systems.  The process is presented in the following slides:

KPI - Damages Reports
In summary, one can say that many KPIs have a mapping to revenues, and that’s how companies can value performance to value.

Once these mappings are determined, which all KPIs may offer the same proportion of value to the generated revenues of a corporation, then one can map the features of a patent portfolio to one or many KPIs and create a weighed average of contribution to the KPIs and hence to the revenues.

In the following charts, I represent that maybe a single patent or IP maps to a KPI which equates to a percentage of the revenues, let’s say it is 20%. Assume for a second that the KPI category contains 20 parameters, that for simplicity will be equally weighted.  As such, the technology where damages are being calculated corresponds to 2 parameters let’s say, hence a 10% of the KPI is then affected or benefited by the patents or technologies.

Setting up a royalty rate, of let’s say 3% to 5% seems reasonable and affects only the percentage of the revenues a KPI is affected by the patents. Hence, there is no dispute on how much effect a patent or an IP affects a business model.

KPIs are usually defined by the defendant or an industry-defined, like in LTE, and each are granular enough that a mapping between a patent portfolio and /or an intellectual property can be mapped to. 

As such a simply royalty yield of 5% can be used to compute an overall royalty that only affects the revenues generated by let’s say LTE Revenues for example, or any other technology with KPIs.

if you have any questions you can contact me or hire me to calculate your damages report.