- ♠ Technology
- ♠ Damages
- February 5, 2020 Damages Expert, Damages Report, Expert Witness, Intellectual Property, Inventions, Litigation, USPTOMusic Choice vs Stingray Settlement arrives right before trial. This case has been analyzed as a case by our experts from two angles:
- December 26, 2019 Cloud, cloud to cable, Media Projects, Mevia, Mobile Development, Mobile Device, Music for Cable TVCloud to Cable TV is the best way to monetize video and music content for cable TV operators and satellite systems with examples - MPVD (Multichannel Programming Video Distribution) . ...
- November 24, 2019 Damages Expert, Damages Report, Daubert Challenge, Expert Witness, Intellectual Property, Litigation, Media Projects, Music for Cable TV
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.
- ♠ 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.
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 firstname.lastname@example.org 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
- cloud to cable TV patents.The final written decisions are available herein:
” The case split the PTAB panel, with each of the three judges filing opinions. The majority ruling by Judge Mitchell Weatherly held that eight of the patent’s 20 claims are invalid because Stingray showed that a person skilled in the art would be motivated to combine the earlier inventions to arrive at Music Choice’s invention, which includes both a playlist and on-demand playback. Source: https://www.law360.com/media/articles/1091845/ptab-partly-axes-music-choice-patent-in-row-with-rival “This goes in accordance to the prediction made by myself back when this issue was discussed initially, specially in the article where I analyzed the acquisition of Music Choice by Stingray digital.
Infringement and Damages ModelAs expected Music Choice should be more interested not so much on the “Video on Demand” revenues which is what these two patents cover, but more so in the patent covering the method and system for broadcasting to Cable TV which is the main source of revenues for both companies. The patent in dispute will be resolved this Friday October 19th, 2018, and the patent 8,769,062 as well as the original applications from 2001-08-28 which is claimed as priority date. It is my opinion that a similar outcome may result from the PTAB panel.Hence, what would the damages be for Music Choice? Well, I don’t have access to any information but what is found online, and in a letter from 2014, Music Choice was claimed to have 56M homes, or 57M listeners per month. Source: https://www.justice.gov/sites/default/files/atr/legacy/2014/08/18/307851.pdf ‘In this document, Music Choice indicates that their Multi-Video Programming Distributors (MVPD) constitutes a main source of income for the company. Additionally, in a marketing material VOD distribution is said to have 72M subscribers as of Music Choice’s 2016 PDF :http://corporate.musicchoice.com/files/2214/6228/4671/2016_Music_Choice_Media_Kit.pdfIn a similar filing, Music Choice makes a case with a rebuttal testimony by Gregory S. Crawford, PhD https://www.crb.gov/rate/16-CRB-0001-SR-PSSR-SDARSIII/rebuttals/2-21-17-music-choice.pdf Hence, assuming a price point of let’s say 0.05c to 0.25c/subscriber and recalling what Mr. Boyko said in a prior-conference call, Music Choice should have revenues could be:
- 0.05c per subscriber @ 50M subs = $30M/year
- 0.25c per subscriber @ 50M subs = $150M/year
” … or the quarter, Canadian revenues decreased 2.6% to $13.6 million (41.3% of total revenues) due to decrease in non-recurring revenues related to digital signage, United States revenues increased 102.2% to $7.8 million (23.5% of total revenues), whereas revenues in Other Countries increased by 34.4% to $11.6 million (35.2% of total revenues). (CNBC source: https://www.cnbc.com/2018/06/07/globe-newswire-stingray-reports-fourth-quarter-2018-results.html) “What this means is that somehow per year $32M/year o revenues were eroded from Music Choice’s pie, or since 2014 when the lawsuit was said to have had some issues with Stingray, then the total loss could be $32×4=$120M on damages. Which, it seems to have been the offering made by Stingray digital to Music Choice for a full acquisition.The question is, what would be the forward revenues would be for a Georgia-Pacific model that a damages expert would have done for pricing moving forward and how Stingray Digital would have to pay for any future earnings to Music Choice. The information collected indices a 35% tax by Stingray on royalties and potentially another 20-30% which in turn would make operations in the United States at no profit or even at a loss.
ConclusionIt is very hard to compute a damages calculation, assuming that infringement takes place in the surviving claims of the patents in dispute. Hence, if damages were to be computed should be in the range of 8-9 digits with upside to the future, not including potential treble damages which could account for more money to be paid.Alternatively, Cloud to Cable TV is the best technological platform for monetization with Cable TV and works using the most recent advancements in Cloud computing, Web technologies, and in combination with standard DVB Systems. A unified patented technology for Cable TV distribution!
- July 9, 2017 Claim Construction, Cloud, EGLA, EGLA MEDIA PLATFORM, Inventions, Mediamplify, Mevia, Music for Cable TV, Patents
Music Choice vs Stingray Digital – Case 2:16-cv-586-JRG-RSP
Music Choice vs Stingray is a case taking place in the E.D. of Texas. We will discuss in the article, the judge’s order (Judge Roy Payne) and memorandum regarding all the claims terms and its construction. As expected, the judge went for:
“[C]laims ‘must be read in view of the specification, of which they are a part.’” Id. (quoting Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc)). “[T]he specification ‘is always highly relevant to the claim construction analysis.
As in many cases, this was also the case as well, here the order/memorandum available online:
As shown, in all cases where Music Choice made a simple term definition, Judge Payne went for the simplest and more appropriate meaning to the words. Music Choice won pretty much all terms in their favor and in all “indefinite” arguments did not move an inch in favor of Stingray. Hence the judge also sided with Music Choice’s arguments and claim construction. For instance:
- What was the goal on trying to interpret a Cable TV system as it if was not a digital system? I don’t really understand why Greenberg did not agree to this simple term? And the judge sided with Music Choice: “Accordingly, the Court rejects Defendants’ proposed “not a digital network” and “signal” limitations and determines the transmission-system terms have their plain and ordinary meaning without the need for further construction.” The claim recites a first transmission and a second transmission system,
- The same thing with “multicast,” this is a well-known term in all Cable TV systems, where multicasting is used to transmit all Linear TV signals. “Accordingly, the Court rejects Defendants’ proposed “not a digital network” and “signal” limitations and determines the transmission-system terms have their plain and ordinary meaning without the need for further construction.”
- A very similar analysis is found with the term “trigger message” where the judge sided with the same simple meaning as follows:” Accordingly, the Court construes “trigger message” as follows: “trigger message” means “message configured to initiate an action”
- And you can find a very similar argument for most of the terms in dispute.
All the evidence is sealed and there is no way to see exactly how these terms match the device in dispute, however, Music Choice’s attorneys should be prepared and if those terms were favorable to them, now one can asume that their evidence to match these terms is solid.
We will keep track on this case and how this develops, on a different note, Music Choice also got hit by Stingray with several IPRs:
Music Choice then has to defend the following IPR cases filed by Stingray Digital regarding this particular case:
- Trial Number – IPR2017-01450
Filing Date – 5/18/2017
Patent # – 9,414,121
Title – SYSTEMS AND METHODS FOR PROVIDING AN ON-DEMAND ENTERTAINMENT SERVICE
Patent Owner – MUSIC CHOICE
Petitioner – Stingray Digital Group Inc.
Tech Center – 2400
- Trial Number – IPR2017-01192
Filing Date – 3/31/2017
Patent # – 8,769,602
Title – SYSTEM AND METHOD FOR PROVIDING AN INTERACTIVE, VISUAL COMPLEMENT TO AN AUDIO PROGRAM
Patent Owner – MUSIC CHOICE
Petitioner – Stingray Digital Group Inc.
Tech Center – 2400
- Trial Number – IPR2017-01191
Filing Date – 3/30/2017
Patent # – 9,351,045
Title – SYSTEMS AND METHODS FOR PROVIDING A BROADCAST ENTERTAINMENT SERVICE AND AN ON-DEMAND ENTERTAINMENT SERVICE
Patent Owner – MUSIC CHOICE
Petitioner – Stingray Digital Group Inc.
Tech Center – 2400
- And maybe others http://www.gbpatent.com/content/uploads/IPR.pdf
For example we found: http://ptolitigationcenter.com/2017/05/pto-litigation-report-may-19-2017/
Disclosure: EGLA, which I own, provided a platform for DMX for digital music distribution. Stingray acquired DMX Music but not our technology and kept its own music delivery system, the infringing system now. However, EGLA owns a patented technology that is called “CLOUD to CABLE TV“ that enables delivery of linear music channels to Cable TV subscribers in a more clever, fault-tolerant, and efficient way than these patents disputed here. Source: http://edwinhernandez.com/2016/08/01/platform-nternet-tv-music/
Patent for the Cloud to Cable TV – WIPO Format
EGLA CORP has a patented technology, superior to all the patented technologies out there, that brings the Cloud -based systems and generated images for music and TV channels that can be overlapped. The Cloud to Cable TV system provides:
- A system to convert HTML5 to Video, MPEG-4 or MPEG2Video, or H.265
- A fault-tolerant system for MVPD and MSO’s – Cable TV Systems
- Streaming for M3U8, HTTP Streaming, and compatible with other technologies
- Virtualized TV in a box system with Cloud
The device is called MediaPlug and also contains other Management APIs, as well as a good implementation tested with:
- and Many other multi-plexers
There is no dependency into any Set Top Box or DOCSIS 2.0, DOCSIS 3.0, or other MPEG frames or dependencies in changes to STB.
All the systems, are fault-tolerant and enable great reliability and remote management system for all distribution devices
Uses standard DSL/Cable Modem technologies with the system to deliver 50, 100, 200 music channels, and 10-20 HD/SD/4K TV Channels.
Many more advantages that are benefit DRM security, provisioning, and tracking for media playback.
[spiderpowa-pdf src=”http://edwinhernandez.com/wp-content/uploads/2017/07/WO2016106360.pdf”]WO2016106360, however the right set of sighted is attached and is corrected in the US/Europe and other applications.Cloud to Cable TV White paper [spiderpowa-pdf src=”http://edwinhernandez.com/wp-content/uploads/2017/07/cloudtocable_whitepaperl.pdf”]cloudtocable_whitepaperl