I'm taking a little chance here because I haven't read any posts subsequent to this one of your's before posting. Not the best approach, as just yesterday I did "catch up" before posting to find that Borredo had responded to a post from you to me after I had "left the building" with the same basic message I would responded with (thanks Borredo - you saved me some effort!).

In any case, here you suggest that our team actually has to justifiy a settlement number. They don't. I'm sure they have a number in mind regarding each of the defendent entities. These numbers may be based purely on gut feel, how much of a pain in the ass a particular entity has been in this process, and/or any combination of measurements of infringement.

What I am suggesting is that there is a number for each, and if any justification for that number becomes necessary, they will "back into" that number using whatever measurement of infringement times the "magic multiple" assigned infringement value per unit (or whatever) that gets them their pre-conceived number.

This situation is very similar to being what is called a "sole source supplier". They can't buy a license for OUR tech from anyone else. We can TRY to charge however much we want. We don't even HAVE TO license to them! (e.g., I believe we could actually complete the legal process, be awarded damages for past infringement, and just say "hell no" to a long term license - it would be a real mess and may be somehow resolved legally, but it's not like the defendants' specific products are essential to the wellbeing of America when there are other sources for virtually identical products). IMO, we have these guys by the short hairs in a very big way.

When I worked for a subsidiary of Hughes Aircraft, in primarily a R&D organization, we were sole source to the DoD and NASA on a bunch of products. We charged whatever we thought we could (keeping in mind that the company deserved a pay-back for internal IR&D expenditures). Typically there was no requirement to justify the number for a sole source commodity. Why? Because when a buyer requires justification for a number, it is for the purpose of comparison with alternative sources for a like commodity and the justification for their number (and with a sole source item, there is nothing to compare with - it's not a competitively bid procurement). Also, typically the justification for a number has to be based on actual historical expenditures to supply a very similar product - that's pretty hard to come up with when the product is unique to the world. I'm not talking Development contracts here, but contracts where we already had the product adequately developed (Development contracts opens another/different can of worms, and are usually cost-plus-type contracts).

Along these lines and recognizing all the above, we really only need one valid patent that is being infringed. That's it. And we can assign any value to that infringement that our heart's desire. Negotiations may raise or reduce that number in order to "make the deal", but IMO we don't have to justify anything in the value we assign.

Now I'll throw in another thought. In my experience, there were occasions where we knew the opposition's number(s). Usually because the budget allocated by Congress for the specific commodity was a discrete, publicly available number, and sometimes because the customer freely disclosed that "this is all we've got" (which would go along with a song-and-dance of "start work with these funds or in some cost-sharing arrangement with the unenforceable promise of a follow-on fully-budgeted contract"). (on one occasion when I was in one-on-one negotiations with a couple of USN reps, I was able to use my ability to read upside-down to know their target numbers - very helpful to say the least, perhaps not too ethical, but they shouldn't have had their numbers on a piece of paper in front of them just a few feet away).

Here we do have a somewhat similar situation. For at least one defendant, we know their budgeted number for annual expenses related to legal disputes. And that number is huge ($.75B ?). Our team's objective is to capture as much of that amount as possible.

Hopefully this refines your thinking on this aspect of what's likely going on.

This stuff I think I KNOW.

SGE