P&A $308 Million Analysis Accepted in Apple Case

We are pleased to announce that a jury accepted our damages analysis in a recent patent infringement case, Personalized Media Communications, LLC (PMC) v. Apple, Inc., that P&A Founder Mike Pellegrino testified in. Just three weeks before trial, Mr. Pellegrino replaced PMC’s damages expert. In preparation, the P&A team analyzed and incorporated nearly 1,000 pages of reports and deposition testimonies to issue a new supplemental report appropriate for trial.

At trial, Mr. Pellegrino provided expert witness testimony against the world’s largest company (Apple) and one of the world’s most prestigious law firms (Kirkland & Ellis), both heavily involved in patent litigation. Despite the defendant’s numerous attempts to thwart Mr. Pellegrino’s testimony and work product, P&A’s efforts survived motions to strike and exclude. The Court ruled that Mr. Pellegrino’s profit split method, as defined in Chapter 11 of Mr. Pellegrino’s BVR’s Guide to IP Valuation, was “sufficiently reasoned, reliable, relevant, and scientific.”

At P&A, we believe our objective approach, proven methods, peer-reviewed sources, and factual underpinnings are a few of the key elements that allow our work efforts to stand up in court. As such, we are honored that the jury in this case validated our analysis to the penny at $308,488,108 and ordered Apple to pay the damages via a running royalty for infringing patents related to digital rights management. To date, the jury verdict is the second highest in 2021.

Artificial Intelligence Patent Explosion

The idea of artificial intelligence dates back to Greek mythology. Through the years, mentions of robots, systems, modes of transportation, and much more operating and thinking on their own appear in novels and movies, especially science fiction where artificial intelligence seems nearly synonymous.

One of the first books to mention artificial intelligence, Frankenstein, was published as far back as 1818 by Mary Shelley. Some other popular artificial intelligence fictions include I, Robot by Isaac Asimov, Robots vs. Fairies by Dominik Parisien and Navah Wolfe, Robopocalypse by Daniel H. Wilson, and Daemon by Daniel Suarz, to name a few.

To visually entice the imagination, many movies based on artificial intelligence theories exist. Some of the top Hollywood artificial intelligence movies are as follows: Metropolis (1927), The Day the Earth Stood Still (1951), 2001: A Space Odyssey (1968), Robocop (1987), The Matrix (1999), Wall-E (2008), and Ex Machina (2014), among many others.

Within many of the movies and books, artificial intelligence is a mere idea. It is an imaginative creation where the authors and producers conjure up scenarios varying from fearing to fighting to controlling to welcoming artificial intelligence. However, newer movies now contain some semblance to artificial intelligence today, making it seem more realistic, more probable, or more potentially viable.

Beginning in the 1950s, artificial intelligence started to become a reality. Twenty years later, computers became commonplace. Since then, artificial intelligence continues to change the world today as we know it. It provides many benefits including better weather predictions, more accurate health diagnoses, self-operating vehicles, and more. And, this is just the beginning!

Unsurprisingly, companies that have the most presence in the artificial intelligence market are high tech companies. According to ipAnalytx, our proprietary patent analytics platform, the following are the top 10 companies with the most patents regarding artificial intelligence:

  • Samsung
  • IBM
  • Microsoft
  • AT&T
  • Intel
  • LG Electronics
  • Avaya
  • Google
  • Qualcomm
  • Amazon
  • As indicated, the artificial intelligence market is dominated by large, high-tech companies with deep pockets. These companies are highly competitive in the market as seen with countless lawsuits suing one another for infringement for various types of innovations, such as smartphones, software, and others. As many of these companies and their products coexist, they aggressively protect their intellectual property.

    According to the USPTO, the number of artificial intelligence patent applications annually rose 100% since 2002! In 2002, the USPTO reported 30,000 patent applications, while the number in 2018 reached more than 60,000. As such, the explosion in artificial intelligence patent applications implies that artificial intelligence is likely to become a way of life. Instead of a fictional depiction of life, it is becoming a reality!

    P&A 2020 Highlights

    It is hard to believe that one month of the New Year is already finished! We are excited for all of the potential opportunities, the new and interesting projects that come our way each year, the new people we get to meet, the new information that we come across, and so much more. We also enjoy working with returning clients and acquaintances we have made in the business. It is always exciting to get each new engagement because it gives us opportunities to help our clients and discover new information about new inventions, what is happening in the market, and so much more. We love what we do and we enjoy learning daily! As such, we would like to highlight our favorite moments of 2020.

    Our projects last year covered a number of topics, including spirits, cloud analysis, online auto parts, family-based prevention programs, concrete, autonomous vehicles, plastic recycling, hyperspectral imaging, paper recycling, telematics, auto insurance, pork, LED lighting, DNA sequencing, point-of-care diagnostics, hybrid engines, welding gas, graphene, Internet of things, energy harvesting, thermal conductivity, refueling techniques, gaming, tobacco, and more. As you can see, we get to enjoy a variety of different topics, which keeps our jobs exciting at all times. We learn something new every day! We also get to teach others about our work, assist clients in the courtroom, provide valuable analytics, and so much more.

    While the pandemic limited travel in 2020, we were still able to attend webinars, offering our knowledge, experience, and skills on various IP valuation topics. For instance, we worked with UK-based law firm Lewis Silkin on a webinar series titled “IP Valuation – A Primer.” P&A gave an introduction to the valuation of various IP forms based on topics in headlines and our professional valuation experiences. In this presentation, we highlighted credible approaches for building IP valuations for a variety of purposes. We also worked with the ASA on its Fair Value Virtual Conference regarding the “Impact of Recent Cases on the Fair Value of Technology.”

    Although we did not get to enjoy our regular team outings, we were able to come together safely at the end of the year to celebrate our team. We were treated to a gourmet meal prepared by our talented company president. After a year of global uncertainty, we were happy to connect and express our appreciation for the company, the team, and the work that we do.

    While 2020 was certainly not a typical year for anyone, we are proud about our ability to adapt well and continue to provide excellent services. We can’t wait to see what 2021 brings!

    5 Reasons for Trademark Denials During Pandemics

    As promised in our last newsletter, we discuss in this article five reasons the USPTO denies trademarks related to pandemics. Pandemics create many emotions, drive, and perceived opportunities, causing people and organizations to apply for trademarks. However, many reasons exist as to why they do not work out. Click “Read More” to discover five reasons for denied trademarks.

    The COVID-19 pandemic, along with other unprecedented events in 2020, affected people worldwide. As such, the USPTO experienced heightened trademark applications, especially regarding the pandemic. While many people envisioned monetary benefits with the potential approval of a granted trademark, the USPTO will likely deny or has already denied trademarks associated with the global pandemic. The following lists five common reasons the USPTO denies trademark applications regarding universal events, such as pandemics:

    • It is offensive: One of the reasons so many people rush to file for trademarks of a new term, even the name of a pandemic, is because there is much hype surrounding it. However, pandemics cause fear and an overall negative connotation. Nobody wants to be reminded of a terrible and fearful time, especially one that causes human loss. COVID has affected hundreds of thousands of people worldwide, causing death, hardship, and so much more. Therefore, it is likely that a trademark application pertaining to a pandemic will be denied based on ethical reasons.
    • It is not tied to a specific product or service: Trademarks are meant to help consumers differentiate products and cut down on search costs. As such, many of the trademarks applied for regarding the pandemic do not promote a specific product that helps consumers differentiate said product from others. Rather, people want to use words associated with the pandemic to place on items such as hats, cups, shirts, and the like. But, the words do not make the products a unique, distinctive brand because they are commonplace.
    • Misconception exists that the first to file “wins”: Many people rush to file a trademark associated with global events before they even know what they will use it for or without the intent to use it because they think that the first to file will win the trademark. However, in the United States, the first to use wins the trademark, as long as certain criteria is met. Therefore, without the intent to use or prove use, the USPTO will certainly deny the trademark application.
    • Pandemics do not last forever: As with everything in life, nothing lasts forever, including a pandemic. As such, the hype eventually dies down and the event becomes an afterthought before long. People move on to other events, concerns, and changes in life. Therefore, terms associated with big events such as a pandemic begin to wan and fewer people talk about them. People get bored eventually and the words don’t hold as much significance once the shock factor dies down and the fear subsides. Even if the USPTO were to approve a trademark, the pandemic could well be over. Many people who file for trademarks during a pandemic plan to use those terms for marketing purposes only during the pandemic. However, the purpose of a trademark is to stand the test of time, not just a certain timeframe. A trademark is distinctive.
    • The term is too common or generic: It is difficult to trademark words and phrases associated with a pandemic because trademarks are meant to differentiate products or services. It is especially difficult when such events are global affairs because everyone uses the terms, making it impossible to tie those terms to a specific product or service. Rather, people think about the actual pandemic from which those terms originated. As such, anytime people see, speak, or hear the terms, they think about the events behind them, not a product or service. Therefore, they become generic and commonplace terms, which cannot be trademarked.

    The trademark process takes effort, time, and money. Essentially, it is risky to file for something that is likely not to grant. Pandemics involve negative connotations including death, fear, financial hardships, and even changes in livelihood. Therefore, on a social and moral level, applying for trademarks to capitalize on a deadly pandemic is likely a waste of time.

    Taylor Swift Among Copyright Infringement Trend

    Taylor Swift is one of the most renowned musicians in the world. As a master in her craft, Swift’s music spans the country and pop genres. Often writing songs pertaining to her own life experiences, she creates a bond with her audience, as many can relate to the same issues she writes about. In an attempt to thwart naysayers, she gains the affections of her fans, known as the Swifties. In addition to her physical presence, Swift commands a strong following on social media. At the beginning of this year, she boasted more than 85.5 million Twitter followers and 125 million Instagram followers.

    While Swift has been a star since she began her career at the young age of 14, she continues to rise in popularity and stardom. With each of her five concert tours, she consistently increased her worth, attracting a bigger audience and generating more revenue, with fewer shows each time. In addition to her concerts, she generates revenue via endorsements, albums, and merchandise. As such, Swift’s net worth is upwards of $360 million.

    Even though Swift enjoys a lucrative career for all of her efforts, she also faces contentions. One of those contentions that many musicians before her have encountered includes the threat of a copyright infringement lawsuit. This is not uncommon in the music industry, which is rife with such lawsuits. In fact, in the last five years, the number of infringement cases has risen, causing musicians to become extra cautious and spend more on emissions and omissions (E&O) insurance.

    For musicians with chart-topping hits, they are at an even bigger risk of infringement claims. Such is the case with Taylor Swift and her biggest hit to date, “Shake It Off.” Songwriters Nathan Butler and Sean Hall claim that the hit contains phrases lifted from their song “Playas Gon’ Play.” Although the case was dismissed in February 2018 for unoriginal content, it has been reinstated by the Ninth Circuit. Both parties argue about the usage of the common words “Players” and “Haters,” and variations thereof. Butler and Hall claim Swift lifted the lyrics from their song, while Swift claims it is merely a coincidence.

    This case, along with several others, present “Blurred Lines” within the music industry in regards to copyright infringement. In 2018, Robin Thicke and Pharrell Williams were handed a controversial verdict to the tune of $5 million, making it one of the highest profile copyright infringement cases in the music industry. The verdict raises concerns in the industry that it stifles song creativity for basing a decision on a music style rather than specific aspects of songs.

    These concerns seem to be validated with the number of infringement cases increasing for star musicians such as Katy Perry, Ed Sheeran, Lady Gaga, and Taylor Swift, among others, since the filing of the “Blurred Lines” case. Given that a number of high-profile musicians have lost cases of infringement recently, it will be interesting to see how Swift will Shake It Off in this particular case. At the very least, musicians will have to take extra measures to keep their work protected.

    5 Reasons Pandemics & Movements Create Trademark Pursuit

    The year 2020 has created high emotions amidst a presidential election, movements, and a pandemic. Whether these instances cause fear, uncertainty, opportunities, anger, or happiness, the entire world is in it together. This year is especially unprecedented as everyone is affected in some aspect by any one of these issues.

    As such, these issues create interest in the intellectual property realm, generating more trademark applications. The following lists five common reasons these issues heighten trademark pursuit:

    • Uniqueness: Often, a pandemic or movement brings about a new term (at least a term not familiar to much of the public). For the entire world, one of the most commonly heard terms this year is “coronavirus.” While coronaviruses have been around for ages, each new strain is given a name of its own. In the current pandemic, the coronavirus strain is known as COVID-19, short for “coronavirus disease 2019.” One of the qualities of good trademarks is that they are unique or distinctive and help consumers identify with products and services. Generic names that are common cannot be trademarked. Therefore, when a new global term comes along, it is not unusual for people to want to capture the word as their own.
    • Ownership: As the world’s population experiences the pandemic together, it brings a sense of belonging. Everyone is affected in some sense, from mask mandates, to contracting the actual virus, and even experiencing detrimental effects of the virus. Applying for a trademark gives people a sense of ownership and a sense of control.
    • Emotion: The BLM movement this year has spurred protests and riots. As such, strong emotions accompany this movement. Therefore, people may file for trademark applications with the hope that the movement remains relevant and important.
    • Capitalization: People apply for trademarks during movements and pandemics in the hopes of capitalizing on trending terms. As such, some trademark applications this year include “I heart COVID-19,” “Quarantini,” and “Social Distance Fitness,” among others. Common products people hope to use include T-shirts, other clothing, mugs, and more.
    • Misunderstanding: Many people hurriedly apply for trademarks with the misunderstanding that the first to file wins the rights to the trademarks. However, the first to file applies to patents, not trademarks. Often, people misunderstand that that they cannot simply rush to own a trademark just to own it; they must have a viable use for a product or service associated with that trademark.
    As you can see, pandemics and movements spark many emotions that lead people to try and capitalize on specific terms associated with those issues. However, there is much misunderstanding in these circumstances. As such, applying for trademarks associated with these issues is typically a waste of time and money. Stay tuned for next month’s newsletter to learn about the main reasons why trademark applications are often denied in these circumstances.

    5 Ways to Protect IP During a Pandemic

    The spread of the COVID-19 virus around the world is forcing a new “work-from-home” environment. And it is likely that this environment will last past the pandemic, or at least continue in some version. As the days move into months, many people and businesses continue to adapt to changes in an effort to keep businesses afloat and salvage the economy. These changes require new ways of solving problems, presenting innovations, and protecting intellectual property. Therefore, while the pandemic has changed business as well as personal lives, it is important to remain diligent when it comes to intellectual property protection. The following list introduces five ways to remain competitive and protect IP during these uncertain times:

    1. File on time. Everyone is adjusting to changes in the way we live and how we conduct business during the pandemic. Much focus is on salvaging jobs, worrying about future security, and remaining competitive. As such, it is even more important to meet IP application deadlines to avoid missed opportunities. It is especially critical to remember that the patent system remains a “first inventor to file” system. Therefore, it is important to continue pursuing patents amid the pandemic. With IP representing some of the most lucrative assets in a company, it is important not to let IP fall to the wayside.

    2. Meet maintenance deadlines. While companies continue to contend with changes in conducting business, they must keep on top of IP maintenance deadlines. It could be detrimental to companies that let maintenance fees lapse-especially in such uncertain times. As many things continue to change and remain uncertain, those who stay on top of IP maintenance deadlines provide the best protection for their assets.

    3. Look for infringing activity. As more business is conducted remotely, the potential for cybercrime increases. Therefore, while companies continue to focus on all other business aspects during the pandemic, more risks exists in infringing activities. As such, companies must keep an eye on and address any infringing behavior in the market.

    4. Continue innovating. It is easy to get lost amid the turmoil affecting the world right now. However, those who remain positive about the future and offer new innovations will likely overcome and succeed the most.

    5. Protect content. With more business conducted online, the risk of infringement increases regarding online content. It is wise to invest in copyrights regularly to protect original content and keep others from stealing or misusing that content. Copyright application costs are cheap compared to any other IP, making copyrights appealing in adding value to business.

    As we all continue to work through the changes made by the pandemic, it remains crucial to keep on top of IP protection measures. These simple methods can provide a world of protection amid a world of uncertainty.

    Tech Transfers: Essential to Innovation

    Many companies provide a plethora of innovations. For instance, IBM, Samsung, Microsoft, Intel, and Sony own tens of thousands of patents for their innovations. But did you know that the products these companies sell contain inventions owned by other companies? For instance, Samsung and Google have a cross-license so that they can share innovations to enhance their products and take advantage of the expertise and intellectual property of each company. This helps them avoid unnecessary patent disputes. In the end, it is a win-win for them. However, there are smaller organizations that play a factor in products sold by large companies. These include technology transfer offices.

    Educational institutions such as universities and research centers are invaluable to the innovative world. These institutions teach and train students with insurmountable information that they take with them to start careers, provide much-needed skills in the world, advance technology, and create cures, among many other things. While these institutes educate attendees, many of them also provide a place for attendees to develop and create important innovations that make a big difference in the world. As such, many universities have technology transfer offices.

    Technology transfer offices patent and copyright discoveries developed in their labs. They then license the intellectual property to businesses that can turn the discoveries into beneficial products. At the beginning of this year, Caltech won a patent infringement lawsuit against Apple and Broadcom for a whopping $1.1 billion. This is just one case of the value technology transfers provide industries.

    According to the Association of University Technology Managers (AUTM), its more than 3,000 members from more than 800 universities offer more than 22,000 technologies for licensing. To further highlight their value, check out their contributions in just a little over two decades:

    • Contributed $1.7 trillion to U.S. gross industrial output.
    • Contributed $865 billion to gross domestic output.
    • Supported 5.9 million jobs.
    • Disclosed more than 420,000 inventions.
    • Received more than 100,000 issued patents.
    • Formed more than 13,000 startups.

    Technology transfers in some instances can be invaluable to our society and the world over. If you have ever questioned or wondered about the role of technology transfer offices, check out all of the work being done through them to tackle the  COVID-19 issue we are currently facing.

    LES: A New Chapter in Indiana

    We are proud to announce that our very own Associate Director of Pellegrino & Associates, Tejas Shah, has launched a Licensing Executives Society (LES) chapter in Indiana! This is great news for professionals interested in all aspects of licensing intellectual property. With more than 50 years of history, LES provides a host of valuable information necessary to promote IP commerce. As an independent, professional organization, LES offers an inviting platform with experience and opportunities to expand member knowledge of technology transfer and licensing. Click Read More to learn about the benefits LES provides and why an Indiana chapter is the perfect addition to this prestigious organization.

    Indiana is home to a considerable number of IP-driven organizations, ripe with IP professionals. With these resources, an LES chapter enhances the success of organizations by serving as a platform for IP and licensing professionals to network and grow professional bonds between IP-driven organizations within the state. LES provides a host of benefits and opportunities including education, best practices, standards development, networking, participation, mentoring, and certification, among others. Strategic goals of LES include demonstrating thought leadership, delivering personalized value, and designing meetings for enhanced business value.

    Types of organizations that make up LES membership include corporations, law firms, consultants/service providers, universities/government, entrepreneurs, and students. Globally, the LES membership directory boasts nearly 9,000 professionals.

    For the recent addition of the Indiana LES chapter, we would like to introduce chapter leaders:

      • Tejas Shah, LES Indiana Chapter Chair, Associate Director, Pellegrino & Associates, LLC
      • John Routon, LES Indiana Chapter Director, Attorney, Barnes & Thornburg LLP
      • Scott Simmonds, LES Indiana Chapter Advisory Council, Partner, Barnes & Thornburg LLP
      • James McGee, LES Indiana Chapter Advisory Council, Senior Director, Corporate Business Development, Eli Lilly and Company
      • T. J. Cole, LES Indiana Chapter Advisory Council, Partner in the Litigation and Intellectual Property Group, Ice Miller LLP
      • Dennis Abbot, LES Indiana Chapter Advisory Council, Director of Global Business Development, Cook Biotech

    As you can see, the LES Indiana chapter board offers expertise from a variety of backgrounds. The board welcomes everyone at meetings. For more information on LES, check out the website at https://www.lesusacanada.org/. For the LES Indiana chapter specifically, check out the following link: https://www.lesusacanada.org/group/IN. Be sure to catch the next meeting at Barnes & Thornburg on March 10 from 5:30 p.m. to 7 p.m. Location is 11 S. Meridian St., Indianapolis, IN 46204.

    2019 Highlights: A Year in Review

    It is hard to believe that we are already into the second month of the New Year! We look forward to each new year in the valuation business as it rewards us with new clients, new projects, new friends, new adventures, and new learning opportunities. Although we enjoy every new aspect of each year, we also value and enjoy our relationships with returning clients and acquaintances we have made in the business. For these reasons, we love what we do. Everything we do gives us an opportunity to learn and grow as a company and as individuals. We have some exciting changes coming to the Pellegrino & Associates firm in the near future, but for now, we would like to highlight moments from 2019.

    Our projects last year covered a number of topics, such as the following: chemical looping, pork, motion-detecting electronics, wireless electronic vehicle charging technology, inverters, USB connectors, plastics, product teardown, malware, telepresence robots, artificial intelligence, satellites, trading strategy software, backtesting software, optogenetics, international student education requirements software, municipal solid waste sorting technology, RFID sensors, among others. As you can see, our job is never boring! Each project gives us an opportunity to learn about various topics, making our job interesting and enjoyable.

    In addition to our projects, throughout the year we attended a variety of conferences and were invited by several organizations for speaking engagements, such as the American Institute of Certified Public Accountants, American Society of Appraisers, Rutgers University, Indiana Health Industry Forum, and AUTM Annual Conference.

    Projects, speaking engagements, and conferences take us many places each year. In 2019, we traveled throughout the country to the following places: Las Vegas, NV; New Brunswick, NJ; Austin, TX; New York, NY; Boston, MA; Chicago, IL; Washington, DC; Delaware, MD; Los Angeles, CA, San Francisco, CA, Boulder, CO, and Montreal, Quebec.

    In addition to our projects and speaking engagements, IAM published Mike’s article, titled “Not All Patents Are Created Equal: The Wizard of Oz and Patent Portfolios” in its IAM Magazine March/April edition. The article discusses the tactics companies use to play analytics tools and the patent system to their advantage. It provides examples of how companies grow their portfolios faster and how patent portfolios differ.

    At our firm, we acknowledge the hard work it takes to provide excellent products to our clients. Therefore, we find it necessary and valuable to take time out once in a while to reward ourselves with fun, sometimes challenging, and team-oriented excursions. For one of our excursions, we flew to Phoenix, AZ to hike the Camelback Mountain at the elevation of 2,704 feet. We also attended the Bondurant High-Performance Driving School where we enjoyed learning valuable driving skills for all kinds of unforeseen circumstances. Once we graduated from the class, we all enjoyed some high-speed chasing on the track! Not to be outdone by the physical challenges we endured in AZ, we decided to try out a local spin cycling class. For some of us, it was a new experience, while others pushed themselves to a new level. Either way, it was a win-win situation as we squeezed in a workout while hanging with staff. Let’s face it, working out is always more fun with others!

    As you can see, we keep busy throughout the year with a variety of tasks. There is never a dull moment! We can’t wait to see what is in store for 2020 with new projects, conferences, speaking engagements, company outings, and so much more. We appreciate all of our connections and the opportunity to continue learning and providing our expertise in the intellectual property valuation realm.