Eolas Technologies Incorporated v. Adobe Systems Incorporated et al
NOTICE by Eolas Technologies Incorporated, The Regents of the University of California PLAINTIFFS' STATEMENT ON ITS DAMAGES MODEL (McKool, Mike) (Entered: 01/16/2012)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
Eolas Technologies Incorporated,
Adobe Systems Inc., Amazon.com, Inc.,
Apple Inc., Argosy Publishing, Inc.,
Blockbuster Inc., CDW Corp.,
Citigroup Inc., eBay Inc., Frito-Lay, Inc.,
The Go Daddy Group, Inc., Google Inc.,
J.C. Penney Company, Inc., JPMorgan
Chase & Co., New Frontier Media, Inc.,
Office Depot, Inc., Perot Systems Corp.,
Playboy Enterprises International, Inc.,
Rent-A-Center, Inc., Staples, Inc., Sun
Microsystems Inc., Texas Instruments Inc.,
Yahoo! Inc., and YouTube, LLC
§ Civil Action No. 6:09-CV-00446-LED
PLAINTIFFS’ STATEMENT ON ITS DAMAGES MODEL
Pursuant to the Court's Order dated January 10, 2012, Plaintiffs The Regents of the
University of California and Eolas Technologies Inc. (“Plaintiffs”) submit this pleading showing
its approximate damages model.
For the most part, Defendants are accused of infringing
Plaintiffs patents-in-suit by including videos, product viewers, product sliders, interactive
advertising, search suggest, and interactive applications on their web pages. Plaintiffs damages
model is based on each Defendants’ use of the infringing technology on their own web pages
(although some Defendants such as Amazon and J.C. Penney have indicated they intend to
attribute the value of their use to Adobe and/or Google, see e.g., Dkt. Nos. 1133).
Plaintiffs employ a similar damages model for all Defendants. Plaintiffs have used the
well-recognized Nash Bargaining Solution (NBS) developed by the Nobel Prize winning
Princeton economist, Dr. John Nash, to calculate damages.
Plaintiffs employ the NBS to
measure the incremental benefit experienced by Defendants, measured as Defendants’
incremental profits directly attributable to use of the patents-in-suit. This is the approach
contemplated by Georgia-Pacific Factor 13, i.e. the portion of the realizable profit that should be
credited to the inventions as distinguished from non-patented elements.
For each Defendant, Plaintiffs identify the revenue generated by the accused products.
Based on the Defendants’ operating profit margin, Plaintiffs calculate the profit generated by the
accused products. Next, Plaintiffs apportion the profit attributable to the inventions disclosed in
the patents-in-suit to determine the incremental benefit from the patents-in-suit. In other words,
Plaintiffs identify the profit that would not exist but for Plaintiffs’ invention. The apportionment
factor or uplift due to the invention varies depending on the accused website/feature and is based
on discovery provided by Defendants. Using the NBS, Plaintiffs determine the reasonable
royalty damages by sharing the incremental benefits of the patents-in-suit between Plaintiffs and
Based on an analysis of the impact of the patents-in-suit on the revenues and profits of
each Defendant, past damages based on currently available financial data are as follows: Google
/YouTube -- $176.4 million; Amazon -- $135.2 million; Yahoo -- $41.8 million; J.C. Penney -$27.7 million; Staples -- $20.2 million; CDW -- $14.7 million; Adobe -- $12.1 million; Go
Daddy -- $3.6 million; Citigroup -- $6.5 million. Plaintiffs anticipate updating these figures to
include damages through time of trial and, accordingly, these figures will increase by
approximately fifty percent.
Plaintiffs’ damages model also includes a fixed-price component for each Defendant.
Dated: January 16, 2012.
MCKOOL SMITH, P.C.
/s/ Mike McKool
Texas State Bar No. 13732100
Texas State Bar No. 04035500
Texas State Bar No. 24040865
MCKOOL SMITH, P.C.
300 Crescent Court, Suite 1500
Dallas, Texas 75201
Telephone: (214) 978-4000
Telecopier: (214) 978-4044
Kevin L. Burgess
Texas State Bar No. 24006927
Josh W. Budwin
Texas State Bar No. 24050347
Gretchen K. Curran
Texas State Bar No. 24055979
Matthew B. Rappaport
Texas State Bar No. 24070472
Texas State Bar No. 24070000
MCKOOL SMITH, P.C.
300 West Sixth Street, Suite 1700
Austin, Texas 78701
Telephone: (512) 692-8700
Telecopier: (512) 692-8744
Robert M. Parker
Texas State Bar No. 15498000
Robert Christopher Bunt
Texas Bar No. 00787165
Andrew T. Gorham
Texas State Bar No. 24012715
PARKER, BUNT & AINSWORTH, P.C.
100 E. Ferguson, Suite 1114
Tyler, Texas 75702
(903) 533-9687- Facsimile
ATTORNEYS FOR PLAINTIFF
EOLAS TECHNOLOGIES INC.
AND THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was filed electronically in
compliance with Local Rule CV-5(a). As such, this document was served on all counsel who
have consented to electronic services on January 16, 2012. Local Rule CV-5(a)(3)(A).
/s/ John B. Campbell
John B. Campbell
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