What if Nanoco went to trial and won?25 May 2023 14:01
9/1 RNS: “In evaluating the settlement offer and concluding that it provides a fair outcome for the Company and its shareholders, the Board, having consulted with its advisers in the litigation, took into account the following considerations..... A settlement removes the risks of the litigation process, potential appeal processes of the trial and the ongoing appeal of the Patent Trial and Appeal Board decisions, further litigation costs, and the time value of money."
Recent Results from Judge Gilstrap (who also presided over Nanoco v Samsung)
In 02/20, KAIST obtained a $203M judgment ($101.5M doubled for wilful infringement) against Samsung and settled just 7 months later in 09/20.
In 02/20, US Automobile Association received $303M (200+103) judgments from judge Gilstrap against Wells Fargo Bank and settled just 1 year later.
In 04/22, Netlist received a $303M verdict against Samsung, subject to increase for wilful infringement. Netlist has a few more suits pending against Samsung.
No doubt Texas is the right venue for trial and huge damages. In all fairness, it’s hard to predict the outcome of a trial. But suppose the most optimistic scenario if Nanoco went to trial and obtained high end damages ($412M), as opposed to the low end $43M, plus wilful infringement (say 2x) = $824M, and then bought judgement preservation insurance from AON, and obtained injunction in Germany and China. Then the value of what Tenner calls a "fair" settlement with "global coverage" (US = 1/3 of WW sales) for "the full life of the five patents in litigation" (14 years of future royalties vs 7 years of past damages) would have been astronomical. Granted, this is the most optimistic scenario.
When Samsung offered $150M (including $85M for patent sale), if you were Edelman with $1M guaranteed upon settlement or Epstein with $5M guaranteed upon settlement, would you have advised the board not to settle? How can anyone give objective advice with this type of compensation structure?
What's the rationale for engaging Epstein (a childhood friend of Edelman, then CEO) with a whopping $5M payable upon settlement (instead of an hourly rate or on contingency based on hourly rate * 3)?
What's the rationale for engaging Edelman (former CEO) with no patent litigation experience (let alone expertise) as a special litigation adviser with a $1M contingent payment when Epstein was already engaged as a litigation adviser?
What's the rationale for appointing Henry Turcan representing LOAM with no patent litigation experience to the Samsung litigation sub-committee without any public disclosure?
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