Music Choice and Stingray Digital Trial

This article provides a summary for the “Music Choice vs. Stingray Digital” Trial and other updates for the case. Back in October 2018, August 2018, October 2017 and July 2017, I reviewed this case and made my observations which are now becoming a reality.

First, I stated the the IPR Board was going to allow several claims that were challenged on some of Music Choice‘s patents, and those were challenged by Stingray Digital again in the District Court by fling a “Motion for Summary Judgement.”  My positions were confirmed and some claims survived and a damages award is based on those claims and the absence of a non-infringement alternative technology to Music Choice’s patents, which I seriously challenge in a different post. 



In preparation for the Music Choice and Stingray Trial, a report was filed by Magistrate Judge Payne indicates that the ‘245 Patent will be trialed and all damages accepted now, over $20M, as far is known and disclosed in the case will be trialed on December 9th and December 16th, 2019.   This is the next prediction confirmed to be truth, which is the award to loss profits and not a reasonable royalty as presented by Dr. Ugone’s and now confirmed by the judges in this matter.   Hence on the ‘245 patent, Claims 10 and 15 are going to be defining a multi-million dollar award.

The Magistrate Judge previously entered his Report and Recommendation (“Report”) (Dkt. No. 271), which recommended denial of Defendants Stingray Digital Inc. (f/k/a/ Stingray Digital Group Inc.) and Stingray Music USA, Inc.’s (“Defendants”) Motion for Summary Judgment of Estoppel as to Claims 10 and 15 of U.S. Patent No. 9,357,245 (“Motion”). (Dkt. No. 193). Defendants have now filed an Objection to that Report. (Dkt. No. 286).

Besides, the magistrate judge on Dkt #280, allowed a report for damages in favor to Music Choice in the order of magnitude of ~$14M for loss profits with AT&T, ~$0.6K for Liberty Puerto Rico and ~$7.8M for other companies, which totals about $22-$23M in damages, which it unknown what else is reported in Dr. Ugone’s testimony and reports.


Additionally, Stingray Digital accused Music Choice of a “smear campaign” and some other counter claims that, clearly Judge Gilstrap scheduled 1st the patent case on December 9th, and 2nd the other second case for December 16th (back-to-back). As in my opinion, there will little to no merit for that case if infringement is found by the jury, failure to get an award for a motion for summary judgement will also have an adverse effect on what is being filed by Stingray in appeal to the IPR ruling allowing claims of MC’s patents.

Besides that, the parties agreed that some affirmative defenses on inequitable conduct that were raised by Stingray Digital, are now gone as presented herein:


By reviewing what was ordered in the motions in liming, it is also clear that the dispute will have some restrictions with prior engagement an acquisition of Music Choice Europe, Stingray being a canadian company, invalidated patents, leave all references to Stingray media room out of the picture, all inequitable conduct defenses, etc.


Clearly some of the aspects of a Motion in Liming will protect the jury from some of the colorful biassed that could taint a trial. 

The cases will be trialed soon and determination of much infringement and a damages award will be known by mid-December. 


In my opinion,. I can anticipate a ruling in favor to Music Choice, possibly an injunction relief order that will likely kick Stingray out of the United States, and potentially a $20-$60M award being conservative assuming punitive damages are awarded plus possibly attorney’s fees (not fully sure about this one).  

Non-Infringing Alternative – Cloud to Cable Patent Portfolio and Software 

As shown in the slides herein, my technology is clearly a non-infringing alternative to Music Choice’s patents as it achieves the same thing both for VOD and Linear channels with visual complement components. 



Additional updates on Music Choice and Stingray Trial 

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 have become a reality and in a way, my analysis of this cases even in 2017 is now a reality. In summary, I concluded that:

  • 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.


Final Opinions

Several rulings have gone unfavorable to Stingray Digital which includes adoption of Magistrate judge opinions and ordering denying the Daubert challenge made to Dr. Keith Ugone, the damages expert in the case representing Music Choice, Inc.  Clearly, 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.

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 change of surviving 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.

Financial Implications?

Before the Music Choice and Stingray Trial takes place, Stingray digital has to find a way to now settle this case or, discuss a way to present my patents as a non-infringing alternative to Music Choice, either way, its is not good to be in this position.

Stingray 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. I will keep track on more updates to follow.

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