nevium inta 2015 san diego internet analytics used for valuation and damages

Internet Analy+c Tools for Brand Valua+on, Damages and Defama+on

Doug Bania and Brian Buss

INTA 2015 Annual Mee+ng, May 3, 2015

2 INTA 2015 Annual Mee+ng, May 3, 2015

A Financial and Economic Perspec+ve on Internet & Social Media IP Introduc+on

Internet & Social Analysis

Intellectual Property Analysis

Bringing Them

Together


Internet & Social Media Analysis



Bringing Them

Together


Old Misuse Tradi+onal Media

New Misuse Search & Social

Obvious misuse in television and Print

Internet misuse can be hidden in metadata and keywords

The number of people witnessing the misuse is geographically

constrained

Worldwide audience and the potenGal of misuse going viral

How many customers actually took acGon is not accurate

Data regarding how many customers took acGon

is very accurate

Old World vs. New World Infringement Internet Misuse Can be Accurately Measured and Quan+fied


Search Appear on first page organic search results for defined

keywords

Op+miza+on Strategically leverage keywords for

first page search results in Search and Social Media

Social Media Build a following.

Create shareable content. Go viral.

Analy+cs Measure and refine op+miza+on

tac+cs to create more website traffic

Key Concepts of Internet Use: Business Owner The Internet is the new corner store and the foot traffic is Search & Social


Search What is your organic ranking

for specific keywords? How did you get there?

Op+miza+on Keywords, tags, metadata vs. visible content

How, where & why IP is used?

Social Media What is your handle? What is your topic of

conversa+on?

Analy+cs Iden+fy & Quan+fy

site traffic Impact of key words

Key Concepts of Internet Analysis Search + Social + Op+miza+on + Analy+cs = Defensible Tes+mony


Educa+ng the Trier of Fact Educate first in order to get set the stage for damages

Internet Damage Experts Must Educate the Judge and Jury

Regarding the Basics of Search & Social Prior to Approaching Damages


Growing importance of the Internet for businesses The Internet is a huge place to promote business Search and How it Works Internet as a huge library with billions of books, Search engines are the tools to find informaGon Importance of First Page Search Results First page is worth the fight Use of Metadata and Op+miza+on First page search results are not an accident Use and Leverage of Google Analy+cs Google provides tools and tacGcs

Educa+ng the Trier of Fact Any Internet valua+on or damages calcula+on starts here


Two compeGng construcGon supply

companies had operated in non-‐overlapping geographies

Both businesses evolved into online retail &

distribuGon of construcGon supplies and design

concepts

Therefore businesses begin to overlap and compete for customers outside their

home geography

Case Study: Educa+ng the Trier of Fact

Defendant used the Plain+ff’s TM-‐protected company name in search op+miza+on and social media


First page of organic search results

PlainGff: First organic result

Defendant: Second and Third organic search result

Of the 9 organic search results, over 50% are for the Defendant

Defendant: Social Media sites

PlainGff’s paid result

PlainGff: Ninth organic result

Educa+ng: Importance of Search & Social


Tac+c Use at SampleCompany.com Likely Result

Use key terms in Title Tag

<Gtle>The Company, Sales and Structure Designs</Gtle>

The Gtle tag “The Company” alerts both the search engines and the user as to the topic of that parGcular page

Use key terms in the URL

h]p://www.sample.com/about-‐the-‐company This URL contains the keywords “The Company” which provides users and search engines more informaGon about the page

Use key terms in the Descrip+on

meta name="descripGon" content=”;The Company has been selling since 1972. Click here to find out more about sales, structure and The Company." />

The descripGon meta tag provides the search engines a summary of what the page is about

Use key terms in the Keywords

<meta name="keywords" content=”sales, structure, the company, green supplies, The Company, Sample Company, samplecompanuy" />

If a search engine finds specific key terms throughout the content of the website and in the keyword meta tags, that website will likely be ranked higher in search results

Educa+ng: Analyze Code to Determine SEO The site’s code can be “read” to inves+gate SEO strategies


Tac+c Use at SampleCompany.com Likely Result

Use key terms in Anchor Text

<a href="h]p://www.SampleCompany.com/about-‐the-‐company">About The Company</a> <a href=h]p://www.SampleCompany/the-‐company-‐brochure>SampleCompany Brochures</a>

Anchor text are the clickable hyperlinks that users click on to be taken to a different page of a website Using “the-‐company” in the anchor text tells users and search engines that the page is about “The Company”

Label images & graphics using key terms

<img src="/upload/thecompany.jpg" alt="" width="137" height="200" align="leh" border="0" hspace="6" />

Including key terms in the name of an image allows the Google search engine to show the image in Google Image search results

Using IMG ALT tag to label image with keywords

<img src="/upload/thecompany.jpg”><img alt=“The Company”width=”157" height=”220" align="leh" border="0" hspace=“4”/>

IMG ALT Tag provides a clear text alternaGve of the image for screen reader users Anyone searching for the phrase “The Company” may find the photo is a search and click to the website

Links to social media accounts

<a href="h]p://www.facebook.com/the_company" target="_blank"><span style="font-‐family: Trebuchet MS;">The Company on Facebook</span></a> <a href="h]p://www.twi]er.com/the-‐company/" target="_blank">The Company on Twi]er</a>

When a Googlebot crawls a website, it will noGce social links and typically associate the social profiles with you company. Posts and comments placed on those social accounts will likely rank you for specific keywords showing up frequently in your follower’s posts

Use key terms in the page’s text

The phrase “the company” has been also been placed 14 Gmes in the text of the page

Key terms throughout the page should be used so that search engines can determine the content of the page matches the Gtle, descripGon, and URL

The site’s code can be “read” to inves+gate SEO strategies Educa+ng: Analyze Code to Determine SEO


IP Valua+on & Damages for the Internet



Bringing Them

Together


Important to base new analyses on accepted methodologies

Standard Methodologies Internet IP Methodologies

Cost Approach

Cost to replace or replicate •  Relief from pay per click •  Value of impressions

Income Approach

Present Value (PV) of future benefits •  Discounted cash flows (DCF) •  Relief from Royalty •  Lost Profits / Unjust Enrichment

PV of •  AddiGonal Site Visits / Traffic •  AddiGonal online transacGon or

customer inquiries

Market Approach

Study of transacGons •  Guideline companies •  Guideline transacGons •  Industry benchmarks

•  Comparable Pay Per Click •  HypotheGcal license/transacGon

Analysis of the financial / economic impact of IP Assets on the Internet will employ one or more of these methodologies

IP Valua+on & Damages Methodologies


IP analysis starts with identifying and understanding the IP assets being used

Understanding the IP Assets


Types of IP assets ofen misused through Internet-‐based mechanism each have unique implica+ons for valua+on and damages analysis

Assets

Misuse boils down to infringement or defama8on

Analy+cal Considera+ons

Trademark & Brand

•  Is the TM used in unseen components of the website? •  Is the TM used to drive search results •  What was the exposure to defamatory comments or posts?

Copyright •  Did the protected content drive traffic? •  Was the image or content a contributor to a sale or transacGon?

Name & Likeness •  Did the use drive traffic? •  Was the use akin to an endorsement?

Domain Names •  Is there a website and how much direct traffic does site receive? •  How many monthly searches occur using this term?

Understanding the IP Assets


Mechanisms

Paid Search

Organic Search

Social Media

Squahng

Infringement

Defama+on

Claims Economic Result

Unjust Enrichment: Incremental profits achieved by Defendant due to the misuse

Lost Profits: Incremental profits not achieved by PlainGff due to the misuse

Pay-‐per-‐click relief: Value of cost, effort avoided due to misuse

Decrease in Value of an IP Asset: Impact on value due to misuse

Regardless of the asset type, the claims made in Internet cases typically occur through one or more mechanisms and the economic results can typically be

measured in 4 ways

Internet Damages Matrix


Explain the mechanism, then quan8fy the impact

Unjust Enrichment Profits: Traffic at Defendant’s Website

Using Google Analy+cs to Support Unjust Enrichment

Monthly visits due to searches using TM 25,000

RaGo: Visitors who purchased 25%

TM search purchases 6,250

Average e-‐commerce purchase $250

Incremental revenue 1,562,500

RaGo: Incremental profit margin 15%

Incremental profit per month 234,375


Using Social Media Analy+cs to Support Lost Profits

Use Accepted Methodology Lost Profits damages = But-‐for less As-‐is

Use of Social Media Data •  “ReacGons” to defamatory posts and tweets •  Language from posts seen in customer emails


Using Google Analy+cs in Name & Likeness Claim

Monthly Pageviews at Defendant’s Website

Search Term Analysis

Top 50 search terms do not include Celebrity’s name

Top 50 search terms yielded 49% of total site visits during the Damages Period

Search terms using Celebrity’s name resulted in a total of 45 visits during the Damages Period, less than (0.004%) Website traffic declined during the

Damages Period


Google AdWords for Celebrity’s Name

Social Media Presence for 12 Comparable Celebri+es

CELEBRITY’s social media presence was greater than comps

Price was less than Google PPC but equal to Facebook CPC

Using Social Media Data in a Market Approach

Google Facebook & FB Adver+sing Twioer

Google Search Results

Average Monthly Searches (Google)

Average Pay Per Click Rate

($/Click) Likes Size of

Audience

Cost Per Click (CPC)

CPC Suggested

Cost Per Thousand Impressions

CPI / 000 Suggested Tweets Followers

Name 1 10,800,000 27,100 $0.00 2,232,238 620,000 0.51 0.30-‐0.68 0.28 0.05-‐1.36 1 15,434

Name 12 42,700,000 165,000 $1.73 10,410,432 2,800,000 0.49 0.29-‐.0.69 0.09 0.3-‐0.64 94 1,894,518

Average 133,600,000 439,157 $0.90 7,992,695 2,210,286 $0.52 $0.22 9,135 1,851,757

Median 42,700,000 165,000 $0.79 8,573,831 720,000 $0.49 $0.18 1,755 187,591

CELEBRITY 244,000,000 301,000 $1.99 34,714,592 5,400,000 0.75 0.30-‐0.71 0.16 0.04-‐1.11 10,611 7,394,012

Search Terms

Avg. monthly searches CompeGGon Suggested

bid

Celebrity 673,000 Low $0.75


Value of YouTube and Facebook Impressions

YouTube 4 videos posted on the CELEBRITY’s channel received over 2 million views Total viewership (an acGve response), mulGplied by the Google AdWord rate

Using Social Media Data in a Relief from Pay Per Click

YouTube Ac+vi+es Viewers

CELEBRITY Presents PRODUCT at CES 454,134

CELEBRITY comes to the CNET stage (CNET) 96,462

CELEBRITY Calls Name 1,188,608

CELEBRITY in Las Vegas introduces PRODUCT 372,067

Total YouTube Impressions 2,111,271

$Value / Impression $0.75

Value of YouTube Ac+vi+es 1,583,453


Value of YouTube and Facebook Impressions

Facebook ReacGons are Likes, Comments and Shares

A ReacGon is an “acGve” response to the Celebrity’s post, and is more valuable than a view

Using Social Media Data in a Relief from Pay Per Click

A Response is more valuable than a view

Likes for CELEBRITY's Facebook page Likes Cost Impression Price ($/1000 impressions) 34,714,592 $0.16 Click Price ($/Click) $0.75 Reac+ons to Posts Involving the Products Likes Comments Shares Visit www.product.com make sure to like! 28,921 7,432 657

CELEBRITY Presents PRODUCT 17,528 1,425 412

CELEBRITY in Vegas Introducing PRODUCT . . . 18,256 312 514

Total 64,705 9,169 1,583

Value of Ac+vity Count Cost Value ($) Net Page Likes 34,649,887 $0.00016 5,544

Post Likes 64,705 $0.75 48,529

Other ReacGons 10,752 $0.75 8,064

Value of Facebook Impressions 62,137


Bringing Them Together



Bringing Them

Together


What’s known about Search & Op+miza+on •  “It’s Google’s algorithm” there are mulGple versions of best pracGces and no pracGGoner

knows exactly how search engines actually select and place websites

Understand the Context of the Calcula+on •  Just because a number was calculated, doesn’t mean the number is relevant

•  Replacement cost based on pay per click can indicate the value of Gme and effort replaced, but not necessarily the value of brand or TM

•  The IP Asset may not be the most important asset for apporGonment

•  Don’t fall for: using a 10% industry royalty the TM is worth more than the enGre business

•  Visits due to a TM-‐based search indicates number of visits, not necessarily profits

The Data is available, but it may not always support the claims

Challenges for the Expert

Concluding Comments


•  The Internet and Social Media markeGng world requires educaGng the trier of fact before proceeding to the quanGtaGve analysis;

•  The Internet MarkeGng World is less understood, but offers many advantages for financial and economic analysis (there is defensible evidence if you know where to look, and how to explain it)

•  Using the analyGcal advantages available from Internet & Social Media markeGng allows compelling Expert Analysis (The Proof is available)

•  Be aware of the limits of your calculaGons

Internet and social media data analysis provides addi8onal tools for the Art & Science of Valua8on

Our Top Take-‐Aways

Concluding Comments

Thank You

Doug Bania and Brian Buss

INTA 2015 Annual Mee+ng, May 3, 2015


Addi+onal Slides

A Deeper Look at the Toolkit


Drivers of Value

Business Value > Value of IP Assets owned by the Business

Appor+onment: IdenGfy the porGon of future benefits derived from use of the IP Assets

Present Value of Expected Future Benefits

Value of Business

Intangible Assets

Tangible Assets

Copyrights

Patents

Intangible Assets Tangible Assets

Trademark

IP depends on other assets and resources in order to generate economic benefits


• Website Analy+cs • Social Media Analysis • Scoring Analyses • Company Language Analysis • Comparable licensing transacGons (“CUT”) • Excess profits (“CPM”) • Feature count and comparison • MarkeGng Mix Analysis • PromoGonal Use Analysis • Surveys / Interviews /Focus Groups

Tools to Appor+on Economic Benefits

Appor+onment Framework

What is the value of this box?

Always best to use mul8ple tools

Internet Analy+cs as an Appor+onment Tool

Present Value of Expected Future Benefits

Value of Business

Intangible Assets

Tangible Assets

Copyrights

Patents

Intangible Assets Tangible Assets

Trademark


It boils down to appor8onment

Key Concept: Appor+onment


Forecas+ng Future Benefits

Asset Remaining Life (Years)

Cash Flow ($)

Asset Value ($)

IP: Remaining Life, Cash Flow & Value

•  IP and the products that use IP have life spans

•  Companies can expect perpetual growth, IP cannot

•  Benefits from the IP will grow, peak and then decline as other IP and other products take their place

Guiding Concepts

Total Contribu+on

Patents

IP: Rela+ve contribu+on

Trademarks & Other Intangibles

Time

Products & Businesses

Business Revenues

Product Life Cycle

IP Remaining Life

Benefit

Today’s Products

Products In-‐development

Future Products

nevium inta 2015 san diego internet analytics used for valuation and damages

Data & Analytics