please 1) A Patent-infringement Suit One of our corporate competitors is threate
ID: 392501 • Letter: P
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1) A Patent-infringement Suit One of our corporate competitors is threatening us with a lawsuit for patent infringement. The competitor is already in court with a similar lawsuit against another firm, and our legal staff estimates that there is a 50 percent chance that our competitor will prevail. One option open to us is to settle out of court now; the alternative is to wait until the current case is resolved before taking action. If our competitor losses the other suit, it will not pursue an action against us. On the other hand, if the competitor wins, it is likely to sue us. Our legal staff estimates that likelihood at 80 percent. They further estimate that the suit would be brought for $10 million. If the competitor sues us, we can negotiate a settlement, go to trial and contest the patent infringement claim, or go to trial and concede the patent infringement but fight the settlement amount. In either case, of course, the trial wl dictate the monetary outcome. Our legal staff estimates that a negotiated settlement would cost us roughly $8 million. If we contest the patent, we have 30 percent chance of winning the suit. If we concede the patent and contest the settlement amount, then the only question would be the size of that amount. Our legal staff envision two possibilities: High, at $15 million, with a 60 percent probability, and low, at $5million, with 40 percent probabilityExplanation / Answer
In the context of the given case study, it is clear that the copyright infringement has happened and that the company in question is trying to estimate their probability of winning the law suit or getting penalized for the damages which could be anything between $15 million to $5million. This amount is quite high for any business to suffer these monetary losses.
After analysing the given case, it is definitely wise and risk mitigated strategy to negotiate the settlement rather than contesting the infringement claim. This is because, the case describes sufficient details that the company in question is at fault and has a high probability of being put to trial and penalized.
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