June 2, 2015

IP HAWK
MARATHON PATENT GROUP (MARA)
Tire Pressure Trial Notes Day #2

David Hoff

David Hoff
iphawk@outlook.com
Founder
@theiphawk
http://theiphawk.blogspot.com
iphawk@outlook.com

Thoughts From the Hawk

Marathon Patent Group announced the acquisition of a new international patent portfolio on May 15, 2015. The patents are
related to tire pressure monitoring systems (TPMS). Of note the German portion of a TPMS patent was asserted in Germany,
which Bridgestone has already prevailed on the infringement portion and is able to post a bond to enforce an injunction. The
German victory does not guarantee success in the United States, but further shows that Marathon is able to source and acquire
valuable IP at various stages in its monetization campaign. The terms of the acquisition have not been fully disclosed
although I estimate any licensing revenues collected could be split 50/50.
A jury trial, Bridgestone v Schrader began on June 1, 2015. I attended day #2 and my notes are below. Please note that
patent litigation is very complicated and all of my notes are personal opinions or observations from attending the jury trial in
Delaware. I could very well be wrong in my understanding and recollection of what was said or demonstrated in court.
Day #2 Morning Session
I counted nine people in attendance including myself along with a trusted associate. I believe the rest were either lawyers,
shadow jurors, or company representatives. More attendees filtered in and out during the morning session. There were six
lawyers representing the plaintiffs and six lawyers representing the defendants. The jury is all female with eight jurors. Two
patents are being asserted with two claims in each patent.
- 895 patent claims 12 and 92
- 476 patent claims 1 and 136
The first plaintiff witness was a Bridgestone engineer with 31 years experience. He gave a background of the TPMS program
and how the program originated.
Next up was another engineer and a named inventor on the patents, David Coombs. He provided his background, which I
thought was very credible. The company he was employed by was contracted by Bridgestone to develop a TPMS device that
was very durable and conserve battery power in order for the device to work for a long time.
Key Data
Price

$4.50

TTM Revenue

$22.71mm

Enterprise Value

$87.1mm

Shares Outstanding

13.98mm

Shares Fully Diluted

19.56mm

Float

10.19mm

52 Week Range

$4.25-9.73

3 Month Avg. Volume

93,928

I am long MARA. I have not been paid to prepare or disseminate this report by Marathon or any company discussed. All information has been obtained from
public sources. All opinions are my own. Please consult a financial advisor before making any financial decisions.

June 2, 2015

IP HAWK
MARATHON PATENT GROUP (MARA)
Tire Pressure Trial Notes Day #2

David Hoff

David Hoff
iphawk@outlook.com
Founder
@theiphawk
http://theiphawk.blogspot.com
iphawk@outlook.com

The system needed to use low power in order to conserve battery life when it wasnt being used or used in a lighter mode
and to use more battery / more power when it was transmitting the pressure information.
Next up was a Schrader employee (Tony Davenport) via video recording (he sounded miserable throughout). I believe he is
responsible for aftermarket products for Schraders TPMS line. He created a TPMS whitepaper to present to Schrader
executives for a business case. Budgeted $2.90 per unit for IP licenses. A note in the report was shown from the paper:
Corporate Risk is High IP Infringement.
Another Schrader employee via video recording was next. He is the Technical Development Team Manager. Generation 3
products and later involved microchips, memory, and a transmitter. He was questioned on the different Schrader TPMS
products and how they worked including the different modes: roll mode, power down mode, off mode, and stationary mode.
Day #2 Afternoon Session
The afternoon session started and ended with Bridgestones infringement expert. I noticed more attendees in the court room
and counted 18 people attending. He went through how Schrader accused products infringe claims 12 and 92 of the 885
patent. Patent 476 should be heard on Day #3. He went through the deep sleep mode with the advantages of power & battery
conservation, flexibility, software upgrades, easier to fix, and three modes of operation. He then testified that Generation 2
products or older do not infringe. They did not have microprocessors, which were programmable with different modes of
operation. He said they were state machines and the circuits were always on. Generation 1 TPMS were shipped in 1997
and in 2003 is when Schrader started shipping Generation 3.
He started with claim 12 of the 885 patent and how a tire tag as construed by the court teaches the steps of claim 1.
1.

A system for measuring a parameter of a device at a first location comprising: a sensor for measuring the device
parameter and generating a data signal representing the measured parameter;
a microprocessor coupled to the sensor for activating the sensor on a first periodic basis to measure the device
parameter;
a memory in the microprocessor for storing the generated data signal representing the measured parameter;
a transmitter coupled to the microprocessor; and

a receiver coupled to the microprocessor, the microprocessor periodically partially awakening to determine, on a
second periodic basis, if a received transmission is a valid interrogation signal and, if so, fully awakening and responding
to the valid interrogation signal, via the transmitter, by at least transmitting the last stored measured parameter.
Bridgestone and Schrader only have a factual dispute with the bolded and underlined portion. The expert went through each
step and testified that Schrader infringed each step of the claim. He used Schrader source code, block diagrams, compliance
FCC testing from U of Michigan, Schrader testimony, and customer software designs. The expert showed exactly where
Schrader infringed each step of the claim and ticked off boxes on an oversized board.
I am long MARA. I have not been paid to prepare or disseminate this report by Marathon or any company discussed. All information has been obtained from
public sources. All opinions are my own. Please consult a financial advisor before making any financial decisions.

June 2, 2015

IP HAWK
MARATHON PATENT GROUP (MARA)
Tire Pressure Trial Notes Day #2

David Hoff

David Hoff
iphawk@outlook.com
Founder
@theiphawk
http://theiphawk.blogspot.com
iphawk@outlook.com

The expert then through the Doctrine of Equivalents and how each product was met through the DoE. Most of the focus on
the claim involved when the sensor awakened, how much power was used with the microprocessor (the different clockspeeds)
and which components of the sensors are used in various modes.
Claim 92 was very similar:
92. A tire tag comprising:
a sensor for measuring at least one tire parameter and generating a data signal representing the measured parameter;
a microprocessor for causing the tire tag to enter a deep sleep mode in which a minimum number of electrical
components are powered to conserve battery power;
the microprocessor, on a periodic basis, causing the tire tag to enter a lucid sleep mode in which certain of the
electrical components are activated to cause the sensor to measure and store the at least one tire parameter; and
the microprocessor periodically partially awakening and looking for a forward link transmission and, if
detected, causing the tire tag to determine whether the forward link transmission is a valid interrogation signal
and, if so, causing the tire tag to enter an interrogation mode where the microprocessor activates all necessary
electrical components to receive, process and respond to the valid interrogation signal.
In my opinion this case will be decided on which expert the jury believes is more credible.

I am long MARA. I have not been paid to prepare or disseminate this report by Marathon or any company discussed. All information has been obtained from
public sources. All opinions are my own. Please consult a financial advisor before making any financial decisions.

June 2, 2015

IP HAWK
MARATHON PATENT GROUP (MARA)
Tire Pressure Trial Notes Day #2

David Hoff

David Hoff
iphawk@outlook.com
Founder
@theiphawk
http://theiphawk.blogspot.com
iphawk@outlook.com

Disclosure: I, David Hoff, own stock in MARA. I have no plans to buy or sell any stock
within the next 72 hours. I wrote this report myself, and it expresses my own opinions. I have no business
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