1. What are the interests in this case of the various players in the Varacil market? 1) Tolemite This company developed Varacil production patent in the market. Tolemite had a monopoly in this patent and this company licensed this skill to BARD. Tolemite took a royalty from BARD about 4% amount of sales. 2) BARD BARD is the number one firm in the Varacil market. They had an overwhelming market share in Varacil market. They had given royalty to Tolemite for using producing skill. Furthermore, BARD received rights to sublicense to other Varacil producers who became interested in the process. This will also give BARD good revenue model. 3) C.K. Clardige(CKC) CKC is in the second position of Varacil market. They also produced Varacil but they didn’t give any royalty to Tolemite currently. This is the strong point of CKC. CKC produced Varacil without any fee, so this aspect will be the competitive advantage of CKC.
2. What should Mr. Purcell do? If you think he should propose a settlement, what amount do your recommend, and how should it be communicated? First of all, we have to take a view of each part of company circumstances when they faced to sue. All three firms had the pros and cons when they went to court. 1) Tolemite : The best or The worst Tolemite will get a 10% royalty from CKC when they win the lawsuit. Moreover, they can make revenue from other company through similar suit when they win this lawsuit. But they had huge risk. If Tolemite lose the suit, they might get zero revenue in the Varacil market. Because losing suit means that the patent of Tolemite is invalid. In this reason, this suit has the chance that the best result and the worst result to Tolemite. 2) BARD : How to make the larger advantages? BARD is the largest beneficiary in this lawsuit. When the Tolemite win the suit, BARD could make competitive advantages. CKC will give Tolemite 10%