Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 1 of 33
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`QUINN EMANUEL URQUHART & SULLIVAN, LLP
` Sean Pak (Bar No. 219032)
` seanpak@quinnemanuel.com
` Melissa Baily (Bar No. 237649)
` melissabaily@quinnemanuel.com
` James Judah (Bar No. 257112)
` jamesjudah@quinnemanuel.com
` Lindsay Cooper (Bar No. 287125)
` lindsaycooper@quinnemanuel.com
` Iman Lordgooei (Bar No. 251320)
` imanlordgooei@quinnemanuel.com
`50 California Street, 22nd Floor
`San Francisco, California 94111-4788
`Telephone:
`(415) 875-6600
`Facsimile:
`(415) 875-6700
`
` Marc Kaplan (pro hac vice)
` marckaplan@quinnemanuel.com
`191 N. Wacker Drive, Ste 2700
`Chicago, Illinois 60606
`Telephone:
`(312) 705-7400
`Facsimile:
`(312) 705-7401
`
`Attorneys for GOOGLE LLC
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`SAN FRANCISCO DIVISION
`
`
`
`SONOS, INC.,
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`
`Plaintiff and Counter-
`Defendant,
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`vs.
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`GOOGLE LLC,
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`
`Defendant and Counter-
`Claimant.
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` Case No. 3:20-cv-06754-WHA
`Consolidated with Case No. 3:21-cv-07559-
`WHA
`
`GOOGLE LLC’S OPPOSITION TO
`SONOS, INC.’S MOTION FOR
`INJUNCTIVE RELIEF AND
`ADDITIONAL DAMAGES
`
`
`Judge: Hon. William Alsup
`Location: Courtroom 12, 19th Floor
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`-1-
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`GOOGLE’S OPPOSITION TO SONOS’S MOTION FOR INJUNCTIVE RELIEF AND ADDITIONAL DAMAGES
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`Case No. 3:20-cv-06754-WHA
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`Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 2 of 33
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`TABLE OF CONTENTS
`INTRODUCTION .......................................................................................................................... 1
`
`I.
`
`II. SONOS IS NOT ENTITLED TO A PERMANENT INJUNCTION ......................................... 2
`
`A. SONOS CANNOT DEMONSTRATE IRREPARABLE INJURY........................................ 2
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`1.
`
`SONOS HAS NOT IDENTIFIED ANY IRREPARABLE HARM ................................ 3
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`(A) SONOS HAS NOT PRESENTED ANY EVIDENCE OF LOST SALES OR
`MARKET SHARE VIA A “LOCK-IN EFFECT” .................................................................. 3
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`(B) THERE IS AT MOST ONLY LIMITED EVIDENCE OF DIRECT COMPETITION
`5
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`2.
`SONOS HAS NOT ESTABLISHED A CAUSAL NEXUS BETWEEN ANY
`ALLEGED HARM AND GOOGLE’S INFRINGEMENT ........................................................ 6
`
`B. MONETARY DAMAGES ARE SUFFICIENT TO COMPENSATE SONOS.................. 10
`
`C. THE BALANCE OF HARDSHIPS FAVORS GOOGLE .................................................... 13
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`D. AN INJUNCTION WOULD NOT BE IN THE PUBLIC INTEREST................................ 14
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`E. REQUIRING GOOGLE TO PROVIDE NOTICE OF INFRINGEMENT AND THE
`PERMANENT INJUNCTION WOULD BE UNJUSTIFIED ...................................................... 16
`
`III.
`
`
`SONOS’S REQUEST FOR AN ENHANCED ONGOING ROYALTY IS PREMATURE
`16
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`A. SONOS’S REQUEST FOR AN ONGOING ROYALTY IS PREMATURE ..................... 17
`
`B. SONOS IS NOT ENTITLED TO AN ONGOING ROYALTY ........................................... 18
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`C. SONOS’S REQUESTED ONGOING ROYALTY RATE IS EXCESSIVE ....................... 18
`
`D. THE COURT SHOULD REJECT SONOS’S IMPROPER ATTEMPT TO USE
`WILLFULNESS AS A BASIS FOR ENHANCING THE ONGOING ROYALTY RATE ...... 20
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`16
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`IV.
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`SONOS’S REQUEST FOR SUPPLEMENTAL DAMAGES IS PREMATURE............... 22
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`1.
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`2.
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`PRE-VERDICT SUPPLEMENTAL DAMAGES .......................................................... 22
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`SUPPLEMENTAL DAMAGES BASED ON GOOGLE’S REDESIGN ..................... 22
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`V. AN AWARD OF PRE- AND POST-JUDGMENT INTEREST IS PREMATURE, AND
`PRE-JUDGEMENT INTEREST IS UNWARRANTED IN LIGHT OF THE EXCESSIVE
`VERDICT) ............................................................................................................................................ 23
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`A. SONOS’S REQUEST FOR INTEREST IS PREMATURE ................................................. 23
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`B. SONOS IS NOT ENTITLED TO PRE-JUDGMENT INTEREST ...................................... 24
`
`C.
`IF THE COURT AWARDS PRE-JUDGMENT INTEREST, IT SHOULD BE SET AT
`THE TREASURY BILL RATE AND COMPOUNDED ANNUALLY ..................................... 24
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`D. THE COURT SHOULD AWARD POST-JUDGMENT INTEREST ONLY IF THE
`JURY’S AWARD WITHSTANDS GOOGLE’S POST-TRIAL MOTIONS AND APPEAL ... 25
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`VI.
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`CONCLUSION ........................................................................................................................ 25
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`-i-
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`GOOGLE’S OPPOSITION TO SONOS’S MOTION FOR INJUNCTIVE RELIEF AND ADDITIONAL DAMAGES
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`Case No. 3:20-cv-06754-WHA
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`Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 4 of 33
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`TABLE OF AUTHORITIES
`
`Cases
`
`ActiveVideo Networks v. Verizon Communications,
`694 F.3d 1312 (Fed. Cir. 2012) ................................................................................................... 11
`
`Acumed LLC v. Stryker Corp.,
`551 F.3d 1323 (Fed. Cir. 2008) ................................................................................................... 11
`
`Affinity Labs of Tex. V. BMW N. Am., LLC,
`783 F. Supp. 2d 891 (E.D. Tex. 2011) ........................................................................................ 22
`
`Alzheimer’s Inst. of Am. v. Eli Lilly & Co.,
`No. 10-CV-00482-EDL, 2016 WL 7732621 (N.D. Cal. Apr. 14, 2016) .................................. 25
`
`Am. Calcar, Inc. v. Am. Honda Motor Co.,
`No. 06CV2433 DMS (CAB), 2008 WL 11337489 (S.D. Cal. Nov. 18, 2008) .................. 12, 13
`
`Apple Inc. v. Motorola, Inc.,
`757 F.3d 1286 (Fed. Cir. 2014) ................................................................................................... 11
`
`Apple Inc. v. Samsung Elecs. Co.,
`695 F.3d 1370 (Fed. Cir. 2012) ........................................................................................ 3, 13, 16
`
`Apple Inc. v. Samsung Elecs. Co.,
`809 F.3d 633 (Fed. Cir. 2015) ..................................................................................................... 10
`
`Apple Inc. v. Samsung Elecs. Co.,
`877 F. Supp. 2d 838 (N.D. Cal. 2012) ........................................................................................ 10
`
`Apple, Inc. v. Motorola, Inc.,
`869 F. Supp. 2d 901 (N.D. Ill. 2012) .................................................................................... 13, 15
`
`Apple, Inc. v. Samsung Elecs. Co.,
`678 F.3d 1314 ............................................................................................................................... 10
`
`Apple, Inc. v. Samsung Elecs. Co.,
`735 F.3d 1352 (Fed. Cir. 2013) ........................................................................ 2, 3, 7, 8, 9, 10, 15
`
`Apple, Inc. v. Samsung Elecs. Co.,
`No. 12-CV-00630-LHK, 2014 WL 6687122 (N.D. Cal. Nov. 25, 2014) ........................... 17, 18
`
`Asetek Danmark A/S v. CMI USA, Inc.,
`No. 13-CV-00457-JST, 2015 WL 5568360 (N.D. Cal. Sept. 22, 2015) ................................... 16
`
`Biedermann Techs. GmbH & Co. KG v. K2M, Inc.,
`No. 2:18CV585, 2023 WL 2329746 (E.D. Va. Jan. 27, 2023) ................................................. 21
`
`Bosch LLC v. Pylon Mfg. Corp.,
`659 F.3d 1142 (Fed. Cir. 2011) ................................................................................................... 14
`
`Broadcom Corp. v. Emulex Corp.,
`732 F.3d 1325 (Fed. Cir. 2013) ................................................................................................... 15
`
`Cave Consulting Grp., LLC v. Optuminsight, Inc.,
`No. 5:11-CV-00469-EJD, 2016 WL 4658979 (N.D. Cal. Sept. 7, 2016) ................................. 17
`
`
`Case No. 3:20-cv-06754-WHA
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`Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 5 of 33
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`Centrak, Inc. v. Sonitor Techs., Inc.,
`915 F.3d 1360 (Fed. Cir. 2019) ................................................................................................... 23
`
`Cioffi v. Google, Inc.,
`No. 2:13-CV-103, 2017 WL 4011143 (E.D. Tex. Sept. 12, 2017) ........................................... 21
`
`Conceptus, Inc. v. Hologic, Inc.,
`No. 09-2280, 2012 WL 44064 (N.D. Cal. Jan. 9, 2012) ...................................................... 11, 24
`
`Cordance Corp. v. Amazon.com, Inc.,
`730 F. Supp. 2d 333 (D. Del. 2010) ............................................................................................ 18
`
`Douglas Dynamics, LLC v. Buyers Products Co.,
`717 F.3d 1336 (Fed. Cir. 2013) ................................................................................................... 12
`
`eBay Inc. v. MercExchange, L.L.C.,
`547 U.S. 388 (2006) .......................................................................................................... 2, 14, 15
`
`EMC Corp. v. Zerto, Inc.,
`No. CV 12-956 (GMS), 2017 WL 3434212 (D. Del. Aug. 10, 2017) ................................ 19, 21
`
`Epistar Corp. v. Lowes Companies, Inc.,
`No. LACV1703219JAKKSX, 2022 WL 18911616 (C.D. Cal. Oct. 4, 2022) ......................... 24
`
`Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co.,
`No. 2:15-CV-1202-WCB, 2017 WL 3034655 (E.D. Tex. July 18, 2017)
`(Bryson, J., sitting by designation) ........................................................................................ 20, 21
`
`Essence Imaging Inc. v. Icing Images LLC,
`No. 2:13–cv–5449–CAS, 2014 WL 1384028 (C.D. Cal Apr. 9, 2014) .................................... 12
`
`Fitness Anywhere LLC v. WOSS Enterprises LLC,
`No. 14-CV-01725-BLF, 2018 WL 6069511 (N.D. Cal. Nov. 20, 2018) .................................. 25
`
`Forest Labs., Inc. v. Ivax Pharms., Inc.,
`501 F.3d 1263 (Fed. Cir. 2007) ................................................................................................... 14
`
`Fresenius USA, Inc. v. Baxter, Int’l, Inc.,
`No. C03-1431 PJH, 2012 WL 761712 (N.D. Cal. Mar. 8, 2012) .............................................. 22
`
`Genband US LLC v. Metaswitch Networks Corp.,
`861 F.3d 1378 (Fed. Cir. 2017) ................................................................................................... 10
`
`Genband US LLC v. Metaswitch Networks Corp.,
`No. 2:14-CV-00033-JRG, 2018 WL 11357619 (E.D. Tex. Mar. 22, 2018) ............................. 19
`
`GuideTech, Inc. v. Brilliant Instruments, Inc.,
`No. C 09-5517 CW, 2014 WL 4182340 (N.D. Cal. Aug. 22, 2014) .......................................... 3
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
`579 U.S. 93 (2016) .......................................................................................................... 20, 21, 22
`
`Hynix Semiconductor Inc. v. Rambus Inc.,
`609 F. Supp. 2d 951 (N.D. Cal. 2009) .................................................................................. 12, 13
`
`i4i Ltd. P’ship v. Microsoft Corp.,
`598 F.3d 831 (Fed. Cir. 2010) ..................................................................................................... 13
`
`
`Case No. 3:20-cv-06754-WHA
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`GOOGLE’S OPPOSITION TO SONOS’S MOTION FOR INJUNCTIVE RELIEF AND ADDITIONAL DAMAGES
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`Inc. v. Shah,
`No. SA CV 13-1321, 2015 WL 13917980 (C.D. Cal. Dec. 11, 2015) ..................................... 24
`
`Innogenetics, N.V. v. Abbott Labs.,
`512 F.3d 1363 (Fed. Cir. 2008) ................................................................................................... 11
`
`L.A. Mem. Coliseum Comm’n v. NFL,
`634 F.2d 1197 (9th Cir. 1980) ..................................................................................................... 12
`
`LG Elecs. U.S.A., Inc. v. Whirlpool Corp.,
`798 F. Supp. 2d 541 (D. Del. 2011) .............................................................................................. 5
`
`Lifetime Indus., Inc. v. Trim-Lok, Inc.,
`869 F.3d 1372 (Fed. Cir. 2017) ................................................................................................... 23
`
`Monsanto Co. v. Geertson Seed Farms,
`130 S. Ct. 2743 (2010) ................................................................................................................... 2
`
`Nichia Corp. v. Everlight Americas, Inc.,
`855 F.3d 1328 (Fed. Cir. 2017) ..................................................................................................... 3
`
`Nutrition 21 v. U.S.,
`930 F.2d 867 (Fed. Cir. 1991) ..................................................................................................... 10
`
`Paice LLC v. Toyota Motor Corp.,
`504 F.3d 1293 (Fed. Cir. 2007) ............................................................................................. 17, 18
`
`Paice LLC v. Toyota Motor Corp.,
`609 F. Supp. 2d 620 (E.D. Tex. 2009) ........................................................................................ 22
`
`Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
`No. C 09-5235 MMC, 2015 WL 604582 (N.D. Cal. Feb. 12, 2015) .......................................... 8
`
`Power Integrations, Inc. v. Fairchild Semiconductor International, Inc.,
`No. 3:09-cv-05235-MMC, Dkt. 667 (N.D. Cal. Nov. 25, 2014) ............................................... 24
`
`Presidio Components, Inc. v. Am. Tech. Ceramics Corp.,
`875 F.3d 1369 (Fed. Cir. 2017) ............................................................................................. 10, 14
`
`Presidio Components, Inc. v. Am. Tech. Ceramics Corp.,
`No. 08-CV-335-IEG-NLS, 2013 WL 4068833 (S.D. Cal. Aug. 12, 2013) .............................. 13
`
`Purewick Corp. v. Sage Prod., LLC,
`No. CV 19-1508-(MN), 2023 WL 2734418 (D. Del. Mar. 31, 2023) ...................................... 17
`
`Riverbed Tech., Inc. v. Silver Peak Sys., Inc.,
`No. CV 11-484-RGA, 2014 WL 4695765 (D. Del. Sept. 12, 2014) ........................................... 8
`
`TEK Glob., S.R.L. v. Sealant Sys. Int’l, Inc.,
`920 F.3d 777 (Fed. Cir. 2019) ..................................................................................................... 15
`
`TiVo Inc. v. Echostar Corp.,
`646 F.3d 869 (Fed. Cir. 2011) ..................................................................................................... 23
`
`Transbay Auto Serv., Inc. v. Chevron U.S.A., Inc.,
`No. C 09-04932 SI, 2013 WL 843036 (N.D. Cal. Mar. 6, 2013) .............................................. 24
`
`TransPerfect Glob., Inc. v. MotionPoint Corp.,
`No. C 10-2590 CW, 2014 WL 6068384 (N.D. Cal. Nov. 13, 2014) .................................. 16, 25
`
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`Case No. 3:20-cv-06754-WHA
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`Verinata Health, Inc. v. Ariosa Diagnostics, Inc.,
`329 F. Supp. 3d 1070 (N.D. Cal. 2018) ...................................................................................... 12
`
`Verinata Health, Inc. v. Ariosa Diagnostics, Inc.,
`809 F. App’x 965 (Fed. Cir. 2020) .............................................................................................. 22
`
`VirnetX Inc. v. Apple Inc.,
`No. 6:12-CV-00855-RWS, 2018 WL 10048706 (E.D. Tex. Aug. 30, 2018) ............................. 6
`
`Whitserve, LLC v. Computer Packages, Inc.,
`694 F.3d 10 (Fed. Cir. 2012) ....................................................................................................... 18
`
`Williamson v. Citrix Online, LLC,
`792 F.3d 1339 (Fed. Cir. 2015) ................................................................................................... 11
`
`XY, LLC v. Trans Ova Genetics, L.C.,
`890 F.3d 1282 (Fed. Cir. 2018) ............................................................................................. 17, 20
`
`28 U.S.C. § 1961 ........................................................................................................................... 24, 25
`
`Statutes
`
`FRE 602, and (3) ................................................................................................................................... 1
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`Other Authorities
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`Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 8 of 33
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`I.
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`INTRODUCTION
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`The Court should deny Sonos’s request for a permanent injunction. Sonos admitted at trial
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`that any alleged harm from infringement of the ’885 patent is readily compensable by monetary
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`damages and, indeed, even now seeks an enhanced ongoing royalty rate and supplemental damages
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`while alleging irreparable, non-compensable harm. There is simply no evidence that Sonos has
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`suffered irreparable harm from Google’s infringement. Although Sonos claims to have invented
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`the claimed speaker grouping functionality in 2005, Sonos waited fifteen years to implement the
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`claimed functionality in its own products. After Google introduced the accused functionality in its
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`own products in 2015, Sonos waited an additional four years to amend the specification of the ’885
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`patent, incorporate new matter and draft claims to cover Google’s products. And when the ’885
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`patent issued in 2020, Sonos added the patent to this case without moving for preliminary injunctive
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`relief. Sonos’s inexcusable delay, combined with its failure to allege irreparable harm at any point
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`before now, eviscerates Sonos’s argument.
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`Sonos alleges irreparable harm based on lost sales and market share, but it has completely
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`failed to carry its burden to prove or even identify any lost sales. Sonos does not even presented
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`market share data to support its claim. Instead, it relies on a self-serving declaration from its general
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`counsel, Alaina Kwasizur, who is biased and not at all qualified to speak to these complex issues.1
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`Sonos also has not established any causal nexus between Google’s infringement and Sonos’s
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`alleged harms. The niche speaker grouping feature at issue does not drive demand for the accused
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`products, and Sonos’s evidence of the alleged importance of the accused functionality is focused on
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`speaker grouping generally and not the narrow invention claimed in the ’885 patent: creating
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`overlapping zone scenes while remaining in standalone mode.
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`Sonos fares no better with respect to the other eBay factors. Money damages can adequately
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`compensate it, as shown by Sonos’s request for a royalty award, the jury’s award of one, and Sonos’s
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`prior licenses and licensing offer to Google. The balance of hardships favors Google, particularly
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`given the scope of Sonos’s broad, vaguely-worded proposed injunction which would apply not just
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`1 Google is separately moving to strike Ms. Kwasizur’s declaration because it (1) is based on
`hearsay, (2) lacks personal knowledge as required by FRE 602, and (3) is improper expert testimony.
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`Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 9 of 33
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`to the accused products but also “substantially similar” products and activities that plainly do not
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`constitute patent infringement. The public interest also favors Google.
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`Sonos’s requests for additional damages in the form of enhanced ongoing royalties,
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`supplemental damages, and pre- and post-judgment interest are premature. Pending motions may
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`nullify the jury’s verdict and moot Sonos’s requests. For every category of additional damages that
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`Sonos seeks, the Court has discretion to delay ruling on Sonos’s requests, and it should do so.
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`Sonos’s requests for additional damages are also unwarranted. Sonos seeks an ongoing
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`royalty that is higher than the one the jury awarded because “the ’885 patent has been found to be
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`valid and infringed.” Mot. 11. But this alone does not compel enhancement. The Court had already
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`determined infringement before trial on the older designs, and both parties’ damages experts
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`assumed the ’885 patent was valid in rendering their opinions. Sonos presents no new evidence that
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`warrants enhancing the jury’s rate, which already overcompensates Sonos and was unsupported by
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`the evidence. Sonos also seeks “supplemental damages” for products sold before the damages
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`period based on Google’s implementation of its redesign. This request has no basis in law.
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`II.
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`SONOS IS NOT ENTITLED TO A PERMANENT INJUNCTION
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`“An injunction is a drastic and extraordinary remedy, which should not be granted as a matter
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`of course.” Apple, Inc. v. Samsung Elecs. Co., 735 F.3d 1352, 1359 (Fed. Cir. 2013) (“Apple III”)
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`(quoting Monsanto Co. v. Geertson Seed Farms, 130 S. Ct. 2743, 2761 (2010)). “[A] plaintiff
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`seeking a permanent injunction ‘must demonstrate: (1) that it has suffered an irreparable injury; (2)
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`that remedies available at law, such as monetary damages, are inadequate to compensate for that
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`injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy
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`in equity is warranted; and (4) that the public interest would not be disserved by a permanent
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`injunction.’” Id. (quoting eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)).
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`A.
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`Sonos Cannot Demonstrate Irreparable Injury
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`Under eBay, there is no presumption of irreparable harm from patent infringement. eBay,
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`547 U.S. at 391-392. To prove irreparable injury, Sonos must show (1) “that absent an injunction,
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`it will suffer irreparable harm,” and (2) “that a sufficiently strong causal nexus relates the alleged
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`harm to the alleged infringement.” Apple III, 735 F.3d at 1359 (quoting Apple Inc. v. Samsung
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`Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 10 of 33
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`Elecs. Co., 695 F.3d 1370, 1374 (Fed. Cir. 2012) (“Apple II”)). Sonos falls short on both prongs.
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`1.
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`Sonos Has Not Identified Any Irreparable Harm
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`Sonos contends that it has lost sales and market share. See Mot. at 2-3.2 Its assertion is
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`based on the unsupported arguments that: (1) customers are “locked in” when they purchase Google
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`devices such that Sonos loses future sales; and (2) Google and Sonos are direct competitors. Sonos
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`has not proven either one, nor has it shown that money damages would be inadequate to compensate
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`for this alleged harm.
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`(a)
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`Sonos Has Not Presented Any Evidence of Lost Sales or Market
`Share Via A “Lock-In Effect”
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`Sonos has not presented any evidence that it has lost sales or market share to Google due to
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`alleged “lock-in.” To begin, Sonos does not provide any evidence regarding lost sales or market
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`share—circumstantial or otherwise—let alone evidence of harm occurring as a result of Google’s
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`infringement. The only evidence Sonos cites is the self-serving declaration of its general counsel,
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`whose declaration consists of nothing more than conclusory and unsupported statements. Ms.
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`Kwasizur claims that: “[c]ustomers sometimes choose Google over Sonos”; when a customer
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`purchases a Google speaker, “it is more likely that subsequent smart speaker purchases from that
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`same consumer would be of Google smart speaker devices, as opposed to . . . Sonos”; and “if Sonos
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`loses out on an initial sale of a speaker product to a new household, then Sonos likely loses out on
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`the sale of at least three devices.” Dkt. 821 ¶¶ 13-14. But Ms. Kwasizur is not an economic or
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`market expert and does not have the qualifications to make these kinds of claims. And the economic
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`experts that Sonos did hire failed to identify any lost profits.3 This failure of proof, alone, should
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`end the inquiry. Nichia Corp. v. Everlight Americas, Inc., 855 F.3d 1328, 1343 (Fed. Cir. 2017)
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`(affirming finding of no irreparable harm and denial of permanent injunction because “Nichia did
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`not prove that it had suffered even a single lost sale from Everlight’s infringement”); GuideTech,
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`Inc. v. Brilliant Instruments, Inc., No. C 09-5517 CW, 2014 WL 4182340, at *7 (N.D. Cal. Aug. 22,
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`2 Sonos also alleges reputational harm in discussing the adequacy of remedies available at law.
`Google addresses that argument in connection with that element.
`3 Sonos originally asserted a lost profits theory of damages, but was unable to identify any such
`damages and ultimately dropped this theory. See Dkt. 591-10; Dkt. 591-9 at 16:20-24, 162:25-
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`163:18.
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`Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 11 of 33
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`2014) (“GuideTech’s arguments . . . regard[ing] [lost sales] are speculative because they offer little
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`more than attorney argument in support.”).
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`Sonos also alleges that “Google capitalizes on this ‘lock-in’ effect by pricing its products at
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`a loss.” Mot. 1; Dkt. 821 ¶¶ 15-17. Again, this is baseless speculation. Ms. Kwasizur has no basis
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`to know how Google “seeks to monetize [its] customers.” Id. ¶ 15. Nor does Eddie Lazarus, another
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`Sonos lawyer whose unsupported hearsay statements Ms. Kwasizur purports to incorporate into her
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`declaration. Id. ¶ 17. Sonos also did not adduce any evidence at trial—besides its own expert’s ipse
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`dixit, Trial Tr. (Malackowski) 1120:10-14, which was itself speculation—that Google prices the
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`accused products at a loss.4 At best, Google’s financial records demonstrate that it loses money on
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`sales of some accused products. Ex. 2 ¶ 255. But this does not show that Google intentionally
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`prices products in a way to lose money no matter the sales volume. To put this argument to rest
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`once and for all: Google does not price the accused products below cost. Declaration of Chris Chan
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`(“Chan Decl.”) ¶ 6.
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`Sonos’s “lock-in effect” argument is particularly dubious in light of its own significant delay
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`in implementing the functionality it claims is so important. If Sonos had actually been concerned
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`about irreparable harm, it would not have waited fifteen years before implementing saved
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`overlapping speaker groups (while releasing “[s]omewhere between dozens and hundreds” of other
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`features during that timeframe, including voice support in Polish and French). Trial Tr.
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`(Lambourne) at 468:25-469:7, 472:2-5; Trial Tr. (Millington) at 392:20-395:1. When Google
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`introduced the claimed feature to the market in 2015 ((Trial Tr. (MacKay) at 1237:24-1238:3),
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`Sonos had not even filed the application that led to the ’885 patent. TX0003 at 3 (filed April 12,
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`2019). Instead of pursuing its patent claims diligently, Sonos waited an additional four years to
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`amend the specification of the ’885 patent, incorporate new matter, and draft claims to cover
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`Google’s products. See Dkts. 712 at 1; 729 at 5, 7-10; 785 at 4, 11, 14; 788 at 1; 819 at 1-6. And
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`4 Google moved in limine to preclude Sonos from advancing this “loss leader” argument at trial
`because it was based on speculation. Dkt. 619 at 1-4. The Court denied Google’s motion, allowing
`Sonos to introduce evidence to support the argument if it had any. See PTC Hr’g Tr. at 67:11-67:14.
`Sonos did not introduce any such evidence that Google employs “loss leader” pricing at trial, nor
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`does it submit any with its motion.
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`Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 12 of 33
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`when the ’885 patent issued in 2020, Sonos added it to this case without seeking preliminary
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`injunctive relief. If Sonos actually believed it was losing sales as a result of a lock-in effect, it could
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`and would have introduced the claimed feature and sought injunctive relief years earlier.
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` Even assuming arguendo that Sonos has lost sales or market share, Sonos still has not
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`established that Google caused any such losses. Sonos’s own cited evidence confirms there are
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`numerous other companies in the smart speaker market, such as Amazon, Apple, and Bose. See
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`TX158 at 18. Amazon has the “‘dominant share’ of the U.S. market for smart speakers”—
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`maintaining a “big lead over Google.” Ex. 1. To the extent Sonos lost any sales or market share at
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`all, Sonos’s losses are likely due to other companies. See LG Elecs. U.S.A., Inc. v. Whirlpool Corp.,
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`798 F. Supp. 2d 541, 563 (D. Del. 2011) (“[T]there is a lack of specific evidence tying Whirlpool’s
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`lost sales to LG’s infringement in the multi-competitor refrigerator market. . . . A portion of
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`Whirlpool’s lost sales may be due to customers’ desire for other features, or sales lost to competitors
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`other than LG.”). Sonos’s alleged harm due to loss of sales to Google fails for this reason alone.
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`(b)
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`There Is At Most Only Limited Evidence of Direct Competition
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`Sonos’s motion and Ms. Kwasizur’s declaration attempt to paint a picture of intense “head
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`to head” competition between the parties. Mot. at 4; Dkt. 821 ¶¶ 15-17. Neither the trial record nor
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`the evidence Sonos submits with its motion supports this characterization.
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`Google and Sonos are not direct competitors with respect to a majority of the accused
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`products. Google sells its products at lower price points and aims to attract customers interested in
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`the intelligence of the Google Assistant to control their smart homes (Trial Tr. (Chan) at 1516:10-
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`13), whereas Sonos prices its premium products at higher price points and aims to attract audiophiles
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`who desire high-quality audio. Chan Decl. ¶ 9; Exs. 3-7; Ex. 2 ¶¶ 111, 656-660. As Ms. Kwasizur
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`admitted at trial, Sonos does not “really sell products that are sort of the 50-dollar range, and so we
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`don’t view [sellers of such products] as competing much with us.” Trial Tr. (Kwasizur) at 1067:8-
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`11. Yet many of the accused products—including the Chromecast, Chromecast Audio, Chromecast
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`with Google TV, Google Mini, and Nest Mini devices—are sold for $50 or less. Trial Tr. (Chan) at
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`1516:10-15; Dkt. 768-1 at 200-203; Ex. 2 at Exhibits. 14.0-14.4. In fact, during the damages period
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`for the ’885 patent, 79% of the accused products sold are in the “50-dollar range” (or less) where
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`Case 3:20-cv-06754-WHA Document 829 Filed 06/29/23 Page 13 of 33
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`Sonos admits it does not compete. Declaration of Jocelyn Ma (“Ma Decl.”) ¶ 3. In addition, 61%
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`of those accused products were Chromecast devices that plug into televisions and are primarily used
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`to stream video, not audio—a product category in which Sonos offers no equivalent product. Id