Case 3:20-cv-06754-WHA Document 836 Filed 07/06/23 Page 1 of 17
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`CLEMENT SETH ROBERTS (SBN 209203)
`croberts@orrick.com
`BAS DE BLANK (SBN 191487)
`basdeblank@orrick.com
`ALYSSA CARIDIS (SBN 260103)
`acaridis@orrick.com
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`The Orrick Building
`405 Howard Street
`San Francisco, CA 94105-2669
`Telephone:
`+1 415 773 5700
`Facsimile:
`+1 415 773 5759
`
`
`SEAN M. SULLIVAN (pro hac vice)
`sullivan@ls3ip.com
`J. DAN SMITH (pro hac vice)
`smith@ls3ip.com
`MICHAEL P. BOYEA (pro hac vice)
`boyea@ls3ip.com
`COLE B. RICHTER (pro hac vice)
`richter@ls3ip.com
`LEE SULLIVAN SHEA & SMITH LLP
`656 W Randolph St., Floor 5W
`Chicago, IL 60661
`Telephone:
`+1 312 754 0002
`Facsimile:
`+1 312 754 0003
`Attorneys for Sonos, Inc.
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN FRANCISCO DIVISION
`
`SONOS, INC.,
`Plaintiff and Counter-defendant,
`v.
`GOOGLE LLC,
`Defendant and Counter-claimant.
`
`
`
`
`
`
`
`Case No. 3:20-cv-06754-WHA
`
`Consolidated with
`Case No. 3:21-cv-07559-WHA
`SONOS, INC.’S REPLY IN SUPPORT
`OF MOTION FOR INJUNCTIVE
`RELIEF
`Judge: Hon. William Alsup
`Courtroom: 12, 19th Floor
`Trial Date: May 8, 2023
`
`
`
`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`Case 3:20-cv-06754-WHA Document 836 Filed 07/06/23 Page 2 of 17
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`TABLE OF CONTENTS
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`Page(s)
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`THE COURT SHOULD PERMANENTLY ENJOIN GOOGLE ...................................... 1
`A.
`Sonos Has Suffered Irreparable Harm .................................................................... 1
`1.
`Sonos and Google directly compete ............................................................ 1
`2.
`Google underprices the accused products to lock in consumers ................. 2
`3.
`Sonos’s harm is connected to Google’s infringement................................. 4
`Monetary Damages Are Inadequate To Compensate Sonos ................................... 7
`B.
`The Balance Of Hardships Favors An Injunction ................................................... 8
`C.
`The Public Interest Would Not Be Disserved By An Injunction ............................ 9
`D.
`Google Should Give Notice Of Its Infringement To Consumers .......................... 10
`E.
`ABSENT AN INJUNCTION, ONGOING ROYALTIES ARE WARRANTED ............ 10
`SUPPLEMENTAL DAMAGES AND INTEREST ......................................................... 11
`A.
`Sonos Is Entitled To Pre-Verdict Supplemental Damages ................................... 11
`B.
`Sonos Is Entitled To Damages For Infringing Products That Google
`“Made.” ................................................................................................................. 11
`Sonos Is Entitled To Pre- And Post-Judgment Interest ......................................... 12
`C.
`CONCLUSION ................................................................................................................. 12
`
`
`I.
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`II.
`III.
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`IV.
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`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`Case 3:20-cv-06754-WHA Document 836 Filed 07/06/23 Page 3 of 17
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`
`
`Cases
`
`TABLE OF AUTHORITIES
`
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`
`Page(s)
`
`ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc.,
`694 F.3d 1312 (Fed. Cir. 2012) ................................................................................................. 8
`
`Acumed LLC v. Stryker Corp.,
`551 F.3d 1323 (Fed. Cir. 2008) ................................................................................................. 8
`
`Apple Inc. v. Motorola, Inc.,
`757 F.3d 1286 (Fed. Cir. 2014) ................................................................................................. 8
`
`Apple Inc. v. Samsung Elecs. Co.,
`809 F.3d 633 (Fed. Cir. 2015) ............................................................................................... 3, 9
`
`Braintree Lab’ys, Inc. v. Nephro-Tech., Inc.,
`81 F. Supp. 2d 1122 (D. Kan. 2000) ....................................................................................... 10
`
`DDR Holdings, LLC v. Hotels.com, L.P.,
`773 F.3d 1245 (Fed. Cir. 2014) ............................................................................................... 12
`
`Edwards Lifesciences AG v. CoreValve, Inc.,
`699 F.3d 1305 (Fed. Cir. 2012) ................................................................................................. 1
`
`Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc.,
`946 F.3d 1367 (Fed. Cir. 2020) ............................................................................................... 11
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`582 F.3d 1288 (Fed. Cir. 2009) ............................................................................................... 10
`
`Genband US LLC v. Metaswitch Networks Corp.,
`861 F.3d 1378 (Fed. Cir. 2017) ............................................................................................. 4, 7
`
`Metalcraft of Mayville, Inc. v. The Toro Co.,
`848 F.3d 1358 (Fed. Cir. 2017) ................................................................................................. 7
`
`Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
`No. C 09-5235 MMC, 2015 WL 604582 (N.D. Cal. Feb. 12, 2015) ........................................ 6
`
`Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
`No. CIV.A. 04-1371-JJF, 2008 WL 5210843 (D. Del. Dec. 12, 2008) .................................. 10
`
`Presidio Components Inc. v. Am. Tech. Ceramics Corp.,
`702 F.3d 1351 (Fed. Cir. 2012) ................................................................................................. 9
`
`Presidio Components, Inc. v. Am. Tech. Ceramics Corp.,
`875 F.3d 1369 (Fed. Cir. 2017) ................................................................................................. 7
`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`Case 3:20-cv-06754-WHA Document 836 Filed 07/06/23 Page 4 of 17
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`TABLE OF AUTHORITIES
`(continued)
`
`
`
`Schwendimann v. Arkwright Advanced Coating, Inc.,
`959 F.3d 1065 (Fed. Cir. 2020) ............................................................................................... 12
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`Page(s)
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`SRI Int’l, Inc. v. Cisco Sys., Inc.,
`14 F.4th 1323 (Fed. Cir. 2021) ................................................................................................ 11
`
`United Constr. Prod., Inc. v. Tile Tech, Inc.,
`843 F.3d 1363 (Fed. Cir. 2016) ................................................................................................. 9
`
`Whitserve, LLC v. Computer Packages, Inc.,
`694 F.3d 10 (Fed. Cir. 2012) ................................................................................................... 10
`
`Statutes
`
`28 U.S.C. § 1961 ........................................................................................................................... 12
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`35 U.S.C. § 271(a) ........................................................................................................................ 11
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`- iii -
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`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`Case 3:20-cv-06754-WHA Document 836 Filed 07/06/23 Page 5 of 17
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`I.
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`THE COURT SHOULD PERMANENTLY ENJOIN GOOGLE.
`A.
`Sonos Has Suffered Irreparable Harm.
`Irreparable harm often arises where the patentee “practices its invention and is a direct
`market competitor” with the infringer. Edwards Lifesciences AG v. CoreValve, Inc., 699 F.3d
`1305, 1315 (Fed. Cir. 2012). Google does not dispute that those facts, as a matter of law, are
`enough to show irreparable harm. Nor does Google dispute that both Sonos and Google practice
`the ’885 patent. Dkt 820 (“Mot.”) at 3. Instead, Google contends that it does not directly
`compete with Sonos. Dkt. 829 (“Opp.”) at 5-6. Google’s assertion is belied by its own actions
`and witness testimony. Google also tries to downplay evidence that it underprices its products to
`lock customers into its ecosystem and evidence of a causal nexus, but those efforts fail too.
`
`1.
`Sonos and Google directly compete.
`At trial, witnesses testified that (1) Google repeatedly introduced products that compete
`with Sonos’s products, (2) Google used the Sonos Play:5 as a direct comparator with Google’s
`products, and (3) this competition started in 2015 and continues today. Mot. 3 (citing Trial
`Transcript (“Tr.”) at. 310:4-311:2, 1534:2-13, 298:25-299:3; 1010:11-13; 1117:5-1118:6). The
`expert witnesses recognized competition between Sonos and Google, as do third-party market
`observers and media. Id. (citing Tr. 1116:21-1117:18; 1603:19-24; TX158; Tr. 1118:11-13; Dkt.
`821 (“Kwasizur Decl.”) ¶¶ 7, 9).1 That is more than enough to demonstrate direct competition.
`Nonetheless, Google argues that “there is at most only limited evidence of direct competition.”
`Opp. 5 (capitalization omitted). And while faulting Sonos for providing a declaration from its
`General Counsel—who has personal knowledge of Sonos’s competition with Google—Google
`relies on declarations from its employee and outside counsel to try to prove that many of
`Google’s accused products are sold too cheaply to compete with Sonos’s products. Cf. Opp. 5-6.
`Google cannot rebut Sonos’s showing of competition, and its own documents refute its
`arguments. For example, Google emphasizes that “many of the accused products” “are sold for
`
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`1 Google moved to strike Ms. Kwasizur’s declaration for, among other things, exhibiting news
`articles … while Google responds in its motion with declarations that rely on different news
`articles. Sonos will separately oppose Google’s motion to strike.
`
`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`Case 3:20-cv-06754-WHA Document 836 Filed 07/06/23 Page 6 of 17
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`$50 or less.” Opp. 5. But the news articles that Google cites make clear that Google is simply
`cherry-picking the cheapest of the accused products. See, e.g., Dkt. 829-7 at ECF p. 3 (noting
`that Chromecast is the “entry-level casting-only option in Google’s streaming arsenal” (emphasis
`added)); Dkt. 829-9 at 6 (describing the Nest Mini as “the most affordable Google-powered
`smart speaker available” (emphasis added)).2 And Google argues that Sonos—unlike Google—
`“aims to attract audiophiles who desire high-quality audio.” Opp. 5. But Google’s cited PC
`Magazine review of its Chromecast Audio product notes that the product’s support for “[h]igh-
`resolution audio” “makes the device an appealing option for … audiophiles.” Dkt. 829-8 at 5; see
`also id. at 4 (noting “excellent” “[a]udio quality”). Google also contends that Sonos does not
`offer a direct Chromecast analog, and for that reason, Google and Sonos do not compete. Opp. 6.
`But Google’s cited Chromecast Audio review describes the product’s support for multi-room
`audio in detail, noting that “[y]ou can now group more than one speaker together and play music
`on several in the same room” or house, a feature that “put[s] the device’s flexibility closer to the
`standards set by wireless audio systems from Sonos.” Dkt. 829-8 at 3.3 Against that evidence
`and Sonos’s, the self-serving assertion of a current Google employee that “I do not think of
`Google and Sonos as competitors in the smart speaker space,” Dkt. 829-1 ¶ 9, is entitled to little,
`if any, weight.4
`
`2.
`Google underprices the accused products to lock in consumers.
`Sonos presented unrebutted evidence that once a customer buys a Sonos or Google
`speaker, that customer is likely to (a) buy more speakers and (b) stick with the ecosystem that the
`
`
`2 Google’s citation of Ms. Kwasizur’s testimony related to products under $50, Opp. 5, relates to
`companies much smaller than Google for which there is no evidence in this case of artificial
`underpricing.
`3 Google also argues that a Google study comparing Sonos and Google products does not literally
`say that the two companies compete. Google’s commissioned study on the smart speaker market
`compares the company’s products and mentions Sonos and Sonos’s competing products
`throughout the document. See, e.g., TX158 at 6, 8, 9, 15, 16, 17, 18, 21, 25, 26, 40, 41, 43.
`4 The Court should reject Mr. Chan’s declaration as an attempt to override his unfavorable trial
`testimony. At trial, the jury heard testimony from Mr. Chan that Google and Sonos compete in
`the “smart speaker market.” Tr. 1226:23-1227:10; Dkt. 755-2 (“Q. [D]o you believe that Google
`competes with Sonos in the smart speaker market? Again, I’m using your definition of
`competition. A. In certain cases, I believe there is some competition, yes.”) (cleaned up).
`
`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`customer has already bought into. Mot. 3-4 (citing Tr. 1019:19-1020:6; 1021:21-26; Dkt. 755-2
`at ECF pp. 59-60; TX158 at 21; Tr. 1606:17-25; 1607:5-8). For example, Ms. Kwasizur testified
`that Sonos customers buy, on average, 2.9 speakers, explaining why Sonos’s sales focus is not
`selling individual products but on household acquisition. Tr. 1020:25-1022:3. Every household
`that “chooses” Google will not choose Sonos, locking those customers into the Google ecosystem
`and harming Sonos. The Federal Circuit has recognized that this “ecosystem effect” can be
`difficult to quantify and irreparable—as it is here. Apple Inc. v. Samsung Elecs. Co., 809 F.3d
`633, 645 (Fed. Cir. 2015)); Mot. 3-4.
`Google argues that Sonos has not presented “any evidence regarding lost sales or market
`share—circumstantial or otherwise.” Opp. 3. That simply ignores the trial evidence and logical
`chain described above and corroborated by the personal knowledge of Sonos’s general counsel,
`Mot. 4. Google suggests that because Sonos did not pursue a lost profits theory of damages,
`“[t]his failure of proof, alone, should end the inquiry.” Opp. 3. But Google’s cited authority does
`not support that assertion. Nichia Corp. v. Everlight Americas, Inc., for example, involved a
`patentee that sold “directly to customers” while the defendant sold “to distributors”; because the
`two parties thus sold to entirely “different parties” at different points in the chain, their
`competition was not “meaningful.” 855 F.3d 1328, 1342 (Fed. Cir. 2017).
`Google also contends that Sonos is wrong that “Google prices the accused products at a
`loss,” while at the same time admitting that “Google’s financial records demonstrate that it loses
`money on sales of some accused products.” Opp. 4. So Google offers a current employee’s
`statement that Google (1) prices the products “at a lower price point,” but (2) does not price the
`accused products below cost. Id. at 5. But Mr. Chan clarifies that he means only that Google
`does not set the MSRP below the manufacturing cost, Dkt. 829-1 ¶ 6, ignoring Google’s costs
`like product development, software engineering, and marketing. Mr. Chan does not dispute that
`Google does not generate a profit on these products, or that Google intentionally prices the
`product at an artificially low price to attract customers to the Google ecosystem.
`And just as significant is the chorus of media voices that Google asks the Court to listen to
`for purposes of opposing Sonos’s request for injunctive relief. Take the GeekWire article
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`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`Case 3:20-cv-06754-WHA Document 836 Filed 07/06/23 Page 8 of 17
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`regarding Google’s market share compared with Amazon and Apple. Dkt. 829-3. This article
`explains that Google’s goal (like Amazon’s) is to achieve customer lock-in: “One critical goal for
`everyone in the industry is to get as many units into as many homes as possible.” Id. at ECF p. 2.
`The reason? “With multiple devices in a single home, a smart speaker platform can claim that
`literal real estate as theirs, as barriers to switching get very high.” Id.
`Google’s cited articles also make clear Google’s “aggressive” pricing strategy. One
`article discussing Chromecast, for example, describes Google’s low pricing as “aggressive” as
`Google is “taking another stab at being the center of your living room.” Dkt. 829-5. See also,
`e.g., id. at 3 (“at $35 [Chromecast] borders on an impulse purchase”). Google is achieving all
`these sales and capture of households through its infringement of Sonos’s patent.
`Google also asserts that “Sonos’s ‘lock-in effect’ argument is particularly dubious in light
`of its own significant delay in implementing the functionality.” Opp. 4. But Google’s argument
`regarding purported “delay” has just as little relevance to Sonos’s request for an injunction as it
`does to Google’s affirmative defenses. Dkt. 828. Google does not point to any legal authority
`suggesting that Sonos’s timeline for implementing its commercial embodiments is relevant—
`much less controlling. Similarly, Google asserts that Sonos should have sought a preliminary
`injunction. But Sonos determined that “the merits [would] be much better presented through full
`litigation than through abbreviated preliminary-injunction proceedings”; Sonos made no “implied
`concession that the infringement-caused injury is not actually irreparable.” Genband US LLC v.
`Metaswitch Networks Corp., 861 F.3d 1378, 1385 (Fed. Cir. 2017).
`Last, Google contends that “Sonos’s losses are likely due to other companies.” Opp. 5.
`But that is mere speculation. There is no evidence in this case that “Amazon, Apple, and Bose”
`underprice their products in order to lock in customers, while there is extensive evidence that
`Google does precisely that, at Sonos’s expense.
`
`3.
`Sonos’s harm is connected to Google’s infringement.
`There is ample evidence that “the patented features impact consumers’ decisions to
`purchase the accused devices,” establishing a causal nexus between Google’s infringement and
`Sonos’s harm. Mot. 4-6 (quoting Apple, 809 F.3d at 642). To establish irreparable harm, Sonos
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`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`need not show that the infringing features of Google’s products “were the exclusive or
`predominant reason why consumers bought” Google’s products; instead, the proper inquiry looks
`to “whether there is some connection between the patented features and the demand” for
`Google’s products. Id. at 4 (quoting Apple) (emphasis added).
`Claim 1 of the ’885 patent covers static grouping and the necessary architecture for
`creating, saving, and later invoking saved groups. Mot. 4 (citing Dkt. 711 at 1). Google does not
`contest that static grouping is a key feature of the accused products. Id. (citing Tr. 1234:5-
`1235:19; 1275:5-21, 1519:8-18, 1529:12-19, 1600:13-23; TX158 at 36). Google’s only response
`is to argue that the ’885 patent “covers only one narrow way to implement static grouping
`involving at least two overlapping speaker groups.” Opp. 7. But as Sonos has explained,
`“overlapping groups” is just one limitation of the claims; static grouping is the primary feature.5
`Dkt. 711. Google’s argument that “[t]he causal nexus inquiry must focus on ‘the importance of
`the claimed invention in the context of the accused product,’” Opp. 7 (quoting Apple, Inc. v.
`Samsung Elecs. Co., 735 F.3d 1352, 1364 (Fed. Cir. 2013), thus fails to help Google here: The
`claims cover static grouping and that is a key feature of Google’s infringing products. Indeed,
`this feature was so important to Google that, rather than remove the feature to avoid the
`possibility of an injunction, Google slightly changed how it implemented the feature in hopes that
`the jury would bless this new version as non-infringing and Google could continue to offer the
`feature. That effort failed. Google similarly attempts to wave away its own survey showing
`consumer demand for the ability to “group speakers to hear music in multiple rooms at the same
`time” with an overly constrained view of what the claimed invention is. This attorney argument
`cannot replace the record evidence on this point.
`Sonos noted that Google’s minimalist redesign demonstrates the value of the invention,
`because Google preferred to retain the ability to add a speaker to multiple static groups when
`(unsuccessfully) trying to avoid infringement—confirming that static grouping is a key feature.
`
`
`5 Google’s claim that the ’885 patent covers “only one narrow way” is also belied by the verdict
`itself. Google purportedly “designed around” the ’885 patent utilizing a different way to effect
`static grouping. The jury found this purported design-around to also infringe.
`
`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`Mot. 6. Google’s only substantive response is that it “had a good faith belief that its first design
`change” did not infringe, but that is beside the point. Opp. 9. If the feature were as unimportant
`as Google claims it is, Google could have removed it and rid itself of its ongoing infringement of
`the ’885 patent. That Google chose not to and instead has deliberately chosen to continue to
`(willfully) infringe the ’885 patent speaks for itself.
`Sonos also identified consumer demand for Sonos’s zone scenes technology and
`widespread praise for zone scenes. Mot. 5 (citing Tr. 469:14-470:15); id. at 6 (citing Tr. 469:14-
`470:15, 1677:6-10, 1677:23-1678:3; Dkt. 820-2 (Kolker Decl. Ex. 1)). Google suggests that this
`evidence is irrelevant because it does not show demand for the “claimed invention in the context
`of the accused product.” Opp. 8 (citing Power Integrations, Inc. v. Fairchild Semiconductor Int’l,
`Inc., No. C 09-5235 MMC, 2015 WL 604582, at *3 (N.D. Cal. Feb. 12, 2015)). But Power
`Integrations merely held that the patentee’s evidence regarding “its own products” was
`“insufficient to establish a causal nexus between those features and demand for [the defendant’s]
`competing products” because there was no “showing that consumers demand [the patentee’s]
`products and [the defendant’s] products for the same reasons.” 2015 WL 604582, at *3
`(emphasis added). Here, Google’s own cited materials make that case. See, e.g., supra 2
`(discussing Dkt. 829-8 at 3).
`Sonos’s cited evidence confirms that Google advertises the ability to create speaker
`groups, meaning Google understood those features were valuable to customers.6 Mot. 5 (citing
`Tr. 1123:1-4; 1530:7-10, 1530:11-17; TX6353, Tr. 1519:12-18, 1523:6-10). That evidence was
`bolstered by Google’s employee Mr. Shekel’s testimony on the importance of overlapping
`groups. Id. (citing Shekel 109:11-110:05; Dkt. 755-2 at 6-7).7 Google also attempts to sanitize
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`6 Google argues that it does not consider “blog posts” to be “advertising.” Opp. 8. The blog
`posts inform current and potential customers about the accused technology to encourage them to
`buy and use Google’s products. Google educates customers because consumers value and want
`to know how to use the accused technology on the accused products. Mr. Chan admitted this.
`See Tr. 1530:7-10 (“Q: Google provides instructions to customers on how to create multizone
`groups of two or more speakers; isn’t that right? A: Yes.”).
`7 Google now suggests that Mr. Shekel’s testimony is somehow irrelevant or unrelated to zone
`scenes technology because it involved “Cast for Audio.” Opp. 9. But the entire basis for
`Google’s equitable estoppel claim is the connection between Cast for Audio and overlapping
`groups, so Google’s objection that “Cast for Audio” “is not accused,” Opp. 9, rings hollow.
`
`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`Case 3:20-cv-06754-WHA Document 836 Filed 07/06/23 Page 11 of 17
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`Mr. Chan’s testimony by arguing that Mr. Chan testified that of users of static groups, “most
`create only one single group covering every speaker they own.” Opp. 9 (citing Tr. 1522:19-
`1523:1, 1523:6-10; Dkt. 829-1 (Chan Decl.) ¶ 3) (emphasis added). But nothing in the cited
`testimony, nor even in Mr. Chan’s declaration, states these users create only that single group.
`Cf. Mot. 5 (discussing Mr. Chan’s testimony).
`Google contends that Sonos’s claim fails because “Sonos fails to demonstrate that any
`alleged lost sales to Google were lost due to the accused feature.” Opp. 9-10. But the authority
`Google cites for this proposition does not support Google’s rule. For example, in Genband, the
`Federal Circuit noted that “under the causation approach suitable for a multi-feature, multi-
`purchaser context, the patentee may be able to make the causal connection between infringement
`and the relevant lost sales through evidence of various kinds, e.g., that the infringing features
`significantly increased the product’s desirability, that soundly supports an inference of
`causation of a significant number of purchasers’ decisions.” 861 F.3d at 1384 (emphasis added).
`And in Presidio Components, the Court merely held that where a finding of irreparable harm was
`“based” “on the jury’s lost profits award,” the reversal of the underlying lost profit award
`necessarily required vacatur of the injunction. Presidio Components, Inc. v. Am. Tech. Ceramics
`Corp., 875 F.3d 1369, 1383 (Fed. Cir. 2017). That did not end the matter; the district court still
`needed to “determine whether other evidence could support a finding of irreparable injury.” Id.
`at 1384 (emphasis added).
`
`B. Monetary Damages Are Inadequate To Compensate Sonos.
`Monetary damages are inadequate because of (1) the ecosystem effect and (2) Google’s
`harm to Sonos’s reputation as an innovator in the wireless multiroom audio market. Mot. 6-7.
`But as the ecosystem evidence (e.g., Mot. 3-4) shows, losing any potential Sonos household to
`Google permanently stunts Sonos’s growth in ways that a simple royalty cannot address. And
`because the downstream effects of Google’s ecosystem grab are substantial but “difficult to
`quantify,” Metalcraft of Mayville, Inc. v. The Toro Co., 848 F.3d 1358, 1368 (Fed. Cir. 2017),
`damages alone are not adequate.
`Google responds first that monetary damages are sufficient because in 2017 “Sonos
`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`offered to license the ’885 patent to Google before litigation began.” Opp. 11. But the term sheet
`in question was merely a non-binding proposal made before Google had launched the majority of
`the infringing products and rapidly and drastically increased its infringement—and therefore its
`competition with Sonos. Google also argues that monetary damages are sufficient because Sonos
`has provided “Denon, Lenbrook, and Legrand with portfolio-wide licenses.” Id. But obviously,
`none of those companies has anything resembling Google’s size and power in the market.8
`Google also asserts that it does not offer the accused products as a “loss leader,” id. 11-12, but
`Google uses a narrow definition of “cost” that misleadingly does not include the full, true cost of
`bringing its products to market. It is undisputed that Google does not make a profit on the
`accused products. See Tr. 1120:7-15 (Q. “[C]an you just give a little bit more description of the
`profitability of the products at issue in this case? A. So in—these products are often what we
`considered a loss leader. So they can be sold at an amount that doesn't generate a net profit. And
`so to understand why Google would do that, it is in order to capture that home, to be able to then
`deliver those advertisements and to collect that data. So that's part of the strategy of this
`business.”). Google’s discussion of the ecosystem effect also fails for the reasons discussed
`above. And Google simply ignores the damages to Sonos’s reputation as an innovator in the field
`of wireless multiroom audio. See, e.g., Dkt. 829-8 at 3 (describing the “standard set by Sonos”).
`
`C.
`The Balance Of Hardships Favors An Injunction.
`Google’s argument on balance of the hardships rehashes its argument that Google and
`Sonos are not competitors. Opp. 13-14. The record says otherwise. Supra 1-2. Google offers no
`response to consideration of “the parties’ sizes, products, and revenue sources when assessing the
`balance of hardships,” which soundly favors Sonos. Mot. 8 (internal quotation marks omitted).
`
`8 Google’s cited authority is either inapposite or belies Google’s position. For example, Google
`strategically omits the emphasized language: “Motorola’s FRAND commitments, which have
`yielded many license agreements encompassing the ’898 patent, strongly suggest that money
`damages are adequate to fully compensate Motorola for any infringement.” Apple Inc. v.
`Motorola, Inc., 757 F.3d 1286, 1332 (Fed. Cir. 2014), overruled by Williamson v. Citrix Online,
`LLC, 792 F.3d 1339 (Fed. Cir. 2015). Similarly, Google ignores the following: “To be clear, we
`are not holding that any time a patentee offers a license to the defendant, it will be unable to
`secure an injunction.” ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc., 694 F.3d 1312,
`1340 (Fed. Cir. 2012). See also Acumed LLC v. Stryker Corp., 551 F.3d 1323, 1332 (Fed. Cir.
`2008) (affirming permanent injunction despite “past licenses having been granted”).
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`SONOS, INC.’S REPLY ISO MOTION
`FOR INJUNCTIVE RELIEF
`3:20-CV-06754-WHA
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`Google instead argues that it will “suffer significant hardship” because the proposed
`injunction is “overbroad.” Opp. 14. The injunction covers infringing products and activities that
`support those infringing products, as necessary to prevent further irreparable harm. And it
`appropriately extends to products that are “substantially similar to” the accused products. Dkt.
`820-5 at 2. Google should not be permitted to avoid the injunction by making trivial changes that
`do not avoid infringement. Thus, the Federal Circuit approved language prohibiting the “sale,
`advertisement, marketing, or promotion of a substantially similar product.” United Constr. Prod.,
`Inc. v. Tile Tech, Inc., 843 F.3d 1363, 1372 (Fed. Cir. 2016). Nothing in Sonos’s proposed
`injunction prevents Google from removing the infringing feature with a simple software update.
`
`D.
`The Public Interest Would Not Be Disserved By An Injunction.
`Google contends that “preserving rights of patent holders” “cannot alone justify injunctive
`relief because such interests ‘are always present in a patent case.’” Opp. 14 (quoting Presidio
`Components Inc. v. Am. Tech. Ceramics Corp., 723 F. Supp. 2d 1284, 1339 (S.D. Cal. 2010)).
`Google’s only support for that point was vacated on appeal because “the district court abused its
`discretion when it denied Presidio a permanent injunction.” See Presidio Components Inc. v. Am.
`Tech. Ceramics Corp., 702 F.3d 1351, 1364 (Fed. Cir. 2012). And contrary to Google’s
`argument, “the public interest nearly alwa