Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38245 Page 1 of 16
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`SEAN C. CUNNINGHAM (Bar No. 174931)
`sean.cunningham@dlapiper.com
`ERIN GIBSON (Bar No. 229305)
`erin.gibson@dlapiper.com
`ROBERT WILLIAMS (Bar No. 246990)
`robert.williams@dlapiper.com
`TIFFANY MILLER (Bar No. 246987)
`tiffany.miller@dlapiper.com
`PETER MAGGIORE (Bar No. 292534)
`peter.maggiore@dlapiper.com
`DLA PIPER LLP (US)
`401 B Street, Suite 1700
`San Diego, California 92101-4297
`Tel: 619.699.2700
`Fax: 619.699.2701
`
`ROBERT BUERGI (Bar No. 242910)
`robert.buergi@dlapiper.com
`AMY WALTERS (Bar No. 286022)
`amy.walters@dlapiper.com
`DLA PIPER LLP (US)
`2000 University Avenue
`East Palo Alto, CA 94303-2215
`Tel: 650.833.2000
`Fax: 650.833.2001
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`Attorneys for
`APPLE INC.
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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF CALIFORNIA
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`APPLE INC.,
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`Plaintiff,
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`v.
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`WI-LAN, INC.,
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`Defendant.
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`AND RELATED
`COUNTERCLAIMS
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`DLA PIPER LLP (US)
`S A N D I E G O
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`WEST\289092420.1
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`CASE NO. 3:14-cv-02235-DMS-BLM
`(lead case);
`CASE NO. 3:14-cv-1507-DMS-BLM
`(consolidated)
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`DEFENDANT APPLE INC.’S MOTION
`FOR JUDGMENT AS A MATTER OF
`LAW AT THE CLOSE OF
`PLAINTIFF’S CASE PURSUANT TO
`FED. R. CIV. P. RULE 50(A)
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`Dept.: 13A
`Judge: Hon. Dana M. Sabraw
`Magistrate Judge: Hon. Barbara L. Major
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`
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`

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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38246 Page 2 of 16
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`TABLE OF CONTENTS
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`Page
`INTRODUCTION ........................................................................................... 1
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`I.
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`II.
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`LEGAL STANDARD FOR JMOL ................................................................. 3
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`III. WI-LAN FAILED TO PROVE DAMAGES AS A MATTER OF
`LAW ................................................................................................................ 4
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`A. Wi-LAN Fails the Apportionment Requirement as a Matter of
`Law Because It Presented No Evidence Tethering Its Damages
`Claim to the Economic Footprint of the Invention in the
`Marketplace. .......................................................................................... 4
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`B. Wi-LAN’s Damages Evidence Is Not “Reliable and Tangible,”
`But Instead Turns on the Application of an Impermissible Rule
`of Thumb to Non-Comparable Licenses. .............................................. 9
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`IV. CONCLUSION ............................................................................................. 12
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38247 Page 3 of 16
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`
`TABLE OF AUTHORITIES
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` Page(s)
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`Cases
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`Berry v. Bunnell,
`39 F.3d 1056 (9th Cir. 1994) ................................................................................. 3
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`Commonwealth Sci. & Indus. Research Org. v. Cisco Sys., Inc.,
`809 F.3d 1295 (Fed. Cir. 2015) ............................................................................. 7
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`DataQuill Ltd. v. High Tech Comput. Corp.,
`887 F. Supp. 2d 999 (S.D. Cal. 2011) ................................................................. 11
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`Ericsson, Inc. v. D-Link Sys., Inc.,
`773 F.3d 1201 (Fed. Cir. 2014) ........................................................................... 11
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`Garretson v. Clark,
`111 U.S. 120 (1884) ............................................................................ 1, 2, 4, 9, 12
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`Lucent Techs., Inc. v. Gateway, Inc.,
`580 F.3d 1301 (Fed. Cir. 2009) ........................................................................... 11
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`Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
`894 F.3d 1258 (Fed. Cir. 2018) .......................................................................... 7-9
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`Reeves v. Sanderson Plumbing Prods., Inc.,
`530 U.S. 133 (2000) .............................................................................................. 3
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`ResQNet.com Inc. v. Lansa Inc.,
`594 F.3d 860 (Fed. Cir. 2010) ............................................................................... 1
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`Uniloc USA, Inc. v. Microsoft Corp.,
`632 F.3d 1292 (Fed. Cir. 2011) ........................................................................... 11
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`United Nat’l Maint., Inc. v. San Diego Convention Ctr. Corp., Inc.,
`No. 07-cv-2172 AJB, 2012 WL 12845620 (S.D. Cal. Sept. 5, 2012) ................... 4
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`VirnetX, Inc. v. Cisco Sys., Inc.,
`767 F.3d 1308 (Fed. Cir. 2014) ....................................................................... 4, 10
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`Other Authorities
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`Fed. R. Civ. P. 50(a) ........................................................................................... 1, 3, 4
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38248 Page 4 of 16
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`Pursuant to Fed. R. Civ. P. 50(a), Defendant Apple Inc. (“Apple”) moves for
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`judgment as a matter of law (“JMOL”) that Wi-LAN did not present legally
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`sufficient evidence to allow a reasonable jury to conclude that Wi-LAN is entitled
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`to any damages at all, much less the $85 million it requests.
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`I.
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`INTRODUCTION
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`Wi-LAN bears the burden of proof on damages. The damages must be
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`apportioned between the patented and unpatented features of the products at issue.
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`But Wi-LAN presented no substantial evidence from which damages can be
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`apportioned. JMOL of zero damages thus should be entered in Apple’s favor.
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`The Supreme Court, the Federal Circuit, and this Court have held that
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`apportionment by the patentee is always required, and its absence is never excused.
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`Specifically, “[t]he patentee . . . must in every case give evidence tending to
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`separate or apportion . . . the patentee’s damages between the patented feature and
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`the unpatented features.” Garretson v. Clark, 111 U.S. 120, 121 (1884) (internal
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`quotation marks omitted). In addition, “such evidence must be reliable and
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`tangible, and not conjectural or speculative.” Id. As a matter of law, Wi-LAN
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`failed to meet both aspects of its burden of proof.
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`First, Wi-LAN offered no evidence tending to apportion damages between
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`the patented and unpatented features for Apple’s accused products. Apportionment
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`means that “[t]he trial court must carefully tie proof of damages to the claimed
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`invention’s footprint in the market place.” ResQNet.com Inc. v. Lansa Inc., 594
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`F.3d 860, 869 (Fed. Cir. 2010). Wi-LAN’s damages expert, Mr. Kennedy,
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`provided no evidence that supports the required nexus. When asked, “And this
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`adjusted per phone rate of 45 cents per phone, does that reflect the value of the
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`patented technology in your opinion?”, Mr. Kennedy responded: “Yes. That’s what
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`I’ve tried to do with my adjustments, yes.” Trial Transcript (“Tr.”) at 246:25 to
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`247:4. But none of Mr. Kennedy’s “adjustments” had anything to do with the value
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`of the patented technology or the relative value of patented and unpatented features.
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38249 Page 5 of 16
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`Rather, Mr. Kennedy’s adjustments to the three licenses he considered
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`strictly concerned matters unrelated to the claimed invention’s footprint in the
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`marketplace. Completely apart from whether it was proper to rely on these licenses
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`in the first place, this analysis was legally insufficient to support a damages award.
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`Mr. Kennedy’s “adjustments” were based on: (1) the assumption of validity and
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`infringement, Tr. at 228:14-16; (2) a “subset discount” for a less-than-portfolio
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`license, Tr. at 228:17-19; (3) U.S. vs. worldwide royalty rates in general, Tr. at
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`228:20-23; (4) no “early adopter” discount, Tr. at 228:24 to 229:1; and (5) larger
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`sales volumes for Apple, Tr. at 229:2-3. See also Tr. at 229:4 to 247:4 (walking
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`through each of these five adjustments and concluding that a 45 cents per unit
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`royalty rate is appropriate). None of these adjustments relates in any way to the
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`value of the patented technology, much less the relative value of the patented and
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`unpatented features. Mr. Kennedy did not even try to tether the value of the
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`invention to the patent claims that were found infringed, to any technical evidence
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`about the invention’s footprint, or to any economic analysis of the contribution of
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`the invention to the accused products in the marketplace.
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`In short, Mr. Kennedy offered nothing that satisfies—or even speaks to—the
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`apportionment requirement. Nor did any other witness fill this gap. As a result,
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`Wi-LAN has no substantial evidence of damages, and the case should not even be
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`submitted to the jury.
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`Second, even if Mr. Kennedy’s testimony were viewed (incorrectly) as
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`“tending to . . . apportion,” that evidence was not “reliable and tangible.”
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`Garretson, 111 U.S. at 121. Wi-LAN instead started with three licenses that are not
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`remotely comparable to what Apple and Wi-LAN hypothetically would have
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`negotiated. Wi-LAN then derived from those non-comparable licenses a royalty
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`rate, mainly by applying an impermissible rule of thumb untethered from the
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`particular facts of this case. This is another independent reason why Wi-LAN fails
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`the apportionment test as a matter of law, and JMOL of no damages is required.
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38250 Page 6 of 16
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`Consistent with Supreme Court and Federal Circuit precedent—not to
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`mention this Court’s prior orders in the case—this Court has decided to instruct the
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`jury that “[t]he amount you find as damages must be based on the value attributable
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`to the patented technology, as distinct from other, unpatented features of the
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`accused product, or other factors such as marketing or advertising, or Apple’s size
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`or market position.” Jury Instruction No. 17.1. Wi-LAN’s burden was put into the
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`trial record evidence that is legally sufficient to enable the jury to perform this task.
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`Wi-LAN completely failed to meet this burden.
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`This alone should end the case. But if the Court sees a need to look any
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`further, Wi-LAN has similarly failed to meet its additional burden to give the jury
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`legally sufficient evidence to do another Court-assigned job: “[Y]ou must account
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`for any differences between those licenses and the hypothetically negotiated license
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`between Wi-LAN and Apple, in terms of the technologies and economic
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`circumstances of the contracting parties, when you make your reasonable royalty
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`determination.” Jury Instruction No. 17. Each of these failures is an independent
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`reason why a judgment of zero damages should be entered against Wi-LAN as a
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`matter of law.
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`II. LEGAL STANDARD FOR JMOL
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`Fed. R. Civ. P. 50(a) provides for the grant of JMOL at the close of a
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`plaintiff’s case if a “reasonable jury would not have a legally sufficient evidentiary
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`basis to find” for the plaintiff. JMOL “is proper when the evidence permits only
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`one reasonable conclusion. The evidence must be viewed in the light most
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`favorable to the nonmoving party, and all reasonable inferences must be drawn in
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`favor of that party.” Berry v. Bunnell, 39 F.3d 1056, 1057 (9th Cir. 1994). The
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`JMOL standard “mirrors” the summary judgment standard, “such that the inquiry
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`under each is the same.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133,
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`150 (2000) (internal quotation omitted). “[T]o defeat a Rule 50 motion, the
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`nonmoving party must come forward with more than a scintilla of evidence, and do
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38251 Page 7 of 16
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`more than rely on conclusory, self-serving, and speculative testimony.” United
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`Nat’l Maint., Inc. v. San Diego Convention Ctr. Corp., Inc., No. 07-cv-2172 AJB,
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`2012 WL 12845620, at *2 (S.D. Cal. Sept. 5, 2012) (internal quotations omitted).
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`III. WI-LAN FAILED TO PROVE DAMAGES AS A MATTER OF LAW
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`A. Wi-LAN Fails the Apportionment Requirement as a Matter of
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`Law Because It Presented No Evidence Tethering Its Damages Claim to the
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`Economic Footprint of the Invention in the Marketplace.
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`To survive a Rule 50(a) motion, Wi-LAN needed to “give evidence tending
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`to separate or apportion . . . the patentee’s damages between the patented feature
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`and the unpatented features.” Garretson, 111 U.S. at 121 (internal quotation marks
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`omitted); see also VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1329 (Fed. Cir.
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`2014) (“The law requires patentees to apportion the royalty down to a reasonable
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`estimate of the value of its claimed technology.”). Consistent with this precedent,
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`this Court has decided to instruct the jury that “[y]ou must be careful to ensure that
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`award is no more or no less than the value of the patented invention.” Jury
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`Instruction No. 14 (emphasis added). The Court likewise has decided to instruct
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`the jury that “[t]he amount you find as damages must be based on the value
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`attributable to the patented technology, as distinct from other, unpatented features
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`of the accused product, or other factors such as marketing or advertising, or Apple’s
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`size or market position.” Jury Instruction No. 17.1; see also id. (“In determining
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`the appropriate royalty base and the appropriate royalty rate, the ultimate
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`combination of both the royalty rate and the royalty base must reflect the value
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`attributable to the patented technology.”) (emphasis added).
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`Despite bearing the burden of proof on damages, Wi-LAN failed to provide
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`substantial evidence that would allow the jury to perform the required
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`apportionment. There is no dispute that iPhones have functionality well beyond the
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`broad categories of functionality at issue in this case, even if one focused on just
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`their baseband chips. As to those categories, we know from Wi-LAN admissions
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38252 Page 8 of 16
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`and prior court rulings that Wi-LAN did not invent the entirety of LTE, VoLTE,
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`adaptive modulation, or bandwidth allocation. Tr. at 101:13 to 103:13. At most, its
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`patents allegedly made some contribution to one or more of those areas, and it is
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`therefore incumbent upon Wi-LAN to provide the jury with record evidence from
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`which it might apportion value among patented and unpatented aspects. Wi-LAN
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`utterly failed to do so.
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`Rather, through its damages expert Mr. Kennedy, Wi-LAN simply offered a
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`series of “adjustments” to the baseline royalty rate it took from the three licenses on
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`which it relied. Setting aside for now the problems with Wi-LAN’s reliance on the
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`Doro, Unnecto, and Vertu licenses in the first place (addressed in the next section),
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`none of Wi-LAN’s adjustments has any nexus to the value of the patented
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`technology. Nor are any of these adjustments useful in apportioning the economic
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`contribution of the patented features from that of the many unpatented features of
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`the accused products. Wi-LAN therefore has not supplied any tools with which the
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`jurors can do the job that this Court would assign to them. As a result, a pre-verdict
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`JMOL of no damages is warranted.
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`Wi-LAN did not provide any apportionment evidence through its fact
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`witnesses or its technical witness, Dr. Madisetti. They spoke nary a word that tends
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`to apportion the value of the features covered by the asserted patent claims from the
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`value of the many unpatented features of the accused products. That task
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`presumably would be left to Mr. Kennedy. Yet Mr. Kennedy’s turn to speak came
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`and went likewise without any evidence of the “value attributable to the patented
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`technology.” Jury Instruction No. 17.1.
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`Instead, after discussing the three licenses on which its damages case hinges,
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`Wi-LAN’s counsel asked Mr. Kennedy: “And this adjusted per phone rate of 45
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`cents per phone, does that reflect the value of the patented technology in your
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`opinion?” Tr. at 246:25 to 247:2. Mr. Kennedy responded: “Yes. That’s what I’ve
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`tried to do with my adjustments, yes.” Tr. at 247:3 to 247:4. But none of Mr.
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`APPLE’S RULE 50(A) JMOL MOTION
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`Kennedy’s “adjustments” had anything to do with the value of the patented
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`technology or the relative value of patented and unpatented features.
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`Rather, Mr. Kennedy’s adjustments to the three licenses he considered
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`strictly concerned matters unrelated to the claimed invention’s footprint in the
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`marketplace. This analysis was legally insufficient to support a damages award,
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`and Wi-LAN has no other evidence to fill this gaping hole. Mr. Kennedy’s
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`“adjustments” were based on: (1) the assumption of validity and infringement, Tr.
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`at 228:14-16; (2) a “subset discount” for a less-than-portfolio license, Tr. at 228:17-
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`19; (3) U.S. vs. worldwide royalty rates in general, Tr. at 228:20-23; (4) no “early
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`adopter” discount, Tr. at 228:24 to 229:1; and (5) larger sales volumes for Apple,
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`Tr. at 229:2-3. See also Tr. at 229:4 to 247:4 (walking through each of these five
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`adjustments and concluding that a 45 cents per unit royalty rate is appropriate).
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`None of these adjustments relates in any way to the value of the patented
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`technology, much less the relative value of the patented and unpatented features:
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`(1) The assumption of validity and infringement is a background premise of
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`the hypothetical negotiation. It says nothing about the differences between the
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`patented and unpatented features, nor how to apportion economic value between the
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`two.
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`(2) Mr. Kennedy’s purported 25% “subset discount” for a less-than-portfolio
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`license—which suffers from its own legal defects discussed in the next section—is
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`completely untethered from the value of the patented invention and the relative
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`economic contributions of the patented and unpatented features. In fact, Wi-LAN
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`has admitted that this is just a rule of thumb it supposedly would apply in
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`blunderbuss fashion to any subset of patents within its portfolio—regardless of the
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`economic footprint of the patented invention or any other relevant facts.
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`(3) Mr. Kennedy’s generic premise about the difference between worldwide
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`and United States royalty rates in license agreements bears no relationship to the
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`value of the patented technology or the relative economic contributions of patented
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38254 Page 10 of 16
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`and unpatented features here. This premise relates simply to the geographic scope
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`of the license that is being hypothetically negotiated.
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`(4) Mr. Kennedy’s so-called “early adopter discount” also has no connection
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`to the particular technology at issue or its economic footprint in the marketplace.
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`Rather, it is just another generic premise, this one relating to the timing of the
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`hypothetical negotiation.
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`(5) Finally, Mr. Kennedy’s consideration of sales volumes is also completely
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`irrespective of the particular technology, accused products, and relative economic
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`contributions of patented and unpatented features. Rather, this “adjustment” relates
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`only to whether the volume of sales is large or small—regardless of what it is that is
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`being sold and how much the patented invention might contribute to its value.
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`And that is all. Mr. Kennedy offered no testimony or other evidence that
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`would allow the jury to measure the economic footprint of Wi-LAN’s patented
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`invention. Nor did he provide any evidence that would enable the jury to size up
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`the accused products and apportion out the economic value attributable to
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`unpatented features and factors. Faced with an obligation to apportion, Wi-LAN
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`never even made it to the starting line. As a result, it would be improper for its
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`damages claim to go to the jury.
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`This alone is enough to warrant JMOL in Apple’s favor. But Wi-LAN’s
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`failure of proof is further compounded by its improper use of the value of the entire
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`iPhone as its royalty base and rejection of the baseband processor as the smallest
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`salable unit (“SSU”). “Where small elements of multi-component products are
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`accused of infringement, calculating a royalty on the entire product carries a
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`considerable risk that the patentee will be improperly compensated for non-
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`infringing components . . . .” Commonwealth Sci. & Indus. Research Org. v. Cisco
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`Sys., Inc., 809 F.3d 1295, 1302-1303 (Fed. Cir. 2015) (“CSIRO”). “[W]here
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`multicomponent products are accused of infringement, the royalty base should not
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`be larger than the smallest salable unit embodying the patented invention.” Power
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38255 Page 11 of 16
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`Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 894 F.3d 1258, 1270 (Fed.
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`Cir. 2018).
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`In granting summary judgment of non-infringement based on the inclusion of
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`licensed Intel chipsets in iPhones, this Court has already acknowledged that the
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`chipset containing the baseband processor is the SSU. ECF No. 401 at 9-11. Even
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`Wi-LAN’s former CEO, Jim Skippen, implicitly acknowledged this fact by
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`testifying that the Intel license covered and licensed iPhones with an Intel chipset.
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`See Tr. at 197:9-24. Yet, Wi-LAN and Mr. Kennedy ignored this Court’s findings
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`and chose to present a damages case based on the entire iPhone value.
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`Despite these contrary facts, Mr. Kennedy ignored the baseband processor as
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`the SSU, “reject[ing] the notion” that this fundamental damages principle is
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`applicable. Id. at 309:17 to 310:1 (“Q: You didn’t consider the smallest salable
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`unit in your analysis[?] . . . A: I did not testify on direct about that, no. Q: In fact,
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`sir, you reject the notion that the smallest salable unit is the baseband chip that
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`Qualcomm supplies to Apple. You have said that. A: Yeah. I disagree that that is
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`the smallest salable unit . . . .”). Neither does Mr. Kennedy perform an
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`apportionment down to the patented technology—he admits as much. Id. at
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`313:13-16 (“Q: And you have said that you don’t have sufficient information to be
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`able to parse out the relative contributions of those other features. That’s your
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`testimony. A: That’s correct.”). This is all the more troubling because he agrees
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`that the processors are salable, are sold, and are smaller units than the iPhone. Id. at
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`312:5 to 312:20 (“Q: so the baseband chip is small, salable, and a unit, right? A:
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`Disconnecting all of those words, that is true that they are, small, and they are
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`salable, and they are units. . . .”). And he agrees that Apple “shouldn’t be paying
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`for technology that goes beyond the scope of the smallest salable unit.” Id. at
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`312:25 to 313:7 (“Q: They shouldn’t be paying for technology that goes beyond
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`the scope of the smallest salable unit, whatever it is, right? A: Right. If the
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`smallest salable unit is all -- is in the application processor and the baseband
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38256 Page 12 of 16
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`processor and the antenna and other component’s . . . if you were going to look at it
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`that way that is where their technology resides and they shouldn’t pay for
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`technology they don’t own.”). Mr. Kennedy failed to apply longstanding Federal
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`Circuit law requiring apportionment based on the SSU, and the jury should not be
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`allowed to consider such testimony. See Power Integrations, Inc., 894 F.3d at
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`1270.
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`For its damages claim to even be submitted to the jury, Wi-LAN was
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`required to, at a minimum: (1) identify and calculate damages from the smallest
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`saleable patent practicing unit (here, the baseband processor); (2) further apportion
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`to identify the value of VoLTE among the other features of the baseband processor;
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`and (3) further apportion to separate out the unpatented aspects of VoLTE—
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`including, most notably, Apple’s own patented and valuable contributions to
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`VoLTE. Wi-LAN did they opposite by hand-waving about the supposed
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`“footprint” of the invention. See Tr. at 293:24-25 (“ . . . It relates to VoLTE, it is a
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`portion of VoLTE.”). Mr. Kennedy did none of those things, and his testimony
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`therefore cannot constitute substantial evidence supporting a damages award in this
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`case. Wi-LAN in fact presented no evidence at all that would permit the jury to
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`apportion between the patented and unpatented features of the accused products.
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`JMOL of no damages should therefore be entered.
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`B. Wi-LAN’s Damages Evidence Is Not “Reliable and Tangible,” But
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`Instead Turns on the Application of an Impermissible Rule of Thumb to Non-
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`Comparable Licenses.
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`Even if Wi-LAN’s evidence were viewed (incorrectly) as meeting the first
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`requirement of “tending to . . . apportion,” it still fails the second requirement
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`because its evidence not “reliable and tangible” for this task. Garretson, 111 U.S.
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`at 121. In addition to the above instructions on apportionment, this Court has
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`decided to instruct the jury that “you must account for any differences between
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`those licenses and the hypothetically negotiated license between Wi-LAN and
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38257 Page 13 of 16
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`Apple, in terms of the technologies and economic circumstances of the contracting
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`parties, when you make your reasonable royalty determination.” Jury Instruction
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`No. 17:. All the evidence that Wi-LAN has given the jury on this subject is, at best,
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`unreliable and speculative and therefore legally insufficient to perform this task.
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`This is another independent reason why JMOL of no damages is warranted.
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`Mr. Kennedy’s opinions are unreliable and untethered to the facts of this case
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`for several reasons. For one thing, the three licenses on which he relies are too far
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`afield from the economic circumstances of the hypothetical negotiation between
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`Wi-LAN and Apple. Among other things, Mr. Kennedy fails to account for the
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`broader range of technologies covered by these licenses than the two-patent
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`hypothetical license to Apple, whether the asserted patents had any particular value
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`to the licensees, and whether licenses to these low-volume, specialty phone
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`manufacturers would have any relevance at all to a licensee like Apple.
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`In addition, Mr. Kennedy improperly assumes the four claims at issue are
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`worth an arbitrary 75 percent of Wi-LAN’s entire portfolio. This assumption is not
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`tied to any analysis of the patent claims or their value. Rather, he admits the same
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`75 percent rule would apply to any subset of Wi-LAN patents; it does not matter
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`how many or which ones. See 329:17 to 330:18. The only requirement is that the
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`subset be less than the entire portfolio. He then boosts his number back up by 20
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`percent supposedly to account for the assumption of infringement and validity—
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`making the four claims worth 90 percent of the entire portfolio—arriving at 45
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`cents per unit ($85 million) that Apple supposedly would have agreed to pay Wi-
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`LAN. This purported “subset discount” is not any sort of analysis of the relative
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`value of the four asserted claims versus the thousands of claims licensed to Doro,
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`Unnecto, and Vertu. Wi-LAN acknowledged these companies were licensed to
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`Bluetooth, CDMA, HSPA, LTE, and Wi-Fi patents that Wi-LAN saw value in. Tr.
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`at 203:3 to 205:19; 325:24 to 326:12. Wi-LAN presented no evidence quantifying
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`the extent to which the asserted claims are more or less valuable than any others in
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`APPLE’S RULE 50(A) JMOL MOTION
`3:14-CV-02235-DMS-BLM
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`Case 3:14-cv-02235-DMS-BLM Document 837 Filed 01/22/20 PageID.38258 Page 14 of 16
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`Wi-LAN’s portfolio. The “subset discount” is not even a numerical comparison of
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`the number of licensed claims versus the number of claims asserted in this case. In
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`short, the “subset discount” is not a reliable or otherwise legally sufficient tool for
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`apportionment.
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`Mr. Kennedy’s arbitrary “subset discount” (1) starts with a “portfolio license
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`rate,” and (2) applies to any licensee and any subset of Wi-LAN patents—not the
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`asserted patents. His opinion therefore hinges on a “rule of thumb” similar to ones
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`the Federal Circuit has repeatedly excluded. See, e.g., Uniloc USA, Inc. v.
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`Microsoft Corp., 632 F.3d 1292, 1318 (Fed. Cir. 2011) (rejecting 25% rule of
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`thumb as a “fundamentally flawed tool for determining a baseline reasonable
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`royalty in a hypothetical negotiation”); VirnetX, 767 F.3d at 1333 (rejecting “Nash
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`Bargaining Solution” 50 percent rule of thumb, holding use of arbitrary rule not tied
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`to facts of the case is “unjustified by evidence about the particular facts of the
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`case”).
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`In sum, Mr. Kennedy was required to “present evidence sufficient to allow
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`the jury to weigh the economic value of the patented feature against the economic
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`value of the features and services covered by” the Doro, Unnecto, and Vertu
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`licenses. DataQuill Ltd. v. High Tech Comput. Corp., 887 F. Supp. 2d 999, 1021-
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`25 (S.D. Cal. 2011); Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1327
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`(Fed. Cir. 2009) (portfolio license was “radically different from the hypothetical
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`agreement under consideration for the [asserted] patent”); Ericsson, Inc. v. D-Link
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`Sys., Inc., 773 F.3d 1201, 1227-28 (Fed. Cir. 2014) (comparable license analysis
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`must involve apportionment). Mr. Kenned