`16
`
`
`
`
`
`
`
`
`
`
`
`EXHIBIT 36
`
`TO DECLARATION OF CHRISTIANA GARRETT
`IN SUPPORT OF NUVASIVE, INC.’S
`REPLY IN SUPPORT OF
`MOTION FOR PARTIAL SUMMARY JUDGMENT
`AND MOTION TO EXCLUDE EXPERT OPINIONS
`(IMPLANT PATENTS)
`
`
`
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30360 Page 2 of
`16
`
`· · · · · · · ·IN THE UNITED STATES DISTRICT COURT
`· · · · · · · · · ·SOUTHERN DISTRICT OF CALIFORNIA
`· · · · · · · · · · · ·SAN DIEGO DIVISION
`
`· · NUVASIVE, INC., a· · · · · )
`· · Delaware corporation,· · · )
`· · · · Plaintiff,· · · · · · ·)
`· · · · · · · · · · · · · · · ·)
`· · VS.· · · · · · · · · · · · )· CASE NO.
`· · · · · · · · · · · · · · · ·)· 18-cv-00347-CAB-MDD
`· · ALPHATEC HOLDINGS, INC.,· ·)
`· · a Delaware corporation,· · )
`· · and ALPHATEC SPINE,· · · · )
`· · INC., a California· · · · ·)
`· · corporation,· · · · · · · ·)
`· · · · Defendants.· · · · · · )
`· · · ·--------------------------------------------------
`· · · · · · · · · · · ATTORNEYS' EYES ONLY
`· · · ·ORAL, VIDEOTAPED AND VIDEOCONFERENCED DEPOSITION OF
`· · · · · · · · · · · KEITH R. UGONE, Ph.D.
`· · · · · · · · · · · · January 12, 2021
`· · · · · · · · · · · · · · ·VOLUME 1
`· · · · --------------------------------------------------
`
`· · · · ·ORAL, AND VIDEOTAPED AND VIDEOCONFERENCED
`
`· · DEPOSITION OF KEITH R. UGONE, Ph.D., produced as a
`
`· · witness at the instance of the Plaintiff, taken in the
`
`· · above-styled and -numbered cause on the January 12,
`
`· · 2021, from 9:04 a.m. to 6:18 p.m., before Jamie K.
`
`· · Israelow, a Certified Shorthand Reporter in and for the
`
`· · State of Texas, Registered Merit Reporter and Certified
`
`· · Realtime Reporter, reported in machine shorthand, with
`
`· · the witness appearing remotely in the City of Dallas,
`
`· · County of Dallas and State of Texas, Regarding the
`
`· · COVID-19 State of Disaster, and the provisions stated on
`
`· · the record or attached hereto; that the deposition shall
`
`· · be read and signed before any notary public.
`
`EXHIBIT 36
`Page 150
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30361 Page 3 of
`16
`
`·1· · · · · · · · · · ·REMOTE APPEARANCES
`
`·2
`
`·3· FOR THE PLAINTIFF:
`
`·4· · · ·Mr. Erik J. Carlson
`· · · · ·WILSON SONSINI GOODRICH & ROSATI P.C.
`·5· · · ·633 West Fifth Street, Suite 1550
`· · · · ·Los Angeles, California· 90071
`·6· · · ·323.210.2900
`· · · · ·ecarlson@wsgr.com
`·7
`
`·8· FOR THE DEFENDANTS:
`
`·9· · · ·Mr. Brian J. Nisbet
`· · · · ·WINSTON & STRAWN LLP
`10· · · ·35 W. Wacker Drive
`· · · · ·Chicago, IL 60601-9703
`11· · · ·D: 312.558.3254
`· · · · ·bnisbet@winston.com
`12
`
`13· ALSO PRESENT:
`
`14· · · ·Rick Bell, Remote Videographer
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`EXHIBIT 36
`Page 151
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30362 Page 4 of
`16
`
`·1· · · · · · · · · · · · · · INDEX
`· · · · · · · · · · · · · · · · · · · · · · · · · · · · PAGE
`·2· Appearances· · · · · · · · · · · · · · · · · · · · · · 2
`
`·3· KEITH R. UGONE, Ph.D.
`
`·4· · · EXAMINATION BY MR. CARLSON· · · · · · · · · · · · ·5
`
`·5
`· · ·Corrections and Signature· · · · · · · · · · · · · ·233
`·6· ·Reporter's Certificate· · · · · · · · · · · · · · · 235
`
`·7
`
`·8· · · · · · · · · · · · · EXHIBITS
`· · · · · · (Provided electronically to the reporter)
`·9· NO.· · · · · · ·DESCRIPTION· · · · · · · · · · · · ·PAGE
`
`10· Exhibit 1· · · ·Supplemental Rebuttal Expert· · · · · 10
`· · · · · · · · · · Report of Keith R. Ugone, PH.D.,
`11· · · · · · · · · December 18, 2020
`· · Exhibit 2· · · ·Exhibits to the Supplemental· · · · · 29
`12· · · · · · · · · Rebuttal Expert Report of Keith R.
`· · · · · · · · · · Ugone, PH.D., December 18, 2020
`13· Exhibit 3· · · ·Spreadsheet Bates Numbered· · · · · · 70
`· · · · · · · · · · ATEC_LLIF000971397
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`EXHIBIT 36
`Page 152
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30363 Page 5 of
`16
`
`·1· · · · · · · · · · P R O C E E D I N G S
`
`·2· · · · · · · · (On the record at 9:04 a.m.)
`
`·3· · · · · · · · (Reporter's Note:· Due to the quality of a
`
`·4· · · · · · · · Zoom videoconference and transmission of
`
`·5· · · · · · · · data, audio distortion and audio freezes
`
`·6· · · · · · · · make it more challenging to prepare a
`
`·7· · · · · · · · transcript as opposed to one prepared
`
`·8· · · · · · · · during in-person proceedings.)
`
`·9· · · · · · · · THE VIDEOGRAPHER:· We're on the record at
`
`10· 9:07 a.m., Central Time.· Today's date is January 12th,
`
`11· 2021.· This is the oral and video-recorded deposition of
`
`12· Keith Ugone, Ph.D., in the matter of NuVasive, Inc.
`
`13· versus Alphatec Holdings and Alphatec Spine,
`
`14· Incorporated, in the United States District Court,
`
`15· Southern District of California, San Diego Division.
`
`16· Case Number 18-CV-00347-CAB-MDD.
`
`17· · · · · · · · This deposition is being held by Zoom
`
`18· videoconference.· Participants should be aware that this
`
`19· proceeding is being recorded, and as such, all
`
`20· conversations held will be recorded unless there is a
`
`21· request and agreement to go off the record.· Private
`
`22· conversations and/or attorney-client interaction should
`
`23· be held outside the presence of the remote interface.
`
`24· · · · · · · · Will counsel please state their appearance
`
`25· for the record.
`
`EXHIBIT 36
`Page 153
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30364 Page 6 of
`16
`
`·1· · · · · · · · MR. CARLSON:· Erik Carlson from Wilson,
`
`·2· Sonsini, Goodrich & Rosati for plaintiff, NuVasive.
`
`·3· · · · · · · · MR. NISBET:· Brian Nisbet on behalf of --
`
`·4· with Winston Strawn on behalf of the Alphatec entities.
`
`·5· · · · · · · · THE VIDEOGRAPHER:· Thank you.
`
`·6· · · · · · · · Will the court reporter please swear in
`
`·7· the witness.
`
`·8· · · · · · · · · ·KEITH R. UGONE, Ph.D.,
`
`·9· having been first duly sworn, testified as follows:
`
`10· · · · · · · · · · · · ·EXAMINATION
`
`11· BY MR. CARLSON:
`
`12· · · Q.· ·Good morning, Dr. Ugone.
`
`13· · · A.· ·Good morning.
`
`14· · · Q.· ·Could you please state your name for the
`
`15· record.
`
`16· · · A.· ·Keith Raymond Ugone, last name is spelled
`
`17· U-g-o-n-e.
`
`18· · · Q.· ·And you were previously deposed in this case,
`
`19· right?
`
`20· · · A.· ·Yes.
`
`21· · · Q.· ·December 30th, 2019 sound right?
`
`22· · · A.· ·That sounds approximately right.· I don't have
`
`23· the exact date, but I'm not going to disagree with that.
`
`24· · · Q.· ·And since that time, has your work address
`
`25· changed?
`
`EXHIBIT 36
`Page 154
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30365 Page 7 of
`16
`
`·1· · · · · · · · MR. NISBET:· Is it -- objection to form,
`
`·2· speculation.
`
`·3· · · A.· ·Yeah.· I don't -- I don't have any -- I don't
`
`·4· have any empirics on that.· I mean, I -- I think the
`
`·5· answer is the same that I gave for the safety issue.
`
`·6· · · Q.· ·(By Mr. Carlson)· Let's turn now to your
`
`·7· reasonable royalty analysis, Dr. Ugone.
`
`·8· · · · · · · · I believe you testified previously, you
`
`·9· did not perform an apportionment in your access system
`
`10· report, and I just wanted to see if that was the case
`
`11· for your implant report.
`
`12· · · · · · · · Did you perform an apportionment for
`
`13· reasonable royalty in your implant report?
`
`14· · · · · · · · MR. NISBET:· Objection to form,
`
`15· mischaracterizing his prior testimony.
`
`16· · · A.· ·Just give me a second because I think I know
`
`17· what the answer is, but I'm trying to connect the dots
`
`18· back to the old report versus -- versus this report.
`
`19· · · · · · · · The value of the patented technology, I
`
`20· believe, is imbedded in the market test or the market
`
`21· results, and the market result is a comparable license
`
`22· that, given the comparability of the Warsaw or Alphatec
`
`23· license to the patents-in-suit, then that dictates, you
`
`24· know, a royalty rate that can be used.· Although, there
`
`25· are indicators why that's, from a defense perspective,
`
`EXHIBIT 36
`Page 155
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30366 Page 8 of
`16
`
`·1· conservatively high.· But I do not view in this
`
`·2· situation that a further apportionment -- that I would
`
`·3· do a further apportionment.· If I did a further
`
`·4· apportionment, that number would come down.
`
`·5· · · Q.· ·(By Mr. Carlson)· Okay.· Could you turn to
`
`·6· Paragraph 137(b) of your report.
`
`·7· · · · · · · · MR. NISBET:· Did you say 137(b), Erik?
`
`·8· · · · · · · · MR. CARLSON:· I did.
`
`·9· · · A.· ·Okay.· Let me just catch up with you for a
`
`10· second here.
`
`11· · · · · · · · Okay.· I think I'm ready.
`
`12· · · Q.· ·(By Mr. Carlson)· Okay.· In Paragraph 137(b),
`
`13· your report has an opinion that:· As of January 2016,
`
`14· numerous claims of the Implant Patents had been deemed
`
`15· invalid, right?
`
`16· · · A.· ·That's my understand -- actually, you said I
`
`17· have an opinion.· I -- that's kind of a factual
`
`18· statement, not an opinion.
`
`19· · · Q.· ·Okay.· My mistake.· A factual statement.
`
`20· · · · · · · · So -- and you continue with:· While
`
`21· NuVasive appealed the invalidity ruling, the uncertainty
`
`22· surrounding the validity of the Implant Patents would
`
`23· have placed additional downward pressure on the
`
`24· to-be-determined royalty amount.
`
`25· · · · · · · · So, here, here, you have an opinion on the
`
`EXHIBIT 36
`Page 156
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30367 Page 9 of
`16
`
`·1· effect of the invalidity ruling on the royalty amount,
`
`·2· right?
`
`·3· · · A.· ·Yes.
`
`·4· · · Q.· ·What's the basis for this opinion that
`
`·5· invalidity ruling has an impact on a reasonable royalty?
`
`·6· · · · · · · · MR. NISBET:· Objection to form.
`
`·7· · · A.· ·I'm going to give the easiest possible answer
`
`·8· that if a patent is invalid, why should you pay
`
`·9· anything?· That's in the extreme.· I mean, if there were
`
`10· negotiations here.
`
`11· · · · · · · · What I'm trying to say is that -- and,
`
`12· frankly, you know, if this was happening, I might even
`
`13· ask for more legal guidance on how to handle this, when
`
`14· you have an invalidity ruling that's being appealed, but
`
`15· if there's a need for a hypothetical negotiation, how
`
`16· does the law even treat that?
`
`17· · · · · · · · So I'm just giving a -- you know,
`
`18· basically, an economic answer here that if there's less
`
`19· claims or the scope of the claims is less -- or if the
`
`20· patent's invalid, you know, why wouldn't there be
`
`21· downward pressure on the -- on the royalty rate?
`
`22· · · · · · · · Why wouldn't somebody pay full price under
`
`23· that state of the world at that moment in time?
`
`24· · · · · · · · You know, unless the court said to me, you
`
`25· know:· Well, you still have to assume that they're valid
`
`EXHIBIT 36
`Page 157
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30368 Page 10 of
`16
`
`·1· and you can't bring this in, then this wouldn't hold.
`
`·2· But I'm saying, given the state of the world and given
`
`·3· that numerous claims have been deemed invalid, and if
`
`·4· you just go with that state of the world, then the rest
`
`·5· of this paragraph holds.
`
`·6· · · Q.· ·(By Mr. Carlson)· So why do you mention the
`
`·7· court not letting this in for the specific opinion?
`
`·8· · · A.· ·You might have misinterpreted.
`
`·9· · · · · · · · Why did I mention letting the court coming
`
`10· this in?· I didn't say that.
`
`11· · · Q.· ·Okay.· I'm sorry.· But if I understood your
`
`12· answer to be that this was an economic perspective, but
`
`13· you may need to seek legal guidance to determine whether
`
`14· the court would let this in for a reasonable royalty
`
`15· analysis.· And I'm paraphrasing that --
`
`16· · · A.· ·No.· That -- that paraphrasing is like follow
`
`17· territory way off in right field.
`
`18· · · Q.· ·All right.· Bring back -- bring it back in
`
`19· play.
`
`20· · · A.· ·What I was saying is, I might need guidance
`
`21· from the court, not that they wouldn't let it in, but
`
`22· how does the court treat this situation?
`
`23· · · · · · · · Would the court say, no, no, no, you still
`
`24· need to assume that the patents, even the invalid claims
`
`25· are still valid, in which case, then, you know, I would
`
`EXHIBIT 36
`Page 158
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30369 Page 11 of
`16
`
`·1· alter what I would say here.· That's what I was trying
`
`·2· to say.
`
`·3· · · Q.· ·Did you analyze the popularity and commercial
`
`·4· success of NuVasive's XLIF product when determining a
`
`·5· reasonable royalty, correct?
`
`·6· · · · · · · · MR. NISBET:· Objection to form.
`
`·7· · · A.· ·I'm sorry.· Analyze -- just ask the question
`
`·8· again.· Sometimes I have a hard time hearing it.
`
`·9· · · Q.· ·(By Mr. Carlson)· Sure.
`
`10· · · · · · · · You analyzed the popularity and commercial
`
`11· success of NuVasive's XLIF product in determining --
`
`12· · · · · · · · THE REPORTER:· I'm sorry.· Wait.· Wait.
`
`13· Of NuVasive's something product.
`
`14· · · Q.· ·(By Mr. Carlson)· Dr. Ugone, you analyzed the
`
`15· popularity and commercial success of NuVasive's XLIF
`
`16· product when determining a reasonable royalty, correct?
`
`17· · · A.· ·That was taken into account, sure.
`
`18· · · Q.· ·Is it the most popular and commercially
`
`19· successful lateral platform on the market?
`
`20· · · · · · · · MR. NISBET:· Objection to form.
`
`21· · · A.· ·I think as indicated by the relative market
`
`22· share of NuVasive, in the LLIF market segment, that it
`
`23· appears to be the best seller.
`
`24· · · Q.· ·(By Mr. Carlson)· So NuVasive is the most
`
`25· popular and commercially successful lateral platform on
`
`EXHIBIT 36
`Page 159
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30370 Page 12 of
`16
`
`·1· the market, right?
`
`·2· · · · · · · · MR. NISBET:· Objection to form.
`
`·3· · · A.· ·They appear to have roughly 50 percent share of
`
`·4· the lateral procedures that we're talking about here.
`
`·5· · · Q.· ·(By Mr. Carlson)· But NuVasive's 50 percent
`
`·6· share makes them the most popular commercially
`
`·7· successful lateral platform on the market, correct?
`
`·8· · · · · · · · MR. NISBET:· Objection to form.
`
`·9· · · A.· ·I'm just hesitating on the word "popular."· It
`
`10· is the most commercially successful, I will agree with
`
`11· that.
`
`12· · · Q.· ·(By Mr. Carlson)· Okay.· Isn't it reasonable to
`
`13· believe that the more Alphatec can make its product
`
`14· similar to XLIF, the more likely it will compete
`
`15· directly with NuVasive?
`
`16· · · · · · · · MR. NISBET:· Objection to form.
`
`17· · · A.· ·I would think that there's a number of
`
`18· different considerations going on, including
`
`19· differentiating your product.· In other words, why
`
`20· should you buy Alphatec as opposed to NuVasive?
`
`21· · · · · · · · And this is where additional
`
`22· considerations come into play.· NuVasive may know that
`
`23· they've got 50 percent of the market.· They've always
`
`24· had 50 percent of the market.· There's 50 percent of the
`
`25· market they're not going to get.· One way to get extra
`
`EXHIBIT 36
`Page 160
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30371 Page 13 of
`16
`
`·1· · · · · · ·IN THE UNITED STATES DISTRICT COURT
`· · · · · · · · · ·SOUTHERN DISTRICT OF CALIFORNIA
`·2· · · · · · · · · · ·SAN DIEGO DIVISION
`
`·3· NUVASIVE, INC., a· · · · · )
`· · Delaware corporation,· · · )
`·4· · · Plaintiff,· · · · · · ·)
`· · · · · · · · · · · · · · · ·)
`·5· VS.· · · · · · · · · · · · )· CASE NO.
`· · · · · · · · · · · · · · · ·)· 18-cv-00347-CAB-MDD
`·6· ALPHATEC HOLDINGS, INC.,· ·)
`· · a Delaware corporation,· · )
`·7· and ALPHATEC SPINE,· · · · )
`· · INC., a California· · · · ·)
`·8· corporation,· · · · · · · ·)
`· · · · Defendants.· · · · · · )
`·9
`
`10· · · REPORTER'S CERTIFICATION OF THE ORAL, VIDEOTAPED
`
`11· · · · · · ·AND VIDEOCONFERENCED DEPOSITION OF
`
`12· · · · · · · · · · KEITH R. UGONE, Ph.D.
`
`13· · · · · · · · · · · ·January 12, 2021
`
`14
`
`15· · · · · · I, Jamie K. Israelow, a Certified Shorthand
`
`16· Reporter duly commissioned and qualified in and for the
`
`17· State of Texas, Registered Merit Reporter and Certified
`
`18· Realtime Reporter, do hereby certify to the following:
`
`19· · · · · · That the witness, KEITH R. UGONE, Ph.D., was
`
`20· duly sworn by the officer and that the transcript of the
`
`21· oral deposition is a true record of the testimony given
`
`22· by the witness:
`
`23· · · · · · That the original transcript was delivered to
`
`24· Mr. Erik J. Carlson.
`
`25· · · · · · That a copy of the certificate was served on
`
`EXHIBIT 36
`Page 161
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30372 Page 14 of
`16
`
`·1· all parties and/or the witness shown herein on
`
`·2· ___________________.
`
`·3· · · · · · I further certify that pursuant to FRCP Rule
`
`·4· 30(f)(1) that the signature of the deponent:
`
`·5· · · · · · _X_ was requested by the deponent or a party
`
`·6· before the completion of the deposition and that
`
`·7· signature is to be before any notary public and returned
`
`·8· within 30 days from date of receipt of the transcript.
`
`·9· If returned, the attached Changes and Signature Page
`
`10· contains any changes and the reasons therefor;
`
`11· · · · · · ___ was not requested by the deponent or a
`
`12· party before the completion of the deposition.
`
`13· · · · · · I further certify that I am neither attorney
`
`14· or counsel for, nor related to or employed by any of the
`
`15· parties to the action in which this deposition is taken,
`
`16· and further that I am not a relative or employee of any
`
`17· attorney or counsel employed by the parties hereto, or
`
`18· financially interested in the action.
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`EXHIBIT 36
`Page 162
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30373 Page 15 of
`16
`
`·1· · · · · · CERTIFIED TO BY ME on this 14th day of
`
`·2· ·January, 2021.
`
`·3
`
`·4
`
`·5· · · · · · · · _____________________________________
`· · · · · · · · · Jamie K. Israelow, CSR, RMR, CRR
`·6· · · · · · · · Texas CSR 3801
`· · · · · · · · · Expiration Date:· 4/30/2021
`·7· · · · · · · · US Legal Support-Dallas
`· · · · · · · · · CRCB Registration No. 343
`·8· · · · · · · · 8144 Walnut Hill Lane, Suite 350
`· · · · · · · · · Dallas, Texas· 75231
`·9· · · · · · · · 214.741.6001
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`EXHIBIT 36
`Page 163
`
`
`
`Case 3:18-cv-00347-CAB-MDD Document 311-12 Filed 02/26/21 PageID.30374 Page 16 of
`16
`Deposition Errata Sheet
`Keith R. Ugone, Ph.D.
`Deposition Date: January 12, 2021
`HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY
`
`
`
`Page:Line
`
`Original Testimony
`
`Corrected Testimony
`
`Reason
`
`92:5
`125:25
`140:23
`154:22
`188:16
`222:17
`223:8
`223:11
`
`223:16
`225:4–5
`
`
`LF
`01
`conversation
`discreet
`follow
`patent
`for the hype of that royalty
`and the year out for the
`
`alteratives
`start process
`
`To clarify the record
`XLIF
`To clarify the record
`zero-one
`Transcription error
`conversations
`To clarify the record
`discrete
`Transcription error
`foul
`Transcription error
`patents
`for the hype -- for the royalty Transcription error
`and took it a year out for the
`Transcription error
`access patents
`alternatives
`start the process
`
`Transcription error
`Transcription error
`
`I, KEITH R. UGONE, Ph.D., have read the foregoing deposition and hereby affix my signature that same is true
`and correct, except as noted above, and that I am signing under penalty of perjury.
`
`
`Date:
`
`
`
`February 19, 2021
`
`
`
`Signature:
`
`
`
`
`
`
`
`
`Keith R. Ugone, Ph.D.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`
`EXHIBIT 36
`Page 164
`
`