Case 1:13-cv-00919-JLH Document 519 Filed 05/01/23 Page 1 of 5 PageID #: 52422
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT DELAWARE
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`C.A. No. 13-919-JLH
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`JURY TRIAL DEMANDED
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`PUBLIC VERSION
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`)))))))))
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`ARENDI S.A.R.L.,
`
`Plaintiff,
`
`v.
`
`GOOGLE LLC,
`
`Defendant.
`
`LETTER TO THE HONORABLE JENNIFER L. HALL FROM DAVID E. MOORE
`REGARDING ARENDI’S NEW DAMAGES AND WILLFULNESS THEORIES
`
`OF COUNSEL:
`
`POTTER ANDERSON & CORROON LLP
`
`David E. Moore (#3983)
`Bindu A. Palapura (#5370)
`Andrew L. Brown (#6766)
`Hercules Plaza, 6th Floor
`1313 N. Market Street
`Wilmington, DE 19801
`Tel: (302) 984-6000
`dmoore@potteranderson.com
`bpalapura@potteranderson.com
`abrown@potteranderson.com
`
`Attorneys for Defendant Google LLC
`
`Robert W. Unikel
`John Cotiguala
`Matt Lind
`PAUL HASTINGS LLP
`71 South Wacker Drive, Suite 4500
`Chicago, IL 60606
`Tel: (312) 449-6000
`
`Robert R. Laurenzi
`Chad J. Peterman
`PAUL HASTINGS LLP
`200 Park Avenue
`New York, NY 10166
`Tel: (212) 318-6000
`
`Ginger D. Anders
`MUNGER, TOLLES & OLSON LLP
`601 Massachusetts Avenue NW, Suite 500E
`Washington, D.C. 20001
`Tel: (202) 220-1100
`
`Vincent Y. Ling
`MUNGER, TOLLES & OLSON LLP
`350 S. Grand Avenue, 50th Floor
`Los Angeles, CA 90071
`Tel: (213) 683-9100
`
`Dated: April 23, 2023
`
`Public Version Dated: May 1, 2023
`
`

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`Case 1:13-cv-00919-JLH Document 519 Filed 05/01/23 Page 2 of 5 PageID #: 52423
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`
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`Dear Judge Hall:
`
`April 23, 2023
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`Google respectfully submits this letter to preclude a new damages theory by Arendi as
`untimely, improper, unreliable, confusing, and highly prejudicial. To prevent Arendi from then
`perversely benefiting from its lack of admissible expert testimony on damages, the Court should
`use its discretionary authority to also prevent Arendi from explicitly or implicitly (i) asking for an
`even higher reasonable royalty than its newly proffered number, or (ii) arguing that Google’s
`damages theories fail to use the proper hypothetical negotiation date. Furthermore, the Court
`should determine that under Arendi’s new theory, there can be no willfulness as a matter of law.
`
`On Friday, April 21 at around 8:10 PM, Arendi informed Google for the first time that it
`would be dropping Content Detectors (“CD”) and Contextual Search Quick Actions (“QA”) as
`accused functionalities, leaving only Smart Text Selection (“STS”) in the case. As a result, Arendi
`is now alleging that infringement starts not on February 1, 2012 but on August 21, 2017, when
`STS was allegedly first released.1 At 10:53 PM, Arendi confirmed its withdrawal in writing and
`served revised exhibits from its damages expert, Mr. Weinstein, that disclosed a new
`
`damages ask. Ex. A (email and attachments). Despite streamlining infringement, Arendi’s new—
`and still not fully disclosed—theory has two collateral consequences: (1) as Mr. Weinstein’s entire
`damages theory was premised on the hypothetical negotiation occurring in February 2012—and
`he failed to provide any alternative theory—Arendi has no permissible damages theory for trial;
`and (2) because Arendi did not allege infringement related to STS functionality until after the ’843
`Patent expired, Arendi’s post-suit allegation of willfulness fails as a matter of law.
`
`Arendi’s behavior is particularly egregious. In a case that has been pending for over a
`decade, Arendi fundamentally changed its damages and willfulness approaches after the close of
`expert discovery, the deadline for Daubert motions, the selection of Google’s trial witnesses, and
`even after the empanelment of a jury, on the last business day before openings. As Arendi said
`before its about-face, “Trial is next week. The time for any kind of obfuscation in hiding the ball
`is gone.” 4/21/23 Draft Tr. at 114:10–11. Yet, Arendi hid the ball on its intended claims and
`damages demand for trial until the last possible moment. And, Google asked twice over the
`weekend for Arendi to confirm that willfulness is no longer at issue; Arendi declined. The Court
`should preclude Arendi’s new damages and willfulness theories and prevent it from benefiting
`from its sanctionable conduct.
`I.
`
`Legal Standards
`
`Fed. R. Evid. 702 imposes a “special obligation upon a trial judge” to “ensure the reliability
`and relevancy of expert testimony” by precluding expert opinions that are neither reliable nor tied
`to the facts and circumstances of the case. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147, 152
`(1999). Expert testimony must be more than “unsupported speculation,” Daubert v. Merrell Dow
`Pharms. Inc., 509 U.S. 579, 590 (1993), and “[c]ourts look for rigor, not mere ‘haphazard, intuitive
`inquiry,’” UGI Sunbury LLC v. Permanent Easement, 949 F.3d 825, 834 (3d Cir. 2020). Under
`Fed. R. Civ. P. 37(c)(1), a party that fails to comply with Rules 26(a), (e), including expert
`disclosures, “is not allowed to use that information . . . unless the failure was substantially justified
`or is harmless.” The Court has discretion to sanction a party for violations after considering: (1)
`prejudice or surprise; (2) possibility of curing the prejudice; (3) potential disruption of orderly and
`
`1 Google contends that any alleged STS infringement started no earlier than December 5, 2017.
`
`
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`Public Version Dated: May 1, 2023
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`

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`Case 1:13-cv-00919-JLH Document 519 Filed 05/01/23 Page 3 of 5 PageID #: 52424
`
`The Honorable Jennifer L. Hall
`April 23, 2023, Page 2
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`efficient trial; (4) bad faith or willfulness in failing to disclose evidence; and (5) importance of
`information withheld. Sprint Commc’ns Co. L.P. v. Charter Commc’ns, Inc., 2021 WL 982731, at
`*2 (D. Del. Mar. 16, 2021) (citing Konstantopoulos v. Westvaco Corp., 112 F.3d 710 (3d Cir.
`1997)). The Court also has inherent authority “to fashion an appropriate sanction for conduct which
`abuses the judicial process,” such as when a party in bad faith, vexatiously, or wantonly “delays
`or disrupts the litigation.” Chambers v. NASCO, Inc., 501 U.S. 32, 44–46 (1991).
`
`II.
`
`The Court Should Preclude Arendi from Presenting Its New Damages Theory
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`A reasonable royalty calculus examines the patented technology’s value “to the parties in
`the marketplace when infringement began.” LaserDynamics, Inc. v. Quanta Comput., Inc., 694
`F.3d 51, 76 (Fed. Cir. 2012) (emphasis added); Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512,
`518 (Fed. Cir. 1995) (warning against “after-the-fact assessment”). Thus, determining the proper
`date for a hypothetical negotiation is “[t]he first step” and an “essential” inquiry to properly assess
`reasonable royalties. Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860, 870 (Fed. Cir.
`2003), vacated on other grounds, 545 U.S. 193 (2005). Even a one year difference in hypothetical
`negotiation dates can result in a “drastically different” hypothetical negotiation. Id.; see also
`LaserDynamics, 694 F.3d at 76 (remanding for new damages trial where hypothetical negotiation
`date changed). Mr. Weinstein’s pre-existing opinions use a now-defunct hypothetical negotiation
`date, which “makes [his] analysis unreliable” and is “not harmless error.” RSA Protective Techs.,
`LLC v. Delta Sci. Corp., 2021 WL 4978462, at *4–5 (C.D. Cal. Oct. 20, 2021).
`
`Arendi must shift the hypothetical negotiation date by more than five years to late 2017
`under its new infringement theory. See LaserDynamics, 694 F.3d at 75 (“In general, the date of
`the hypothetical negotiation is the date that the infringement began.”). This major change has
`undetermined and untested ripple effects on the damages analysis. Differences between early 2012
`and late 2017 inevitably “change the risks and expectations of the parties,” Integra, 331 F.3d at
`870, in ways that Mr. Weinstein has not analyzed and render his opinions unreliable. For example:
`the different market landscape, business practices, and parties’ bargaining positions in view of a
`quickly evolving technological field (Georgia-Pacific factors 3, 4, 5, 12, 15); a dramatically
`shorter license duration of about one year (late 2017–Nov. 2018) instead of nearly seven years
`(early 2012–Nov. 2018) (GP factors 7, 11, 15); and Google’s consideration of acceptable non-
`infringing alternatives under the changed circumstances (GP factors 9, 15).2
`
`Arendi might try to argue that the parties should forge ahead with the ongoing trial by
`speculating how these and other factors would or would not impact Mr. Weinstein’s opinions. But
`that misses the fundamental point that Arendi has deprived Google of an opportunity to take any
`discovery concerning, or test his analysis of, a late 2017 negotiation over just one accused
`functionality. Nor does Mr. Weinstein’s attempt to excise 2012-to-late-2017 units from his royalty
`base fix the issue. The same problems above apply, plus his math is improper. For example, when
`CD and QA were in the case, the accused functionalities for Chrome spanned all relevant operating
`system versions, so breaking down the royalty base by operating system version did not matter.
`However, STS was only enabled starting with the Android 8 mobile operating system, so it is now
`critical to distinguish between products using pre-Android 8 operating systems (no longer
`
`2 For instance, Google might have more seriously relied on non-infringing alternatives Linkify and
`Smart Linkify (held not to infringe, D.I. 393) in the shorter period of alleged infringement.
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`

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`Case 1:13-cv-00919-JLH Document 519 Filed 05/01/23 Page 4 of 5 PageID #: 52425
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`The Honorable Jennifer L. Hall
`April 23, 2023, Page 3
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`allegedly infringing by any app) vs. post-Android 8 operating systems (allegedly infringing). Yet
`Mr. Weinstein has not attempted to do that; his new opinion is further unreliable for violating
`apportionment principles. See Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1309 (Fed. Cir.
`2018) (“[U]ltimate combination of royalty base and royalty rate must reflect the value attributable
`to the infringing features of the product, and no more.” (citation omitted)). The Court should
`preclude Arendi from presenting expert testimony on damages, whether through Mr. Weinstein or
`any witness. See ePlus, Inc. v. Lawson Software, Inc., 700 F.3d 509, 523 (Fed. Cir. 2012)
`(prejudice from changing damages on eve of trial “sufficient basis to preclude [patentee] from
`presenting any evidence of damages at trial”); MLC Intell. Prop., LLC v. Micron Tech., Inc., 10
`F.4th 1358, 1373 (Fed. Cir. 2021) (courts may properly preclude reliance on “computation or
`evidence” of damages beyond timely disclosures).
`III. The Court Should Also Bar Arendi from Benefiting from Its Behavior
`
`Precluding Weinstein’s testimony is necessary and appropriate because that testimony is
`no longer reliable. Additionally, a targeted sanction is necessary to prevent Arendi perversely from
`benefiting from that preclusion—which it will if it is permitted to suggest, or the jury believes, that
`it may award even more than Mr. Weinstein’s new
` number. Arendi’s disclosure came
`without warning on the eve of trial, was avoidable and thus suggests bad faith, and is extremely
`prejudicial, as it deprives Google of adequate notice and opportunity to develop critical issues for
`its defenses. In view of the extremely late disclosure, it is not possible to cure the prejudice, let
`alone do so without disrupting trial. Thus, the relevant considerations all favor sanctions, and the
`Court may also invoke its inherent powers. A reasonable and appropriate sanction here would be
`to ensure that Arendi may not benefit from its behavior and lack of a viable damages theory: Arendi
`should not be allowed to explicitly or implicitly (1) urge an award larger than
`; or (2) assert
`that Google’s damages expert used an incorrect hypothetical negotiation date, as that would
`penalize Google for a problem of Arendi’s creation and on which Arendi has the burden of proof.
`IV.
`
`The Court Should Grant Summary Judgment of No Willfulness
`
`To prevail on willfulness as a matter of law under Fed. R. Civ. P. 56(a), Google need only
`establish “absence of evidence to support [Arendi’s] case.” Celotex Corp. v. Catrett, 477 U.S. 317,
`325 (1986). Arendi’s new willfulness theory fails because it did not provide notice of alleged STS
`infringement until after the ’843 Patent expired—and thus Google could not subsequently have
`infringed, let alone with the requisite specific intent to infringe. See Ex. B (11/12/18 supplemental
`list of accused products adding Google Pixel mobile devices and Android software that use STS);
`D.I. 97 (Amended Complaint) ¶ 5 (accusing mobile products using STS). The initial infringement
`contentions identified “Google Drive, including Google Docs,” and “Gmail,” both in desktop
`browsers. See Ex. C (excerpted 12/6/13 Contentions). In contrast, STS is only used with the
`Android mobile operating system. Critically, with the removal of CD and QA, there now is not a
`single product accused of infringement from the time of the initial 2013 Complaint until late-2017
`(when STS was first released), such that a post-complaint willful infringement allegation makes
`no sense. Even assuming Google knew of the ’843 Patent when it released STS, that knowledge
`of the patent (and any infringement) is insufficient as a matter of law to establish “deliberate or
`intentional” infringement with STS. Bayer Healthcare LLC v. Baxalta Inc., 989 F.3d 964, 988
`(Fed. Cir. 2021).
`
`
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`

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`Case 1:13-cv-00919-JLH Document 519 Filed 05/01/23 Page 5 of 5 PageID #: 52426
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`The Honorable Jennifer L. Hall
`April 23, 2023, Page 4
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`Respectfully,
`
`/s/ David E. Moore
`
`David E. Moore
`
`DEM:nmt/10770470/12599.00040
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`Enclosures
`cc:
`Clerk of the Court (via hand delivery)
`Counsel of Record (via electronic mail)
`
`