Case 1:16-cv-00453-RGA Document 673 Filed 04/15/19 Page 1 of 18 PageID #: 51986
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`ACCELERATION BAY LLC,
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`Plaintiff,
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`v.
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`ACTIVISION BLIZZARD, INC.,
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`Defendant.
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`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`C.A. No. 16-453 (RGA)
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`REDACTED
`PUBLIC VERSION
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`DEFENDANT ACTIVISION BLIZZARD’S BRIEF IN OPPOSITION
`TO PLAINTIFF ACCELERATION BAY’S MOTION TO EXCLUDE OPINIONS OF
`CATHARINE M. LAWTON
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Stephen J. Kraftschik (#5623)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`skraftschik@mnat.com
`
`Attorneys for Defendants
`
`OF COUNSEL:
`B. Trent Webb
`Aaron E. Hankel
`Jordan T. Bergsten
`Maxwell C. McGraw
`SHOOK HARDY & BACON LLP
`2555 Grand Boulevard
`Kansas City, MO 64108
`(816) 474-6550
`
`Tanya Chaney
`SHOOK HARDY & BACON LLP
`600 Travis Street, Suite 3400
`Houston, TX 77002
`(713) 227-8008
`Original Filing Date: April 5, 2019
`Redacted Filing Date: April 15, 2019
`
`

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`Case 1:16-cv-00453-RGA Document 673 Filed 04/15/19 Page 2 of 18 PageID #: 51987
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`TABLE OF CONTENTS
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`INTRODUCTION .............................................................................................................. 1
`I.
`STATEMENT OF FACTS ................................................................................................. 2
`II.
`ARGUMENT ...................................................................................................................... 3
`III.
`Standards of Admissibility .................................................................................................. 3
`A.
`B. Ms. Lawton Makes an Assumptecyion of Fact and Does Not Offer Technical Opinions .. 3
`i. Ms. Lawton’s Commonsense Opinions and Assumptions Are Well-Supported ....... 4
`ii. Acceleration is Not Prejudiced by Ms. Lawton’s Opinions ...................................... 7
`iii. Acceleration Cannot Employ a “Head-in-the-Sand” Approach to Non-Infringing
`Alternatives ................................................................................................................ 8
`C. Ms. Lawton’s Criticisms of Mr. Parr’s Use of Dr. Valerdi’s Purported Cost Estimate
`Report Are Admissible Damages Opinions ........................................................................ 9
`i. Ms. Lawton Criticizes Mr. Parr’s Reliance on Dr. Valerdi, Not the Technical
`Reliability of Dr. Valerdi’s Source Code Inputs ...................................................... 10
`ii. Ms. Lawton is Qualified to Consult Studies on the Reliability of SEER-SEM to
`Assess Whether it Should be Used in a Damages Model ........................................ 12
`CONCLUSION ................................................................................................................. 13 
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`IV.
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`i
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`Case 1:16-cv-00453-RGA Document 673 Filed 04/15/19 Page 3 of 18 PageID #: 51988
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`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Cryovac Inc. v. Pechiney Plastic Packaging, Inc.,
`430 F. Supp. 2d 346 (D. Del. 2006) ...........................................................................................7
`
`Grain Processing Corp. v. Am. Maize-Prod. Co.,
`185 F.3d 1341 (Fed. Cir. 1999)..................................................................................................8
`
`Kannankeril v. Terminix Intern., Inc.,
`128 F.3d 802 (3d Cir. 1997).......................................................................................................3
`
`Micro Chem., Inc. v. Lextron, Inc.,
`317 F.3d 1387 (Fed. Cir. 2003)..................................................................................................4
`
`Presidio Components, Inc. v. Am. Tech. Ceramics Corp.,
`875 F.3d 1369 (Fed. Cir 2017)...................................................................................................8
`
`Stecyk v. Bell Helicopter Textron, Inc.,
`295 F.3d 408 (3d Cir. 2002).......................................................................................................4
`
`W.L. Gore & Assocs., Inc. v. C.R. Bard, Inc.,
`No. 11-515-LPS-CJB, 2015 WL 12806484 (D. Del. Sept. 25, 2015) .......................................5
`
`Rules and Statutes
`
`FED. R. EVID. 702 .........................................................................................................................3, 5
`
`ii
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`I.
`
`INTRODUCTION
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`Plaintiff Acceleration Bay does not challenge the economic credentials of Activision’s
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`damages expert, Ms. Cathy Lawton, but moves to strike two portions of Ms. Lawton’s rebuttal
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`report by incorrectly claiming they include technical analysis. D.I. 648. Because these opinions
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`need not, and do not, include any technical analysis from Ms. Lawton, this Court should deny
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`Acceleration’s motion.
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`First, Acceleration claims that Ms. Lawton provides a new technical analysis on non-
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`infringing alternatives to the accused videogames, when in reality she merely evaluates the value
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`to Activision of prior versions of the accused games. For this opinion she does not conduct any
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`technical analysis on whether those prior versions infringe. Rather, she relies on Acceleration’s
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`own litigation positions, as Acceleration recently abandoned its infringement claims against
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`these prior versions, and its new damages expert who now opines that these prior versions were
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`successful before Activision allegedly “began infringement.” Ms. Lawton’s analysis of the value
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`of these non-accused, successful, prior versions of the accused games—and the role they would
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`play at a hypothetical negotiation—is solidly within her economic expertise.
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`Second, Acceleration incorrectly claims that Ms. Lawton goes outside her expertise to
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`criticize the SEER-SEM cost estimation model used by Dr. Valerdi. But in truth, Ms. Lawton
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`merely questions Mr. Parr’s decision to use Dr. Valerdi’s calculations as a direct input in
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`determining damages without appropriate safeguards.1 For example, Ms. Lawton points out that
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`in an alleged attempt to measure the cost of developing a non-infringing alternative, Dr. Valerdi
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`input all
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` source code files for one accused game into his model, even though Dr.
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`Medvidovic’s infringement report only cited
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` distinct source code files in connection with his
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`1 Notably, Acceleration’s prior damages expert, Dr. Meyer, rejected using Dr. Valerdi’s
`estimates as inputs into a damages calculation.
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`1
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`infringement theories for that game. See Ex. A, 2019 Lawton Report at ¶ 229. Likewise, Ms.
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`Lawton points to articles questioning the reliability of the SEER-SEM model, compared to Dr.
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`Valerdi’s conclusory claim, without citation, that it is reliable. It is perfectly appropriate for Ms.
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`Lawton to opine that Mr. Parr should not have directly used Dr. Valerdi’s calculations without
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`any explanation of these and similar discrepancies.
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`Ms. Lawton’s responsive opinions are well within her economic expertise and
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`Acceleration’s motion should be denied.
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`II.
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`STATEMENT OF FACTS
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`After this Court struck Acceleration’s damages case for the third time prior to trial,
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`Acceleration was granted “a final opportunity to present [the Court] with an admissible damages
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`case.” D.I. 619 at 2. This Court continued trial indefinitely, allowed Acceleration to make a
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`“proffer of the case it intends to submit to the jury on damages,” and explained that “Plaintiff
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`may supplement its expert reports if it wishes to do so.” Id.
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`Acceleration then hired a brand new damages expert, Russell Parr, and served his
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`“supplemental” expert report on December 7, 2018. Ex. B, Parr Report. In his supplemental
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`report, Mr. Parr opines on seven separate royalties across three “Approaches” (“Cost-Savings,”
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`“Revenue-Based,” and “User-Based”). See Ex. B, Parr Report at ¶ 18.
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`In response, Activision utilized its original damages expert in this case, Ms. Lawton, and
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`served her supplemental rebuttal expert report on January 25, 2019. Ex. A, 2019 Lawton Report.
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`Acceleration does not challenge her credentials as an economics expert, as she has a Bachelor of
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`Science in Finance and Economics, id. at ¶ 16, with over 30 years of experience as a damages
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`expert in patent infringement disputes involving computer system and video game technology.
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`Ex. C, 2017 Lawton Report at ¶¶ 8, 13.
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`2
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`On March 15, 2019, Acceleration filed the present motion challenging Ms. Lawton’s
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`opinions on the value of pre-infringement versions of the accused games and on Mr. Parr’s ill-
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`advised reliance on Dr. Valerdi’s purported cost-savings estimate. D.I. 648 at 1. Activision
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`timely files this opposition, and respectfully asks the Court to deny Acceleration’s motion to
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`strike.
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`III.
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`ARGUMENT
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`A. Standards of Admissibility
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`Under Rule 702, a qualified expert may testify to assist the trier of fact if the testimony is
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`based on sufficient facts or data, the product of reliable principles and methods, and based on a
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`reliable application of the principles and methods to the facts of the case. FED. R. EVID. 702.
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`“Daubert does not set up a test of which opinion has the best foundation, but rather whether any
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`particular opinion is based on valid reasoning and reliable methodology.” Kannankeril v.
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`Terminix Intern., Inc., 128 F.3d 802, 806 (3d Cir. 1997).
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`B. Ms. Lawton Makes an Assumption of Fact and Does Not Offer Technical
`Opinions
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`Acceleration moves to strike an opinion that Ms. Lawton never advances. Acceleration
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`argues that Ms. Lawton is providing a technical opinion relating to non-accused prior versions of
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`the accused products. Not so. Rather, Ms. Lawton only makes an assumption of non-
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`infringement based on Acceleration’s recent abandonment of its infringement claims against
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`these versions, and on Mr. Parr’s recent opinion that “infringement began” in 2012. Ex. B, Parr
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`Report at ¶¶ 47–48. In contrast, Acceleration’s prior damages expert, Dr. Meyer, stated that
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`infringement began in 2004 with the first release of World of Warcraft. See Ex. D, Meyer
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`Report, Ex. 3 (Activision Release Dates of Accused Products). Ms. Lawton’s analysis of the
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`economic value of Activision’s non-accused game versions that enjoyed market success between
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`3
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`2004 and 2012 is based on a factual assumption stemming from Acceleration’s own assertions,
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`which falls solidly within her purview as an expert in intellectual property analysis. The Court
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`should thus reject Acceleration’s motion as its arguments related to Ms. Lawton’s assumptions
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`underpinning her opinions can be tested on cross-examination. See Micro Chem., Inc. v.
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`Lextron, Inc., 317 F.3d 1387, 1392–94 (Fed. Cir. 2003) (finding expert testimony admissible
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`where the “case [was] a classic example of competing experts” and noting that “when [] the
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`parties’ experts rely on conflicting sets of facts, it is not the role of the trial court to evaluate the
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`correctness of facts underlying one expert’s testimony”); see also Stecyk v. Bell Helicopter
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`Textron, Inc., 295 F.3d 408, 414 (3d Cir. 2002) (“A party confronted with an adverse expert
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`witness who has sufficient, though perhaps not overwhelming, facts and assumptions as the basis
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`for his opinion can highlight those weaknesses through effective cross-examination.”).
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`i. Ms. Lawton’s Commonsense Opinions and Assumptions Are Well-
`Supported
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`Ms. Lawton’s damages opinions and factual assumptions regarding the non-infringement
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`of prior versions of the Accused Products are in response to a recent change in a fundamental
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`aspect of Acceleration’s damages case—the date of first infringement. At the pre-trial
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`conference in October 2018, Acceleration’s counsel disclosed for the first time that infringement
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`allegedly began with the “[c]ross-realm zone technology that was added in a particular patch to
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`World of Warcraft.” Ex. E, 10-19-18 Pretrial Conf. at 45:10–16. Then, in his “supplemental”
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`report, Mr. Parr clarified that Activision’s alleged “infringement began for the accused games” in
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`September 2012 with the launch of the World of Warcraft: Mists of Pandaria expansion pack.
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`Ex. B, Parr Report at ¶¶ 47–48. Mr. Parr also highlighted that his reliance on Dr. Valerdi’s cost
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`estimate opinion was “conservative” because Mr. Parr assumed that any non-infringing
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`4
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`alternative Activision developed for World of Warcraft could be used for the other accused
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`games. Ex. B, Parr Report at ¶ 152.
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`Ms. Lawton addresses the value to Activision of these non-accused prior versions of the
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`accused games to rebut Mr. Parr’s “holdup” theory. See Ex. A, 2019 Lawton Report at ¶¶ 94–
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`100. Specifically, Ms. Lawton reasonably opined that the versions of the Accused Products
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`available before the date of first infringement now alleged by Acceleration “would limit
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`Boeing’s ability to use ‘holdup’ to attempt to extract a royalty from Activision in excess of the
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`economic value of the” Asserted Patents. See Ex. A, 2019 Lawton Report at ¶ 30. This is a
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`traditional economic analysis—not technical—upon which Ms. Lawton is qualified to opine. See
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`W.L. Gore & Assocs., Inc. v. C.R. Bard, Inc., No. 11-515-LPS-CJB, 2015 WL 12806484 at *6
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`(D. Del. Sept. 25, 2015) (citing Daubert and Third Circuit guidance and noting that, for
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`reliability, Rule 702 requires expert testimony to be supported by “good grounds, based on what
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`is known” and be based on “more than subjective belief or unsupported speculation”) (internal
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`citations omitted).
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`Ms. Lawton’s deposition testimony merely confirms that Ms. Lawton recognizes she is
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`not a technical expert and does not, as Acceleration contends, show that she is offering technical
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`opinions. In her most recent deposition, Ms. Lawton made it clear she was not equipped to
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`answer questions regarding the granular technical operations of the Accused Products. See e.g.,
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`Ex. F, 2019 Lawton Dep. Tr. at 62:5-11. This is consistent with the deposition testimony from
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`Ms. Lawton’s 2018 deposition where she testified that “[w]ith respect to technical matters, [she
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`was] relying on the technical experts.” Ex. G, 2018 Lawton Dep. Tr. at 23:24-25:11. This
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`testimony only shows that Ms. Lawton agrees that she is not a technical expert and that she
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`recognizes that the scope of her damages opinions is limited to her specific area of expertise.
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`5
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`Acceleration also cites Ms. Lawton’s 2019 deposition to argue that she is not relying on
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`any of Activision’s technical experts to find that these products are suitable non-infringing
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`alternatives. D.I. 648 at 5. First, doing so would be unnecessary and not allowed, as
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`Acceleration changed the dates of its infringement allegations with Mr. Parr’s 2019 report, and
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`this Court did not invite a new round of expert discovery on technical issues.2 Second,
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`Acceleration misstates Ms. Lawton’s testimony. In these cited portions, Ms. Lawton simply
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`discloses that she: (1) did not rely upon further conversations with Activision’s technical experts
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`for her rebuttal to Mr. Parr’s “supplemental” report; and (2) declines to opine on whether World
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`of Warcraft could technically operate without its server network. Ex. F, 2019 Lawton Dep. at
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`30:17-31:2, 62:5-11. Neither of these is necessary to explain that the un-accused prior versions
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`of the accused games were commercially successful, and that their un-accused technology would
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`have provided Activision with leverage at a hypothetical negotiation. Because Ms. Lawton only
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`opines on these damages issues, Acceleration’s criticisms fail.
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`2 Prior to the service of Mr. Parr’s report, Acceleration’s case included a claim of first
`infringement in 2004 with the first release of World of Warcraft. Ex. D, Meyer Report, Ex. 3
`(Activision Release Dates of Accused Products). Accordingly, Activision’s technical experts
`opined as to the availability of multiple non-infringing alternatives according to that March 2004
`date. See Ex. H, 2017 Macedonia Report at ¶¶ 611–655; Ex. I, 2017 Kelly Report at ¶¶ 1291–
`1339. Dr. Macedonia opined that in addition to the non-infringing alternatives, Activision could
`“simply mak[e] some minor modifications to the existing network topology and functionalities of
`the accused products” in 2004 to be non-infringing. Ex. H, 2017 Macedonia report at ¶ 615.
`Also, Dr. Kelly identified ActiveNet as a non-infringing alternative, as it was created at
`Activision and used by Activision game developers to provide multiplayer games prior to 2004.
`Ex. I, 2017 Kelly Report at ¶¶ 1312–1316. Now, Acceleration has shifted its date of first
`infringement to September 2012 with the release of World of Warcraft: Mists of Pandaria
`expansion in 2012. Ex. B, Parr Report at ¶¶ 47–48. While it is not necessary, and was not
`contemplated by this Court’s order, to provide additional technical testimony related to non-
`infringing alternatives prior to 2012, Dr. Kelly and Dr. Macedonia’s analysis can be reasonably
`applied to pre-2012 versions of the Accused Products. If deemed necessary, Activision’s
`technical experts can testify to these opinions at trial.
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`6
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`ii.
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`Acceleration is Not Prejudiced by Ms. Lawton’s Opinions
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`Acceleration’s claims of prejudice, and that Ms. Lawton “manufactur[ed] a non-
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`infringing alternative out of thin air,” are belied by the discovery record. D.I. 648 at 3.
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`Acceleration’s second
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`interrogatory sought Activision’s description of non-infringing
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`alternatives. Ex. J, 7-7-17 Activision’s Resp. to Acceleration’s First Set of Party-Specific
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`Interrog. at 9. In July 2017, Activision timely responded and disclosed “Activision games
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`available before the date on which Plaintiff contends infringement began” as a logical non-
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`infringing alternative. Id. at 10. Accordingly, Acceleration was on notice, 18 months prior to
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`the service of Ms. Lawton’s rebuttal report, of Activision’s contention that pre-infringement
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`versions of the Accused Products are non-infringing alternatives. Despite this notice, neither Mr.
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`Parr’s report nor Acceleration’s proffer argue that the pre-2012 versions of World of Warcraft or
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`the pre-2014 versions of Call of Duty would be (1) infringing; (2) unavailable; (3) unacceptable;
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`or (4) cost Activision any money at all. The absence of this discussion in the context of the
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`Boeing-Activision hypothetical negotiation is one of many fundamental flaws in Mr. Parr’s
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`damages analysis, which is also discussed in Ms. Lawton’s rebuttal report. See e.g., Ex. A, 2019
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`Lawton Report at ¶ 332.
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`With voluminous support in the record, Ms. Lawton made the factual assumption that
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`pre-infringement versions of the accused products would inform the hypothetical negotiation
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`between Boeing and Activision. Any criticisms by Acceleration regarding Ms. Lawton’s
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`qualifications to offer her opinions are misplaced and can be asserted by Acceleration on cross-
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`examination. See Cryovac Inc. v. Pechiney Plastic Packaging, Inc., 430 F. Supp. 2d 346, 363–
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`64 (D. Del. 2006) (allowing defendant’s damages expert to testify regarding non-infringing
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`alternatives where they helped inform the expert’s opinions on lost profits damages).
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`7
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`iii.
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`Acceleration Cannot Employ a “Head-in-the-Sand” Approach to Non-
`Infringing Alternatives
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`Acceleration seeks to avoid the inevitable result of advancing an alleged date of first
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`infringement that is eight years after the first release of World of Warcraft by contending that
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`Acceleration simply “has not taken a position one way or the other on the infringement of these
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`earlier games.” D.I. 648 at 6. At the same time, however, Acceleration is arguing that the
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`asserted patents have no non-infringing alternatives. Ex. B, Parr Report at ¶ 56. Acceleration
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`cannot have it both ways.
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`For instance, the source code for World of Warcraft produced in this case includes
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`features that pre-date the “cross realm zone” functionality, such as “JAMS” functionality. The
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`record is clear that JAMS existed in World of Warcraft since its initial release in 2004.
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`Throughout discovery, Acceleration’s
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`infringement contentions focused on
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`the JAMS
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`functionality as part of the alleged infringement. Acceleration never limited its infringement
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`theories to “cross-realm zones.” But now Acceleration advances a 2012 date of first
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`infringement, while simultaneously ignoring the versions of World of Warcraft that were
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`successful between 2004 and 2012 as non-infringing alternatives.
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`Acceleration carries the burden of proving the absence of non-infringing alternatives after
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`it was put on notice during discovery that Activision would argue that earlier versions of its
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`accused games were non-infringing alternatives. See Presidio Components, Inc. v. Am. Tech.
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`Ceramics Corp., 875 F.3d 1369, 1380–81 (Fed. Cir 2017); see also Grain Processing Corp. v.
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`Am. Maize-Prod. Co., 185 F.3d 1341, 1353–55 (Fed. Cir. 1999). Rather than conduct discovery
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`as to those earlier versions, however, Acceleration chose not to take a “position one way or the
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`other.”
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`8
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`C. Ms. Lawton’s Criticisms of Mr. Parr’s Use of Dr. Valerdi’s Purported Cost
`Estimate Report Are Admissible Damages Opinions
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`Acceleration incorrectly argues that Ms. Lawton goes beyond her expertise to criticize
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`Dr. Valerdi’s method for trying to calculate cost-savings. In reality, Ms. Lawton merely
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`criticizes Mr. Parr’s decision to break with Acceleration’s earlier damages expert, Dr. Meyer,
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`and use Dr. Valerdi’s calculations without any economic evaluation as an input for determining a
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`reasonable royalty in this case. Because Ms. Lawton’s criticism of Mr. Parr’s failure to evaluate
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`the inputs to his model falls well within her expertise, Acceleration’s argument fails.
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`Acceleration’s new damages expert, Mr. Parr, now uses Dr. Valerdi’s purported cost
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`savings calculations as a direct input to calculate damages, even as Acceleration’s previous
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`damages expert concluded that “it [was] necessary to rely on other indicators of value.” Ex. K,
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`Meyer Report at ¶ 57. Ms. Lawton criticizes this new, direct reliance that contradicts
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`Acceleration’s prior positions.
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`Acceleration served Dr. Valerdi’s purported cost-savings report on September 23, 2017.
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`Ex. L, Valerdi Report. In his report, Dr. Valerdi calculated what it would cost to re-architect
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`each of the Accused Products from scratch. Ex. L, Valerdi Report at ¶ 1. Dr. Valerdi disclosed
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`that he used a general “knowledge base” and input every single line of produced code into his
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`SEER-SEM model to opine that it would cost Activision a staggering
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`
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` to re-architect the accused games. Ex. L, Valerdi Report at 3–13; see also Ex. M, 2017
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`Valerdi Dep. at 113:1–8, 115:18–23. Dr. Meyer, Acceleration’s original damages expert, did not
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`use these dollar amounts in her calculations or even mention them in the body of her September
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`25, 2017 report. Instead, she merely pointed out that Dr. Valerdi’s calculations suggested that “a
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`NIA . . . would have been unlikely to be economically viable” such that “it [was] necessary to
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`rely on other indicators of value.” Ex. K, Meyer Report at ¶ 57. But Acceleration’s newly hired
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`9
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`expert, Mr. Parr completely reversed course and plugged Dr. Valerdi’s results directly into his
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`damages calculations. Ex. B, Parr Report at ¶¶ 149–155.
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`Mr. Parr concludes that Dr. Valerdi’s cost-savings calculations are conservative,
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`reasonable, and reliable based on the word of Dr. Valerdi, but did not conduct any independent
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`analysis to confirm that the numbers are an appropriate input into a reasonable royalty
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`calculation. Ex. B, Parr Report at ¶ 102. Faced with Mr. Parr’s sudden adoption of Dr. Valerdi’s
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`calculations, and Mr. Parr’s lack of analysis regarding the appropriateness of using the
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`calculation as an input, Ms. Lawton relied on her qualifications and experience to offer fair and
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`reasonable rebuttal opinions that centered on that lack of analysis in Acceleration’s damages
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`case.
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`i. Ms. Lawton Criticizes Mr. Parr’s Reliance on Dr. Valerdi, Not the
`Technical Reliability of Dr. Valerdi’s Source Code Inputs
`
`Acceleration repeats the same mischaracterization of Ms. Lawton’s opinions to argue that
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`she offers speculative technical opinions regarding Dr. Valerdi’s source code inputs. But Ms.
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`Lawton does not offer technical conclusions regarding any of the source code files—she
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`identifies inconsistencies and omissions in Dr. Valerdi’s analysis that Mr. Parr should have
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`resolved or explained before relying on that analysis. As an experienced damages expert, Ms.
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`Lawton is qualified to opine on Mr. Parr’s failure to establish the appropriate prerequisites for
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`including Dr. Valerdi’s calculations as an input for determining a reasonable royalty in this case.
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`Acceleration argues that Ms. Lawton concludes certain source code files are not related to
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`accused network functionalities. But a plain reading of Ms. Lawton’s report shows that she is
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`simply identifying inconsistencies and omitted discussions in Dr. Valerdi’s economic analysis as
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`applied by Mr. Parr. As explained by Ms. Lawton, these considerations are important because
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`Dr. Valerdi did not confirm or explain why his assumptions relating to the code inputs were
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`reliable to inform the costs of a hypothetical but un-identified non-infringing alternative. Ex. A,
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`2019 Lawton Report at ¶ 224. For the source code inputs into his model, Dr. Valerdi’s only
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`analysis was a discussion with Acceleration’s technical experts where he was told that 100% of
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`the produced source code files were relevant to this case. Ex. M, 2017 Valerdi Dep. at 113:1–8,
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`115:18-23. However, Acceleration’s technical expert reports do not include any support for this
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`conclusion upon which Dr. Valerdi relied. Ex. A, 2019 Lawton Report at ¶ 228. Further, for
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`each accused game, Ms. Lawton identifies important information in the record that contradicts
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`Dr. Valerdi’s inputs but were not explained by Dr. Valerdi or Mr. Parr in their reports. See e.g.,
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`Ex. A, 2019 Lawton Report at ¶ 229. For example, Ms. Lawton points out that Dr. Valerdi
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`inputted
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` source code files for Call of Duty: Advanced Warfare into his model, but Dr.
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`Medvidovic’s infringement report only cited
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` distinct source code files in connection with his
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`infringement theories, and Activision’s interrogatory response only identified six source code
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`directories and modules that related to multiplayer functionality. Id. Ms. Lawton merely
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`questions Mr. Parr’s decision to rely on Dr. Valerdi’s calculations without these explanations
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`that might tie those calculations to the facts of this case.
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`Ms. Lawton is also qualified to critique Mr. Parr’s reliance on Dr. Valerdi’s report
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`despite a lack of analysis of the code files used in Dr. Valerdi’s model. For instance, in the Call
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`of Duty: Advanced Warfare source code produced in this case, two of the folders were named
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`“PS3” and “PS4.” Ex. A, 2019 Lawton Report at ¶ 230. Ms. Lawton notes that “PS3” and
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`“PS4” could represent code files that relate to Sony platforms that are not included in the
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`infringement case. Id. Acceleration contends that Ms. Lawton is conducting technical analysis.
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`Not so. Ms. Lawton is simply questioning why “Dr. Valerdi does not explain why his model
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`includes the files in the folders” when there was support in the factual record to question their
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`Case 1:16-cv-00453-RGA Document 673 Filed 04/15/19 Page 15 of 18 PageID #: 52000
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`applicability. Id. For each of the Accused Products, Ms. Lawton’s report clearly establishes
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`that she is criticizing Dr. Valerdi’s lack of explanation and analysis surrounding his selection of
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`code files—not analyzing the technical operation or contents of the files themselves. See e.g., Id.
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`at ¶ 230, 234, 238, 245. Mr. Parr’s lack of analysis or explanation for his use of Dr. Valerdi’s
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`analysis is precisely the type of opinion Ms. Lawton is qualified to offer.
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`Acceleration’s argument primarily is based on certain portions of Ms. Lawton’s
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`deposition that supposedly demonstrate her alleged technical opinions. It is true that Ms. Lawton
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`did not review the source code, and did not have the technical expertise to opine on the code’s
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`functionality. But this testimony only demonstrates that Ms. Lawton understands the proper
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`bounds of her expert opinions. Ms. Lawton did not examine the source code or interview
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`technical experts because her opinions were confined to critiques of Mr. Parr and his
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`inconsistencies with the factual record. For example, Ms. Lawton noted in her deposition that
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`Dr. Valerdi’s report is inconsistent with Acceleration’s expert technical reports. See e.g., Ex. F,
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`2019 Lawton Dep. at 46:6-17 (“. . . Dr. Valerdi doesn’t state why his cost estimating wasn’t
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`tracking to the specific files that Doctor Mitzenmacher and Doctor Medvidovic were focusing on
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`for their . . . infringement work.”). Calling out this type of omission does not require technical
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`expertise, but rather the analysis of an expert in the methodology appropriate to provide a
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`damages opinion in a patent infringement case, the precise expertise that Ms. Lawton possesses.
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`ii. Ms. Lawton is Qualified to Consult Studies on the Reliability of SEER-
`SEM to Assess Whether it Should be Used in a Damages Model
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`Acceleration next argues that, even though she is a qualified patent damages expert with
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`30 years of experience, Ms. Lawton is somehow unqualified to opine on the reliability of SEER-
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`SEM as a tool used in a damages analysis. D.I. 648 at 13–14. Here, Acceleration attempts to
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`draw a false distinction within the world of patent damages to define “software cost estimation”
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`Case 1:16-cv-00453-RGA Document 673 Filed 04/15/19 Page 16 of 18 PageID #: 52001
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`as a subspecialty that Ms. Lawton is unqualified to critique. Even if that were true, Ms. Lawton
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`does not directly test the SEER-SEM model, but merely points to articles questioning the error
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`rate of the SEER-SEM model as an additional reason for why Mr. Parr should not have included
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`Dr. Valerdi’s calculations as an input to his damages model. See Ex. A, 2019 Lawton Report at
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`¶¶ 206–11, nn. 498–510 (discussing scientific and industry scholarship regarding error rates in
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`cost estimates). This is a fair rebuttal to Mr. Parr’s use of Dr. Valerdi’s calculations without
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`independently examining Dr. Valerdi’s claims that SEER-SEM has an “excellent reputation in
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`the industry to provide high quality cost models” and is the “the most systematic and reliable
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`way to arrive at a cost estimate was to use a commercially available cost model.” Ex. L, Valerdi
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`Report at 3–4. Because Ms. Lawton is qualified to assess what information can appropriately be
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`included in a damages model, and what independent verification of reliability is necessary to do
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`so, the Court should reject Acceleration’s argument.
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`IV. CONCLUSION
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`For
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`the reasons stated above, Activision respectfully request
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`the Court deny
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`Acceleration’s motion to strike Ms. Lawton’s rebuttal report.
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`OF COUNSEL:
`B. Trent Webb
`Aaron E. Hankel
`Jordan T. Bergsten
`Maxwell C. McGraw
`SHOOK HARDY & BACON LLP
`2555 Grand Boulevard
`Kansas City, MO 64108
`(816) 474-6550
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`
`/s/ Stephen J. Kraftschik
`__________________________________
`Jack B. Blumenfeld (#1014)
`Stephen J. Kraftschik (#5623)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mn