throbber
Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 1 of 14 PageID #: 38600
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`C.A. No. 17-770-JDW
`
`JURY TRIAL DEMANDED
`
`)))))))))
`
`WIRTGEN AMERICA, INC.,
`
`Plaintiff,
`
`v.
`
`CATERPILLAR INC.,
`
`Defendant.
`DECLARATION OF BRETT REED IN OPPOSITION TO WIRTGEN
`AMERICA, INC.’S MOTION FOR ENHANCED DAMAGES, ATTORNEYS’ FEES,
`INJUNCTION OR ONGOING ROYALTIES, AND OTHER RELIEF
`Bindu A. Palapura (#5370)
`Andrew L. Brown (#6766)
`POTTER ANDERSON & CORROON LLP
`Hercules Plaza, 6th Floor
`1313 N. Market Street
`Wilmington, DE 19801
`Tel: (302) 984-6000
`bpalapura@potteranderson.com
`abrown@potteranderson.com
`
`Attorneys for Defendant Caterpillar Inc.
`
`OF COUNSEL:
`
`James C. Yoon
`Ryan R. Smith
`Christopher D. Mays
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`650 Page Mill Road
`Palo Alto, CA 94304
`Tel: (650) 493-9300
`
`Lucy Yen
`Cassie Leigh Black
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`1301 Avenue of the Americas, 40th Floor
`New York, NY 10019
`Tel: (212) 999-5800
`
`Matthew A. Macdonald
`Neil N. Desai
`Naoya Son
`Alex J. Turner
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`953 E. 3rd St., #100
`Los Angeles, California 90013
`Tel: (323) 210-2900
`
`Dated: May 24, 2024
`11524918/11898.00005
`
`

`

`v.
`
`
`CATERPILLAR INC.,
`
`
`Defendant
`
`
`
`
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`C.A. No. 17-770-JDW
`
`
`
`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 2 of 14 PageID #: 38601
`
`THE UNITED STATES DISTRICT COURT
`FOR DISTRICT OF DELAWARE
`
`
`
`
`WIRTGEN AMERICA, INC.,
`
`
`Plaintiff
`
`DECLARATION OF BRETT REED IN OPPOSITION TO WIRTGEN AMERICA,
`INC.’S MOTION FOR ENHANCED DAMAGES, ATTORNEYS’ FEES,
`INJUNCTION OR ONGOING ROYALTIES, AND OTHER RELIEF
`
`
`I, Brett Reed, declare as follows:
`
`1.
`
`I submit this declaration in support of defendant Caterpillar Inc.’s (“Caterpillar”)
`
`opposition to plaintiff Wirtgen America, Inc.’s (“Wirtgen”) Motion for Enhanced Damages,
`
`Attorneys’ Fees, Injunction or Ongoing Royalty, and Other Relief (D.I. 371, “Motion”).
`
`2.
`
`I previously submitted expert reports on Caterpillar’s behalf in the above action
`
`relating to damages issues.1 I testified in a deposition in this case on August 11, 2023. I also
`
`testified at the February 2024 trial on damages issues.
`
`3.
`
`4.
`
`In my prior expert reports, I set forth my background, qualifications, and opinions.
`
`At trial, I presented a demonstrative, DDX12, which helped summarize my
`
`opinions. DDX12 is attached hereto as Ex. R1.
`
`5.
`
`I incorporate my reports, deposition testimony, and trial testimony (including my
`
`demonstratives) into this declaration.
`
`
`1 5/19/23 Expert Report of Brett L. Reed (“Op. Rept.); 6/16/23 Expert Rebuttal Report of Brett L.
`Reed (“Reb. Rept.”); 7/7/23 Reply Expert Report of Brett L. Reed (“Reply Rept.”).
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 3 of 14 PageID #: 38602
`
`A. Market Share
`
`6.
`
`As I explained at trial and in my expert reports, the record does not support that
`
`Wirtgen lost market share after 2017 for milling machines to Caterpillar’s accused PM300/600/800
`
`or RM 600/800 machines.
`
`7.
`
`During trial, Wirtgen’s Vice President of Product Support, Jans Schmidt, testified
`
`that Wirtgen’s share of the milling machine market is close to the highest it has ever been. Trial
`
`Tr. at 339:25-340:2 (Schmidt); Mays Decl. ¶¶ 47-56.
`
`8.
`
`Also at trial, I was asked whether Wirtgen could have grown its market share even
`
`more if Caterpillar was not in the market. In response, I testified that Wirtgen’s CEO, Jim
`
`McEvoy, testified at his deposition that Wirtgen was near the absolute peak market share. Trial
`
`Tr. at 1812:15-22; see also 1815:16-1816:17; Ex. 232 (3/31/23 McEvoy Dep. Tr. at 165:5-9).
`
`Wirtgen’s market share in recent years has been at least 74-75% (and higher—80%—in the large
`
`milling machine category). Ex. R2 (Op. Rept.) at 54-55, 60.
`
`9.
`
`Additionally, Wirtgen has consistently increased its prices every year since at least
`
`2014. Trial Tr. at 1815:22-1816:17. Wirtgen’s CEO, Mr. McEvoy, testified during deposition
`
`that he was never concerned about the price from Wirtgen GmbH being too low. Ex. R2 (Op.
`
`Rept.) at 44 (citing Ex. 23 (3/31/23 McEvoy Dep. Tr.) at 235). These price increases applied to
`
`machines that compete with Caterpillar. Id.
`
`10.
`
`I have reviewed Wirtgen’s evidence about market share, including documents and
`
`testimony before and during trial, and I conclude that Wirtgen has not presented any evidence that
`
`it lost market share to Caterpillar after 2017, and certainly not because of any of the patented
`
`
`2 Unless otherwise indicated, all cites to “Ex.” refer to exhibits to the Declaration of Christopher
`D. Mays in Support of Caterpillar’s Opposition to Wirtgen America’s Motion for Enhanced
`Damages, Attorneys’ Fees, Injunction or Ongoing Royalties, and Other Relief, filed concurrently
`herewith.
`
`
`
`-2-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 4 of 14 PageID #: 38603
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`features. As I addressed at trial, there were transitional periods that had some impact on market
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`share (certain Wirtgen dealers were terminated after the John Deere acquisition, impacting dealer
`
`purchase patterns, and new product introductions also impacted sales patterns) (Trial Tr. 1814:20-
`
`1815:17, 1859:3-1861:2; Ex. R2 (Op. Rept.) at 11, 13, 115), but the best evidence of Wirtgen’s
`
`market share before and after Caterpillar’s new product introductions was seen at Ex. R1 (DDX12-
`
`11). Overall, Wirtgen gained share and Roadtec and BOMAG lost shares.
`
`11.
`
`In my experience, to prove that a company lost market share to another company’s
`
`products because of specific features, a detailed market analysis is required. Wirtgen did not and
`
`has not conducted this type of market analysis,3 and this corresponds with the fact that Wirtgen
`
`never attempted to prove lost profits, but rather relied on Dr. Seth building-in lost profits
`
`assumptions to her royalty formula models. Any assertion that Wirtgen lost market share or that
`
`it could have gained market share but for Caterpillar’s alleged infringement is unsupported and
`
`speculative at best.
`
`12.
`
`At trial, I presented evidence of numerous Caterpillar customers who purchased
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`additional Caterpillar machines after Caterpillar removed accused features, with no evidence of
`
`customer complaints (Trial Tr. 1824:17-1826:2; Ex. R1 (DDX12-23)). When customers accepted
`
`the machines with alternative features, it does not support that customers would not have purchased
`
`from Caterpillar absent the accused features.
`
`
`3 Dr. Seth attempted to point to Caterpillar “voice of the customer” statements to suggest the
`accused features were critical to some customers, but I addressed the errors of this analysis (Trial
`Tr. at 1829:25-1831:25; Ex. R1 (DDX12-26-27); Ex. R2 (Op. Rept.) at 9-13, 24-32), including the
`fact that the interview statements she relied on could not even be associated with actual Caterpillar
`milling machine customers, but rather general customers in the industry (including Wirtgen
`customers). In any event, her use of these materials does not support that Caterpillar customers
`would have bought from Wirtgen if the accused features were not available from Caterpillar.
`
`
`
`-3-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 5 of 14 PageID #: 38604
`
`13.
`
`In addition, there is plentiful evidence that even Wirtgen’s employees believed
`
`numerous reasons other than the patented features impact Wirtgen’s market share. This is reflected
`
`in a Wirtgen slide “Why are we losing against CAT PM622”, which was presented at trial (Ex. R1
`
`(DDX12-30).
`
`14. Wirtgen’s price increases were one major reason. For example, Wirtgen GmbH
`
`employees wrote communications that customers and dealers were “tired of our annual price
`
`increases.” Ex. R2 (Op. Rept.) at 45. Those price increases were putting pressure on Wirtgen’s
`
`market share. Id. at 46; Ex. 8 (noting a 2.2% price increase in 2019); Ex. 9 at WA-1135576 (email
`
`to Wirtgen GmbH stating “[i]f we stay with the price increases you sent on the above units we will
`
`lose share in 2018”); Ex. 10 (Draper Dep. Tr.) at 113:8-114:13, 117:10-118:10 (noting an average
`
`annual price increase of 3-5%); Ex. 11 (noting a 6% price increase from 2014 to 2016 before
`
`launch of Caterpillar’s PM600 and PM800 machines).
`
`15. Wirtgen’s other competitors were another reason. The milling machine market is
`
`not a two-player market, which makes it difficult to determine the impacts of any one company’s
`
`activities on another’s market share (and provides another reason why a detailed analysis, which
`
`Wirtgen did not do, is required). The milling machine market includes Wirtgen (including Wirtgen
`
`GmbH), Caterpillar, BOMAG, and Roadtec. Ex. R2 (Op. Rept.) at 46, 52; Trial Tr. at 1814:21-
`
`1815:18. A Wirtgen GmbH employee stated that Wirtgen was getting pressure not just from
`
`Caterpillar, but also from BOMAG, and Roadtec. Ex. R2 (Op. Rept.) at 46, 52. In other words,
`
`Wirtgen GmbH itself acknowledged that BOMAG and Roadtec were impacting its business. In
`
`fact, in a June 2018 email about market share in Florida, Wirtgen noted that Linder FL had lost
`
`sales at 7 customers, or which 4 purchased Roadtec machines and one bought a BOMAG machine.
`
`Id. at 56. Moreover, Wirtgen has not alleged that BOMAG and Roadtec infringe the asserted
`
`
`
`-4-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 6 of 14 PageID #: 38605
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`patents, which shows that there are other factors from those competitors that put pressure on
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`Wirtgen’s market share besides the features claimed to be associated with the asserted patents.
`
`16.
`
`As I have explained in my expert reports and above, Wirtgen’s market share
`
`dropped in 2017 due to Caterpillar and competitors introducing new machines. Additionally,
`
`following John Deere’s purchase of Wirtgen, some ex-Wirtgen dealers switched to BOMAG
`
`machines, and other dealers began shifting purchase patterns, consistent with the desire to
`
`demonstrate stronger performance when it was known that John Deere was transitioning certain
`
`dealership territories to John Deere dealers. Trial Tr. at 1859:4-17; Ex. R2 (Op. Rept.) at 11, 65-
`
`66, 84-85, 115). Wirtgen’s market share from 2020 and 2021 is actually larger compared to its
`
`prior market share in 2014-2016 (addressed above, and with DDX12-11). Furthermore, Wirtgen’s
`
`market share kept increasing in 2022 to the present. Ex. R2 (Op. Rept.) at 52-61. Caterpillar’s
`
`increased market share has thus come at the expense of those of BOMAG and Roadtec, and not
`
`Wirtgen. Id.; Trial Tr. at 1814:21-1815:18. I see no evidence that in today’s market Caterpillar is
`
`taking sales that would otherwise go to Wirtgen, and indeed the evidence is to the contrary. And
`
`once again, none of this market share activity ties to any particular accused features.
`
`17. With respect to Caterpillar, there are other factors that put pressure on Wirtgen. For
`
`example, at trial, Caterpillar presented evidence that it incorporates at least 75 of its own patents
`
`in its milling machines. Trial Tr. at 550:7-551:21 (Engelmann). It also presented evidence that its
`
`machines have valuable features that are unique to its machines, including 18 “Superior” features.
`
`Trial Ex. 611.0039. I also addressed the significance of many new features in the new Caterpillar
`
`machines, and the C18 engine, all unrelated to the asserted patents. Trial Tr. at 1832:20-1833:6.
`
`Wirtgen does not show that Caterpillar’s own patented and non-patented features were not the
`
`demand drivers for Caterpillar machines.
`
`
`
`-5-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 7 of 14 PageID #: 38606
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`18. Wirtgen itself prepared summaries indicating that any sales lost to Caterpillar had
`
`to do with reasons other than the allegedly Wirtgen-patented features. For example, Wirtgen’s
`
`related entities stated that the competitive pressure associated with Caterpillar’s accused PM622
`
`machine came from “Machine price levels,” “Cummins [engine] problems,” “machine
`
`availability,” and that “Customers are more than open for Competition.” Trial Tr. 1833:24-
`
`1834:18, 1861:14-24; Ex. R2 (Op. Rept.) at 47, 57; Ex. R1 (DDX12-30). Wirtgen’s employees
`
`also felt that competing with Caterpillar required features that had nothing to do with the asserted
`
`patents, such as “bigger tracks” and “more horsepower.” Ex. R2 (Op. Rept.) at 49. Wirtgen
`
`executives stated that any lost sales were due to issues completely unrelated to the patented
`
`technology such as the “extended warranty,” “machine delivery availability,” Caterpillar’s “more
`
`professional dealers,” “finance + leasing programs,” “machine price,” cameras, and other unrelated
`
`features. Id. at 47, 49, 65, 91; Ex. 28 (Trial Ex. 4068) at WA-0169567; Ex. 12 (noting additional
`
`unpatented features missing from Wirtgen’s machines that cost sales); Ex. 31 (Trial Ex. 4099)
`
`(noting that Wirtgen’s supply issues were costing market share); Ex. 32 (Trial Ex. 4100) (“Wirtgen
`
`America has a lot bigger delivery problem than you have.”); Trial Tr. at 343:11-344:10 (Schmidt).
`
`19.
`
`As Wirtgen’s executives have acknowledged, Caterpillar’s dealers have been the
`
`industry standard in financial wherewithal and end customer support. Trial Tr. at 1833:7-21;
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`Ex. R2 (Op. Rept.) at 65. Dealer relationships can make a difference in selling product, and
`
`Wirtgen had issues with numerous dealers since 2016. Ex. R2 (Op. Rept.) at 65.
`
`20.
`
`Even after Caterpillar redesigned its products relating to three of the five relevant
`
`patents on large machines and one of the two regarding compact machines, its market position did
`
`not change. In other words, the presence of accused features had no impact on Caterpillar’s sales
`
`success and pricing in the market. Trial Tr. at 1825:4-1826:3.
`
`
`
`-6-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 8 of 14 PageID #: 38607
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`B.
`
`21.
`
`Effects on Customers of an Injunction Against Caterpillar
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`Customers would be negatively impacted if Caterpillar could not sell its milling
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`machines. As explained above, Wirtgen stated that “Customers are more than open for
`
`Competition” and “Machine price levels” was one reason it was losing sales. Customers were
`
`concerned about the stranglehold of Wirtgen in the market. Trial Tr. at 1833:7-1834:17; Ex. R2
`
`(Op. Rept.) at 47, 57. Milling machine customers value competition, which helps improve product
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`quality and brings down prices of offerings from all competitors. Caterpillar is currently the
`
`second largest market player after Wirtgen.
`
`22.
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`Removing Caterpillar’s products from the market would also be problematic
`
`because BOMAG’s and Roadtec’s market shares have tumbled in recent years. Customers would
`
`have limited competitive alternatives to Wirtgen given Wirtgen’s market dominance. Ex. R2 (Op.
`
`Rept.) at 59-60.
`
`C.
`
`23.
`
`Damages Awarded at Trial
`
`At trial, Wirtgen’s expert, Dr. Seth, presented a reasonable royalty damages theory,
`
`not a lost profits theory. Additionally, the jury awarded reasonable royalty damages, associated
`
`with a damages amount adequate to compensate Wirtgen for Caterpillar’s alleged infringement
`
`(this “adequate” construct was addressed at trial). Trial Tr. at 1808:15-1809:4 (Reed).
`
`D.
`
`24.
`
`Enhanced Royalties
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`I understand that Wirtgen is seeking an increased royalty rate for application to
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`ongoing royalties. I disagree with Wirtgen that a royalty rate that exceeds the effective rate of the
`
`jury determination is appropriate because of an asserted change in “bargaining” position.
`
`25.
`
`At trial, Wirtgen’s damages theory was based on Dr. Seth’s assertions that
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`Caterpillar subjectively believed that in 2016, the alleged patented features were critical and that
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`Caterpillar had no alternative to the accused features. See Trial Tr. at 1024:20-1025:1 (Seth),
`
`
`
`-7-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 9 of 14 PageID #: 38608
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`1821:15-1821:22; Ex. R1 (DDX12-15). Dr. Seth’s royalty bargaining model and reasonable
`
`royalty results presented to the jury reflected an assumption that Wirtgen would lose profits if it
`
`granted the hypothetical license, and Caterpillar would gain profits, and her results were ultimately
`
`apportioned because of the Court’s Order. Trial Tr. at 1840:11-1840:24, 1841:11-1841:19, Ex. R1
`
`(DDX12-15).
`
`26.
`
`Given that position presented to the jury, and the amount of the jury award, there is
`
`no reasonable basis to suggest that Wirtgen’s bargaining position today would be greater. The
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`Wirtgen model was based on substantial lost profits assumptions, with apportionment essentially
`
`as directed by the Court. At best, these points would continue to apply with no reasonable upward
`
`adjustment. More realistically, were the parties to have a hypothetical negotiation now, Caterpillar
`
`would be in a better position. As I detailed at trial, multiple redesigns that were actually
`
`implemented have shown that those accused features were not important to customers, and
`
`Caterpillar would be able to cite the evidence showing this point. Indeed, in the past hypothetical
`
`negotiation relevant to the jury determination, Wirtgen was addressing claims for five patents
`
`relating to the large milling machines, claiming all related to critical capabilities. Today, after the
`
`redesigns, the Wirtgen claims relate to only two of those five patents for large milling machines
`
`(and only one patent for compact milling machines). Accordingly, Wirtgen today would not be in
`
`a better bargaining position. This does not support an upward adjustment over an effective royalty
`
`rate consistent with the jury verdict.
`
`E.
`
`27.
`
`Pre-Judgment Interest Calculation
`
`I have reviewed Dr. Seth’s declaration in support of Wirtgen’s Motion. Dr. Seth’s
`
`methodology for calculating pre-judgment interest has errors. Specifically, she uses a quarterly
`
`“mid-period sales convention” (D.I. 373 (Seth Decl.) ¶ 6) which assumes royalty payments are
`
`paid quarterly (not annually) and are received at the midpoint of each quarter.
`
`
`
`-8-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 10 of 14 PageID #: 38609
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`28.
`
`Dr. Seth does not provide any support that a quarterly royalty payment assumption
`
`should apply here. In her declaration she states that “Wirtgen is requesting prejudgment interest
`
`at the Bank Prime Rate compounded quarterly,” and then she took the jury verdict and “calculated
`
`the effective damages in each quarter based on the jury verdict awarding a reasonable royalty of
`
`$12.9 million.” Id. ¶¶ 4, 6. However, there is nothing in the jury verdict that shows that the
`
`reasonable royalty amounts reflect quarterly or annual royalty payments. Given the lack of
`
`evidence on the record or in the jury verdict supporting any potential agreement or industry
`
`practice regarding the concept of quarterly royalty payments, an alternative approach of annual
`
`royalty payments may be more appropriate. In my opinion, at a minimum Dr. Seth should have
`
`presented the Court the option of an annual payment calculation. I note that an annual royalty
`
`payment approach can still be applied with interest compounded quarterly, if the Court desired.
`
`29.
`
`Further, the “mid-period sales convention” makes no sense with a reasonable
`
`royalty damages award. The “mid-period sales convention” may have applicability in a lost profits
`
`case, where the plaintiff is losing sales, and lost profits are spread out over the year. However,
`
`royalty payments are not received in this manner. Dr. Seth implicitly assumes that Caterpillar
`
`would pay Wirtgen a royalty payment as soon as a Caterpillar sale takes place. In my experience,
`
`this is improper for prejudgment interest calculations for a reasonable royalty damages assessment
`
`because royalties are paid on a delayed basis. Royalty reporting typically occurs after a specified
`
`reporting period, and often the actual payment will take place weeks or months after the royalty
`
`accounting period. With annual royalty reporting, a payment for 2022 could be received by the
`
`end of January 2023, for example, but with the “mid-period sales convention,” Dr. Seth would
`
`assume Wirtgen receives the full royalty payment by July 1, 2022. This has the impact of
`
`overstating pre-judgment interest. In my experience in calculating pre-judgment interest in
`
`
`
`-9-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 11 of 14 PageID #: 38610
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`reasonable royalty cases, the royalty payment is typically treated as paid at the end of the relevant
`
`royalty accounting period, and I do not recall ever seeing an assumption such as Dr. Seth’s that
`
`royalty payments would be received by the plaintiff well before the end of a reporting period.
`
`30. While using quarterly payments (rather than annual) and applying the “mid-period
`
`sales convention” increases the pre-judgment interest calculation, Dr. Seth also made an error that
`
`partially understated pre-judgment interest. For the partial period in Q1 2024 (to February 22,
`
`2024), she incorrectly uses the formula “(91-31-22)/91.” See Note [D] to her Tables to the Seth
`
`Decl. (D.I. 373). This formula removes March (31 days) and removes 22 days in February,
`
`resulting in including 38 days of the quarter for interest (January plus 7 days in February).
`
`However, I believe Dr. Seth intended to include January plus 22 days in February, or 53 days in
`
`the quarter.
`
`31.
`
`I have performed alternative calculations of pre-judgment interest to illustrate these
`
`issues (attached hereto as Exs. R3 – R6). All of these calculations apply quarterly compounding,
`
`use the quarterly prime rate presented by Dr. Seth, and use the same temporal breakdown of the
`
`jury-awarded reasonable royalties as determined by Dr. Seth (measured quarterly but also summed
`
`annually in two of my calculations).
`
`32.
`
`The first, Calculation 1 (attached hereto as Ex. R3), provides an alternative one-
`
`page calculation based on Dr. Seth’s general approach (but without the per-patent detail she
`
`applied in her many page calculations). This assumes quarterly royalty payments and applies a
`
`mid-period assumption similar to Dr. Seth’s approach. I.e., half of the royalty payment for a
`
`quarter is assumed available to earn interest in the quarter (even though it makes no sense that the
`
`royalty payment would occur consistent with that schedule). The point of Calculation 1 is to show
`
`
`
`-10-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 12 of 14 PageID #: 38611
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`the result of this simplified calculation is very similar to Dr. Seth’s detail, as the total interest
`
`amounts in both her calculation and Calculation 1 round to $2.920 million.
`
`33.
`
`The second, Calculation 2 (attached hereto as Ex. R4), only corrects for the
`
`application of Dr. Seth’s mid-period sales assumption. Calculation 2 considers quarterly royalty
`
`payments that would be available at the end of the quarter, adding to the balance for quarterly
`
`interest compounding at the beginning of the next quarter. With only this change, the pre-judgment
`
`interest is approximately $2.827 million.
`
`34.
`
`Calculation 3 (attached hereto as Ex. R5) uses an annual royalty payment schedule.
`
`Royalty payments are assumed collected at the end of each year, and the cumulative balance with
`
`quarterly earned interest is available for quarterly compounding. Calculation 3 shows total pre-
`
`judgment interest of approximately $2.520 million.
`
`35.
`
`Finally, Calculation 4 (attached hereto as Ex. R6) simply adjusts Calculation 3 to
`
`cover the period through February 22, 2024, correcting Dr. Seth’s calculation for Q1 2024 by using
`
`53 days rather than the 38 days she used. This increased the total amount of pre-judgement interest.
`
`Therefore, Calculation 4 stands on its own as a potential calculation of pre-judgment interest,
`
`totaling $2,571,836 through February 22, 2024. It applies an annual (end of year) royalty payment
`
`structure, compounding quarterly using the same quarterly prime rate figures proposed by Dr. Seth,
`
`and correcting Dr. Seth’s two errors (her use of (i) a mid-point sales convention in a royalty case
`
`and (ii) the wrong number of days relevant for Q1 2024).
`
`36.
`
`In summary, the use of annual royalty payments with these two corrections results
`
`in a pre-judgement interest calculation through February 22, 2024 of $2,571,836, which is
`
`approximately $348,249 below the current calculation of Dr. Seth ($2,920,084.65). (D.I. 373 (Seth
`
`Decl.) ¶ 6).
`
`
`
`-11-
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 13 of 14 PageID #: 38612
`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 13 of 14 PagelD #: 38612
`
`I declare under penalty of perjury under the laws of the United States that the foregoing is
`
`true and correct to the best of my knowledge and belief after reasonable investigation. Executed
`
`this 24th day of May, 2024 in Pasadena, California.
`
`
`
`

`

`Case 1:17-cv-00770-JDW Document 410 Filed 06/12/24 Page 14 of 14 PageID #: 38613
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`CERTIFICATE OF SERVICE
`
`I, Bindu A. Palapura, hereby certify that on May 24, 2024, the attached document was
`
`electronically filed with the Clerk of the Court using CM/ECF which will send notification to the
`
`registered attorney(s) of record that the document has been filed.
`
`I hereby certify that on May 24, 2024, the attached document was electronically mailed to
`
`the following person(s):
`
`VIA ELECTRONIC MAIL
`
`Adam W. Poff
`Pilar G. Kraman
`Samantha G. Wilson
`YOUNG CONAWAY STARGATT & TAYLOR, LLP
`Rodney Square
`1000 North King Street
`Wilmington, DE 19801
`apoff@ycst.com
`pkraman@ycst.com
`swilson@ycst.com
`
`Ryan D. Levy
`Seth R. Ogden
`William E. Sekyi
`Dominic A. Rota
`Mark A. Kilgore
`PATTERSON INTELLECTUAL PROPERTY
`LAW, P.C.
`1600 Division Street, Suite 500
`Nashville, TN 37203
`wirtgen1-litigation@iplawgroup.com
`
`Daniel E. Yonan
`Paul A. Ainsworth
`R. Wilson Powers III
`Kyle E. Conklin
`Deirdre M. Wells
`Davin B. Guinn
`Joseph H. Kim
`Daniel S. Block
`William H. Milliken
`Brooke N. McLain
`Andrew Z. Barnett
`Graham C. Phero
`STERNE, KESSLER, GOLDSTEIN & FOX, PLLC
`1101 K Street, NW, 10th Floor
`Washington, DC 20005
`Wirtgendctlit@sternekessler.com
`
` /s/ Bindu A. Palapura
`Bindu A. Palapura
`
`
`
`

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