Case 1:19-cv-01410-MN Document 330 Filed 10/17/24 Page 1 of 3 PageID #: 13034
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`VB ASSETS, LLC,
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`Plaintiff,
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`v.
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`AMAZON.COM SERVICES LLC,
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`Defendant.
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`C.A. No. 19-1410-MN
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`UNREDACTED PUBLIC VERSION
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`DECLARATION OF BRETT L. REED
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`Case 1:19-cv-01410-MN Document 330 Filed 10/17/24 Page 2 of 3 PageID #: 13035
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`I, Brett L. Reed, declare as follows:
`1. This declaration updates my prior interest calculations and addresses an ongoing royalty rate.
`Based on the modified judgment, I calculate pre-judgment interest at $7,137,894.1 Ex. 1. Based on
`the Order and updated pre-judgment interest, I also compute post-judgment interest of $6,930 in
`daily interest starting November 9, 2023, totaling $2,335,410 as of October 10 ($6,930 x 337 days).
`2. In my January 17, 2024 Declaration ¶¶ 9-10, I addressed Amazon’s arguments on bargaining
`positions and explained why “VB Assets has at least as strong a negotiating position in the post-
`judgment hypothetical negotiation as [VoiceBox] did in the hypothetical negotiation in 2014.”
`3. Amazon continues to have strong incentives to retain and gain Alexa customers. It continues to
`compete with companies like Google and Apple. Amazon has not produced updated device cost
`and pricing data, but public information suggests Amazon is losing more than the ~$20 per Echo
`device presented to the jury underlying the $0.40 rate for the ’681 patent.2 My assessment focused
`on Amazon’s loss of ~$20 per unit on key Echo devices from 2014-April 2022, but the losses were
`increasing over time. Ex. 5. Indications exist that Amazon’s losses have continued at the highest
`level, i.e., more than $20/unit, which supports a larger royalty rate for the ’681 patent. See Ex. 3.
`4. Ex. 3 shows that prices for the base Echo device have declined notably since the 2020 – early 2022
`time period, which likely led to larger average losses. Indeed, increased relative demand for this
`Echo with premium sound could have occurred as competitor Sonos recently had a significant
`misstep on its app launch.3 If per unit losses have grown to $40 or more on the Echo and remain
`$20-30 or more on the Dot and Show devices (Ex. 3), these changed economic circumstances
`would indicate a $30 loss per unit going forward, rather than $20, and the same methodology
`presented at trial now supports a 50% increase in the rate for the ’681 patent, i.e., $0.60.
`5. More generally, the high inflation from 2021-2024 (12% over the reasonably anticipated rate of
`approximately 2% per year, see Ex. 4) suggests the value of cost savings increased over time above
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`1 Pre-judgment interest is based only on the annual reasonable royalty amounts through the end of 2022.
`2 The approximate $20 loss on popular Echo Dot and Echo Show devices, with the 10% loss growth factor and
`20%/80% apportionment, was a presented quantification ($20 x 10% x 20% = $0.40).
`3 See “Sonos tries to get its groove back after upsetting loyal customers,” https://www.latimes.com/business/story/
`2024-10-04/sonos-tries-to-get-its-groove-back-after-a-disastrous-app-launch-upset-customers.
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`1
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`Case 1:19-cv-01410-MN Document 330 Filed 10/17/24 Page 3 of 3 PageID #: 13036
`Case 1:19-cv-01410-MN
`Document 330
`Filed 10/17/24
`Page 3 of 3 PagelD #: 13036
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`what may have been anticipated at the hypothetical negotiation. Considering the 12% unexpected
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`jumpin costs, royalty rates of 45 cents for the 681 patent (rather than 40 cents), and 25 cents for
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`the voice ad patents(rather than 22 cents) would be supported dueto the additionalinflation alone.
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`I declare underpenalty of perjury that the foregoing is true and correctto the best of my
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`knowledgeand belief. Executed on the 10th day of October, 2024, at Pasadena, California.
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`/ BrettL.Reed eth
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