Case 6:17-cv-01217-EFM Document 260-1 Filed 10/12/22 Page 1 of 8
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF KANSAS
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`Case No. 6:17-cv-01217
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`LOGANTREE LP,
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` Plaintiff,
`vs.
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`GARMIN INTERNATIONAL, INC.,
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`Defendant.
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`GARMIN’S EXPLANATION AND LEGAL AUTHORITY IN SUPPORT OF ITS
`PROPOSED JURY INSTRUCTIONS AND VERDICT FORM
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`Pursuant
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`to
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`this Court’s Trial Scheduling Order
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`(ECF No. 229), Garmin
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`provides below its brief explanation and legal authority supporting its version of the
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`outstanding proposed
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`instructions and verdict form, attached as Exhibit A. Garmin
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`respectfully requests the Court adopt Garmin’s proposed jury instructions and verdict
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`form.
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`A. Brief Explanation and Legal Authority Supporting Garmin’s Proposed Instructions
`and Verdict Form
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`1. Disputed Instruction No. 1 – Relevant Factors for Determining a Reasonable
`Royalty
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`The parties agree that the Federal Circuit’s Model Instruction B.5-5.8 is a suitable
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`instruction for the relevant factors to consider in determining a reasonable royalty. However,
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`LoganTree’s suggestion that a recitation of the Georgia-Pacific factors is not mandatory is based
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`on a misunderstanding of the committee’s comments and authorities. The committee stated “[t]he
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`Federal Circuit has made it clear that the Georgia Pacific factors are not mandatory” as a test for
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`royalty calculations. Ex. B, Excerpts from Federal Circuit’s Model Instructions, at 3. LoganTree
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`misinterprets the committee’s statement as suggesting that the listing of the Georgia Pacific factors
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`Case 6:17-cv-01217-EFM Document 260-1 Filed 10/12/22 Page 2 of 8
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`in a jury instruction is not mandatory, where the committee was simply noting the Georgia Pacific
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`factors are not required in forming royalty calculations. Indeed, in the very next sentence, the
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`committee expressly notes that “if [the Georgia Pacific factors] are used, the jury should be
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`instructed only on the factors that are relevant to the evidence before the jury.” Id. Here,
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`LoganTree’s expert, Dr. Volkov, purported to consider the Georgia-Pacific factors generally,
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`while Garmin’s expert, Mr. Finch, explicitly addressed each of the 15 factors. Thus, per the
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`committee’s instructions in its comment to this Model Instruction, the jury should be instructed on
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`all of the Georgia-Pacific factors. Id. If the Court does not provide these instructions, the jury will
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`be hopelessly confused when they hear the parties and experts discussing “Georgia Pacific factors”
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`with no concomitant instructions and explanations from the Court.
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`2. Disputed Instruction No. 2 - Apportionment
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`Once again, the parties agree that a Federal Circuit’s Model Instruction (B.5-5.12) should
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`serve as the base for this instruction. Ex. B, at 5–6. However, LoganTree’s proposed version of
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`the instruction again omits relevant portions of the Model Instruction in its proposed instruction—
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`specifically, the Federal Circuit’s paragraph discussing the entire market value rule (“EMVR”).
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`Neither party has contended in this case the entire market value rule is at issue in this case, nor did
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`LoganTree or its expert attempt to satisfy its requirements in LoganTree’s expert report on
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`damages. With these facts, it is black letter law that LoganTree cannot recover damages based on
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`the entire market value (i.e., total revenues) of the Accused Products. As the Federal Circuit
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`explained in LaserDynamics:
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`Where small elements of multi-component products are accused of
`infringement, calculating a royalty on the entire product carries a considerable
`risk that the patentee will be improperly compensated for non-infringing
`components of that product. Thus, it is generally required that royalties be based
`not on the entire product, but instead on the “smallest salable patent-practicing
`unit.” Cornell Univ. v. Hewlett–Packard Co., 609 F.Supp.2d 279, 283, 287–88
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`(N.D.N.Y.2009) (explaining that “counsel would have wisely abandoned a
`royalty base claim encompassing a product with significant non-infringing
`components. The logical and readily available alternative was the smallest
`salable infringing unit with close relation to the claimed invention—namely the
`processor itself.”).
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`The entire market value rule is a narrow exception to this general rule. If it can
`be shown that the patented feature drives the demand for an entire multi-
`component product, a patentee may be awarded damages as a percentage of
`revenues or profits attributable to the entire product. Rite–Hite, 56 F.3d at 1549,
`1551. In other words, “[t]he entire market value rule allows for the recovery of
`damages based on the value of an entire apparatus containing several features,
`when
`the
`feature patented
`constitutes
`the basis
`for
`customer
`demand.” Lucent, 580 F.3d at 1336 (quoting TWM Mfg. Co. v. Dura Corp., 789
`F.2d 895, 901 (Fed.Cir.1986)). The entire market value rule is derived from
`Supreme Court precedent requiring that “the patentee ... must in every case give
`evidence tending to separate or apportion the defendant's profits and the
`patentee's damages between the patented feature and the unpatented features,
`and such evidence must be reliable and tangible, and not conjectural or
`speculative.” Garretson v. Clark, 111 U.S. 120, 121, 4 S.Ct. 291, 28 L.Ed. 371
`(1884). The Court explained that “the entire value of the whole machine, as a
`marketable article, [must be] properly and legally attributable to the patented
`feature.” Id.
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` See LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 67 (Fed. Cir. 2012) (emphasis
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`added). Accordingly, failure to instruct the jury on the proper scope of its apportionment duties in
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`the context of the EMVR is reversible error. Id.; see also Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d
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`1308, 1328 (“We conclude that the district court’s jury instruction regarding the entire market
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`value rule was legally erroneous. Moreover, that error cannot be considered harmless, as VirnetX’s
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`expert relied on the entire value of the iOS devices as the ‘smallest salable units,’ without
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`attempting to apportion the value attributable to the VPN On Demand and FaceTime features.
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`Thus, it is clear that the jury’s verdict was tainted by the erroneous jury instruction.”).
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`Garmin’s proposed revisions to the Federal Circuit’s instruction on the EMVR are made to
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`simplify and clarify the issues for the jury. As noted above, neither party contends the EMVR is
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`at issue in this case. As such, Garmin contends there is no need to introduce this new term, and
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`complicated rule, to the jury, risking confusion. As such, Garmin has proposed a simplified version
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`that instructs the jury on the relevant points: (1) LoganTree is only entitled to damages based on
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`the total revenues if it contends and proves the patented feature drives demand; (2) LoganTree
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`does not contend the patented features drive demand; and (3) therefore, the jury must apportion
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`the royalty base to reflect the value attributable to only the allegedly infringing features.
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`3. Question #1 of the Verdict Form
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`It is indisputable that LoganTree bears the burden of infringement. Medtronic, Inc. v.
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`Mirowski Family Ventures, LLC, 571 U.S. 191, 198 (2014) (“It is well established that the burden
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`of proving infringement generally rests upon the patentee”) (citing Imhaeuser v. Buerk, 101 U.S.
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`647, 662 (1880)). LoganTree has accused 41 Garmin products of infringing three different claims.
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`ECF No. 187, at 4–5. As a result, LoganTree “[bears] the burden of proving by preponderant
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`evidence that [LoganTree]’s accused products satisfy every limitation of [the asserted claims].”
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`LNP Eng’g Plastics, Inc. v. Miller Waste Mills, Inc., 275 F.3d 1347, 1356 (Fed. Cir. 2001); see
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`also L&W, Inc. v. Shertech, Inc., 471 F.3d 1311, 1318 (Fed. Cir. 2006) (“When a patentee with
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`the burden of proof seeks summary judgment of infringement, it must make a prima facie showing
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`of infringement as to each accused device before the burden shifts to the accused infringer to offer
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`contrary evidence”) (citing Saab Cars USA, Inc. v. United States, 434 F.3d 135, 1369 (Fed. Cir.
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`2006)). Apparently unhappy with the amount of work this has created for itself and for the jury,
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`LoganTree now seeks to reduce its burden to a single question on different claims for products that
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`do not share the same components. LoganTree’s answer is a legally untenable one—to “simply
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`‘assume’ that all of [Garmin]’s products are like the one . . . tested and thereby shift to [Garmin]
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`the burden to show that is not the case.” L&W, 471 F.3d at 1318.
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`L&W is instructive. There, plaintiff’s expert assumed in his declaration that all the accused
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`products were similar to the single part number he analyzed, and argued “if [defendant] genuinely
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`believed that there were relevant distinctions between the ‘accused products’ that would have
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`affected the district court’s infringement analysis, [defendant] was obligated to make those
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`arguments at the summary judgment stage in order to refute [plaintiff’s] assumption that the design
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`of the sixteen [accused products] was substantially similar.” Id. at 1317–1318. But the Federal
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`Circuit rejected the expert’s argument because it “ignore[d] the burden of proof on infringement,
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`which falls on [plaintiff][.]” Id. at 1318. Thus, the plaintiff could not just assume the remaining
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`accused products were like the one the expert tested in an attempt to shift the burden to defendant
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`to show why that was not the case. Id. Given plaintiff’s burden, it is plaintiff that “must make a
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`prima facie showing of infringement as to each accused device before the burden shifts to the
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`accused infringer to offer contrary evidence.” Id.
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`LoganTree’s verdict form attempts to do precisely what the plaintiff in L&W was rebuffed
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`for doing. LoganTree and its expert made an affirmative decision to lump all 41 Accused Products
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`into 5 different groups. LoganTree’s own expert noted there are vast differences in the hardware
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`and software components of the products. This is precisely why LoganTree and Garmin have not
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`agreed that LoganTree’s self-selected five Accused Products groups are representative of the
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`remaining 36 Accused Products. Instead, as it explained in its fourth motion in limine, LoganTree
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`contends only that statements by Garmin’s counsel during the summary judgment hearing amount
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`to such a contention. LoganTree’s claim is without merit. At the outset, and as Garmin will explain
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`in more detail in its opposition to LoganTree’s related motion in limine, the statements of Garmin’s
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`counsel related solely to a single, discrete functionality of the Accused Products—that they all
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`count steps, have a step goal, and write nothing to memory when the step goal is met. These
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`statements had nothing to do with the specific overlap (or lack of overlap) for the operation of the
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`Accused Products’ step counting and step goal functionality. Moreover, this statement had nothing
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`to do with the hardware of the accused watches, which is significantly different between each
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`product.
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`First, the only aspect of the Accused Products’ step counting and step goal functionality at
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`issue in summary judgment was whether the Accused Products record a time stamp when a Garmin
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`user achieves their step goal. See ECF No. 191, at 12 (“The key claim limitation in all the asserted
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`claims warranting summary judgment of no infringement is the ‘time stamp’ limitation”). That
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`is the only question to which Garmin’s counsel was referring—none of Garmin’s Accused
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`Products take any action regarding timestamps when the step goal is met. Second, even the quoted
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`portion of counsel’s statement makes clear that while the Accused Products’ lack of action for the
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`step goal is “consistent,” the specifics as to how that operation is performed is governed by five
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`different bodies of source code. ECF No. 247, at 3.
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`Moreover, LoganTree’s position still fails because it fails to account for all of the other
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`limitations in the claim—none of which were being discussed at summary judgment. It is black
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`letter law that LoganTree must prove each and every Accused Product includes each and every
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`claim limitation. SIMO Holdings Inc. v. Hong Kong uCloudlink Network Tech. Ltd., 983 F.3d
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`1367, 1380 (Fed. Cir. 2021); LNP Eng’g, 275 F.3d at 1356. This includes the portion of the asserted
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`claims requiring certain claimed hardware (e.g., a movement sensor, a power source, a
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`microprocessor connected to the movement sensor, at least one user input connected to the
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`microprocessor, a real-time clock connected to the microprocessor, memory, and an output
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`indicator), and the performance of additional functions (the microprocessor receiving, interpreting,
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`storing, and responding to the movement data, which is distinct from detecting the step goal,
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`measuring the angle and velocity of the movement). Neither LoganTree nor Myers made any
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`attempt to prove that the 36 Accused Products Myers considered are similar in this regard, likely
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`because they are not. These Accused Products differ significantly when it comes to their hardware
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`components. This is precisely why LoganTree wants to avoid this analysis at trial—it will be time
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`consuming and difficult to explain to a jury. And LoganTree failed to ask any witness these critical
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`questions in their deposition—meaning much of trial will now be a discovery expedition by
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`LoganTree as its new counsel tries to fix an incomplete record. But this is the choice LoganTree
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`made by accusing 41 Accused Products and asserting three different claims for infringement.
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`In sum, it is LoganTree’s burden to prove that all 41 of the Accused Products infringe the
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`asserted claims. LoganTree has never contended, let alone proven, that the five Accused Products
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`Myers considered were representative of the remaining 36 Accused Products. As such, LoganTree
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`is required to convince the jury, by a preponderance of the evidence, that all 41 Accused Products
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`infringe. But the jury must be free to consider LoganTree’s evidence as to each Accused Product.
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`Because the jury may conclude LoganTree has failed to meet its burden as to one or more of the
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`Accused Products, the verdict form must give the jury the ability to specify as to which Accused
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`Products LoganTree has met its burden.
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`Case 6:17-cv-01217-EFM Document 260-1 Filed 10/12/22 Page 8 of 8
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`Dated: October 12, 2022
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`Respectfully submitted,
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`ERISE IP, P.A.
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`/s/ Adam P. Seitz
`Adam P. Seitz, KS Bar #21059
`Megan J. Redmond, KS Bar #21999
`Carrie A Bader, KS Bar #24436
`Clifford T. Brazen, KS Bar #27408
`ERISE IP, P.A.
`7015 College Blvd., Suite 700
`Overland Park, Kansas 66211
`Telephone: (913) 777-5600
`Facsimile: (913) 777-5601
`adam.seitz@eriseip.com
`megan.redmond@eriseip.com
`carrie.bader@eriseip.com
`cliff.brazen@eriseip.com
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`Attorneys for Defendant
`Garmin International, Inc.
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`CERTIFICATE OF SERVICE
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`I hereby certify that, on October 12, 2022, the foregoing document filed with the Clerk of
`the Court using CM/ECF and that all counsel of record who are deemed to have consented to
`electronic service are being served with a copy of this document via the Court’s CM/ECF system
`accordingly.
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`By: /s/ Adam P. Seitz
`Adam P. Seitz
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`