Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 1 of 36
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`WESTERNGECO L.L.C.,
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`Plaintiff,
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`Civil Action No. 4:13 cv 02725
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`JURY TRIAL DEMANDED
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`IN THE UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`v.
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`PETROLEUM GEO-SERVICES, INC., and
`PGS GEOPHYSICAL AS,
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`Defendants.
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`GEO'S MOTION FOR SUMMARY JUDGMENT
`AGAINST WESTERN'S ATTEMPTED DOUBLE RECOVERY
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`
`
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`Of Counsel:
`
`Morgan Chu
`Benjamin Hattenbach
`Ellisen Turner
`Arka Chatterjee
`Dominik Slusarczyk
`IRELL & MANELLA LLP
`1800 Avenue of the Stars
`Suite 900
`Los Angeles, CA 90067
`Tel.: 310-277-1010
`Fax: 310-203-7199
`
`
`
`Dated: July 15, 2014
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`
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`
`
`David Beck
`Attorney-in-Charge
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`State Bar No. 00000070
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`Federal Bar No. 919
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`dbeck@beckredden.com
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`Michael E. Richardson
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`State Bar No. 24002838
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`Federal Bar No. 23630
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`mrichardson@beckredden.com
`BECK REDDEN LLP
`1221 McKinney
`Suite 4500
`Houston, TX 77010
`Tel.: 713-951-3700
`Fax: 713-951-3720
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`Attorneys for Defendants
`Petroleum Geo-Services, Inc. and PGS
`Geophysical AS
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`WESTERNGECO Exhibit 2030, pg. 1
`PGS v WESTERNGECO
`IPR2014-01475
`
`

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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 2 of 36
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`TABLE OF CONTENTS
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`Page
`
`1.
`
`Factual Background. ......................................................................................................... 3
`
`A.
`
`B.
`
`The ION suit. ......................................................................................................... 3
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`The present litigation. ........................................................................................... 6
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`2.
`
`3.
`
`Legal Standard. ................................................................................................................. 7
`
`Argument. ......................................................................................................................... 8
`
`A.
`
`Exhaustion – ION's bond assures that it will satisfy the ION
`judgment and exhausts Western's patent claims against Geo. .............................. 8
`
`B.
`
`C.
`
`1.
`
`2.
`
`3.
`
`A damages judgment exhausts patent rights. ............................................ 8
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`The ION judgment provided full compensation. .................................... 11
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`Western may not collaterally attack the sufficiency of the
`ION judgment.......................................................................................... 13
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`Double recovery – any damages award based on digiFINs included
`in the ION judgment would be an impermissible double recovery. ................... 15
`
`Issue preclusion prevents Western from re-litigating digiFIN
`damages............................................................................................................... 17
`
`1.
`
`2.
`
`3.
`
`4.
`
`The ION litigation presented the identical issue. .................................... 17
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`Western's full compensation was thoroughly litigated. .......................... 18
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`Full compensation was necessary to the ION judgment. ........................ 20
`
`Judge Ellison's evidentiary rulings do not limit the scope of
`the ION judgment or its preclusive effect. .............................................. 21
`
`D.
`
`Judicial estoppel precludes Western from seeking patent damages
`from any downstream digiFIN purchasers. ......................................................... 22
`
`E.
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`Claim preclusion bars Western's infringement claims. ....................................... 24
`
`1.
`
`2.
`
`3.
`
`The ION judgment was a final judgment on the merits,
`rendered by a court of competent jurisdiction. ....................................... 25
`
`Western raises the same cause of action in both suits. ........................... 25
`
`Defensive claim preclusion does not require actual privity
`where the non-movant has already averred its existence. ....................... 26
`
`Conclusion. ..................................................................................................................... 27
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`- i -
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`4.
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`3058421
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`WESTERNGECO Exhibit 2030, pg. 2
`PGS v WESTERNGECO
`IPR2014-01475
`
`

`

`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 3 of 36
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Aero Products Int'l, Inc. v. Intex Recreation Corp.,
`466 F.3d 1000 (Fed. Cir. 2006)............................................................................. 15, 16, 17
`
`Amstar Corp. v. Envirotech Corp.,
`823 F.2d 1538 (Fed. Cir. 1987)......................................................................................... 10
`
`Anderson v. Liberty Lobby, Inc.,
`477 U.S. 242 (1986) ............................................................................................................ 7
`
`Arlington Industries, Inc. v. Bridgeport Fittings, Inc.,
`2010 U.S. Dist. LEXIS 19339 (M.D. Pa. Mar. 3, 2010) ................................................... 16
`
`Birdsell v. Shaliol,
`112 U.S. 485 (1884) .......................................................................................................... 14
`
`Brain Life, LLC v. Elekta Inc.,
`746 F.3d 1045 (Fed. Cir. 2014)......................................................................................... 25
`
`Catalina Lighting, Inc. v. Lamps Plus, Inc.,
`295 F.3d 1277 (Fed. Cir. 2002)......................................................................................... 16
`
`Celotex Corp. v. Catrett,
`477 U.S. 317 (1986) ............................................................................................................ 7
`
`Commissioner v. Sunnen,
`333 U.S. 591 (1948) .......................................................................................................... 24
`
`Dixon v. Warden Louisiana State Penitentiary,
`20 F.3d 468 (5th Cir. 1994) .............................................................................................. 12
`
`General Motors Corp. v. Devex Corp.,
`461 U.S. 648 (1983) .......................................................................................................... 13
`
`Glenayre Elecs., Inc. v. Jackson,
`443 F.3d 851 (Fed. Cir. 2006).................................................................................... passim
`
`Hidden Oaks Ltd. v. City of Austin,
`138 F.3d 1036 (5th Cir. 1998) .......................................................................................... 18
`
`In re Coastal Plains, Inc.,
`179 F.3d 197 (5th Cir. 1999) ............................................................................................ 23
`
`In re Freeman,
`30 F.3d 1459 (Fed. Cir. 1994)........................................................................................... 17
`
`In re Howe, 913 F.2d 1138 (5th Cir. 1992) .................................................................................. 25
`
`3058421
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`- ii -
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`WESTERNGECO Exhibit 2030, pg. 3
`PGS v WESTERNGECO
`IPR2014-01475
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`

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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 4 of 36
`
`
`
`In re Nintendo of America, Inc.,
`--- F.3d ---, Dkt. No. 2014-132, 2014 WL 2889911 (Fed. Cir. Jun 25,
`2014) ................................................................................................................................... 9
`
`Junker v. Eddings,
`396 F.3d 1359 (Fed. Cir. 2005)......................................................................................... 16
`
`Koh v. Microtek Int'l, Inc.,
`250 F. Supp. 2d 627 (E.D. Va. 2003) ............................................................................... 10
`
`LG Electronics, Inc. v. Asustek Computers,
`126 F. Supp. 2d 414 (E.D. Va. 2000) ................................................................................. 9
`
`Mars, Inc. v. Nippon Conlux Kabushiki Kaisha,
`58 F.3d 616 (Fed. Cir. 1995)............................................................................................. 25
`
`Minco, Inc. v. Combustion Eng’g, Inc.,
`95 F.3d 1109 (Fed. Cir. 1996)........................................................................................... 12
`
`Minnesota Min. & Mfg. Co. v. Chemque, Inc.,
` 303 F.3d 1294 (2002) ................................................................................................. 22, 23
`
`Nilsen v. City of Moss Point,
`701 F.2d 556 (5th Cir. 1983) ............................................................................................ 25
`
`Odetics, Inc. v. Storage Tech. Corp.,
`14 F. Supp.2d 785 (E.D. Va. 1998) ...................................................................... 10, 11, 13
`
`Prager v. El Paso Nat'l Bank,
`417 F.2d 1111 (5th Cir. 1969) .......................................................................................... 22
`
`Quanta Computer, Inc. v. LG Electronics, Inc.,
`553 U.S. 617 (2008) ............................................................................................................ 8
`
`Recoveredge, L.P. v. Pentecost,
`44 F.3d 1284 (5th Cir. 1995) ............................................................................................ 17
`
`Rodriguez v. Corvel Corp.,
`CIV.A.SA-99-CA1339HG, 2001 WL 674172 (W.D. Tex. Feb. 26, 2001) ...................... 13
`
`Secure Axcess, LLC v. Nintendo of America Inc.,
`2014 WL 986169 (E.D. Tex. Mar. 7, 2014) ....................................................................... 9
`
`Sherman, Clay & Co. v. Searchlight Horn Co.,
`225 F. 497 (9th Cir. 1915) ................................................................................................ 14
`
`Shifferaw v. Emson USA,
`2010 WL 1064380 (E.D. Tex. Mar. 18, 2010) ................................................................... 9
`
`SSIH Equip., S.A. v. U.S. Int'l Trade Comm'n,
`718 F.2d 365 (Fed. Cir. 1983)........................................................................................... 22
`
`Stickle v. Heublein, Inc.,
`716 F.2d 1550 (Fed. Cir. 1983)................................................................................... 10, 15
`
`3058421
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`- iii -
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`WESTERNGECO Exhibit 2030, pg. 4
`PGS v WESTERNGECO
`IPR2014-01475
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`

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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 5 of 36
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`
`
`Strickland v. Washington,
`466 U.S. 668 (1984) .......................................................................................................... 12
`
`Transclean Corp. v. Jiffy Lube Intern., Inc.,
`474 F.3d 1298 (2007) ........................................................................................................ 26
`
`Union Tool Co. v. Wilson,
`259 U.S. 107 (1922) .......................................................................................................... 14
`
`United States v. Shanbaum,
`10 F.3d 305 (5th Cir. 1994) .............................................................................................. 17
`
`United States v. Univis Lens Co.,
`316 U.S. 241 (1942) ............................................................................................................ 8
`
`Vulcan Engineering Co., Inc. v. Fata Aluminium, Inc.,
`278 F.3d 1366 (Fed. Cir. 2002)........................................................................................... 7
`
`Wagner Sign Serv. v. Midwest News Reel Theatres,
`119 F.2d 929 (7th Cir. 1941) ............................................................................................ 10
`
`Weeks v. Angelone,
`528 U.S. 225 (2000) .......................................................................................................... 12
`
`Other Authorities
`
`18 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE &
`PROCEDURE § 4416 (2d ed.) .............................................................................................. 17
`
`18 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE &
`PROCEDURE § 4420 (2d ed.) .............................................................................................. 17
`
`18 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE &
`PROCEDURE § 4433 (2d ed.). ............................................................................................. 22
`
`18 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND
`PROCEDURE § 4406 (2d ed. 2002) ..................................................................................... 24
`
`18A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE
`& PROCEDURE § 4435 (2d ed.) .......................................................................................... 25
`
`18A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE
`& PROCEDURE § 4464 (2d ed.). ......................................................................................... 22
`
`RESTATEMENT (SECOND) OF JUDGMENTS § 24 (1981) .................................................................. 25
`
`Rules
`
`Fed. R. Civ. P. 56 ............................................................................................................................ 7
`
`Fed. R. Civ. Pro. 51(d)(1) ............................................................................................................. 18
`
`
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`3058421
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`- iv -
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`WESTERNGECO Exhibit 2030, pg. 5
`PGS v WESTERNGECO
`IPR2014-01475
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`

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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 6 of 36
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`
`
`Ex.
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`A
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`B
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`C
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`D
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`E
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`F
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`G
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`H
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`I
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`J
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`K
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`L
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`TABLE OF EXHIBITS
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`Description
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`January 13, 2014 Transcript of Case Management Conference (Excerpts)
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`Final Judgment, WG v. ION (Dk. No. 687)
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`May 12, 2014 Order Granting Approval of Suersedeas Bond, WG v. ION (Dk. No. 689)
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`June 12, 2009 Complaint, WG v. ION (Dk. No. 1)
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`January 22, 2010 Letter from Ameet Modi to Michael Heim
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`February 8, 2010 Response to Subpoena, WG v. ION (Dk. No. 57) (Excerpts)
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`[UNDER SEAL]
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`Trial Demonstratives of Ray Sims (Excerpts)
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`July 16, 2012 Order Excluding Sims's Testimony, WG v. ION (Dk. 402)
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`July 30, 2012 Transcript, WG v. ION (Dk. No. 461) (Excerpts)
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`August 14, 2012 Jury Instructions, WG v. ION (Dk. No. 530)
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`August 15, 2012 Trial Transcript, WG v. ION
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`M
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`August 16, 2012 Verdict Form, WG v. ION (Dk. No. 536)
`
`N
`
`O
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`P
`
`Q
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`R
`
`S
`
`T
`
`U
`
`V
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`July 18, 2012 Transcript (Excerpts)
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`July 3, 2014 Chatterjee letter to Locasio
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`July 9, 2014 Gilman letter to Chatterjee
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`Trial Demonstratives of Lance Gunderson (Excerpts)
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`April 30, 2014 Supplemental Damages Order, WG v ION (Dk. No. 686)
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`[UNDER SEAL]
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`October 24, 2013 Supplemental Damages Order, WG v. ION (Dk. No. 664)
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`September 28, 2012 WG Motion for Permanent Injunction, WG v. ION (Dk. No. 558)
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`June 19, 2013 Order re Damages, WG v. ION (Dk. No. 634) (Excerpts)
`
`W
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`July 13, 2012 Transcript of Pretrial Conference, WG v. ION (Dk. No. 403) (Excerpts)
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`3058421
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`WESTERNGECO Exhibit 2030, pg. 6
`PGS v WESTERNGECO
`IPR2014-01475
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`

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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 7 of 36
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`
`
`Ex.
`
`X
`
`Y
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`Description
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`July 1, 2014 Transcript of Case Management Conference (Excerpts)
`
`[UNDER SEAL]
`
`AA
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`July 31, 2012 Afternoon Trial Transcript (Excerpts)
`
`BB
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`July 31, 2012 Morning Trial Transcript (Excerpts)
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`CC
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`July 23, 2012 Trial Transcript (Excerpts)
`
`Arlington Industries, Inc. v. Bridgeport Fittings, Inc.,
`2010 U.S. Dist. LEXIS 19339 (M.D. Pa. Mar. 3, 2010)
`
`In re Nintendo of America, Inc.,
`--- F.3d ---, Dkt. No. 2014-132, 2014 WL 2889911 (Fed. Cir. Jun 25, 2014)
`
`Rodriguez v. Corvel Corp.,
`CIV.A.SA-99-CA1339HG, 2001 WL 674172 (W.D. Tex. Feb. 26, 2001)
`
`Secure Axcess, LLC v. Nintendo of America Inc.,
`2014 WL 986169 (E.D. Tex. Mar. 7, 2014)
`
`Shifferaw v. Emson USA,
`2010 WL 1064380 (E.D. Tex. Mar. 18, 2010)
`
`DD
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`EE
`
`FF
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`GG
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`HH
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`
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`3058421
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`- vi -
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`WESTERNGECO Exhibit 2030, pg. 7
`PGS v WESTERNGECO
`IPR2014-01475
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`

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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 8 of 36
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`Western's claims against Geo seek patent infringement damages based on ION's digiFIN
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`products.1 ION made and sold every digiFIN at issue here. Geo AS used those digiFINs to
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`perform some surveys outside the United States. Western already received all the compensation
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`for its claims that the law allows when it successfully sued ION for patent infringement. In the
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`ION suit, Western asserted that ION directly and indirectly infringed the same four patents at
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`issue here based on the same digiFINs. Western then won damages based on the exact same
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`digiFINs provided to Geo AS. The damages judgment against ION included every digiFIN that
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`ION had ever made and sold, including every digiFIN that Geo ever used.2 Thus, Western's
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`patents are exhausted as to digiFIN and any further patent damages obtained from Geo would
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`give Western an unlawful double-recovery. Geo is therefore entitled to summary judgment
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`dismissing Western’s patent infringement claims.
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`At the ION trial, the court instructed the jury that its damages award must "put [Western]
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`in approximately the same financial position that it would have been in had the infringement not
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`occurred." Western sought both lost profits and reasonable royalty damages from ION. Hence,
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`the court further instructed that if Western "has proved its claim for lost profits for only a portion
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`of the infringing sales, then you must award [Western] a reasonable royalty for all infringing
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`sales for which it has not been awarded lost profits damages." The jury thus had to give Western
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`every cent Western proved it would have made if ION had never provided digiFIN to anyone, as
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`well as full compensation for the harm caused by every digiFIN that ION did provide.
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`1 In keeping with the Court's practice, "Western" refers to the plaintiff. "ION" refers to
`non-party ION Geophysical Corporation. "Geo Inc." and "Geo AS" refer to the defendants,
`which are collectively called "Geo" in this brief because the relief sought applies equally to both.
`2 References to digiFINs covered by the ION judgment do not include digiFINs sold to
`Fugro, which are not at issue here and for which Western concedes it has received full
`compensation.
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`3058421
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`WESTERNGECO Exhibit 2030, pg. 8
`PGS v WESTERNGECO
`IPR2014-01475
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`

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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 9 of 36
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`Following those instructions, the jury awarded Western lost profits and reasonable
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`royalties for every digiFIN presented at trial. The court's supplemental damages award,
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`calculated based on the jury's verdict, then added a reasonable royalty for all other digiFINs ever
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`sold. The ION final judgment thus included $123 million as full compensation for every digiFIN
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`ever sold or supplied to anyone, including all digiFINs provided to Geo.
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`Western now seeks more money from Geo based on the exact same digiFINs included in
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`the ION judgment. But Western's attempted double-dipping is so contrary to law that at least
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`five independent legal principles forbid Western's claims. Western may not collaterally attack
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`the jury's verdict, or the court's evidentiary rulings, and may not assert infringement claims
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`against Geo based on the very same digiFINs for which Western has already been compensated,
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`for the at least following reasons:
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`(A) Exhaustion. The ION judgment and supersedeas bond exhaust Western's patent
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`rights over all digiFINs that ION sold;
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`(B) Double Recovery. Any damages award based on any digiFINs already included
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`in the ION judgment would result in an unlawful double recovery;
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`(C)
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`Issue Preclusion. Western may not re-litigate the sufficiency of the reasonable
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`royalty and other compensation that the ION jury and Court already awarded;
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`(D)
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`Judicial Estoppel. Western is estopped from pursuing patent infringement claims
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`against any downstream digiFIN customers; and
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`(E) Claim Preclusion. Western is precluded from asserting infringement claims
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`against Geo based on the same digiFINs or digiFIN transactions already put in
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`issue in the ION litigation.3
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`3 Geo raised these issues at the very first case management conference. See e.g., Ex. A at
`16:14 – 18:12 . Now that final judgment has been entered and satisfaction assured by ION's
`supersedeas bond, these issues are ripe for adjudication here. Ex. B; Ex. C.
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`3058421
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`WESTERNGECO Exhibit 2030, pg. 9
`PGS v WESTERNGECO
`IPR2014-01475
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`

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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 10 of 36
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`
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`1.
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`Factual Background.
`
`A.
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`The ION suit.
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`ION manufactured and sold all the digiFINs at issue in the present case. Nearly five
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`years ago, Western sued ION for directly and indirectly infringing the same patents that Western
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`is now asserting against Geo. Ex. D. In the ION suit, Western asserted that ION's customers,
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`including Geo, used digiFIN to steer cables towed behind vessels used to conduct marine seismic
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`surveys. Geo AS had used ION's digiFINs during surveys, but only outside the United States.
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`Western knew those facts for years, but never added Geo as a defendant in the ION suit.4
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`Shortly before trial, ION filed a Daubert motion to exclude certain testimony from
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`Western's damages expert, Raymond Sims. Judge Ellison granted the motion in part and
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`excluded portions of Mr. Sims' opinions due to flaws in "his application of the hypothetical
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`license negotiation." Ex. I at 2. A hypothetical negotiation is one aspect of the Georgia-Pacific
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`factors, which are often used to assess a reasonable royalty for patent infringement. Judge
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`Ellison found that "Mr. Sims' methodology inherently arrives at an unreasonable result" because
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`his "unreasonable negotiating approach" improperly allocated the risks during the hypothetical
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`negotiation. Id. at 4-5. Western thereafter submitted a new damages theory in a new report from
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`Mr. Sims. He was ultimately permitted to testify at trial, over ION's objection, regarding both
`
`lost profits and a reasonable royalty. See, e.g., Ex. J at 1819:12-18; Ex. AA at 2268:20-2269:5,
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`2269:24-2270:14. Western also made an offer of proof, preserving Mr. Sims' original opinions
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`for appeal as part of the record. Ex. BB at 1981:10-20.
`
`
`4 In January of 2010, Western subpoenaed Geo Inc., and Geo Inc. agreed to provide
`"communications and documents related to the marketing and sale of ION products" in its
`possession, custody, or control. See Ex. E; Ex. F. These documents, along with countless others
`from ION, showed that Geo AS was procuring digiFIN equipment. See, e.g., Ex. G. Western's
`trial demonstratives also show that it was aware that Geo AS was performing surveys abroad
`using digiFIN. Ex. H at 4, 16.
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`3058421
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`- 3 -
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`WESTERNGECO Exhibit 2030, pg. 10
`PGS v WESTERNGECO
`IPR2014-01475
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`

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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 11 of 36
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`Although Judge Ellison found legal flaws in Mr. Sims' peculiar "methodology" because
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`he improperly allocated risk during the hypothetical negotiation, the order never precluded
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`Western from using other arguments and evidence to seek full compensation from ION.5 To the
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`contrary, the Court instructed the jury to "put [Western] in approximately the same financial
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`position that it would have been in had the infringement not occurred." Ex. K at 24. Further,
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`under the Court's instructions, to award lost profits the jury must have determined that Western
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`had proven "[t]he amount of profit [Western] would have made if ION had not infringed." Id. at
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`25.
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`When Western’s counsel asked the jury for damages, he reiterated that they must award a
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`full recovery for every downstream harm to Western that ION’s customers caused. He reminded
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`them that "damages have to be adequate to compensate [Western]," and that ION's "digiFIN
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`opened the door to competition to Western." Ex. L at 5301:2-20; Ex. CC at 77:1978:16.
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`Accordingly, the jury awarded Western $105.9 million in damages. The jury's award included
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`$93.4 million for Western's lost profits for all surveys that Western argued it lost to Geo and
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`other ION customers because ION had provided them with digiFIN to perform surveys around
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`
`5 Indeed, in a July 18 oral ruling that denied Western's motion for reconsideration of the
`order that excluded part of Sims' testimony, Judge Ellison chastised Western for arguing
`otherwise and putting its own spin on the Court's order, which merely excluded Mr. Sims's
`particular faulty methodology for calculating full compensation. Ex. N at 3:23-4:12 ("[Western's
`motion for reconsideration] is premised on [Western's] reading of the court's opinion as
`concluding as a matter of law that a reasonable royalty cannot be greater than the revenues or
`profits of the infringer. That is not my holding. That is not what I think. I held as a matter of
`law that ION would never have agreed to the royalty obligation that Mr. Sims reaches."). Geo
`has asked Western multiple times to provide a citation to any ruling from Judge Ellison expressly
`precluding full compensation from ION and Western has not identified any. See, e.g., Ex. O;
`Ex. P.
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`WESTERNGECO Exhibit 2030, pg. 11
`PGS v WESTERNGECO
`IPR2014-01475
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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 12 of 36
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`the world. See Ex. M; Ex. H at 64. More than $63 million of the lost profits award was based on
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`Geo (or its affiliates) using digiFIN to perform surveys. Ex. H at 64; Ex. Q at 19.6
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`The court also instructed the jury that if Western "has proved its claim for lost profits for
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`only a portion of the infringing sales, then you must award [Western] a reasonable royalty for all
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`infringing sales for which it has not been awarded lost profits damages." See Ex. K at 27
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`(emphasis added). Accordingly, the jury gave Western an additional $12.5 million in reasonable
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`royalties for patent infringement based on all remaining digiFINs identified during fact
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`discovery. Together with the $93.4 million lost profits award, this additional reasonable royalty
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`award brought the total verdict to $105.9 million.
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`After the jury verdict, Western sought and received supplemental damages from the court
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`to cover the full measure of harm it suffered when ION provided digiFINs to its customers,
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`including Geo. The court ultimately provided an additional $9.4 million in damages that covered
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`every digiFIN not already included in the jury's verdict, including those sold between the verdict
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`and the Court's injunction that barred further sales. Ex. B at 1-2; Ex. R at 1-4. The supplemental
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`award was comprehensive: it included even unassembled digiFIN components that were merely
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`exported and warehoused abroad, including some that remained unsold. Id.; Ex. S at 4; Ex. T at
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`5-8 (awarding royalty for 287 units that remained unsold and for 260 units manufactured abroad
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`from U.S. parts).
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`Western also sought comprehensive prospective relief to fully address any future
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`digiFINs that might have been sold after the judgment. Western asked the Court to issue an
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`order permanently "enjoining further infringement," or alternatively to award an "ongoing
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`royalty as compensation for the continuing harm caused by ION." Ex. U at 5-6, 19.
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`6 Mr. Gunderson provided expert testimony on ION’s behalf at the ION trial regarding
`damages.
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`WESTERNGECO Exhibit 2030, pg. 12
`PGS v WESTERNGECO
`IPR2014-01475
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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 13 of 36
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`Western's own arguments for prospective relief demonstrated that the jury's award was
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`full compensation for every digiFIN that the jury addressed. According to Western, the jury's
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`award had provided full compensation for the "entirety of the harm" to Western for each digiFIN
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`and hence should be used to calculate an ongoing royalty for any future digiFIN sales. Id. at 18
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`(Western arguing that the $105.9 million jury award established an "ongoing damages rate that
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`would account for the entirety of the harm caused by ION's continued infringement as
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`determined by the jury."). Western thus conceded that no ongoing royalties were needed to
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`compensate Western for "the entirety of the harm" caused by digiFINs already included in the
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`jury's award and the supplemental damages award. Ultimately, there were no additional digiFIN
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`sales on which to apply Western's proposed ongoing royalty because the Court issued Western's
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`requested injunction barring future digiFIN sales. Ex. V at 45; Ex. B at 2.
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`The ION judgment accounted for every digiFIN ever manufactured, used, or sold within
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`the United States, and every digiFIN ever supplied from the United States, including each and
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`every digiFIN that Geo ever used or obtained. In one filing, Western even agreed that digiFIN
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`devices for which the royalty had been paid are not subject to the Court's injunction and do not
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`infringe Western's patents. Ex. S at 5. On May 12, 2014, the ION court approved both the form
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`and the amount of ION's posted bond, which the court confirmed "constitutes a full bond." Ex. C
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`at 1.
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`B.
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`The present litigation.
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`Despite receiving a complete remedy in the ION suit, Western filed its present claims in
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`an attempt to extract a double recovery from Geo for the exact same digiFINs that the ION
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`judgment already covers. Western now seeks $349 million in damages arising from the same
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`digiFINs that were at issue in the ION Litigation. D.I. 105 at 2-3 and Ex. 14 at 4. Western
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`concedes that Geo is entitled to a credit for the portion of the ION judgment attributable to them,
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`WESTERNGECO Exhibit 2030, pg. 13
`PGS v WESTERNGECO
`IPR2014-01475
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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 14 of 36
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`but nonetheless asserts that it can re-litigate the issue of damages and recover lost profits based
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`on an alleged $500 million "in service revenue for lost marine seismic surveys performed with
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`DigiFIN." Id. Western also contends that it is entitled to a second royalty payment based on an
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`alleged $1 billion "in service revenue for marine seismic surveys performed with DigiFIN." Id.
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`at 2. Despite Geo's repeated requests, Western has refused to identify anything in the ION
`
`litigation record stating that Western was permitted to seek a double recovery based on the exact
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`same digiFINs already covered by the ION judgment. See, e .g., Ex. O; Ex. P.
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`2.
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`Legal Standard.
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`Summary judgment is proper when "the movant shows that there is no genuine dispute as
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`to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P.
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`56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Material facts are those that may
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`affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A
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`dispute involving a material fact is genuine only "if the evidence is such that a reasonable jury
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`could return a verdict for the nonmoving party." Id. To carry its burden, the moving party need
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`only point out "that there is an absence of evidence to support the nonmoving party's case."
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`Celotex, 477 U.S. at 325. Once the moving party carries its burden, it necessarily prevails unless
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`the non-moving party "designate[s] specific facts showing that there is a genuine issue for trial."
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`Id. at 324 (internal quotation marks omitted). Evidence that "is merely colorable, or is not
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`significantly probative," is insufficient to avoid summary judgment. Anderson, 477 U.S. at 249-
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`50 (internal citation omitted).
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`As discussed below, there is no genuine question of fact regarding the amount and scope
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`of the ION judgment, and Western bears the burden of proving its entitlement to damages in light
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`of these undisputed facts. See Vulcan Engineering Co., Inc. v. Fata Aluminium, Inc., 278 F.3d
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`WESTERNGECO Exhibit 2030, pg. 14
`PGS v WESTERNGECO
`IPR2014-01475
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`Case 4:13-cv-02725 Document 124 Filed in TXSD on 07/15/14 Page 15 of 36
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`1366, 1376 (Fed. Cir. 2002) ("The patentee bears the burden of proving its damages by a
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`preponderance of the evidence.").
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`3.
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`Argument.
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`The ION suit concerned the same patents and the same digiFINs at issue here. The ION
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`judgment provided a complete remedy for harm that Western proved it suffered based on ION
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`making those digiFINs and provi