Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 1 of 381
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`648
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`TOUCHSTREAM TECHNOLOGIES,
`INC.
`VS.
`GOOGLE LLC
`
`July 19, 2023
`
` CIVIL ACTION NO. W-21-CV-569
`
`**
`
`**
`
`*
`BEFORE THE HONORABLE ALAN D ALBRIGHT
`JURY TRIAL PROCEEDINGS
`Volume 3 of 5
`
`APPEARANCES:
`For the Plaintiff:
`
`For the Defendant:
`
`Ryan D. Dykal, Esq.
`Lauren Douville, Esq.
`Jordan T. Bergsten, Esq.
`Robert McClendon, Esq.
`Philip Alexander Eckert, Esq.
`Shook, Hardy & Bacon, LLP
`2555 Grand Boulevard
`Kansas City, MO 64108
`Gary M. Miller, Esq.
`Justin R. Donoho, Esq.
`Samuel G. Bernstein, Esq.
`Shook, Hardy & Bacon LLP
`111 S. Wacker Drive, Suite 4700
`Chicago, IL 60606
`Sharon A. Israel, Esq.
`Shook, Hardy & Bacon L.L.P.
`600 Travis Street, Suite 3400
`Houston, TX 77002
`Tharan Gregory Lanier, Esq.
`Michael C. Hendershot, Esq.
`Evan M. McLean, Esq.
`Gurneet Singh, Esq.
`Jones Day
`1755 Embarcadero Road
`Palo Alto, CA 943034
`
`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`Comcast, Ex. 1183
`Comcast v. Touchstream
`IPR2024-00322
`
`
`
`648
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`TOUCHSTREAM TECHNOLOGIES,
`INC.
`VS.
`GOOGLE LLC
`
`July 19, 2023
`
` CIVIL ACTION NO. W-21-CV-569
`
`**
`
`**
`
`*
`BEFORE THE HONORABLE ALAN D ALBRIGHT
`JURY TRIAL PROCEEDINGS
`Volume 3 of 5
`
`APPEARANCES:
`For the Plaintiff:
`
`For the Defendant:
`
`Ryan D. Dykal, Esq.
`Lauren Douville, Esq.
`Jordan T. Bergsten, Esq.
`Robert McClendon, Esq.
`Philip Alexander Eckert, Esq.
`Shook, Hardy & Bacon, LLP
`2555 Grand Boulevard
`Kansas City, MO 64108
`Gary M. Miller, Esq.
`Justin R. Donoho, Esq.
`Samuel G. Bernstein, Esq.
`Shook, Hardy & Bacon LLP
`111 S. Wacker Drive, Suite 4700
`Chicago, IL 60606
`Sharon A. Israel, Esq.
`Shook, Hardy & Bacon L.L.P.
`600 Travis Street, Suite 3400
`Houston, TX 77002
`Tharan Gregory Lanier, Esq.
`Michael C. Hendershot, Esq.
`Evan M. McLean, Esq.
`Gurneet Singh, Esq.
`Jones Day
`1755 Embarcadero Road
`Palo Alto, CA 943034
`
`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
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`Comcast, Ex. 1183
`Comcast v. Touchstream
`IPR2024-00322
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 2 of 381
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`649
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`Tracy Ann Stitt, Esq.
`Jennifer L. Swize, Esq.
`Edwin O. Garcia, Esq.
`John R. Boule III, Esq,
`Jones Day
`51 Louisiana Avenue, N.W.
`Washington, DC 20001
`Michael E. Jones, Esq.
`Shaun William Hassett, Esq.
`Potter Minton PC
`110 North College, Suite 500
`Tyler, TX 75702
`Kristie M. Davis, CRR, RMR
`PO Box 20994
`Waco, Texas 76702-0994
`(254) 340-6114
`
`Court Reporter:
`
`Proceedings recorded by mechanical stenography,
`transcript produced by computer-aided transcription.
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`
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 3 of 381
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`(Hearing begins.)
`THE COURT: Please remain standing for
`
`(Jury entered the courtroom.)
`THE COURT: Thank you. You may be
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`the jury.
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`seated.
`
`Counsel?
`MR. MILLER: May I proceed, Your Honor.
`THE COURT: Please.
`MR. DYKAL: Thanks.
`DIRECT EXAMINATION CONTINUED
`BY MR. MILLER:
`Q.
`Good morning, Mr. Chandler.
`A.
`Good morning.
`Q.
`Could we -- I think we ended on 65 actually.
`A.
`Oh, I need to advance that. Yes. Whoops.
`Bear with me. Yes.
`Q.
`Yep. Right there.
`So we were talking about your opinion that the
`Chromecast -- Google Chromecast-enabled devices would
`be discounted 50 percent. And I think where we left
`off is you were talking about the fact you looked at
`some Google usage data, so data indicating how much
`people use these products to cast, and you found some
`problems with that data.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 4 of 381
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`651
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`Do you recall that?
`Yeah. I discussed a number of irregularities,
`A.
`such as some spikes, and inconsistency in the data that
`just made it unreliable.
`Q.
`All right. Had you found just very reliable
`good data like that, usage data, does that tell the
`whole story about the value of cast to these products?
`A.
`No. Not at all. That's just one factor that
`would have been informative and helpful to see, but it
`really doesn't speak to the value by itself.
`There's a lot of other considerations such as
`the -- there was a wow factor to cast, and that's
`something that people clearly enjoyed and purchased
`because this is the fastest-selling TV item in history
`according to Google.
`In addition, you know, Google valued this as
`the foundation to their ecosystem and wanted to get it
`in as many devices in front of as many users as
`possible. So those are other aspects, all of which
`needs to be taken into consideration.
`Q.
`Okay. Thank you.
`So let's turn to the third bucket of products.
`These are the third-party Chromecast-enabled devices.
`And what did you determine would be the result
`of the hypothetical negotiation with respect to the
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 5 of 381
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`652
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`third-party devices?
`A.
`Well, I -- in my view and as I described, in
`the hypothetical negotiation, Google would have pushed
`for a discount and a further discount for devices that
`it essentially licenses its Chromecast technology to.
`And this is akin to, in my field, in the field
`of licensing, there's a term called "sublicensing,"
`where a patent owner will license something, such as
`the patents-in-suit, to Google. And if a company like
`Google further licenses that technology, in this case,
`the Chromecast built-in, to other parties such as TV
`manufacturers, like Sony and Vizio, that's referred to
`as a sublicense.
`In the -- in the field of licensing, it's
`well-known historically and among professionals like
`myself that a patent owner is entitled to a share of
`that value that is generated by those third parties,
`those sublicensees.
`And the typical range, historically -- and
`it's, again, well-known within the industry -- is
`between 25 percent and 50 percent of that value going
`back to the original IP owner.
`In this case, in my view, Google would have
`argued for the lower discount. Touchstream still would
`have pointed out, well, this enables you to get cast in
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 6 of 381
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`653
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`front of many, many more people. And, in fact, if
`you're not making a device and you're just giving it
`away for free, you're not losing money on those devices
`that you were losing money on. So in a sense, you're
`already -- you're gaining, in a sense, as well as many
`users.
`
`But in my view, the size of Google and their
`ability to invest and to get this into the market would
`have prevailed. And conservatively, I believe that
`Touchstream would have accepted a 25 percent share of
`that revenue, and that for -- so a 75 percent discount
`or $3.84 per activated device.
`Q.
`So taking all that together and just -- where
`do we come down, then, for each of the devices, just to
`remind the jury?
`A.
`Well, this is a summary slide of each of those
`three categories, those three buckets for the
`Chromecast devices.
`The dongles, $15.36 per activated unit,
`one-time payment.
`The royalty rate for Google Chromecast-enabled
`devices, a 50 percent discount, $7.68 per activated
`device.
`
`And for the third-party Chromecast-enabled
`devices that we just discussed, a 75 percent discount
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 7 of 381
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`654
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`for $3.84 per activated device.
`Q.
`Again, and just to remind the jury, the way,
`for example, on the Chromecast devices, you arrived at
`the $15.36 is 32 cents per month for each month and the
`life of the products for four years, and that adds
`up --
`For four years. Yeah. As we discussed
`A.
`yesterday. 48 months.
`Q.
`Okay. Thanks.
`What was the next step in your analysis?
`Well, the next step is to revisit and to
`A.
`determine the actual number of device activations. And
`I believe I showed these numbers early on in the
`presentation.
`But in summary, there have been over 139
`million Chromecast-enabled devices that have been
`activated.
`Q.
`And the final step then?
`A.
`Well, of those, 25 were Chromecast --
`approximately 25 million were Chromecast dongles,
`approximately 30 million were Chromecast -- Google
`Chromecast-enabled devices, and approximately 84 and a
`half million were third-party Chromecast-enabled
`devices.
`Q.
`
`Okay. I was skipping ahead.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 8 of 381
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`655
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`And then the final step in the analysis?
`Well, final step in this analysis, as I
`A.
`mentioned, this is a straightforward calculation:
`Multiply the devices that were activated by the royalty
`rate for that type of device and then, you know, add
`those totals together.
`Q.
`Okay. So you've been talking about how you
`think the hypothetical negotiation would go and a heavy
`reliance on the Quadriga license agreement that --
`A.
`Yes.
`Q.
`-- certainly Touchstream would be pushing,
`correct?
`Yes.
`A.
`And this is one of the ways you arrived at the
`Q.
`this number, correct?
`A.
`Yes. That's correct.
`Q.
`Is there an alternative way that you think the
`jury might consider how the -- how the hypothetical
`negotiation would have gone?
`A.
`There's other ways. One way would be to apply
`a royalty rate percentage and then make adjustments
`from there.
`And, you know, we heard yesterday, it was
`brought up that Touchstream entered into a settlement
`agreement with a company called Vizbee, and that
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 9 of 381
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`settlement agreement was for a lump sum. And I've
`reviewed that agreement. And it specifically states
`that that lump sum was in lieu of a 10 percent running
`royalty of future revenues for -- that Vizbee would
`earn.
`
`So another way would be to apply a running
`royalty.
`Q.
`Based on the 10 percent?
`A.
`Based on the 10 percent from the Vizbee
`agreement.
`Q.
`Okay. Thank you.
`Okay. So summing all this up, everything you
`said yesterday, everything you said today, in your
`professional opinion, what is the appropriate damage
`number in this case?
`A.
`In my opinion, based on all the considerations
`that I outlined yesterday and today, my opinion, the
`appropriate reasonable royalty for Google to pay
`Touchstream for its use and the value derived from the
`patented invention, the three patents-in-suit,
`$941,419,212.
`Q.
`Okay. Thank you.
`MR. MILLER: Your Honor, we'd like to
`move into evidence some of the exhibits that
`Mr. Chandler talked about. The following: PTX-871,
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 10 of 381
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`657
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`PTX-891, PTX-307, PTX-487, JTX-167, PTX-511, PTX-182,
`PTX-314, and PTX-285.
`MR. JONES: Your Honor, with regard to
`those exhibits that we've already raised a continuing
`objection about, we continue to assert those
`objections. But besides that, we have no objection.
`THE COURT: They're all admitted, and
`your objections are noted.
`MR. JONES: Thank you, Your Honor.
`MR. MILLER: I have no further questions,
`Mr. Chandler. Thank you very much for your time.
`THE WITNESS: Thank you.
`MR. JONES: May I approach the witness,
`
`Your Honor?
`
`THE COURT: Yes, sir.
`MR. JONES: Mr. Chandler, another book.
`THE WITNESS: Oh, thank you.
`CROSS-EXAMINATION
`
`BY MR. JONES:
`Q.
`Mr. Chandler, good morning. My name is Mike
`Jones, and it's my privilege to represent Google in
`this matter.
`A.
`Good morning. Nice to meet you.
`Q.
`Mr. Chandler, you've established clearly that
`in this case, your testimony is about damages, right,
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 11 of 381
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`658
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`sir?
`I've established my testimony is about
`A.
`damages, but I'm also testifying on matters of
`licensing, as I mentioned at the beginning.
`Q.
`Thank you.
`And licenses are -- the licensing testimony's
`applicable to your damages figure, correct, sir?
`A.
`I'm also -- yes. It is. But I'm also
`testifying as a licensing expert.
`Q.
`Thank you, sir.
`And as a damages expert, you are offering no
`opinion whatsoever on the issue of invalidity, right,
`sir?
`That's correct. As a -- as a basis of my
`A.
`analysis, I am required and asked to assume that the
`patents are valid.
`Q.
`Okay. And I'm not arguing with you about
`that. I'm just saying you're offering no opinion on
`invalidity; you're offering no opinion on infringement,
`right, sir?
`A.
`That's correct. And in infringement, as with
`validity, it's one of the foundational assumptions of
`damages analysis. One must assume validity and
`infringement. And others are offering opinions on
`those matters.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 12 of 381
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`659
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`Certainly. And you know in this case that
`Q.
`those issues, the issue of infringement and the issue
`of validity is a contested issue that will be decided
`by the jury, right, sir?
`A.
`I understand that's part of the reason we're
`here today. Yes.
`Q.
`Thank you, sir.
`And in the event the jury were to decide that
`the patents were not valid, then you would agree with
`me the damages are zero, right, sir?
`A.
`Well, given that my assumption -- foundational
`assumption is that validity --
`THE COURT: Let me explain to you the way
`it works. When you're on direct, you get to talk as
`long as you want.
`THE WITNESS: Yes, Your Honor.
`THE COURT: When Mr. Jones is asking you
`questions, you want to favor the jury with a direct
`answer. Okay?
`THE WITNESS: Yes, Your Honor.
`THE COURT: Thank you.
`
`BY MR. JONES:
`Q.
`I'll try to make my questions very pointed,
`sir.
`
`And if the jury were to find that Google does
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 13 of 381
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`660
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`not infringe, then damages would be zero, right, sir?
`A.
`Yes. That's correct.
`Q.
`Now, we've established that you are not a
`technical expert in this case, right?
`A.
`That is correct.
`Q.
`And you talked about the SIPCO license in your
`direct testimony, right, sir?
`A.
`Yes. I did.
`Q.
`And you know that a technical expert,
`Dr. Mayer-Patel, has analyzed it and written a report
`that it is technically comparable to the technology in
`question in this suit, right, sir?
`A.
`Yes. I read his report.
`Q.
`And you have seen no opinion in a report from
`Touchstream's expert, Dr. Kevin Almeroth, saying he is
`wrong and that the technology is not comparable, right,
`sir?
`A.
`Q.
`
`Not in his report.
`Okay. Thank you, sir.
`Now, since -- since 2011, you believe
`Touchstream has been a leader in the casting technology
`industry, correct?
`A.
`I'm not sure that's what I've testified to.
`Q.
`I just asked you your belief, sir. I really
`wasn't asking about your testimony.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 14 of 381
`
`661
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`You -- you believe that since 2011,
`Touchstream has been a leader in casting technology,
`right, sir?
`A.
`I don't fully agree with that --
`Q.
`Okay.
`A.
`-- characterization.
`Q.
`Thank you, sir.
`Now, you discuss in your report, where you
`gave us your opinions, the marketplace applicable to
`these -- to these patents and your analysis, correct?
`You discussed the market?
`I did.
`A.
`And the two types of markets you discussed,
`Q.
`the first one is the media streaming market device,
`right, sir?
`A.
`I'm not sure that I discussed two types of
`markets. I just -- I believe I just discussed the
`media streaming opportunity.
`Q.
`I've got -- I've got your report from -- in
`front of you. So maybe I can refresh your memory.
`A.
`Yes.
`Q.
`If you would go to your November the 14th,
`2022 report.
`A.
`Yes. I have it here.
`Q.
`On Page 14 of that original report, do you
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 15 of 381
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`662
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`have a section entitled Media Streaming Device Market?
`A.
`Yes. I do.
`Q.
`And in that section -- or let me just ask this
`question.
`A.
`Uh-huh.
`Q.
`Do -- do you agree that Google was in that
`market?
`Google entered that market with Chromecast.
`A.
`Certainly.
`Q.
`And you note or you know that Apple launched
`its first digital media player, Apple TV, in 2007,
`right, sir?
`A.
`Yes. I believe I mentioned them as well.
`Q.
`And in March of 2012, with the launch of
`AirPlay, Apple led the market, that particular market,
`correct, sir?
`A.
`Yes.
`Q.
`Did Apple ever take a license to any of
`Touchstream's patents, sir?
`A.
`I'm not aware that they did.
`Q.
`Now, Roku launched Roku DV -- DVP N1000 in
`2007, right, sir?
`A.
`In 2007?
`Q.
`Yes.
`A.
`It sounds -- sounds correct.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 16 of 381
`
`663
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`And it's in that marketplace, right, sir?
`Q.
`Yes. It's in the media streaming market.
`A.
`At any time has Roku ever taken a license to
`Q.
`the patents-in-suit or any patents of Touchstream?
`A.
`I'm not aware of whether or not they're
`practicing the patents.
`Q.
`In your work in this case, have you seen any
`license by Roku and Touchstream, sir?
`A.
`No. I have not. No.
`Q.
`Thank you, sir.
`Now, Xbox was another player in the field,
`right, sir?
`A.
`It's my understanding they were in the field
`in a -- in a slightly different way. Yes.
`Q.
`And did Xbox ever take a license to
`Touchstream's patents?
`A.
`Again, I don't -- they did not. I don't know
`that they were practicing the patents-in-suit one way
`or the other.
`Q.
`But, again, my question to you is really
`simple, sir.
`My question to you is, did they ever take a
`license to Touchstream's patents?
`A.
`No. They did not.
`Q.
`PlayStation was another player in the field,
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 17 of 381
`
`664
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`right, sir?
`A.
`I'm not sure. I'm not sure. I'm not familiar
`with the PlayStation too well.
`Q.
`If you would, I would direct your attention
`back to your report in Paragraph 45.
`A.
`Yes.
`Q.
`And doesn't it discuss PlayStation there?
`A.
`Yes. It does.
`Q.
`And did PlayStation ever take a license to
`Touchstream's patents, sir?
`A.
`No. They did not.
`Q.
`Samsung was another player in the media
`streaming device market, right, sir?
`A.
`Yes. That's correct.
`Q.
`Did they ever take a license to Touchstream's
`patents at any time?
`A.
`No. I've not seen any license.
`Q.
`Amazon entered the market in April of 2013
`with the launch of Fire TV, right, sir?
`A.
`That's correct. Yes.
`Q.
`Did they ever take a license to any of
`Touchstream's patents?
`A.
`No. I've not seen any licenses with Amazon.
`Q.
`Now, you've also analyzed the Smart TV market
`in connection with your work in this case, right, sir?
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 18 of 381
`
`665
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`Yes. I have.
`A.
`And Roku launched Roku TV with TCL and
`Q.
`Hisense, right, sir?
`A.
`That's correct.
`Q.
`Did TCL ever take a license to any of the
`patents in this suit or any of Touchstream's patents?
`A.
`No. They've not entered into a license.
`Q.
`Did Hisense take a license to any of the
`patents in this suit or Touchstream's patents?
`A.
`No. They've not.
`Q.
`Now, LG launched Smart TVs with Smart TV
`interface, right, sir?
`A.
`Yes. That's correct.
`Q.
`Did they ever take a license to any of
`Touchstream's patents?
`A.
`No. They've not.
`Q.
`Smart -- Samsung launched, in May of 2015, a
`Smart TV that ran on Tizen OS.
`In connection with that project, did Samsung
`take any kind of licenses of Touchstream patents?
`A.
`No. They've not entered into a license.
`Q.
`Amazon partnered with Insignia, Toshiba, JVC,
`and Grundig on Fire TV, correct, sir?
`A.
`Yes. That's correct. Pardon me.
`Q.
`Did Insignia take any license from Touchstream
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 19 of 381
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`at any time?
`A.
`No.
`Q.
`Did Toshiba take any license from Touchstream
`at any time?
`A.
`No.
`Q.
`Did JVC take any license from Touchstream at
`any time?
`A.
`No.
`Q.
`Did Grundig take any license from Touchstream
`at any time?
`A.
`No.
`
`MR. JONES: If we could, Mr. McDonald,
`could we go to Slide 7?
`BY MR. JONES:
`Q.
`So here, we look at all -- and I won't go back
`through them, but we look at all the people I just
`talked about that were in the media streaming device
`market and the Smart TV market.
`And I think you and I can agree that none of
`these players ever took a license to any of
`Touchstream's patents, right, sir?
`A.
`Yes. That's correct.
`Q.
`And a number of these players did joint
`ventures with each other. We've heard that discussion,
`right, sir?
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 20 of 381
`
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`Yes.
`A.
`And none of these players in the industry did
`Q.
`any kind of joint venture in this area with
`Touchstream, right, sir?
`A.
`That's correct.
`Q.
`Now, I'd like to turn your attention next to
`HP.
`
`Touchstream worked on a product with HP,
`right, sir?
`A.
`That's correct.
`Q.
`And this was not a consumer product, right,
`sir?
`I believe that's correct.
`A.
`And Touchstream's software was to go into an
`Q.
`HP product for its businesses, right, sir?
`A.
`Offhand I don't recall that, but I'll take
`your representation.
`Q.
`Thank you.
`And you do know, in fact, that the
`relationship ended, right, sir?
`A.
`Yes.
`Q.
`And you were in the courtroom and you heard
`Mr. Mitschele's testimony yesterday that it did not end
`because of Chromecast, right, sir?
`A.
`That's correct.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 21 of 381
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`And the moneys paid pursuant to that HP
`Q.
`agreement for the work that was done by Touchstream
`were about $2 million, right, sir?
`A.
`That's my understanding. Yes.
`Q.
`And HP never, at any point, took a license to
`any of Touchstream's patents, right, sir?
`A.
`I believe that's correct.
`Q.
`Now, I'd like to turn next to Touchstream's
`licensing history.
`Touchstream had an established history of
`licensing patents covering its technology, right, sir?
`A.
`That's correct. They have -- well,
`established history. It entered into a handful of
`licenses.
`Q.
`Thank you, sir.
`And Touchstream's licensing history for the
`patents-in-suit would have been highly material to the
`discussions of the parties to the hypothetical
`negotiation, right, sir?
`A.
`It could have been, and I reviewed those in my
`analysis.
`Q.
`Thank you.
`And there are --
`MR. JONES: Go to Slide 2.
`
`BY MR. JONES:
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 22 of 381
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`And the sum total of all the licenses in the
`Q.
`nine or so years that these patents have been out
`there, there are four of them, right, sir? There's
`Quadriga, Vizbee, FetchIT, and Mash, right, sir?
`A.
`That's correct.
`Q.
`So if we want to look at the licensing
`history, all of it, of Touchstream, we look at these
`four agreements, right?
`A.
`Yes. I did review all those and commented on
`those in this report.
`Q.
`And for your quantification of your damages
`figure in this case, you take, for the quantification,
`information from one of these agreements and that's
`Quadriga, right, sir?
`A.
`That's correct. For all the reasons I've
`outlined in my report.
`Q.
`Let's drill down a little bit on Quadriga.
`Now, the name of the Quadriga agreement is
`Quadriga Software Development and License Agreement,
`right, sir?
`A.
`That's correct.
`Q.
`And it is Exhibit 567 of the -- of the trial
`in this case. That's the -- that's the exhibit number,
`I believe, and I think you have it in your notebook
`before you?
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 23 of 381
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`670
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`Yes. I just moved to that. Yes.
`A.
`I'd like to bring up a excerpt from
`Q.
`Exhibit 567, which is the Quadriga Software Development
`and License Agreement.
`MR. JONES: Could we bring up Slide 3?
`Thank you, sir.
`
`BY MR. JONES:
`Q.
`And let's go to --
`MR. JONES: Is this Slide 3,
`Mr. McDonald? There you go. Thank you, sir.
`I'm sorry. Thank you, Mr. McDonald.
`
`BY MR. JONES:
`Q.
`Now, this comes from the background section of
`that agreement, Sections B, C, and D.
`Do you see that, sir?
`I do. Yes. From the Page 1.
`A.
`And it talks about what's going on here. And
`Q.
`it says in Section B that: Shodogg is an experienced
`software designer -- excuse me -- software designer,
`developer, and programmer, right, sir?
`A.
`Yes. And I believe I heard Mr. Mitschele's
`testimony to that effect.
`Q.
`Thank you, sir.
`And it says that: Quadriga wishes to have
`Shodogg modify Shodogg's existing video content
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 24 of 381
`
`671
`
`application, correct, sir?
`A.
`Yes. That's correct.
`Q.
`So Quadriga wanted Shodogg to come up with a
`new product, right?
`A.
`Yes. That's my understanding.
`Q.
`Thank you.
`And Shodogg, it says next in Section D, wishes
`to work with Quadriga to provide cloud-based software
`services to enable its video content application and to
`market and sell the modified application on the terms
`and conditions of this agreement.
`So what they were doing is they were hiring
`Touchstream to help them develop a product to market
`and sell, right, sir?
`A.
`Yes. Yes. That's -- I agree with that fully.
`MR. JONES: Now, if we could go next to
`Slide 6, Mr. McDonald?
`BY MR. JONES:
`Q.
`And it says here in Slide 6, which comes from
`Paragraph 13.1 of Exhibit 567, that: During the
`initial period, the parties shall work together in good
`faith in relation to the announcement, marketing, and
`commercial launch of the licensed materials...
`And that's the software product, right, sir?
`I believe it is. Yes.
`
`A.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
`
`
`Case 6:21-cv-00569-ADA Document 262 Filed 09/01/23 Page 25 of 381
`
`672
`
`...as part of Quadriga's proprietary
`Q.
`audio/visual technology. Right, sir?
`A.
`Yes. Their proprietary technology.
`Q.
`Okay. And so what they were doing is they
`were developing a proprietary audio/visual technology
`product for Quadriga that after they developed it,
`after they made it, they were going to approach major
`hotels, trade shows, and they were going to launch that
`product, right, sir?
`A.
`I'm just reading through this.
`Q.
`
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