Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 1 of 11 PageID #: 19288
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`IN THE UNITED STATES DISTRICT COURT FOR
`THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`CASE NO. 2:17-cv-514-JRG
`(LEAD CASE)
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`JURY TRIAL DEMANDED
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`CASE NO. 2:17-CV-515-JRG
`(CONSOLIDATED CASE)
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`JURY TRIAL DEMANDED
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`§§§§§§§§§
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`§§§§§§§§§
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`AGIS SOFTWARE DEVELOPMENT, LLC
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`Plaintiff,
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`
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`v.
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`
`HTC CORPORATION, et al.
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`
`Defendant.
`AGIS SOFTWARE DEVELOPMENT, LLC
`
`
`
`Plaintiff,
`
`
`
`v.
`
`LG ELECTRONICS INC.
`
`
`Defendant.
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`
`
`REPLY TO AGIS SOFTWARE DEVELOPMENT LLC’S RESPONSE IN OPPOSITION
`TO LG ELECTRONICS INC.’S MOTION TO EXCLUDE THE OPINIONS OF
`MR. ALAN RATLIFF RELATING TO DAMAGES
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`
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`
`
`IN THE UNITED STATES DISTRICT COURT FOR
`THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`CASE NO. 2:17-cv-514-JRG
`(LEAD CASE)
`
`
`JURY TRIAL DEMANDED
`
`CASE NO. 2:17-CV-515-JRG
`(CONSOLIDATED CASE)
`
`
`JURY TRIAL DEMANDED
`
`§§§§§§§§§
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`§§§§§§§§§
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`AGIS SOFTWARE DEVELOPMENT, LLC
`
`
`Plaintiff,
`
`
`
`v.
`
`
`HTC CORPORATION, et al.
`
`
`Defendant.
`AGIS SOFTWARE DEVELOPMENT, LLC
`
`
`
`Plaintiff,
`
`
`
`v.
`
`LG ELECTRONICS INC.
`
`
`Defendant.
`
`
`
`REPLY TO AGIS SOFTWARE DEVELOPMENT LLC’S RESPONSE IN OPPOSITION
`TO LG ELECTRONICS INC.’S MOTION TO EXCLUDE THE OPINIONS OF
`MR. ALAN RATLIFF RELATING TO DAMAGES
`
`
`
`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 2 of 11 PageID #: 19289
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`I.
`II.
`III.
`IV.
`V.
`VI.
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`TABLE OF CONTENTS
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`Page
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`MR. RATLIFF’S
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` IS AN UNRELIABLE BASIS FOR THE
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`HYPOTHETICAL NEGOTIATION ...............................................................................1
` IS UNRELIABLE AND UNSUPPORTED...........2
`UNSUPPORTED ............................................................................................................3
`ARE NOT RELEVANT TO THIS CASE ........................................................................4
`THE OPINIONS VIOLATE THE ENTIRE MARKET VALUE RULE ...........................4
`CONCLUSION ...............................................................................................................5
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`THE
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`THE
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`THE
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` IS UNRELIABLE AND
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`-i-
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`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 3 of 11 PageID #: 19290
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`TABLE OF AUTHORITIES
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`Page(s)
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`
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`Cases
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`BMC Software, Inc. v. ServiceNow, Inc.,
`No. 2:14-CV-903-JRG, 2016 WL 379620 (E.D. Tex. Feb. 1, 2016) ....................................... 4
`
`Chrimar Holding Co., LLC v. ALE USA Inc.,
`2018 WL 2120618 (Fed. Cir. 2018) ................................................................................... 3, 4
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`Exmark Mfg. Co. v. Briggs & Stratton Power Prods. Group, LLC,
`879 F.3d 1332 (Fed. Cir. 2018) .............................................................................................. 2
`
`Open Text S.A. v. Box, Inc.,
`No. 13-cv-04910-JD, 2015 WL 349197 (N.D. Cal. Jan. 23, 2015) ......................................... 3
`
`Summit 6, LLC v. Samsung Elecs. Co., Ltd.,
`802 F.3d 1283 (Fed. Cir. 2015) .............................................................................................. 3
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`Other Authorities
`
`Fed. R. Evid.
`702(b) ................................................................................................................................... 4
`702(c) .................................................................................................................................... 4
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`-ii-
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`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 4 of 11 PageID #: 19291
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`As set forth below and in LG Electronics Inc.’s (“LG Korea”) motion (D.I. 118), the
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`Court should exclude the opinions of AGIS’s damages expert Alan Ratliff.
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`I.
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` IS AN UNRELIABLE BASIS FOR
`MR. RATLIFF’S
`THE HYPOTHETICAL NEGOTIATION
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`Mr. Ratliff ignores
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`AGIS asserts that it is an “‘apples to oranges’ comparison” to suggest that
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` (D.I. 153 at 4.) But this illustrates how Mr. Ratliff has made an
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`unsupported comparison between
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`. AGIS claims
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`” (D.I. 153 at 4.) AGIS has no citation to back this,
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`proving that Mr. Ratliff
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` AGIS cites no discussion or evidence in Mr. Ratliff’s report purporting to analyze
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`-1-
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`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 5 of 11 PageID #: 19292
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`AGIS also argues that “LG provides no case law in support of its argument that
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`Mr. Ratliff’s
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` is unreliable.” (D.I. 153 at 4.) But, LG Korea provided Federal Circuit
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`authority holding that the failure to address basic economic principles merits exclusion of
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`damages testimony. (D.I. 118, at 5 (citing Exmark Mfg. Co. v. Briggs & Stratton Power Prods.
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`Group, LLC, 879 F.3d 1332, 1350 (Fed. Cir. 2018).) Exmark held it an abuse of discretion to
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`admit the testimony of an expert who “failed to conduct any analysis indicating the degree to
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`which these considerations [that affect sales and profits] impact the market value or profitability”
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`of the accused product, and how these in turn affected the royalty rate. 879 F.3d at 1350.
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`Similarly, here, Mr. Ratliff failed to analyze
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`. AGIS’s
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`opposition fails to cite, discuss, or distinguish Exmark at all.
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`AGIS asserts that LG Korea has focused on “Mr. Ratliff’s starting point, to the exclusion
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`of his additional adjustments,” leading to a “misleading and erroneous conclusion.” (D.I. 153 at
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`6.) Mr. Ratliff’s “additional adjustments” are no less problematic, and addressed elsewhere in
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`LG Korea’s motion. But no matter how many “adjustments” are made, they cannot fix the flaw
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`of
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`.
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`II.
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`THE
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` IS UNRELIABLE AND UNSUPPORTED
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`Mr. Ratliff’s
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` is unreliable for failure to
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`to navigate to a shared location is merely another step or component performed after the
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`infringing activity.” (D.I. 153 at 6.) This assertion demonstrates the foundational errors of
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` AGIS now claims “using Google Maps
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`-2-
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`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 6 of 11 PageID #: 19293
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`AGIS and Mr. Ratliff.
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` (D.I. 118, at 7 (citing Open Text S.A. v.
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`Box, Inc., No. 13-cv-04910-JD, 2015 WL 349197, at *7 (N.D. Cal. Jan. 23, 2015)).)
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`AGIS pivots to claiming that a
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` Mr. Ratliff
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` This renders his opinions unreliable. Cf. Summit 6,
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`LLC v. Samsung Elecs. Co., Ltd., 802 F.3d 1283, 1297-99 (Fed. Cir. 2015) (finding that expert’s
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`“damages methodology was based on reliable principles and was sufficiently tied to the facts of
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`the case,” where expert “estimated the percentage of camera users who used the camera to
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`perform the infringing methods rather than for other purposes”) (emphasis added).
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`III. THE
`UNSUPPORTED
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` IS UNRELIABLE AND
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`AGIS analogizes Mr. McAlexander’s
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`
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`to statements made by an expert in Chrimar Holding Co., LLC v. ALE
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`USA Inc., 2018 WL 2120618, *9 (Fed. Cir. 2018). This falls flat. While an expert in Chrimar
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`did state that “the patents ‘relate to the majority and the most critical aspects of the standard,’”
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`id., that is not all the expert stated. He further explained that “the standards would not be
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`-3-
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`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 7 of 11 PageID #: 19294
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`successful without [plaintiff’s] inventions,” and “the standards would not have gained
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`widespread adoption without [plaintiff’s] patented inventions.” Id. Chrimar does not help AGIS
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`because Mr. Ratliff engaged in no such analysis, and has failed to explain any reliable basis or
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`methodology for translating a subjective and conclusory statement
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`into a quantitative means to apportion value.
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`IV.
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`THE
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` ARE NOT RELEVANT TO THIS CASE
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`AGIS would defend Mr. Ratliff’s use of irrelevant
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`excuse Mr. Ratliff’s
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` Such complaints cannot
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` AGIS agrees that “[t]here is no simple
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`or direct basis for such an estimate,” but that concession means the testimony is inadmissible.
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`(Id. at 13.) A methodology that rests on subjective methods and made-up data is per se
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`unreliable. Fed. R. Evid. 702(b)-(c); see also BMC Software, Inc. v. ServiceNow, Inc., No. 2:14-
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`CV-903-JRG, 2016 WL 379620, at *2 (E.D. Tex. Feb. 1, 2016) (striking expert’s opinion where
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`methodology was not generally accepted or based on reliable principles and methods, but rather
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`was based on his own personal experience).
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`V.
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`THE OPINIONS VIOLATE THE ENTIRE MARKET VALUE RULE
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`AGIS claims that Mr. Ratliff is not offering an analysis based on the entire market value
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`rule, but the substance shows otherwise. Tellingly, in defending Mr. Ratliff’s
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`-4-
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`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 8 of 11 PageID #: 19295
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`opposition is non-responsive, suggesting that Mr. Ratliff discussed
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`only in connection with a single Georgia-Pacific factor. (Id. at 14.) His entire damages model
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` despite AGIS claiming otherwise. AGIS’s
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`violates the entire market value rule and should be excluded.
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`VI. CONCLUSION
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`For the foregoing reasons, LG Korea’s motion should be granted, and Mr. Ratliff’s
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`damages opinions should be excluded.
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`Dated: February 19, 2019
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`Respectfully submitted,
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`By:
`
`/s/ Michael A. Berta
`J. Mark Mann
`SBN: 12926150
`G. Blake Thompson
`SBN: 24042033
`MANN TINDEL THOMPSON
`300 West Main Street
`Henderson, Texas 75652
`Tel: (903) 657-8540
`mark@themannfirm.com
`blake@themannfirm.com
`
`Michael A. Berta
`ARNOLD & PORTER KAYE SCHOLER LLP
`Three Embarcadero Center
`10th Floor
`San Francisco, CA 94111-4024
`Tel: (415) 471-3277
`Michael.Berta@arnoldporter.com
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`-5-
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`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 9 of 11 PageID #: 19296
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`James S. Blackburn
`Nicholas H. Lee
`Justin J. Chi
`ARNOLD & PORTER KAYE SCHOLER LLP
`777 South Figueroa Street
`44th Floor
`Los Angeles, CA 90017-5844
`Tel: (213) 243-4156
`James.Blackburn@arnoldporter.com
`Nicholas.Lee@arnoldporter.com
`Justin.Chi@arnoldporter.com
`
`Bonnie Phan
`ARNOLD & PORTER KAYE SCHOLER LLP
`3000 El Camino Real
`Five Palo Alto Square
`Suite 500
`Palo Alto, CA 94306-3807
`Tel: (650) 319-4500
`Bonnie.Phan@arnoldporter.com
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`Attorneys for Defendant LG Electronics Inc.
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`-6-
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`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 10 of 11 PageID #: 19297
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`CERTIFICATE OF AUTHORIZATION TO FILE UNDER SEAL
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`The undersigned certifies that the foregoing document is authorized to be filed under seal
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`pursuant to paragraphs 26 and 27 of the Protective Order entered in this case.
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`/s/ Michael A. Berta
` Michael A. Berta
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`-7-
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`Case 2:17-cv-00514-JRG Document 223 Filed 02/21/19 Page 11 of 11 PageID #: 19298
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that counsel of record who are deemed to have
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`consented to electronic services are being served with a copy of this document via the Court’s
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`CM/ECF system per Local Rule CV-5(a)(3) on February 19, 2019.
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`/s/ Michael A. Berta
` Michael A. Berta
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`-8-
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