Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 1 of 11 PageID #: 21134
`
`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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`§§§§§§§§§
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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.
`
`LG ELECTRONICS INC.’S SUR-REPLY IN OPPOSITION TO AGIS SOFTWARE
`DEVELOPMENT LLC’S DAUBERT MOTION TO EXCLUDE THE OPINIONS OF W.
`CHRISTOPHER BAKEWELL RELATING TO DAMAGES
`
`
`
`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
`
`§§§§§§§§§
`
`§§§§§§§§§
`
`AGIS SOFTWARE DEVELOPMENT, LLC
`
`Plaintiff,
`
`v.
`
`HTC CORPORATION, et al.
`
`Defendant.
`AGIS SOFTWARE DEVELOPMENT, LLC
`
`Plaintiff,
`
`v.
`
`LG ELECTRONICS INC.
`
`Defendant.
`
`LG ELECTRONICS INC.’S SUR-REPLY IN OPPOSITION TO AGIS SOFTWARE
`DEVELOPMENT LLC’S DAUBERT MOTION TO EXCLUDE THE OPINIONS OF W.
`CHRISTOPHER BAKEWELL RELATING TO DAMAGES
`
`
`
`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 2 of 11 PageID #: 21135
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`TABLE OF CONTENTS
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`Page
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`I.
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`II.
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` IS RELIABLE ................................................................. 1
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`MR. BAKEWELL HAS SHOWN ECONOMIC COMPARABILITYERROR! BOOKMARK NOT DEFINED.
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`i
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`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 3 of 11 PageID #: 21136
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`TABLE OF AUTHORITIES
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`
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`Page(s)
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`Cases
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`Flexuspine, Inc. v. Globus Med., Inc.,
`No. 6:15-cv-201-JRG-KNM, 2016 WL 9276023 (E.D. Tex. July 6, 2016) ..........................1, 5
`
`Realtime Data LLC v. EchoStar Corp.,
`No. 6:17-CV-00084-JDL, 2018 WL 6266300 (E.D. Tex. Nov. 15, 2018) ............................2, 3
`
`Virnetx, Inc. v. Cisco Sys., Inc.,
`767 F.3d 1308 (Fed. Cir. 2014)..................................................................................................2
`
`Other Authorities
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`https://www.fcc.gov/general/9-1-1-and-e9-1-1-services .................................................................5
`
`ii
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`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 4 of 11 PageID #: 21137
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`AGIS’s reply demonstrates yet again that it has not brought a proper Daubert motion.
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`Daubert motions concern unreliable methodology, not complaints about the weight to be given
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`to a particular license agreement. AGIS concedes that settlement agreements can be relied upon
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`as comparable licenses. AGIS also apparently concedes that
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`is technically
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`comparable, as it must when its own expert
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`Thus, AGIS’s only complaint is whether
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` is economically comparable.
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`Each of AGIS’s complaints regarding the economic comparability of
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`are
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`issues for cross-examination, not exclusion. The jury can weigh the economic comparability.
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`Because AGIS’s motion goes to the weight of Mr. Bakewell’s opinions and not their
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`admissibility, AGIS’s motion should be denied.
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`I.
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` IS RELIABLE
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`As stated in Flexuspine, a key element in assessing the comparability of licenses is
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`“whether more reliable licenses for the patents in suit are available.” Flexuspine, Inc. v. Globus
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`Med., Inc., No. 6:15-cv-201-JRG-KNM, 2016 WL 9276023, *4 (E.D. Tex. July 6, 2016). Here,
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`there is no dispute that there are no more reliable licenses. AGIS has produced no licenses to its
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`patents, indicating it has been unable to license its patents. And the licenses relied on by AGIS’s
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`expert are much less reliable on the very metrics cited by AGIS as criticism for the Zoltar
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`Agreement.
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`-1-
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`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 5 of 11 PageID #: 21138
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` It is clear that, on the record
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`available here,
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`is the most reliable license presented by the parties.
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`II.
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`MR. BAKEWELL HAS SHOWN ECONOMIC COMPARABILITY
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`AGIS criticizes Mr. Bakewell for not explaining
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`
`
`
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` There is no express requirement that how the lump sum amount
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`in comparable licenses was negotiated is a prerequisite consideration, and AGIS cites no
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`authority for such a requirement. AGIS further criticizes Mr. Bakewell for not
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`
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` AGIS presumes that
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`
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` but no evidence supports this
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`assumption. AGIS’s criticism goes to the weight, not admissibility, of Mr. Bakewell’s report.
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`The case AGIS relies on, Realtime, upholds the proposition LG Korea advocates—that
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`degree of comparability is a jury issue, not a methodological flaw, and thus is “best addressed by
`
`cross examination, rather than exclusion.” Realtime Data LLC v. EchoStar Corp., No. 6:17-CV-
`
`00084-JDL, 2018 WL 6266300, at *3 (E.D. Tex. Nov. 15, 2018) (citing Virnetx, Inc. v. Cisco
`
`Sys., Inc., 767 F.3d 1308, 1331 (Fed. Cir. 2014)). As noted in Realtime, “[a] jury may hear
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`testimony regarding the differences between the alleged comparable licenses and the
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`hypothetical negotiation, evaluate its credibility, and ultimate[ly] determine whether to accept or
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`-2-
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`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 6 of 11 PageID #: 21139
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`reject the testimony.” Realtime, 2018 WL 6266300, at *3. The Realtime Court ultimately
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`allowed an expert’s discussion of FRAND licenses. Id., at *4. It did exclude a separate
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`settlement agreement, but its reasons for doing so undermine, rather than support, AGIS’s
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`criticisms of Mr. Bakewell. AGIS claims that “the first factor” the Realtime Court considered in
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`excluding the expert’s opinion related to the settlement agreement was that “the final agreement
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`reached lacks any reference to the court’s prior order or the royalty base (if any at all) used to
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`arrive at the lump sum payment.” (D.I. 195 at 3.) AGIS implies that the lack of reference to the
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`royalty base in the settlement agreement was a ground for exclusion. But, AGIS misconstrues
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`the Court’s statement. The Realtime expert opined that a prior court order “suggest[ed] that the
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`settlement agreement was calculated based on a component royalty base,” but, in fact, the
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`settlement agreement, which included a lump-sum payment, was silent as to the royalty base.
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`2018 WL 6266300, at *4. In deciding to exclude the opinion related to the settlement agreement,
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`the Court noted that the expert “[sought] to effectively attach additional terms to the final written
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`agreement.” Id. In other words, one reason the Court excluded the opinion related to the
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`settlement agreement was that it translated a lump-sum payment into a component royalty based
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`on extrinsic evidence that was not reflected in the settlement agreement itself. Exclusion was
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`also appropriate because the expert conceded that the settlement agreement was not technically
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`comparable (id.), which is not the case here. Effectively, AGIS is improperly attempting to use
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`Realtime to exclude Mr. Bakewell for not doing what was a cause for exclusion in that case.
`
`AGIS also complains about
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`-3-
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`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 7 of 11 PageID #: 21140
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`Mr. Bakewell further testified that
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` This goes to the weight―not admissibility―of Mr. Bakewell’s opinions, and
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`should be addressed by AGIS during cross examination at trial.
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`AGIS again argues that Mr. Bakewell did not fully consider
`
`
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`
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` But, as discussed in LG Korea’s opposition, Mr. Bakewell
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`does discuss the context of
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`
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` Yet again, AGIS fails to identify any relevance and has cited no authority for the
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`relevance of license amounts paid by entities that are not parties and not at all related to the
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`claims or defenses in the present action. The focus here is on LG Korea’s licenses, not those of
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`other defendants who are not parties to the hypothetical negotiation here.1
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`AGIS also claims that there is no evidence that LG Korea practiced the inventions
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`claimed
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`
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`But, AGIS cites no legal authority that LG Korea must show it practiced the inventions claimed
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`1 AGIS complains that Mr. Bakewell did not account for
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`-4-
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`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 8 of 11 PageID #: 21141
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`. Indeed, such a requirement would make no sense as it would mean that accused
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`infringers have to concede infringement when defending against claims of patent infringement.
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`It is always the case in license agreements that a licensee that may otherwise have been an
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`accused infringer does not concede that it practices the claimed inventions or that the patents
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`were valid and infringed, and AGIS cites no cases requiring a trial within a trial on separate
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`technology to prove use, as the purpose of the license agreement is to covenant not to sue. (See
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`D.I. 148 at 3-4.) What is relevant is that a payment was made for a class of products. Whether
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`LG Korea
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` is not a predicate to comparability.
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`Finally, AGIS asserts that Mr. Bakewell did not account for the changing value of the
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`licensed technology over time. (D.I. 195 at 4.) However, Mr. Bakewell recognized that
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` Further, E-911
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`technology remains relevant as it is mandated by FCC in all cellular phones for emergency
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`telephone calls, including LG Korea mobile phones that AGIS accuses of infringement in this
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`matter.2 Flexuspine is of no help to AGIS. As LG Korea explained in its opposition, the Court
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`in Flexuspine struck portions of an expert’s report related to a settlement agreement because the
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`expert’s “field of use” abstraction did not provide adequate support for technical comparability,
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`and other reliable licenses of the patents-in-suit existed. Flexuspine, 2016 WL 9276023, *5. As
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`discussed above, no other reliable licenses to the Patents-In-Suit exist here.
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`For the foregoing reasons, AGIS’s Daubert motion to exclude should be denied.
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`2 “911 and E911 Services,” FCC website (accessed: https://www.fcc.gov/general/9-1-1-and-e9-1-
`1-services).
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`-5-
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`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 9 of 11 PageID #: 21142
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`Dated: February 27, 2019
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`Respectfully submitted,
`
`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
`
`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
`
`Attorneys for Defendant LG Electronics Inc.
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`-6-
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`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 10 of 11 PageID #: 21143
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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.
`
`/s/ Michael A. Berta
` Michael A. Berta
`
`-7-
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`Case 2:17-cv-00514-JRG Document 264 Filed 03/04/19 Page 11 of 11 PageID #: 21144
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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 27, 2019.
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`/s/ Michael A. Berta
` Michael A. Berta
`
`-8-
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