Case 2:23-cv-00059-JRG Document 185 Filed 09/05/24 Page 1 of 9 PageID #: 10135
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`TOUCHSTREAM TECHNOLOGIES, INC.,
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`Plaintiff,
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`v.
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`CHARTER COMMUNICATIONS, INC., et al.,
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`Defendants.
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`Lead Case No. 2:23-cv-00059-JRG
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`TOUCHSTREAM TECHNOLOGIES, INC.,
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`Plaintiff,
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`v.
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`COMCAST CABLE COMMUNICATIONS,
`LLC, D/B/A XFINITY, et al.,
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`Defendants.
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`Member Case No. 2:23-cv-00062-JRG
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`CHARTER DEFENDANTS’ REPLY BRIEF IN FURTHER SUPPORT OF ITS MOTION
`TO STRIKE DR. MANGUM’S DAMAGES THEORIES
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`Case 2:23-cv-00059-JRG Document 185 Filed 09/05/24 Page 2 of 9 PageID #: 10136
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`Charter respectfully replies to Touchstream’s opposition (Dkt. 129,1 “Opp.”) to Charter’s
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`Motion to Exclude and Strike Dr. Russell Mangum’s Improper Opinions (Dkt. 95, “Mot.”).
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`I.
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`ARGUMENT
`DR. MANGUM DID NOT ACCOUNT FOR ACTUAL OR ESTIMATED USE OF
`THE CLAIMED INVENTION, WHICH IS REQUIRED BY LAW
`Touchstream is wrong when it argues that damages for method claims need not be based
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`on actual or “estimated number of times a patented method is performed.” (Opp. 1.) Touchstream
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`relies heavily on Hanson and chides Charter for “neglecting” to cite it, but Touchstream
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`misrepresents that opinion, which goes directly against Touchstream. In Hanson, the expert
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`accounted for “estimated cost savings resulting from Alpine’s use of the infringing Hedco
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`machines” by basing his “calculations on the use of the machines for 800 hours a year,” assuming
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`“an average season’s use of snowmaking systems.” Hanson v. Alpine Valley Ski Area, Inc., 718
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`F.2d 1075, 1080-81 (Fed. Cir. 1983) (emphases added). Touchstream cites Lucent (which
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`referenced Hanson), but that case also goes against Touchstream: “The damages award ought to
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`be correlated, in some respect, to the extent the infringing method is used by consumers.” Lucent
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`Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1334 (Fed. Cir. 2009).
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`Touchstream mispresents the other cases it cites. It asserts that Trading Technologies is a
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`“method patent case[]” (Opp. 7), but both method and system claims were at issue. Trading Techs.
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`Int’l v. IBG LLC, No. 10-cv-715, 2021 WL 5038754 (N.D. Ill. July 23, 2023), aff’d sub. nom.
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`Brumfeld v. IBG LLC, 97 F.4th 845 (Fed. Cir. 2024); Brumfeld, 87 F.4th at 863, 864-65, 871, 877
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`(during Daubert and summary judgment, the “court treated together the method and system claims
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`of the patents,” and considered a different damages framework than at issue here, “damages based
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`on foreign conduct,” which requires a “causal connection” and must still “respect[] the
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`1 Charter responds to the corrected opposition (Dkt. 129) and to the original exhibits (Dkt. 126).
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`1
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`Case 2:23-cv-00059-JRG Document 185 Filed 09/05/24 Page 3 of 9 PageID #: 10137
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`apportionment limit that excludes values beyond that of practicing the patent.”). As for Carnegie
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`Mellon University v. Marvell Technology Group, the court took usage into account but permitted
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`the plaintiff to base damages on non-infringing sales because “Marvell has also conceded that its
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`infringing use is the but-for cause of [its] sales.” 890 F. Supp. 2d 602, 609-10 (W.D. Pa. 2012).
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`Neither Touchstream nor Dr. Mangum have asserted anywhere that the accused Send-to-TV
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`feature is a “but-for” cause of any Charter sales or subscriptions. Lastly, Touchstream relies on
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`Sprint Communications Co. v. Charter Communications, Inc., which preceded Niazi and does not
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`follow Federal Circuit precedent. No. 17-cv-1734-RGA, 2021 WL 982732 (D. Del. Mar 16, 2021).
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`Touchstream’s effort to distinguish Cardiac Pacemakers and Niazi Licensing is baseless
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`and ignores the core principle of both cases that “patentees cannot recover damages based on sales
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`of products with the mere capability to practice the claimed method.” See Niazi Licensing Corp.
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`v. St. Judge Med., S.C., Inc., 30 F.4th 1339, 1357 (Fed. Cir. 2022) (citing Cardiac Pacemakers,
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`Inc. v. St. Jude Med., Inc., 576 F.3d 1348, 1358-59 (Fed. Cir. 2009)). Dr. Mangum’s royalty base
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`consisting of all devices capable of infringing is contradicted by these controlling precedents and
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`their progeny.
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`Dr. Mangum ignores this principle, stating that “a damages model based on usage of the
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`app is inappropriate.” (Mangum Op. ¶142.)2 Dr. Mangum’s royalty base covers every accused
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`STB (based on capability), regardless of whether it has ever been used to perform the claim
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`method, and the citations to Dr. Mangum in Touchstream’s Opposition refer only to capability,
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`not actual or estimated usage: “Touchstream would consider expectation and potential of the
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`2 Dr. Mangum’s assertion that “the extent of use . . . is accounted for in the royalty base” (Mangum
`Op. ¶141) contradicts not only his statement that “a damages model based on usage of the app is
`inappropriate” (¶142) but also the fact that his royalty base does not account for use at all and
`instead simply adds up all STBs with just the “potential” of being used.
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`2
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`Case 2:23-cv-00059-JRG Document 185 Filed 09/05/24 Page 4 of 9 PageID #: 10138
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`counterparty’s use of the technology” (Opp. Ex. A ¶106; id. ¶141 “the extent of use, which is
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`factoring into subscriber counts”); id. ¶114 (“Defendant stands ready to perform the patented
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`methods for each STB in a subscriber’s house upon request, and should pay Touchstream per STB,
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`per month for the right to do so.”).) What is worse, Touchstream and Dr. Mangum had Charter’s
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`data on actual usage, but intentionally ignored it and made no effort to explain why it should not
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`be considered.3 When Touchstream chose to assert only method claims, it gave up the damages it
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`now seeks as a matter of law, and they should be stricken.
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`II.
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`DR. MANGUM FAILED TO APPORTION HIS ROYALTY RATE TO
`ACCOUNT FOR THE ADDITIONAL ITEMS INCLUDED IN THE
`LICENSE RATE
`Dr. Mangum improperly applied the full
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`apportion the value of the asserted claims from the products, services, and other rights given to
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` This error warrants striking his royalty rate opinions. See, e.g., Apple Inc. v. Wi-LAN
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`Inc., 25 F.4th 960, 971-74 (Fed. Cir. 2022). Touchstream provides no basis for the Court to
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`disregard the Federal Circuit’s CSIRO decision which requires, for reliability under Daubert, that
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`the “ultimate reasonable royalty award must be based on the incremental value that the patented
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`invention adds to the end product.” 809 F.3d 1295, 1301 (Fed. Cir. 2015). Touchstream offers no
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`explanation why Dr. Mangum refused to apportion so much as a penny from the
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`rate to any non-patented components of the reasonable royalty in this case, as shown in the chart
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`in the Motion at 11. Touchstream’s opposition ignores this chart.
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`3 Touchstream also says that Dr. Mangum “factor[ed] in estimates for how many times
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`would use the patented method” but it never discloses these estimates, which are fictitious. (Opp.
`5.) Factoring in “the hotel rooms” count is not an estimate of usage because there is no data or
`even estimate of whether
` customers used the allegedly patented features or not. Nor
`would such a consideration necessarily be relevant to
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`purportedly included Touchstream’s unasserted system claims whose infringement does not
`depend on use. See, supra, II.
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`3
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`Case 2:23-cv-00059-JRG Document 185 Filed 09/05/24 Page 5 of 9 PageID #: 10139
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`Touchstream argues that because
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`or estimated use, Charter would do the same. This not only ignores the law, as discussed, but it
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`ignores the critical fact that the
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` agreement purportedly conveys rights to apparatus
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`claims. (See Ex. 18, ’251 Patent, claims 11-21) These apparatus claims, unlike the method claims
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`asserted against Charter, command royalties based on device capability, not actual usage. Niazi,
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`30 F.4th at 1357. Dr. Mangum’s failure to account for this at all, as well as the other items in
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`Charter’s chart (Mot. at 11), justify striking Dr. Mangum’s royalty opinions for failure to conduct
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`a proper apportionment.
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`III. DR. MANGUM IMPROPERLY RELIES ON THE GOOGLE TRIAL AND
`UNPRODUCED DOCUMENTS
`The Court’s Standing Order on Motions in Limine No. 13 prohibits reference to “either
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`party’s other litigations” such as Google, because it is prejudicial. Touchstream argues that the
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`Court should defer ruling on this because “Charter appears likely to open the door.” (Opp. 14.)
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`This argument is irrelevant and simply avoids the issue. Reference to the Google trial should be
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`excluded at least per the Court’s Standing MIL No. 13, and Charter will not open the door—if it
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`does, then the Court can permit Touchstream to respond, as with any motion in limine. Even if
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`there is some relevance of information from the Google trial (there is not), the resulting prejudice
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`could not be cured by a limiting instruction. Therefore, all references to the Google trial in Dr.
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`Mangum’s report should be stricken.
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`Touchstream argues that the Google trial is relevant to “post-filing willfulness” or to rebut
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`lack of commercial success. (Opp. at 14). Dr. Mangum, however, does not offer any opinions on
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`willful infringement and is precluded from doing so by the Court’s Standing Order on Motions in
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`Limine No. 23. Dr. Mangum’s discussion of the “commercial success” of the Google Chromecast
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`devices (in a footnote) is not relevant because he did not show any nexus between the asserted
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`4
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`Case 2:23-cv-00059-JRG Document 185 Filed 09/05/24 Page 6 of 9 PageID #: 10140
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`claims in this case and Chromecast’s sales. (Opp., Ex. A, n.206). In his footnote, Dr. Mangum
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`made no attempt to explain how or if it was the asserted patent claims that drove Google
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`Chromecast’s supposed success, versus other claims, making his opinion unreliable.
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`Moreover, the Google trial relates to different patents, different products, and different
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`damages theories and as such has no relevance to Touchstream’s allegations against Charter.
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`Touchstream just wants the jury to know that another Texas jury found one of the Asserted Patents
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`infringed and awarded Touchstream hundreds of millions of dollars—the prejudice to Charter from
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`this showing would be massive and uncurable by any instruction from the Court. Touchstream’s
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`reliance on Sprint is misplaced because “Time Warner has not shown in its briefs any reason to
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`believe that the technology asserted in the Vonage case was materially different from the
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`technology raised in this case.” Sprint Commc’ns Co., L.P. v. Time Warner Cable, Inc., 760 F.
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`App’x 977, 981 (Fed. Cir. 2019). By contrast, there is no dispute that Google’s Chromecast and
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`Charter’s accused cable TV systems are materially different (Mot. at 13), and Dr. Mangum has no
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`technical opinions comparing Charter’s and Google’s products nor did he recall any discussion
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`with Touchstream’s experts regarding any such differences.
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`Finally, as to Unproduced Documents, Touchstream claims without support that Dr.
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`Mangum did not rely on them, because the documents were not cited in the body of his report.
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`(Opp. 15.) Yet, Touchstream does not dispute that Dr. Mangum reviewed and considered these
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`documents when formulating his opinions and that Touchstream did not provide Charter with the
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`Unproduced Documents. (Id.) Therefore, the Court should preclude Touchstream and Dr. Mangum
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`from relying on the Unproduced Documents.
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`CONCLUSION
`For these reasons, Charter respectfully asks that the Court grant Charter’s Motion to strike
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`the opinions of Dr. Russell W. Mangum III.
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`5
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`Case 2:23-cv-00059-JRG Document 185 Filed 09/05/24 Page 7 of 9 PageID #: 10141
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`Dated: August 28, 2024
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`Respectfully submitted,
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`/s/ Daniel Reisner
`Daniel L. Reisner, pro hac vice
`David Benyacar, pro hac vice
`Melissa Brown, pro hac vice
`Robert Stout, pro hac vice
`ARNOLD & PORTER KAYE SCHOLER LLP
`250 West 55th Street
`New York, NY 10019
`Phone: (212) 836-8000
`Email: daniel.reisner@arnoldporter.com
`Email: david.benyacar@arnoldporter.com
`Email: melissa.brown@arnoldporter.com
`Email: robert.stout@arnoldporter.com
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`Dina M. Hayes, pro hac vice
`ARNOLD & PORTER KAYE SCHOLER LLP
`70 West Madison Street, Suite 4200
`Chicago, IL 60602
`Phone: (312) 583-2300
`Email: dina.hayes@arnoldporter.com
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`Marc A. Cohn, pro hac vice
`ARNOLD & PORTER KAYE SCHOLER LLP
`601 Massachusetts Avenue, NW
`Washington, DC 20001
`Phone: (202) 942-5000
`Email: marc.cohn@arnoldporter.com
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`Carson Anderson, pro hac vice
`ARNOLD & PORTER KAYE SCHOLER LLP
`3000 El Camino Real, Suite 500
`Palo Alto, CA 94306
`Phone: (650) 319-4500
`Email: carson.anderson@arnoldporter.com
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`Deron R. Dacus
`State Bar No. 00790553
`THE DACUS FIRM, P.C.
`821 ESE Loop 323, Suite 430
`Tyler, TX 75701
`Phone: (903) 705-1117
`Fax: (903) 581-2543
`Email: ddacus@dacusfirm.com
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`6
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`Case 2:23-cv-00059-JRG Document 185 Filed 09/05/24 Page 8 of 9 PageID #: 10142
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`Attorneys for Defendants Charter Communications,
`Inc., Charter Communications Operating, LLC,
`Spectrum Management Holding Company, LLC,
`Time Warner Cable Enterprises, LLC, Spectrum
`Gulf Coast, LLC, Charter Communications, LLC
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`Case 2:23-cv-00059-JRG Document 185 Filed 09/05/24 Page 9 of 9 PageID #: 10143
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`CERTIFICATE OF SERVICE
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`The undersigned counsel certifies that the foregoing document and all attachments thereto
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`are being filed electronically in compliance with Local Rule CV-5(a). As such, this document is
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`being served August 28, 2024, on all counsel of record, each of whom is deemed to have consented
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`to electronic service. L.R. CV-5(a)(3)(A).
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`/s/ Daniel Reisner
`Daniel Reisner
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`CERTIFICATE OF CONFERENCE
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`Pursuant to Local Rule CV-7(h), the undersigned counsel hereby certifies that counsel for
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`the parties met and conferred by telephone on July 31, 2024, and plaintiff has stated that it opposes
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`this motion.
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`/s/ Daniel Reisner
`Daniel Reisner
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`8
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