Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 1 of 10 PageID #: 10389
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`IN THE 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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`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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`Lead Case No. 2:23-cv-00059-JRG
`Member Case No. 2:23-cv-00062-JRG
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`TOUCHSTREAM’S SURREPLY BRIEF OPPOSING CHARTER’S MOTION
`TO EXCLUDE AND STRIKE DR. RUSSELL W. MANGUM III’S OPINIONS
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`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 2 of 10 PageID #: 10390
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`The Federal Circuit explains
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`that damages should
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`track “real-world
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`licensing
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`negotiations,” and thus has repeatedly rejected the “rigid requirement” Charter calls for, which Dr.
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`Mangum in any event satisfies. See Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1334 (Fed.
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`Cir. 2009). Here, Dr. Mangum follows Lucent’s guidance, finding the most comparable real-world
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`agreement, subtracting out payments from the agreement to focus on the footprint of the patents,
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`making the proper adjustments to this case, and explaining why no further adjustments are needed.
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`Ex. A, Mangum Report § V.A.1.1 He also explained how his approach accounts for expected use
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`of the patented method. Id. ¶¶ 106, 141, 149-53. Charter finally acknowledges these opinions, and
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`retreats to merely arguing Dr. Mangum elsewhere “contradicts” himself. Reply Br. at 2 n. 2. Even
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`if true (it is not), this is a quintessential issue for cross examination. Dr. Mangum’s approach is
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`legally sound and reliable, and Charter’s disagreements with its application are for cross.
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`Charter also continues to make plainly inaccurate statements about Dr. Mangum’s opinions
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`and Touchstream’s arguments, and this alone is reason to deny Charter’s full motion. Touchstream
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`has already explained how Charter incorrectly represented to the Court that Dr. Mangum’s report
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`“does not even mention” copyright and trademark rights from the
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` agreement, when in
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`fact his report discussed those exact issues at length. Opp. at 2. Charter does not even try to defend
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`that false statement. See generally Reply Br. Amazingly, Charter now makes a similar inaccurate
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`claim that “Touchstream’s opposition ignores” a chart on page 11 of Charter’s brief (Reply Br. at
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`3), when that opposition spends over a page discussing “Charter’s diagram (Mot. at 11)” and how
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`Dr. Mangum addresses everything in it. Opp. at 13-14. When Charter cannot be trusted to
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`accurately describe basic issues like this, the Court should deny Charter’s entire motion.
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`1 Defined terms carry the same meaning as in Touchstream’s Opposition (Dkt. 126), and “Ex. __”
`refers to the exhibits attached to that Opposition unless otherwise specified.
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`1
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`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 3 of 10 PageID #: 10391
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`A. Dr. Mangum Goes Beyond Any Legal Requirement for Addressing Actual Use
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`Charter’s argument that Dr. Mangum fails to adequately address usage of the patented
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`methods continues to misunderstand both what Dr. Mangum did and what the law requires.
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`As to what Dr. Mangum opined on, he explained that the
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` month rate from the
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` factored in how many times the parties expected
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` would perform
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`the accused method for users, and he concluded the expected usage for Charter would be similar
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`enough that no adjustment is required. Ex. A, Mangum Report ¶¶ 106, 141, 149-153. Charter
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`appears confused by this point, but factoring expected use into a flat rate is nothing new. Insurance
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`companies clearly base monthly premiums on an estimate of the number and cost of claims and
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`apply that rate to every customer each month whether they make a claim or not. These monthly
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`flat fees account for expected use of the service, they just do so in a different way that is more
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`convenient and predictable. Dr. Mangum explained at length why Touchstream and Charter would
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`agree to such a rate here, including because
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` agreed to this in similar circumstances, and
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`because this approach aligns with Charter’s need for the technology and how Charter (and its
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`competitors) charge video customers. Id. ¶¶ 106-09, 114. He has also explained that if he
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`artificially changed the base, such as by applying the
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` rate only to customers who actually
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`used the technology in a given month, he would need to increase the rate, see Ex. C, Mangum Tr.
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`at 68:9-69:25, as would insurance companies if they suddenly started only charging customers for
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`months where they made a claim. This is a reliable approach, well-grounded in the facts and law.
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`As to applicable law, Charter’s discussions are academic because, as explained above, Dr.
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`Mangum’s opinions easily meet any requirement of being “correlated, in some respect, to the
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`extent the infringing method is used by consumers.” Reply Br. at 1 (quoting Lucent, 580 F.3d at
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`1334). And the cases Charter discusses leave flexibility for a real-world approach like the one
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`2
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`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 4 of 10 PageID #: 10392
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`applied by Dr. Mangum here. With Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075, 1080-
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`81 (Fed. Cir. 1983), involving only method claims, Charter’s interpretation is at odds with the
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`Federal Circuit’s decision in Lucent, which 26 years later favorably described Hanson as
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`“approving a reasonable royalty not based on ‘actual use of the snowmaking machinery’ but on
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`what a party would have paid to have the machine available to use.” See 580 F.3d at 1334
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`(emphasis added). Dr. Mangum’s calculations, which also explain why Charter and its customers
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`would independently value having the patented method available to use, but which nonetheless
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`applied a rate factoring in expected use of that method, is well supported by controlling law.2
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`Nothing in the additional cases cited by Charter changes this result. Charter suggests that
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`Cardiac Pacemakers and Niazi Licensing represent some major change in the law, but this ignores
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`that the Federal Circuit in Cardiac Pacemakers took up some issues, but not this one, en banc. See
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`Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348, 1358-59 (Fed. Cir. 2009). This
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`confirms that no judge on the Federal Circuit saw anything in Hanson that was controversial and
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`should be overruled, which the Federal Circuit confirmed the next month when it cited Hanson
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`favorably in the Lucent case. Cardiac Pacemakers and Niazi Licensing should thus be limited to
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`their facts, which Touchstream distinguished in arguments that Charter only addresses in
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`conclusory fashion as “baseless.” Reply Br. at 2. This also shows that Charter is incorrect to
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`dismiss Sprint Commc’ns Co. v. Charter Commc’ns, Inc., C.A. No. 17-cv-1734, 2021 WL 982732
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`(D. Del. Mar. 16, 2021) as “preced[ing] Niazi” and “not follow[ing] Federal Circuit precedent”
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`(Reply Br. at 2). That case fell within the controlling reasoning of Hanson and Lucent when the
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`2 Charter also claims Lucent “goes against Touchstream[.]” Reply Br. at 1. But Lucent rejected the
`argument that “for method claims, [precedent] requires that damages be limited to the proven
`number of instances of actual infringing use.” See 580 F.3d at 1323. And the language Charter cites
`discusses of Georgia-Pacific factor 11, not an independent reason for exclusion. See id. 1333-34.
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`3
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`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 5 of 10 PageID #: 10393
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`court rejected defendant’s argument that a flat monthly fee for method patents failed to apportion
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`to the number of infringing calls, noting that (as here) defendants “did not refund any money to
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`subscribers if they did not make [infringing] calls.” See Charter, 2021 WL 982732 at *14.3
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`B. Charter’s Apportionment Challenges are an Issue for Cross-Examination
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`Dr. Mangum’s use of the
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` agreement, the comparability of which Charter does not
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`appear to challenge, satisfies Daubert requirements. Dr. Mangum subtracted out several payments
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`in that agreement, including “development fees” and “integration” fees (Ex. A, Mangum Report ¶
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`110), and explained why the remaining
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` per month rate properly applies in this case once an
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`appropriate royalty base was selected and adjusted for consistency. Id. ¶¶ 102-19, 161, 163.
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`Charter does not even try to address Touchstream’s argument that “Charter employs the
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`common, unpersuasive tactic of claiming that simply because a damages expert employs the same
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`royalty rate from a prior agreement, the expert ‘failed to apportion’ that rate to the footprint of the
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`patent.” Opp. at 11. Nor does Charter attempt to distinguish this case from Time Warner Cable on
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`this issue, where the Federal Circuit rejected just such an argument in affirming a $140 million
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`award. See 760 F. App’x at 982-84. Indeed, Charter’s argument here, that “Dr. Mangum refused to
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`apportion so much as a penny from the
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`” (Reply Br. at 3), is eerily similar to
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`the rejected argument there (by Charter’s subsidiaries) that the plaintiff’s damages expert “made
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`no attempt to apportion” a past royalty rate because he used the same rate “without adjusting it
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`even a fraction of a cent.” Opp. at 11 (quoting Br. of Def.-Appellants in Time Warner Cable). As
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`in Time Warner Cable, here Dr. Mangum acknowledges the unpatented technology in that
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`agreement and explains why it does not make economic sense to subtract out anything more than
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`3 See also Sprint Commcn’s Co. v. Time Warner Cable, 760 F. App’x 977, 979, 982-84 (Fed. Cir.
`2019) (affirming award of “$1.37 per VoIP subscriber per month” for patented “method for using
`a packet-switched network to transport telephone calls”), cert. denied, 140 S.Ct. 467 (2019).
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`4
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`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 6 of 10 PageID #: 10394
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`he already did. The opinion is thus reliable and the jury will decide if it apportioned far enough.
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`Charter also makes much of its claim that this agreement included software, but Dr.
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`Mangum explained at length that there were separate payments for this software that he already
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`subtracted out. Ex. A, Mangum Report, ¶¶ 109-13, 158. Whether the
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` included any
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`software that had not separately been paid for, and whether any such software had any additional
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`value to subtract out, is a hotly contested fact issue for the jury. For instance, Dr. Mangum pointed
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`out that Touchstream’s founders testified they would not have joined the company unless it had
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`patents, and that David Marcus, head patent counsel for the largest cable company (Comcast)
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`publicly stated of “startup companies” that “without patents they’re virtually, you know, almost
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`worthless,” as evidence of the cable industry’s actual view on this topic. Id. ¶ 112.4
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`C. Charter’s Motion to Exclude Google References is Premature
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`Charter does not adequately explain why the Court should issue an order now excluding
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`mention of the Google case, when Charter’s knowledge of this judgment and resulting actions are
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`highly probative on Touchstream’s post-filing willfulness claims, and when the parties dispute
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`whether and to what extent Charter will open the door. Charter questions the “nexus” between the
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`Asserted Patents and the Google Chromecast sales (Reply Br. at 4-5), but a jury found that product
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`to infringe one of those patents, and that verdict is the type of information Charter should have
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`considered in assessing risk and that experts should consider in assessing value.5
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`The Court should deny Charter’s Motion to Exclude and Strike Dr. Mangum’s Opinions.
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`4 Charter also argues “the
` agreement purportedly conveys rights to apparatus claims”
`(Reply Br. at 4), but this too is no different from Time Warner Cable. See 760 F. App’x at 983 n.3
`(rejecting similar argument, as defendant had “not shown that the additional patents included
`technology materially different from the technology covered by the patents-in-suit in this case”).
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`5 Charter still does not point to any document it contends Dr. Mangum actually relied on for an
`opinion for trial that Charter thinks Touchstream should have, but did not, produce. Reply Br. at 5.
`As such, there is nothing to exclude, and this aspect of Charter’s motion is moot.
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`5
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`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 7 of 10 PageID #: 10395
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`Date: September 4, 2024
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`Respectfully submitted,
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`/s/ Ryan D. Dykal
`Lead Counsel
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`Ryan D. Dykal (pro hac vice)
`Jordan T. Bergsten (pro hac vice)
`Mark Schafer (pro hac vice)
`Philip A. Eckert (pro hac vice)
`Anita Liu (TX State Bar No. 24134054)
`BOIES SCHILLER FLEXNER LLP
`1401 New York Ave, NW
`Washington, D.C. 20005
`(t) 202-274-1109
`rdykal@bsfllp.com
`jbergsten@bsfllp.com
`mschafer@bsfllp.com
`peckert@bsfllp.com
`aliu@bsfllp.com
`
`John M. Lyons (pro hac vice)
`Sabina Mariella (pro hac vice)
`Sophie Roytblat (pro hac vice)
`BOIES SCHILLER FLEXNER LLP
`55 Hudson Yards, 20th Floor
`New York, NY 10001
`jlyons@bsfllp.com
`smariella@bsfllp.com
`sroytblat@bsfllp.com
`
`Melissa Smith (TX State Bar No. 24001351)
`GILLAM & SMITH LLP
`303 S. Washington Ave.
`Marshall, TX 75670
`(t) 903-934-8450
`melissa@gillamsmithlaw.com
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`Counsel for Plaintiff Touchstream Technologies,
`Inc.
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`6
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`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 8 of 10 PageID #: 10396
`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 8 of 10 PagelD #: 10396
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`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 9 of 10 PageID #: 10397
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`CERTIFICATE OF SERVICE
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`I hereby certify that, on September 4, 2024, the foregoing was filed under seal with the
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`Clerk of Court using the CM/ECF system, and all counsel of record who are deemed to have
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`consented to electronic service are being served with a notice of this document via the Court’s
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`CM/ECF system. Further, I hereby certify that a courtesy copy of the foregoing was emailed to
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`counsel for Defendants on September 4, 2024.
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` /s/ Ryan D. Dykal
` Ryan D. Dykal
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`Counsel for Comcast:
`
`Deron R Dacus
`THE DACUS FIRM, PC
`821 ESE Loop 323
`Suite 430
`Tyler, TX 75701
`Tel: 903-705-1117
`Fax: 903-581-2543
`ddacus@dacusfirm.com
`
`
`Thomas G. Saunders
`WILMER HALE
`2100 Pennsylvania Ave, NW
`Washington, DC 20007
`Tel.: 202-663-6536
`Fax: 202-663-6363
`thomas.saunders@wilmerhale.com
`
`
`
`Counsel for Charter:
`
`Deron R Dacus
`THE DACUS FIRM, PC
`821 ESE Loop 323
`Suite 430
`Tyler, TX 75701
`Tel: 903-705-1117
`Fax: 903-581-2543
`
`
`
`David J. Lisson
`Ashok Ramani
`James Park
`Micayla Hardisty
`DAVIS POLK & WARDWELL LLP
`1600 El Camino Real
`Menlo Park, CA 94025
`david.lisson@davispolk.com
`ashok.ramani@davispolk.com
`james.park@davispolk.com
`micayla.hardisty@davispolk.com
`dpw.comcast.touchstream@davispolk.com
`
`Alena Farber
`DAVIS POLK & WARDWELL LLP
`450 Lexington Avenue
`New York, NY 10017
`alena.farber@davispolk.com
`
`
`Daniel Reisner
`David Benyacar
`Elizabeth A. Long
`Melissa A. Brown
`Robert Stout
`ARNOLD & PORTER KAYE SCHOLER LLP
`250 West 55th Street
`New York, NY 10019
`
`8
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`Case 2:23-cv-00059-JRG Document 198 Filed 09/12/24 Page 10 of 10 PageID #: 10398
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`ddacus@dacusfirm.com
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`
`
`
`
`Tel: 212-836-8000
`Fax: 212-836-8689
`daniel.reisner@arnoldporter.com
`david.benyacar@arnoldporter.com
`elizabeth.long@arnoldporter.com
`melissa.brown@arnoldporter.com
`robert.stout@arnoldporter.com
`A&P_EDTX60_Charter@arnoldporter.com
`
`Dina M. Hayes
`ARNOLD & PORTER KAYE SCHOLER LLP
`70 West Madison Street
`Suite 4200
`Chicago, IL 60602
`dina.hayes@arnoldporter.com
`
`Carson Anderson
`ARNOLD & PORTER KAYE SCHOLER LLP
`3000 El Camino Real, Bldg 5, Suite 500
`Palo Alto, CA 94306
`carson.anderson@arnoldporter.com
`
`Marc A. Cohn
`ARNOLD & PORTER KAYE SCHOLER LLP
`601 Massachusetts Ave, NW
`Washington, DC 20001
`marc.cohn@arnoldporter.com
`
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`9
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