Case 5:19-cv-00036-RWS Document 659 Filed 03/14/21 Page 1 of 6 PageID #: 33196
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`MAXELL, LTD.,
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`Plaintiff
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`v.
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`APPLE INC.,
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` Defendant.
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`CASE NO. 5:19-CV-00036-RWS
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`DEFENDANT APPLE INC.’S RESPONSE TO PLAINTIFF’S ARGUMENTS AND
`AUTHORITIES PRESENTED TO THE COURT ON MARCH 11, 2021
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`Apple respectfully responds to Maxell’s new arguments and authorities presented to the
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`Court via Mr. Culbertson’s email on March 11, 2021 (attached as Exhibit A), regarding Apple’s
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`objections to the admission of PX-80, 81, 83, 84, and 86, the “Made for iPod” (MFi) agreements
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`and royalty reports (MFi Exhibits). Apple’s objection should be sustained because these exhibits
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`are irrelevant and any probative value they may have is far outweighed by the prejudice they
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`would cause. See Fed. R. Evid. 402, 403.
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`A.
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`The MFi Exhibits Are Irrelevant To Damages.
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`The Rembrandt decision stands for the proposition that if a party “opens the door” by
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`unfairly characterizing evidence it moved in limine to exclude, the opposing party may introduce
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`the excluded evidence to rebut the party’s arguments. See Rembrandt Wireless Techs., LP v.
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`Samsung Elecs. Co., No. 2:13-CV-213-JRG-RSP, 2015 WL 627430, at *5 (E.D. Tex. Jan. 31,
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`2015). That is not the case here. The MFi Exhibits do not “rebut” Mr. Gunderson’s “critici[sm]
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`[of] Ms. Mulhern for utilizing a running royalty calculation as part of her damages analysis”
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`because they are fundamentally different from the inbound patent license that would result from
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`the hypothetical negotiation here. The MFi agreements are outbound licenses to Apple
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`Case 5:19-cv-00036-RWS Document 659 Filed 03/14/21 Page 2 of 6 PageID #: 33197
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`trademarks and technology from eight years before the hypothetical negotiation. Tellingly, Ms.
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`Mulhern does not cite or mention the MFi agreements at all. Nor has any technical expert cited
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`or mentioned them, let alone opined that they involve technology comparable to the asserted
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`patents. Thus, Mr. Gunderson’s criticism about Ms. Mulhern’s “running royalty” opinion has
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`not “opened the door” to these MFi agreements.
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`Mr. Gunderson’s opinion about Apple’s preference for lump-sum patent licenses also
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`does not “open the door” to these agreements. He will not opine about the MFi agreements or
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`any other outbound licenses to Apple technology and trademarks. On the contrary, he analyzes
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`comparable inbound patent licenses to conclude that Apple prefers lump-sum payments when it
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`licenses patents from third parties. The MFi agreements are not relevant to damages, even by
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`way of “rebuttal,” and the Rembrandt decision does not support their admission.
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`B.
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`The MFi Exhibits Are Not “Background” Information.
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`The Bosch decision from the Central District of Illinois is also inapposite. The MFi
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`Exhibits are not relevant to “establishing chronology, providing background, [and] outlining the
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`relationship between the parties.” Bosch v. Ball-Kell, No. 03-1408, 2007 WL 601721, at *6
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`(C.D. Ill. Feb. 21, 2007). The MFi agreements were executed beginning in 2005, more than
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`eight years before the parties or their predecessors began discussing a potential patent license to
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`Hitachi’s smartphone portfolio. None of the witnesses in this case were involved in these 2005-
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`era agreements, and Maxell provided no corporate testimony on any events before June 2013—
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`which by itself makes admitting the MFi Exhibits improper and prejudicial. See Exhibit B,
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`Nakamura Depo. at 48:5-49:10. Other than a conclusory statement, Maxell offers no reason why
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`the MFi Exhibits would be admissible to provide “background” here, because they are not.
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`Case 5:19-cv-00036-RWS Document 659 Filed 03/14/21 Page 3 of 6 PageID #: 33198
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`C.
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`The MFi Exhibits Are Irrelevant To Willful Infringement.
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`Contrary to Maxell’s citation to Fed. R. Evid. 401, the MFi Exhibits do not make Apple’s
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`alleged willful infringement “more or less probable than it would be without the evidence.”
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`Rather, “[t]o establish willfulness, the patentee must show the accused infringer had a specific
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`intent to infringe at the time of the challenged conduct.” Bayer Healthcare LLC v. Baxalta Inc.,
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`No. 2019-2418, 2021 WL 771700, at *15 (Fed. Cir. Mar. 1, 2021). The MFi Exhibits have
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`nothing to do with the asserted patents, and therefore are irrelevant to whether Apple had “a
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`specific intent to infringe.” Id. And because they are outbound technology and trademark
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`licenses and date back to 2005, they do not, as Maxell argues, bear on whether Apple acted
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`“consistently with the standards of behavior for its industry.” Ex. A.
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`D.
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`Maxell Confirms That It Seeks To Use The “Licensing Rates” In The MFi
`Agreements For A Prejudicial Purpose.
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`Finally, the MFi agreements are more prejudicial than probative. Fed. R. Evid. 403.
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`Given their lack of relevance and their glaring absence from any expert opinions, Maxell’s only
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`purpose in introducing these agreements is a prejudicial one: Maxell wants the jury to see the
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`per-unit “licensing rates” in these agreements to make their damages demand appear reasonable.
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`Maxell’s email tacitly confirms this. Ex. A (agreeing not to “directly compare” the MFi rates to
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`Maxell’s “damages request.”). Whether any comparison is “direct” or not matters none because
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`any use of the MFi agreements will undoubtedly “skew the damages horizon for the jury,”
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`Uniloc USA, Inc. v. Microsoft Corp., 632 F. 3d 1292, 1320 (Fed. Cir. 2011) as the jury will
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`surely compare the per-unit rates in the MFi agreements to Maxell’s damages request and believe
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`it is reasonable—particularly without any expert testimony on the issue. This is what Rule 403
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`was designed to prevent. The jury cannot be expected to distinguish the non-comparable,
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`outbound MFi agreements from the hypothetical inbound patent license here.
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`Case 5:19-cv-00036-RWS Document 659 Filed 03/14/21 Page 4 of 6 PageID #: 33199
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`Dated: March 14, 2021
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`Respectfully submitted,
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`By: /s/ Mark D. Fowler
`Melissa Richards Smith
`Texas Bar No. 24001351
`GILLAM & SMITH, LLP
`303 South Washington Avenue
`Marshall, TX 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
`Email: melissa@gillamsmithlaw.com
`
`Mark D. Fowler (Pro Hac Vice)
`Brent K. Yamashita
`Christian Chessman
`DLA PIPER LLP (US)
`2000 University Ave.
`East Palo Alto, CA 94303-2214
`Tel: 650.833.2000
`Fax: 650.833.2001
`
`Sean C. Cunningham (Pro Hac Vice)
`Erin P. Gibson (Pro Hac Vice)
`David R. Knudson (Pro Hac Vice)
`DLA PIPER LLP (US)
`401 B Street, Suite 1700
`San Diego, CA 92101
`Tel: 619.699.2700
`Fax: 619.699.2701
`
`Michael Jay (Pro Hac Vice)
`DLA PIPER LLP (US)
`2000 Avenue of the Stars, Suite 400
`Los Angeles, CA 90067
`Tel: 310.595.3000
`Fax: 310.595.3300
`
`Aaron G. Fountain
`Zachary Loney
`DLA PIPER LLP (US)
`401 Congress Avenue, Suite 2500
`Austin, Texas 78701-3799
`Tel: 512.457.7000
`Fax: 512.457.7001
`
`Dawn M. Jenkins
`DLA PIPER LLP (US)
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`4
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`Case 5:19-cv-00036-RWS Document 659 Filed 03/14/21 Page 5 of 6 PageID #: 33200
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`1000 Louisiana, Suite 2800
`Houston, TX 77002-5005
`Tel: 713.425.8490
`Fax: 713.300.6012
`
`Paul Steadman
`Stephanie Lim (Pro Hac Vice)
`DLA PIPER LLP (US)
`444 West Lake Street, Ste. 900
`Chicago, IL 60606
`Tel: 312.368.4000
`Fax: 312.236.7516
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`COUNSEL FOR DEFENDANT APPLE INC.
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`Case 5:19-cv-00036-RWS Document 659 Filed 03/14/21 Page 6 of 6 PageID #: 33201
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that on March 14, 2021, all counsel of record who are deemed
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`to have consented to electronic service are being served with a copy of this document through the
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`Court’s CM/ECF system under Local Rule CV-5(a)(3). Any other counsel of record will be
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`served by a facsimile transmission and/or first class mail.
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`/s/ Mark D. Fowler
`Mark D. Fowler
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`6
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