Case 5:19-cv-00036-RWS Document 660 Filed 03/15/21 Page 1 of 6 PageID #: 33210
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`MAXELL, LTD.,
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`v.
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`APPLE INC.,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`Plaintiff,
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`Defendant.
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`Case No. 5:19-cv-00036-RWS
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`JURY TRIAL DEMANDED
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`MAXELL, LTD.’S REPLY TO
`APPLE INC.’S RESPONSE TO PLAINTIFF’S ARGUMENTS AND AUTHORITIES
`PRESENTED TO THE COURT ON MARCH 11, 2021
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`Maxell hereby respectfully responds to the arguments raised in Apple’s Response (D.I.
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`659) regarding whether exhibits constituting or relating to Apple’s “Made for iPod” (MFi)
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`agreements should be excluded from evidence. As set forth below, Apple’s position that the
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`exhibits are irrelevant is inaccurate. Furthermore, Apple’s position that the exhibits are prejudicial
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`relies on an anticipated use of the exhibits to support the appropriate damages figure. Maxell has,
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`however, already explicitly agreed to not use the exhibits in this way.
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`I.
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`Though Irrelevant to a Damages Amount, the MFi Exhibits Are Relevant to the
`Issue of the Form of Licenses Apple Enters Into
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`Apple’s expert, Mr. Gunderson, has explicitly taken a position regarding Apple’s
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`preference for lump sum licenses. Indeed, the position is one that Apple deemed important enough
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`to support a Daubert Motion. D.I. 362 (Apple Inc.’s Daubert Motion to Exclude the Opinions and
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`Testimony of Plaintiff’s Damages Expert Ms. Carla Mulhern) at Section IV.A (“Ms. Mulhern’s
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`‘Reasonable Royalty Analysis’ is Predicated on Completely Ignoring the Record Evidence of
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`Apple’s Strong Preference for Lump Sum Licenses”). Mr. Gunderson’s position in this regard also
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`Case 5:19-cv-00036-RWS Document 660 Filed 03/15/21 Page 2 of 6 PageID #: 33211
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`underlies his own damages calculation. Apple has opened the door to what form of license is
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`preferred by Apple and evidence relevant to such supposed preference is thus plainly relevant. The
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`teachings of Rembrandt Wireless Techs., LP v. Samsung Elecs. Co., No. 2:13-CV-213-JRG-RSP,
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`2015 WL 627430, at *5 (E.D. Tex. Jan. 31, 2015) apply here.
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`The relevance of Apple’s preference is not undermined by a distinction between inbound
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`and outbound licenses. If Apple’s licensing policy is to treat such types of licenses differently, then
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`Apple is free to explain such policy at trial. Such distinction goes to weight of the evidence and is
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`not a basis on which to exclude relevant evidence completely.
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`Apple’s argument otherwise rests on an incorrect assertion that a document must have been
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`relied upon by an expert in order to be presented into evidence at trial. That is not so. That the MFi
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`agreements did not appear in Ms. Mulhern’s expert report means only that she may not rely upon
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`them now to support her damages calculation. Maxell has already agreed it will not attempt to do
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`this. But there is nothing that should preclude Maxell from rebutting Mr. Gunderson’s opinions,
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`and testing the predicates thereto, with evidence from outside of the expert reports (particularly
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`where, as here, there were no reply expert reports). This is a proper, and relevant, use of the
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`agreements.
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`II.
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`The MFi Exhibits Are Relevant Background Information
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`Apple’s argument that the MFi agreements are irrelevant due to the date they were entered
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`into is disingenuous. As Apple is well aware, although the original agreements may have been
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`entered into around 2006, through either the agreements themselves or amendments thereto, the
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`agreements have remained effective years later. Indeed, Maxell produced in this case payment
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`reports subject to these agreements through 2015. Thus, Maxell was making royalty payments to
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`Apple pursuant to MFi agreements at the exact same time that licensing negotiations for the patents
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`in suit were taking place. The agreements are thus material to the relationship between the parties,
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`and their state of mind, at the time that the licensing negotiations which underlie this case were
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`occurring. Thus, Bosch v. Ball-Kell, No. 03-1408, 2007 WL 601721, at *6 (C.D. Ill. Feb. 21, 2007),
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`is relevant to the entry of the evidence here.
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`Apple also raises an argument that the exhibits should be excluded because Maxell
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`provided no corporate testimony on events before June 2013. But Maxell produced the MFi
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`exhibits early on in this case. It was not thereafter required to present corporate testimony on the
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`exhibits. Indeed, a party does not depose its own witness during a case. It is unlikely that Apple
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`will agree to hold its own fact witnesses to the exact testimony they provided in response to
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`Maxell’s deposition questions.
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`III. The MFi Exhibits are Relevant to Willfulness
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`While Apple presents case law that a patentee must show an accused infringer has a specific
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`intent to infringe with respect to willfulness, even Apple itself has acknowledged that such intent
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`is not the only relevant inquiry. Specifically, although Apple objects to a willfulness instruction
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`being presented to the jury, generally, it has agreed that, if such instruction is presented, one factor
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`to be considered is “whether or not Apple acted consistently with the standards of behavior for its
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`industry” See Dkt. 638-2 at 20. The MFi exhibits are relevant to this inquiry and Apple’s case law
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`does not state otherwise.
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`IV.
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` Maxell Does Not Seek to Introduce the MFi Exhibits For A Prejudicial Purpose
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`At the pretrial conference and in its correspondence to the Court, Maxell confirmed that it
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`will not use the MFi exhibits for a prejudicial purpose. Somehow, though, Apple has taken
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`Maxell’s explicit agreement to “prohibiting the direct comparison between the licensing rates in
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`the Made for iPod agreements and it damages request” as a signal that Maxell is actually seeking
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`to introduce the agreement in order to make a comparison between the licensing rates in the MFi
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`agreements such that its damages demand appears reasonable. Such twisting of Maxell’s express
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`words is nothing more than a strawman. Maxell has not hidden its intended use of the exhibits.
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`Just the opposite, through argument and submissions on this issue, Maxell has shown its hand
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`completely.
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`Finally, Apple’s reliance on Uniloc USA, Inc. v. Microsoft Corp., 632 F. 3d 1292, 1320
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`(Fed. Cir. 2011) is inapposite to the issue here. Uniloc concerned the entire market value rule and
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`the prejudicial disclosure that the infringing party had $19 billion in revenue from infringing sales.
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`Maxell has agreed to not reference Apple’s revenue at trial. The situation here is completely
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`different. Unlike hefty revenues, the MFi agreements have nothing to do with the “damages
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`horizon,” or Apple’s sales at all. That there will be no skewing is further confirmed by the fact that
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`Maxell’s damages expert will not be referencing or otherwise rely upon the MFi exhibits in her
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`presentation of Maxell’s damages request. There is also nothing that would preclude Apple from
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`presenting to the jury the arguments that it is now presenting to the Court regarding the lack of
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`comparability between the MFi agreements and a license to the patents here.
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`Dated: March 15, 2021
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`/s/ Jamie B. Beaber
`Geoff Culbertson
`Kelly Tidwell
`Patton, Tidwell & Culbertson, LLP
`2800 Texas Boulevard (75503)
`Post Office Box 5398
`Texarkana, TX 75505-5398
`Telephone: (903) 792-7080
`Facsimile: (903) 792-8233
`gpc@texarkanalaw.com
`kbt@texarkanalaw.com
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`Jamie B. Beaber
`Alan M. Grimaldi
`Kfir B. Levy
`James A. Fussell, III
`Baldine B. Paul
`Tiffany A. Miller
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`By:
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`Case 5:19-cv-00036-RWS Document 660 Filed 03/15/21 Page 5 of 6 PageID #: 33214
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`Saqib J. Siddiqui
`Bryan C. Nese
`William J. Barrow
`Alison T. Gelsleichter
`Clark S. Bakewell
`MAYER BROWN LLP
`1999 K Street, NW
`Washington, DC 20006
`Telephone: (202) 263-3000
`Facsimile: (202) 263-3300
`jbeaber@mayerbrown.com
`agrimaldi@mayerbrown.com
`klevy@mayerbrown.com
`jfussell@mayerbrown.com
`bpaul@mayerbrown.com
`tmiller@mayerbrown.com
`ssiddiqui@mayerbrown.com
`bnese@mayerbrown.com
`wbarrow@mayerbrown.com
`agelsleichter@mayerbrown.com
`cbakewell@mayerbrown.com
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`Robert G. Pluta
`Amanda Streff Bonner
`Mayer Brown LLP
`71 S. Wacker Drive
`Chicago, IL 60606
`(312) 782-0600
`rpluta@mayerbrown.com
`asbonner@mayerbrown.com
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`Counsel for Plaintiff Maxell, Ltd.
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`Case 5:19-cv-00036-RWS Document 660 Filed 03/15/21 Page 6 of 6 PageID #: 33215
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that all counsel of record who are deemed to have consented to
`electronic service are being served this 15th day of March, 2021 with a copy of this document via
`the Court’s CM/ECF system per Local Rule CV-5(a)(3)
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`/s/ Jamie B. Beaber
`Jamie B. Beaber
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