Case 1:20-cv-00034-ADA Document 221 Filed 04/16/21 Page 1 of 13
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`AUSTIN DIVISION
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`ANCORA TECHNOLOGIES, INC.,
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`CIVIL ACTION NO. 1:20-CV-00034-ADA
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`Plaintiff,
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`JURY TRIAL DEMANDED
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`v.
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`LG ELECTRONICS INC. and LG
`ELECTRONICS U.S.A., INC.,
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`Defendants.
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`Ancora TECHNOLOGIES, INC.,
`.
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`CIVIL ACTION NO. 1:20-CV-00034-ADA
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`Plaintiff,
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`JURY TRIAL DEMANDED
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`v.
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`SAMSUNG ELECTRONICS CO., LTD.,
`and SAMSUNG ELECTRONICS
`AMERICA, INC.,
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`Defendants.
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`PUBLIC VERSION
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`ANCORA’S OPPOSITION TO LGE’S DAUBERT MOTION TO
`EXCLUDE AND STRIKE CERTAIN OPINIONS OFFERED BY MR. ROBERT MILLS
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`Case 1:20-cv-00034-ADA Document 221 Filed 04/16/21 Page 2 of 13
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`LGE’s challenge to Mr. Robert Mills’s damages report is meritless. Among other
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`shortcomings, LGE does not cite a single case that excluded a damages opinion—confirming that
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`LGE attacks the weight, not the admissibility, of Mr. Mills’s thorough opinions.
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`LEGAL STANDARDS
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`A proper challenge to an expert’s non-legal opinion is “[v]igorous cross-examination” or
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`“presentation of contrary evidence.” Daubert v. Merrell Dow Pharm. Inc., 509 U.S. 579, 596
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`(1993). In “the context of patent damages,” it is “particularly essential” that “the gatekeeping role
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`of the judge is limited to excluding testimony based on unreliable principles and methods.”1 Apple
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`Inc. v. Motorola, Inc., 757 F.3d 1286, 1315 (Fed. Cir. 2014), overruled in part on other grounds,
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`Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015). Disputes over “the
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`interpretation of data do[] not render an expert’s opinion unreliable if the opinion is otherwise
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`grounded in a proper foundation and the expert is qualified by training, education, and experience.”
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`Sanchez v. Swift Transp. Co. of Ariz., LLC, 2017 WL 3333118, at *1 (W.D. Tex. June 29, 2017).
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`Because LGE’s challenges go to weight, not admissibility, its Daubert motion fails.
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`I.
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`ANCORA TIMELY DISCLOSED E-FOTA.
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`ARGUMENT
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`LGE first invokes Rule 37(c), claiming it did not timely learn that Samsung’s E-FOTA
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`functionality and price could be relevant to damages. But Ancora did timely disclose E-FOTA. In
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`fact, Ancora endeavored to ensure that LGE received Mr. Mills’s damages report in the Ancora v.
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`Samsung matter—which contained a lengthy and detailed discussion of Mr. Mills’s E-FOTA
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`opinions—well before the January 8, 2021 fact discovery cutoff. See Ex. 8 (Ancora-Samsung
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`12/21/2020 email) at 1; Ex. 9 (Ancora-LGE 12/21/2020 email) at 4. And any delay—at latest
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`1 All emphases are added by Ancora unless otherwise stated. All exhibits are appended to the April
`9, 2021 Declaration of Steven M. Seigel.
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`Case 1:20-cv-00034-ADA Document 221 Filed 04/16/21 Page 3 of 13
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`January 22, with trial set for June 7—would have been “substantially justified” or “harmless.” Fed.
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`R. Civ. P. 37(c)(1). Not surprisingly, LGE cites zero cases excluding evidence under Rule 37.
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`First, Rule 37 does not apply because Ancora went well beyond its discovery obligations.
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`Rule 37(c)(1) permits sanctions only if “a party fails to provide information or identify a witness
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`as required by Rule 26(a) or (e).” Ancora complied with Rule 26 because it timely made E-FOTA
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`known to LGE. LGE admits that it received Mr. Mills’s November 2020 damages report in the
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`Ancora v. Samsung matter, which contained a lengthy and detailed discussion of Mr. Mills’s E-
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`FOTA opinions. LGE thus had a detailed preview of Mr. Mills’s methodology and analysis of E-
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`FOTA. LGE even received Samsung’s expert reports
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`Regardless, those disclosures were more than required. As Ancora repeatedly explained,
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`LGE’s contention interrogatories regarding damages were premature. Ancora’s interrogatory
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`responses thus agreed to provide “additional evidence through its damages expert” and
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`“incorporate[d] by reference the expert reports set to be served in accordance with the Court’s
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`schedule.” E.g., Ex. 11 (ROG 24 Resp.) at 56; accord id. at 50-54 (ROG 23 Resp.). That is
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`undisputedly proper: “[A] party need not disclose the basis for its expert’s opinion before the
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`deadline for expert reports.” KAIST IP US LLC v. Samsung Elecs. Co., 2018 WL 10498308, at *1
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`(E.D. Tex. May 31, 2018). For good reason, LGE did not object to that approach.
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`Second, even if E-FOTA were untimely disclosed, exclusion still would be inappropriate.
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`The only relevant case LGE cites—Primrose Operating Co. v. Nat’l Am. Ins. Co.—squarely
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`rejected LGE’s arguments: Primrose affirmed the denial of Rule 37 sanctions where (like here)
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`the defendant “knew, or should have known” the “nature of the [expert]’s testimony” “almost six
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`2
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`months before trial.” 382 F.3d 546, 564 (5th Cir. 2004).2 Courts consistently hold that the proper
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`remedy (if any) for so short a delay so far from trial was a deposition of the expert—not exclusion.3
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`Here, even these remedies are not necessary. LGE neglects to mention that it declined to
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`take Mr. Mills’s deposition even after reviewing his E-FOTA opinions in both this case and the
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`Samsung matter. LGE also omits that its experts responded to Mr. Mills’s (and Samsung’s) E-
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`FOTA analysis. See Ex. 10 (Ratliff Rpt.) ¶¶ 23, 129-131, 140-141, 146-147, 149. Thus, LGE’s
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`vague claims of prejudice—that it was not “afforded any opportunity to conduct discovery on
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`Samsung’s E-FOTA” or that “at this late stage in the case, LGE cannot adequately test Mr. Mills’s
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`opinions,” Mot. at 3—are misleading or false. The Court should reject LGE’s gamesmanship.
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`II. MR. MILLS’S PER-UPDATE ROYALTY OPINIONS ARE ADMISSIBLE.
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`A.
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`LGE’S Claim Construction Objections Are Misplaced.
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`In challenging Mr. Mills’s per-update royalty analysis, LGE argues chiefly that he was not
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`correctly “applying” the Court’s construction of the Claim 1 term “acting on the program.” Mot.
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`at 5. But as a damages expert, Mr. Mills did not “apply” a claim construction at all. That role was
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`for Ancora’s technical expert, Dr. Martin, who details how LGE’s updates satisfy the claim
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`limitation. See Ex. 2 (Martin Phone Rpt.) ¶¶ 26, 141-152; Ex. 3 (Martin TV Rpt.) ¶¶ 12, 52-56.
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`2 LGE also cites Katrinecz v. Motorola Mobility LLC for the unremarkable point that Rule 37(c)
`permits sanctions. 2014 WL 12160772 (W.D. Tex. Aug. 11, 2014).
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`3 E.g., Tex. A&M Rsch. Found. v. Magna Transp., Inc., 338 F.3d 394, 402 (5th Cir. 2003) (denying
`Rule 37 relief because “any prejudice was cured by the approximately one month during which
`Italia was allowed to examine and respond”); Realtime Data LLC v. EchoStar Corp., 2018 WL
`6257472, at *3-4 (E.D. Tex. Nov. 15, 2018) (finding “harmless” the disclosure of damages
`evidence after close of discovery and “just a few months” before trial because “Defendants
`obtained, or at a minimum has access to, the information regarding Plaintiff’s reasonable royalty”);
`Kaist IP US LLC v. Samsung Elecs. Co., 2018 WL 2688185, at *2 (E.D. Tex. June 5, 2018)
`(defendant suffered no prejudice from two-week delay); Nano-Proprietary, Inc. v. Canon Inc.,
`2007 WL 7733440, at *1 (W.D. Tex. Feb. 28, 2007) (proper remedy disclosure of “‘supplemental’
`damages report” after fact-discovery cutoff was a deposition).
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`3
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`LGE’s motion thus fails because Dr. Martin’s technical opinion is unchallenged. Because
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`LGE did not move to “strike portions of [Ancora’s] technical expert’s … report and portions of
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`[Ancora’s] damages expert’s … report that rely on the former,” Fundamental Innovation Sys. Int’l,
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`LLC v. ZTE Corp., 2019 WL 6060203, at *3 (N.D. Tex. Nov. 14, 2019),4 LGE has forfeited any
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`possible challenge to either and Mr. Mills “is entitled to rely on” them. Genband US LLC v.
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`Metaswitch Networks Corp., 2016 WL 125503, at *6 (E.D. Tex. Jan. 9, 2016).
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`LGE’s argument that only “negative” actions satisfy the “acting” step is also “a back-door
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`attempt to have a [second] Markman hearing [on the scope of a term] that the defendants already
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`agreed was unnecessary and renege on their agreement as to the construction.” Minemyer v. B-
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`Roc Reps., Inc., 2011 WL 1099265, at *2 (N.D. Ill. Mar. 22, 2011). Critically, even though both
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`parties proposed constructions for the “acting” step, they agreed that “allowing the use of the
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`program” satisfied the limitation. D.I. 45 (Defs. Markman Br.) at 20; D.I. 44 (Pltf. Markman Br.)
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`at 27; D.I. 49 (Defs. Markman Opp.) at 18 (“[T]he license verifier application will ‘allow’ the
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`operation of the program if the program is licensed”). Neither party asked the Court to construe
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`“acting” to exclude such actions. O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d
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`1351, 1362 (Fed. Cir. 2008) (“Claim construction is a matter of resolution of disputed meanings
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`and technical scope”); Star Envirotech, Inc. v. Redline Detection, LLC, 2015 WL 12743875, at *3
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`(C.D. Cal. Apr. 30, 2015) (“inappropriate” to construe if “no dispute exists as to claim scope”).
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`But even if the Court allowed LGE “to renege on [its] agreement,” Minemyer, 2011 WL
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`1099265, at *2, and argue for the exact opposite construction—that the “acting” step excludes
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`“allowing use of the program”—LGE’s brand-new construction would contradict the ’941 Patent,
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`4 Underscoring LGE’s mistaken focus is its reliance on Chi. Mercantile Exch., Inc. v. Tech. Rsch.
`Grp., LLC, 782 F. Supp. 2d 667 (N.D. Ill. 2011), which involved a challenge to a technical expert.
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`4
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`which states that “allowing the use of the program” falls within the “acting” step’s scope. The
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`summary of the invention discloses how upon a “match” during verification, “the program is
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`verified to run on the computer.” Ex. 12 (’941 Patent) at 2:19-20. Describing a preferred
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`embodiment, the Patent further explains how the acting step may vary based on whether the
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`verification step yields a “successful comparison, non-critical failure comparison,” or “critical
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`failure comparison.” Id. at 5:54-57; id. at 3:33-47 (teaching that the “license authentication bureau
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`… can participate in either or both of” the establishing or verifying steps). Upon a “successful
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`comparison,” the invention “will allow the license program to operate.” Id. at 5:55-59. LGE’s
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`contrary construction would exclude this disclosed embodiment: a cardinal claim construction sin.5
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`Finally, even if LGE’s new construction were correct, LGE does not dispute
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` LGE’s claim-construction argument fails.
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`B. Mr. Mills Reliably Estimated Update Counts, Particularly Given
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`Next, LGE faults Mr. Mills for relying on download statistics from 2019 and 2020 to
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`estimate that
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`First, Mr. Mills explained
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`:
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`5 Construing the “acting on” step to include only negative actions also would flout the principle of
`claim differentiation. The only limitation added by Claim 10 of the ’941 Patent is to define “acting
`on the program” to include negative actions.
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`5
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` Third, Mr. Mills relied on publicly available statistics from, e.g., the FTC and Pew
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`Research Center,
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`Finally, Mr. Mills’s reliance on all the above is admissible because
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` and refused further discovery into its download statistics.
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` LGE represented to this Court
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`that it could not retrieve such statistics before 2019—a representation this Court credited with the
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`caveat that it would not allow LGE to make any argument that Ancora could have rebutted had
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`LGE produced the requested discovery.8 At a minimum, because
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`evidence to the jury concerning the loss and likely relevance of information” and to a jury
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`instruction that it “may consider that evidence, along with all the other evidence in the case, in
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`making its decision.” Fed. R. Civ. P. 37(e) advisory committee’s note (2015); see also Apple Inc.
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`v. Samsung Elecs. Co., 881 F. Supp. 2d 1132, 1147 (N.D. Cal. 2012) (concluding that a “biweekly
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`8 D.I. 125 (Jan. 26, 2021 H’g Tr.) at 7:19-22 (denying Ancora’s motion to compel take-rate
`statistics but noting “I am also concerned about allowing LG to make any argument at trial that
`could be rebutted if I were to allow this discovery”); id. 9:15-18 (explaining that “[i]f you think at
`trial [LGE is] making an argument that is inappropriate because of a refusal to produce something
`during discovery, you can take it up at that time and I’ll fix it at that time”).
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`Case 1:20-cv-00034-ADA Document 221 Filed 04/16/21 Page 8 of 13
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`automatic destruction policy” despite preservation obligation supports spoliation instruction).9
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`Nor is there any merit to LGE’s objection to Mr. Mills’s per-update estimates for smart
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`TVs.
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`Nor could it. LGE’s arguments distill to disagreements over “whether [Mr. Mills’s]
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`calculations properly account for actual infringing use,” which “go to weight, not admissibility.”
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`Cirba Inc. v. VMware, Inc., 2020 WL 70968, at *2 (D. Del. Jan. 7, 2020). And notably, the Federal
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`Circuit has endorsed the methods Mr. Mills employed here. See Summit 6, LLC v. Samsung Elecs.
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`Co., 802 F.3d 1283, 1297–98 (Fed. Cir. 2015) (expert properly calculated revenue “attributable to
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`the infringement” by “estimat[ing] the percentage of [device] users who used the [device] to
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`perform the infringing methods” based on third-party and defendant usage data). Thus, “to the
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`extent Mr. [Mills]’s credibility, data, or factual assumptions have flaws, these flaws go to the
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`weight of the evidence, not to its admissibility.” Id. at 1299.
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`C. Mr. Mills Properly Relied on the AMI Agreement.
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`Further, LGE seeks to exclude the AMI
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`Case 1:20-cv-00034-ADA Document 221 Filed 04/16/21 Page 9 of 13
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`First, LGE falsely claims that Mr. Mills “failed to consider the circumstances under which
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`it was entered.” Mot. at 6. Wrong. Mr. Mills details the relative sizes, expectations, operations,
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`market footings, and negotiating positions of the AMI Agreement’s signatories, as well as the
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`scope and terms of that agreement. D.I. 198-3 ¶¶ 93-97, 108-109, 185-187, 190-192. Mr. Mills
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`then compared those circumstances to the hypothetical negotiation. E.g., id. ¶¶ 195-200.
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`Second, LGE mischaracterizes Mr. Mills’s analysis as
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` Wrong again. To account for LGE’s infringement, Mr. Mills analyzed the
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`Georgia–Pacific factors and calculated a reasonable royalty under two alternative models.
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`Case 1:20-cv-00034-ADA Document 221 Filed 04/16/21 Page 10 of 13
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` Further, the point is moot in any case.
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` the AMI Agreement is
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`“highly probative as to what constitutes a reasonable royalty.” LaserDynamics, Inc. v. Quanta
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`Computer, Inc., 694 F.3d 51, 80 (Fed. Cir. 2012). In fact, the sole case LGE cites actually permitted
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`testimony about licenses despite the different competitive position of the licensee as compared to
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`the defendant. Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1211-12 (Fed. Cir. 2010).
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`In sum, like the rest of its citationless contentions, LGE’s arguments here target “weight,
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`not admissibility.” Open Text S.A. v. Box, Inc., 2015 WL 393858, at *6 (N.D. Cal. Jan. 29, 2015);
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`see VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1330 (Fed. Cir. 2014) (permitting reliance on
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`licenses “drawn to related technology” despite differences in breadth and timing from hypothetical
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`Case 1:20-cv-00034-ADA Document 221 Filed 04/16/21 Page 11 of 13
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`negotiation); Apple, 757 F.3d at 1326 (“[W]hether these licenses are sufficiently comparable . . .
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`goes to the weight of the evidence”). The AMI Agreement is reliable.
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`III. MR. MILLS’S PER-UNIT ROYALTY OPINIONS ARE ADMISSIBLE.
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`Still failing to cite any cases, LGE attacks Mr. Mills’s per-unit royalty opinion—disputing
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`“royalty rate indicators” he considered “along with [his] analysis of the Georgia-Pacific factors.”
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`D.I. 198-3 (Mills Rpt.) ¶ 194; see Mot. at 7-10. LGE vaguely contends that various indicators are
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`“based on” “improperly apportioned calculations,” Mot. at 8, but apportionment is met by “proper
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`analysis of the Georgia–Pacific factors.” Exmark Mfg. Co. v. Briggs & Stratton Power Prod. Grp.,
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`LLC, 879 F.3d 1332, 1349 (Fed. Cir. 2018).
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`Similarly, LGE’s objections to Mr. Mills’s citation of business projections by Ancora and
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`Beeble Inc.—Ancora’s predecessor and original patent assignee—are contrary to law. The jury
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`may “consider [plaintiff]’s expectations of profits as part of a hypothetical negotiation.” SEB S.A.
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`v. Montgomery Ward & Co., 594 F.3d 1360, 1380 (Fed. Cir. 2010) (emphasis in original); see
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`Aqua Shield v. Inter Pool Cover Team, 774 F.3d 766, 772 (Fed. Cir. 2014) (endorsing use of
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`“business prognostications”). Thus, courts routinely instruct juries to “focus” on “the expectations
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`of the patent holder.” FCBA Model Patent Jury Instructions § B.5.6; accord MV3 Partners LLC v.
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`Roku, Inc., No. 6:18-cv-308-ADA, D.I. 379 (Final Jury Instructions) at 24. And LGE’s other
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`protests—
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`are simply “disputes over . . . the
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`accuracy of the underlying facts,” which “are for the jury.” Summit 6, 802 F.3d at 1299.12
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`The Court should deny LGE’s Daubert motion.
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`12 LGE also disputes whether E-FOTA is technologically comparable to LGE’s OTA functionality.
`As explained in Ancora’s opposition to LGE’s Daubert motion directed at Dr. Martin, these
`arguments are meritless. In any event, Mr. Mills “is entitled to rely on Dr. [Martin’s] opinions on”
`these “technical subjects.” Genband, 2016 WL 125503, at *6.
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`Case 1:20-cv-00034-ADA Document 221 Filed 04/16/21 Page 12 of 13
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`Date: April 9, 2021
`
`/s/ Steven M. Seigel
`Charles Ainsworth
`State Bar No. 00783521
`Robert Christopher Bunt
`State Bar No. 00787165
`PARKER, BUNT & AINSWORTH, P.C.
`100 E. Ferguson, Suite 418
`Tyler, TX 75702
`903/531-3535
`charley@pbatyler.com
`rcbunt@pbatyler.com
`Lexie G. White (Texas 24048876)
`SUSMAN GODFREY LLP
`1000 Louisiana Street, Suite 5100
`Houston, Texas 77002
`Tel: (713) 651-9366
`Fax: (713) 654-6666
`lwhite@susmangodfrey.com
`
`Andres Healy (pro hac vice)
`Steven M. Seigel (pro hac vice)
`Nicholas S. Crown (pro hac vice)
`SUSMAN GODFREY LLP
`1201 Third Avenue, Suite 3800
`Seattle, Washington 98101
`Tel: (206) 516-3880
`Fax: 206-516-3883
`ahealy@susmangodfrey.com
`sseigel@susmangodfrey.com
`ncrown@susmangodfrey.com
`
`Zachary B. Savage (pro hac vice)
`SUSMAN GODFREY LLP
`1301 Avenue of the Americas, 32nd Floor
`New York, New York 10019
`Tel: (212) 336-8330
`Fax: (212) 336-8340
`zsavage@susmangodfrey.com
`
`COUNSEL FOR PLAINTIFF ANCORA
`TECHNOLOGIES, INC.
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`Case 1:20-cv-00034-ADA Document 221 Filed 04/16/21 Page 13 of 13
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that all counsel of record who have consented to electronic service
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`are being notified of the filing of this document via the Court’s CM/ECF system per Local Rule CV-
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`5(b)(1). I also hereby certify that LGE’s counsel of record are being served with a copy of the foregoing
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`document via electronic mail on this 9th day of April, 2021.
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`/s/ Steven M. Seigel
`Steven M. Seigel
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`12
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