`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`
`
`
`
`
`IGT and IGT CANADA SOLUTIONS ULC,
`
`
`Plaintiffs,
`
`
`
`
`
`vs.
`
`
`ZYNGA INC.,
`
`
`Defendant.
`
`Case No. 6:21-cv-00331-ADA
`ORAL ARGUMENT
`REQUESTED
`
`
`
`
`
`
`
`
`
`ZYNGA’S REPLY IN SUPPORT OF ITS MOTION TO EXCLUDE
`THE DAMAGES TESTIMONY OF DR. KEITH UGONE
`
`FILED UNDER SEAL
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 2 of 17
`
`TABLE OF CONTENTS
`
`Page
`
`
`TABLE OF AUTHORITIES .......................................................................................................... ii
`TABLE OF EXHIBITS ................................................................................................................. iii
`I.
`INTRODUCTION ...............................................................................................................1
`II.
`ARGUMENT .......................................................................................................................1
`A.
`Apportionment Is Required, But Dr. Ugone Failed To Apportion ..........................1
`1.
`IGT concedes that Dr. Ugone did not apportion the royalty base ...............2
`2.
`Dr. Ugone did not apportion the royalty rate ...............................................3
`Dr. Ugone’s Opinion Is Divorced From The Facts Of The Case ............................7
`1.
`Dr. Ugone failed to account for economic differences between the
`indicators of value and the hypothetical negotiation ...................................7
`The page count of Dr. Ugone’s report is irrelevant ...................................10
`2.
`CONCLUSION ..................................................................................................................10
`
`B.
`
`III.
`
`
`i
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 3 of 17
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Acceleration Bay LLC v. Activision Blizzard Inc.,
`2019 WL 4194060 (D. Del. Sept. 4, 2019) ................................................................................3
`
`AstraZeneca AB v. Apotex Corp.,
`782 F.3d 1324 (Fed. Cir. 2015)..................................................................................................2
`
`Exmark Mfg. Co. v. Briggs & Stratton Power Prods. Grp., LLC,
`879 F.3d 1332 (Fed. Cir. 2018)................................................................................................10
`
`Finjan, Inc. v. Blue Coat Sys., Inc.,
`879 F.3d 1299 (Fed. Cir. 2018)........................................................................................2, 7, 10
`
`MLC Intell. Prop., LLC v. Micron Tech., Inc.,
`10 F.4th 1358 (Fed. Cir. 2021) ..........................................................................................1, 3, 4
`
`Omega Pats., LLC v. CalAmp Corp.,
`13 F.4th 1361 (Fed. Cir. 2021) ..........................................................................................4, 5, 6
`
`Utah Med. Prods., Inc. v. Graphic Controls Corp.,
`350 F.3d 1376 (Fed. Cir. 2003)..................................................................................................7
`
`Vectura Ltd. v. Glaxosmithkline LLC,
`981 F.3d 1030 (Fed. Cir. 2020)..............................................................................................4, 6
`
`Whitserve, LLC v. Comput. Packages, Inc.,
`694 F.3d 10 (Fed. Cir. 2012)................................................................................................9, 10
`
`Statutes
`
`35 U.S.C. § 271(f) ............................................................................................................................2
`
`
`
`ii
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 4 of 17
`
`Exhibits Submitted With Zynga’s Reply Brief
`
`TABLE OF EXHIBITS
`
`Exhibit No.
`Exhibit 17
`
`
`
`Description
`Additional relevant excerpts from the Jan. 6, 2023 deposition transcript of
`Keith R. Ugone
`
`Previously Filed Exhibits
`
`Description
`Dkt. No. 125-1: Expert Report of Keith R. Ugone Ph.D. dated Nov. 10,
`2022
`Dkt. No. 125-2: Relevant excerpts of Jan. 6, 2023 deposition transcript of
`Keith R. Ugone
`Dkt. No. 125-6: Technology Development and License Agreement between
`InterTrust Technologies and Universal Music Group (IGT_0018968-19053)
`Dkt. No. 125-16: Appendix A to Expert Report of Keith R. Ugone Ph.D.
`dated Nov. 10, 2022
`Dkt. No. 138-1: Expert Report of Dr. Craig E. Wills Regarding Zynga’s
`Infringement of U.S. Patent Nos. 7,168,089 and 8,266,212, served Nov. 10,
`2022
`
`Exhibit No.
`Exhibit 1
`
`Exhibit 2
`
`Exhibit 6
`
`Exhibit 16
`
`IGT Ex. 26
`
`
`
`
`
`iii
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 5 of 17
`
`
`
`I.
`
`INTRODUCTION
`
`IGT does not dispute that it was required to apportion damages. Despite this, Dr. Ugone
`
`did not apportion the royalty base, and did not adjust the royalty rates he put into his “Royalty Rate
`
`Negotiation Matrix.” As a result, none of the inputs to Dr. Ugone’s analysis were apportioned.
`
`Dr. Ugone then selected two of the royalty rates from his matrix and opined that they constitute a
`
`reasonable royalty with no further adjustments. Thus, at no point did Dr. Ugone apportion.
`
`IGT’s only defense for this total failure to apportion is to assert that Dr. Ugone’s damages
`
`analysis reflects “built-in” apportionment. Dkt. 175 (“Opp.”) at 1. This is a blatant attempt at ex-
`
`post rationalization. Indeed, Dr. Ugone’s report never once discusses “built-in” or “baked in”
`
`apportionment. More fundamentally, built-in apportionment simply isn’t applicable here. IGT
`
`only really argues for built-in apportionment with respect to one of the “indicators of value” and
`
`there is literally nothing about that “indicator” (the dual-rate structure in the Mylex/EMC license
`
`agreement) to suggest that the royalty rate could be understood to reflect the purported
`
`technological contributions of IGT’s patents to Zynga’s products.
`
`For these reasons, and as discussed below, the Court should exclude Dr. Ugone.
`
`II.
`
`ARGUMENT
`A.
`
`Apportionment Is Required, But Dr. Ugone Failed To Apportion.
`
`IGT admits that Zynga made important, non-infringing contributions to the accused games.
`
`Opp. 18-19. Apportionment is therefore required. Dkt. 125 (“Mot.”) at 10. IGT asserts that Dr.
`
`Ugone properly apportioned because he “applied an apportioned royalty rate to properly account
`
`for the value of the patented features, along with an appropriate royalty base.” Opp. 9. Not so.
`
`Instead, Dr. Ugone “did not properly apportion either the royalty base or the royalty rate to account
`
`for the patented technology.” MLC Intell. Prop., LLC v. Micron Tech., Inc., 10 F.4th 1358, 1373
`
`(Fed. Cir. 2021). His opinion should be excluded.
`
`1
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 6 of 17
`
`
`
`1.
`
`IGT concedes that Dr. Ugone did not apportion the royalty base.
`
`Dr. Ugone’s royalty base is not apportioned to account for the technological contribution
`
`of the patents to Zynga’s accused games. The royalty base applicable to each patent was selected
`
`purely to reflect what IGT believes it can legally accuse of infringement. Opp. 17. For example,
`
`the ’064 patent is limited to US-only revenue because IGT alleges that Zynga infringes that patent
`
`when Zynga’s users in the US play the accused games. IGT asserts only method claims, for which
`
`there can be no infringement under 35 U.S.C. § 271(f). On the other hand, Dr. Ugone uses
`
`worldwide revenue (less China) for the ’189 patent because IGT is accusing Zynga of infringing
`
`system claims under 35 U.S.C. § 271(f).
`
`IGT touts that damages for the ’212 patent are “limited” based on installations of accused
`
`games. Opp. 18. That’s not apportionment. That’s just complying with the requirement that “[t]he
`
`royalty base for reasonable royalty damages cannot include activities that do not constitute patent
`
`infringement.” AstraZeneca AB v. Apotex Corp., 782 F.3d 1324, 1343 (Fed. Cir. 2015). Put
`
`differently, excluding non-infringing products is the first step in a damages analysis, and (except
`
`where the entire market value rule applies) it is not sufficient to match the royalty base to the
`
`technological footprint of the invention. Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1311
`
`(Fed. Cir. 2018) (“ultimate reasonable royalty award must be based on the incremental value that
`
`the patented invention adds to the end product” (citation omitted)). And, contrary to IGT’s
`
`argument, Dr. Ugone made no adjustment to the royalty base based on any “nexus” or “benefits
`
`associated with the infringement.” Opp. 4, 18 (citing Ugone Rep. ¶ 55 nn.33-35). In the cited
`
`portion of Dr. Ugone’s report, he regurgitates the acts IGT asserts are infringing, but does not
`
`make any attempt to analyze the “value of the patented technology compared to the value of the
`
`unpatented elements,” much less tie a portion of the revenues to such an analysis. Finjan, 879
`
`F.3d at 1311. Instead, he uses all of the accused revenues.
`
`2
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 7 of 17
`
`
`
`2.
`
`Dr. Ugone did not apportion the royalty rate.
`
`Dr. Ugone’s royalty rate analysis started with the creation of a reasonable royalty matrix
`
`containing rates based on several alleged “indicators of value.” Mot. 2-3; Ex. 1 (Ugone Rep.)
`
`¶ 260. The inputs into that matrix were royalty rates lifted from other transactions (
`
`
`
` rate made up from thin air). Ex. 1 (Ugone Rep.) ¶¶ 260, 261(d). Dr.
`
`Ugone then picked two rates from the matrix that he believes the parties would agree to in a
`
`hypothetical negotiation. Mot. 7. At no point—either before inputting the rates into the matrix,
`
`in selecting one (or more) rates from the matrix, or in any post-selection application of the
`
`Georgia-Pacific factors—did Dr. Ugone apportion the rates to account for the technological
`
`contribution of the patents to Zynga’s accused products.
`
`IGT first makes a passing argument that merely applying the Georgia-Pacific factors to his
`
`range of royalty options satisfies the apportionment requirement. Opp. 9. But Dr. Ugone never
`
`provided such an opinion. And this is also not true. To the contrary, the Federal Circuit has
`
`affirmed the exclusion of expert testimony for failure to apportion even where the expert
`
`“considered each of the factors set out in Georgia-Pacific.” MLC, 10 F.4th at 1363-64, 1373.
`
`IGT’s primary argument is that Dr. Ugone’s report reflects “built-in” apportionment.
`
`Opp. 10-15. But IGT admits that Dr. Ugone’s report never refers to nor discusses built-in
`
`apportionment. Id. at 10-11. The Court can exclude Dr. Ugone’s opinion on this basis alone. See
`
`Acceleration Bay LLC v. Activision Blizzard Inc., 2019 WL 4194060, at *5 (D. Del. Sept. 4, 2019)
`
`(rejecting built-in apportionment argument as insufficiently explained in report).
`
`Dr. Ugone not only failed to discuss built-in apportionment, but he also didn’t establish
`
`that it is appropriate here. It is not. As an initial matter, IGT appears to admit that the Mylex/EMC
`
`license is the only indicator of value for which it is trying to establish built-in apportionment
`
`(Opp. 11) and it is the only license that Dr. Ugone discussed in his deposition as reflecting built-
`
`3
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 8 of 17
`
`
`
`in apportionment (Ex. 2 (Ugone Dep. Tr.) at 40:15-44:17 156:11-157:7). But that means that Dr.
`
`Ugone’s royalty matrix includes four other “indicators of value” which are not apportioned and
`
`for which there is no argument that built-in apportionment applies. So, to the extent Dr. Ugone is
`
`allowed to present the Mylex/EMC license and attempt to establish built-in apportionment at trial,
`
`he should not be allowed to present any of his other “indicators of value.” Put differently, the
`
`Court should not allow Dr. Ugone to create the false impression that his opinion is supported by
`
`multiple data points, when it is in fact supported, at most, by only one.
`
`And the Court should not allow Dr. Ugone to present a damages argument based on the
`
`Mylex/EMC license at all, because Dr. Ugone provided no analysis or evidence showing that it
`
`reflects built-in apportionment. IGT makes no effort to analogize the license to any of the handful
`
`of cases in which the Federal Circuit found that built-in apportionment applied. Instead, it argues
`
`that any “sufficiently comparable” license reflects built-in apportionment. Opp. 12-13. That is
`
`not the law.
`
`Built-in apportionment is a separate doctrine from comparability. The Federal Circuit has
`
`rejected the “contention that because the licenses are ‘comparable,’ there is de facto no need to
`
`apportion.” MLC, 10 F.4th at 1374. Comparability is a prerequisite; built-in apportionment can
`
`apply only if a license is “sufficiently comparable in that principles of apportionment were
`
`effectively baked into the purportedly comparable license.” Omega Pats., LLC v. CalAmp Corp.,
`
`13 F.4th 1361, 1377 (Fed. Cir. 2021) (cleaned up and emphasis added). IGT omits that qualifier
`
`in its argument that “sufficiently comparable” is all that is required. Opp. 12-14. As the Federal
`
`Circuit’s cases explain, built-in apportionment applies in the “unusual” case where an expert
`
`establishes that the “negotiators of a comparable license settled on a royalty rate and royalty base
`
`combination embodying the value of the asserted patent.” Vectura Ltd. v. Glaxosmithkline LLC,
`
`4
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 9 of 17
`
`
`
`981 F.3d 1030, 1040-41 (Fed. Cir. 2020). Thus, built-in apportionment applies only in “unusual”
`
`cases where the comparable licenses covered the same patents, same parties, or same products, or
`
`some combination thereof. Mot. 15-16. IGT cites no cases suggesting otherwise.
`
`Dr. Ugone did not establish that the Mylex/EMC license reflects built-in apportionment.
`
`He provided no analysis of how a negotiation over a portfolio of patents covering enterprise-level
`
`hardware products reflects the value of four remote game server patents to Zynga’s online games.
`
`Mot. 17 (describing Mylex/EMC license). Dr. Ugone’s only explanation for that conclusion is
`
`that because the license “gives a per-patent rate,” that was “sufficient in [his] mind to conclude
`
`that that rate has been apportioned between non-patented and patented features in the agreements.”
`
`Ex. 2 (Ugone Dep. Tr.) at 39:20-45:7. That makes no sense and Dr. Ugone offers no explanation
`
`of how a uniform per-patent rate implies an apportionment between patented and unpatented
`
`features.
`
`Indeed, the opposite is true. Because the Mylex/EMC agreement values every patent
`
`equally, IGT would need to show that all of the 60+ patents licensed in that agreement have the
`
`same technological footprint, or else the uniform per-patent royalty rate cannot be tied to the
`
`technological footprint of the covered patents. Instead, the presence of a uniform rate suggests
`
`that the parties used an “average” rate or reached a business accommodation designed to avoid
`
`having to spend the time and money necessary to determine technology-specific licensing rates for
`
`each of the covered patents. But “built-in” apportionment is only supposed to apply where the
`
`“principles of apportionment were effectively baked into the purportedly comparable license.”
`
`Omega, 13 F.4th at 1377 (cleaned up and emphasis added). Put differently, the fact that
`
`Mylex/EMC use a single, uniform royalty rate for patents that IGT has not established are all
`
`technologically equally valuable shows that it doesn’t embody principles of apportionment. To
`
`5
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 10 of 17
`
`
`
`give an analogy, if I go into a clothing store having a sale in which everything is priced at $10, it’s
`
`clear that the store is not trying to tie the prices to the value of the individual goods. Yet (without
`
`explaining his reasoning) Dr. Ugone made exactly the opposite inference.
`
`Moreover, at best, the Mylex/EMC license reflects some kind of apportionment of the EMC
`
`patents to Mylex’s products. There is no evidence of that, but even if we assume it arguendo, it
`
`would not matter because it would not establish that the “negotiators of [the EMC/Mylex license]
`
`settled on a royalty rate and royalty base combination embodying the value of [IGT’s asserted]
`
`patent” to Zynga’s accused products. Vectura, 981 F.3d at 1041. For example, Dr. Ugone did not
`
`analyze how the non-patented features of Mylex’s enterprise-level data storage products are
`
`similar or different from the non-patented features of Zynga’s games, e.g., Harry Potter themed
`
`content. In other words, the Federal Circuit has only found built-in apportionment appropriate
`
`when the circumstances were highly similar—e.g., the same parties, patents and products. See
`
`Mot. 14-15 (collecting cases). But none of those facts are present here and Dr. Ugone has not
`
`provided any analysis of how the current circumstances are similar.
`
`Dr. Ugone’s apportionment theory fails for another reason. Mot. 18-19. Dr. Ugone’s
`
`theory that the Mylex/EMC license reflects that each licensed patent was equally valued at 1% of
`
`gross revenue “regardless of which patent it was” (Ex. 2 (Ugone Dep. Tr.) at 40:15-24) is the same
`
`theory that the Federal Circuit rejected in Omega. See 13 F.4th at 1377. IGT does not disagree
`
`with Zynga’s reading of Omega or the Federal Circuit’s holding in that case. Opp. 14-15. IGT’s
`
`only response is that Dr. Ugone did not rely solely on Mylex/EMC. See id. But his ultimate royalty
`
`rates are taken from the Mylex/EMC license, and the Mylex/EMC license is the only input he ever
`
`claims has been apportioned. So, as in Omega, Dr. Ugone has no basis for concluding that, because
`
`the Mylex/EMC license contains a single rate regardless of which patent is infringed, IGT and
`
`6
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 11 of 17
`
`
`
`Zynga would value every patent-in-suit equally. Finally, IGT tries to defend Dr. Ugone’s reliance
`
`on Mr. Calogero’s off-the-record conversation about IGT’s licensing policy. Opp. 15-16.
`
`According to IGT, relying on the patentee’s “starting position” in negotiations is only error if that
`
`is the only input into the damages analysis. Id. But Zynga showed why relying on, even as one
`
`input, Mr. Calogero’s statements was improper: (i) they only reflect a wish-list, opening offer rate
`
`(ii) they don’t reflect built-in apportionment and (iii) the statements don’t appear to reflect IGT’s
`
`position at the time of the hypothetical negotiation. Mot. 20-21, 25-27. Under Finjan, they
`
`“cannot be the basis for a reasonable royalty calculation.” 879 F.3d at 1312.
`
`IGT nonetheless contends that these were merely an “input” into Dr. Ugone’s overall
`
`analysis. If Mr. Calogero’s statements were not relied upon, they are irrelevant and Dr. Ugone
`
`should not be permitted to testify about them. If, on the other hand, Dr. Ugone did rely on them
`
`then his opinions are based on unreliable evidence. See Mot. 20-21.
`
`B.
`
`Dr. Ugone’s Opinion Is Divorced From The Facts Of The Case.
`
`1.
`
`Dr. Ugone failed to account for economic differences between the
`indicators of value and the hypothetical negotiation.
`
`An expert must explain how he accounted for the differences between the “comparable”
`
`licenses and the hypothetical negotiation. Mot. 22-23. Merely “acknowledg[ing]” the differences
`
`is not enough. Opp. 21. Dr. Ugone did not explain either: (1) why no adjustments for economic
`
`comparability were necessary, or (2) what, if any, adjustment he made to account for those
`
`differences. Here, it is undisputed that Dr. Ugone did not make any adjustments to the rates in the
`
`“indicators of value” to account for differences between those licenses (or term sheets) and the
`
`hypothetical negotiation. Mot. 3. He needed to explain why that was so. Failing to undertake a
`
`required analysis is a basis for exclusion, not cross-examination. See Utah Med. Prods., Inc. v.
`
`Graphic Controls Corp., 350 F.3d 1376, 1385-86 (Fed. Cir. 2003) (affirming the exclusion of
`
`7
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 12 of 17
`
`
`
`expert damages testimony as “unreliable” where the expert failed to show that the chosen license
`
`agreements “were in any way comparable” to the asserted patent).
`
`IGT’s argument seems to be that Dr. Ugone did not rely on any one piece of information,
`
`so he did not have to explain how he accounted for the differences between the licenses and the
`
`hypothetical negotiation. Opp. 21. In other words, Dr. Ugone put everything in the mix and
`
`selected a number. That is not a reliable damages analysis; it is picking a number from a hat. (And
`
`it is especially problematic when those numbers do not reflect apportionment to begin with.)
`
`Without the necessary explanation of how he arrived at his final number—not just of what the
`
`inputs were—Dr. Ugone has no reliable opinion to present to the jury.
`
`Take, for example, the Universal/Intertrust license. IGT’s opposition (at 22-23) fails to
`
`identify any analysis in which Dr. Ugone explains why he did not adjust the 2% royalty rate to
`
`account for the acknowledged differences between the Universal/Intertrust license and the
`
`hypothetical negotiation. IGT cites Dr. Ugone’s report at ¶¶ 250-252. In those paragraphs, Dr.
`
`Ugone describes Universal and Intertrust’s businesses (¶ 250), the purpose of the license (¶ 251),
`
`and the terms of the license (¶ 252). There is no analysis of how any of that compares to the
`
`hypothetical negotiation.1 That is not a matter for cross-examination. Zynga cannot cross-examine
`
`Dr. Ugone about an analysis he did not undertake.
`
`Next, consider the Mylex/EMC license. Zynga explained the many economic differences
`
`between the license and the hypothetical negotiation, including the number of patents covered by
`
`
`1 IGT asserts that Zynga mischaracterized the Universal/Intertrust as just a software license.
`Opp. 5. But the license is clear that Intertrust licensed software to Universal. E.g., Ex. 6
`(Universal-Intertrust License) at 18971 (definition of “Authorized Application Software”); id. at
`19022-29 (Exhibit A listing licensed technology). Although Dr. Wills refers to Universal’s
`“infringing hardware,” he cites nothing to support his opinion that Universal had any hardware
`product. IGT Ex. 26 (Wills Rep.) ¶ 358.
`
`8
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 13 of 17
`
`
`
`the license and the very different products covered by the license. Mot. 24. IGT claims that Dr.
`
`Ugone “explained why” adjusting the rates within the Mylex/EMC license was not necessary.
`
`Opp. 23-24. But IGT does not cite any relevant portion of Dr. Ugone’s report in this argument.
`
`Instead, IGT cites ¶ 247 of Dr. Ugone’s report, which says that Zynga and IGT would use the
`
`license as a “guidepost,” and that the expectation that the market for mobile gaming would expand
`
`would place “upward pressure” on the ultimate royalty rate. That does not explain, for example,
`
`how the parties would account for the differences in a license covering 60+ patents to one covering
`
`just one to four patents. IGT also cites Dr. Ugone’s deposition testimony, but that testimony again
`
`merely identified differences between the Mylex/EMC license and the hypothetical negotiation, it
`
`did not explain how Dr. Ugone accounted for those differences.
`
`Lastly, IGT turns to its
`
`. IGT’s excuse for not providing an explanation of how
`
`to adjust (or not) the
`
` to account for differences with the hypothetical negotiation is to
`
`again assert that Dr. Ugone merely treated the
`
` as “informative” or “guideposts.”
`
`Opp. 25-26. This is just a cop out. If he didn’t rely on them, they should be excluded. And if he
`
`did rely on them, then he needed to explain why adjustments were unnecessary.
`
`The reality is that Dr. Ugone did rely on the
`
`; he used them to place a cap on
`
`the royalty rate, to bolster his preferred royalty rate as being within that range, and inflate the top
`
`value of the range. Mot. 7, 28-29. Put differently, Dr. Ugone is using the unadjusted
`
`
`
`to suggest that he is being conservative in suggesting a 1-3% royalty. Ex. 17 (Ugone Dep. Tr.)
`
`285:22-286:7; see Whitserve, LLC v. Comput. Packages, Inc., 694 F.3d 10, 29-30 (Fed. Cir. 2012).
`
`IGT’s example of how Dr. Ugone “accounted for”
`
`
`
`approach. In the passages quoted and cited on page 27 of IGT’s opposition, Dr. Ugone
`
` illustrates the problem with Dr. Ugone’s
`
`9
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 14 of 17
`
`
`
`how to account for the difference between
`
`. But he never says
`
`
`
`The same is true for Dr. Ugone’s failure to explain why the timing of the
`
`—
`
`—did not require adjustment. Zynga’s argument is not that
`
`post-hypothetical negotiation licenses are categorically irrelevant, it is that explanation is required.
`
`But Dr. Ugone offered none.
`
`Moreover, IGT has now admitted that the
`
` reflect IGT’s
`
` Opp. 29.
`
`
`
`
`
`
`
`
`
` Finjan, 879 F.3d at 1312. This makes Dr. Ugone’s use of the
`
`unadjusted
`
` highly unreliable.
`
`2.
`
`The page count of Dr. Ugone’s report is irrelevant.
`
`IGT’s entire argument about Dr. Ugone’s Georgia-Pacific analysis is that it’s very lengthy,
`
`so it must be sufficient. Opp. 30. Wrong. To take just one example, consider Georgia-Pacific
`
`Factor 4. Dr. Ugone does not mention this factor even once in the body of his report. In “Appendix
`
`A,” Dr. Ugone states that Factor 4 would place upward pressure on the negotiation, based on the
`
`. Ex. 16 at 3. But there is no explanation of how this
`
`factor led to selection of a 1-3% running royalty. The same is true of many other factors. See id.;
`
`Mot. 28-30. The Court should exclude this ipse dixit on the ground that it is not helpful to the fact-
`
`finder. Exmark Mfg. Co. v. Briggs & Stratton Power Prods. Grp., LLC, 879 F.3d 1332, 1350 (Fed.
`
`Cir. 2018); Whitserve, 694 F.3d at 31.
`
`III. CONCLUSION
`
`Zynga respectfully requests that this Court grant Zynga’s motion to exclude.
`
`10
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 15 of 17
`
`
`
`Dated: March 9, 2023
`
`
`
`By: /s/ Mark D. Siegmund
`
`Mark D. Siegmund
`Texas Bar No. 24117055
`CHERRY JOHNSON SIEGMUND JAMES, PLLC
`400 Austin Ave., 9th Floor
`Waco, Texas 76701
`msiegmund@cjsjlaw.com
`Telephone: (254) 732-2242
`Facsimile: (866) 627-3509
`
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`Clement Seth Roberts, Bar No. 209203
`(Pro Hac Vice)
`croberts@orrick.com
`Elizabeth R. Moulton, Bar No. 286937 (Pro Hac
`Vice)
`emoulton@orrick.com
`Will Melehani, Bar No. 285916 (Pro Hac Vice)
`wmelehani@orrick.com
`Sarah K. Mullins, Bar No. 324558 (Pro Hac
`Vice)
`sarahmullins@orrick.com
`The Orrick Building
`405 Howard Street
`San Francisco, CA 94105
`Telephone: +1 415 773 5700
`Facsimile: +1 415 773 5799
`
`Bas de Blank, Bar No. 191487 (Pro Hac Vice)
`basdeblank@orrick.com
`1000 Marsh Rd.
`Menlo Park, CA 94025
`Telephone: +1 650 614 7400
`Facsimile: +1 415 773 5799
`
`Alyssa Caridis, Bar No. 260103 (Pro Hac Vice)
`acaridis@orrick.com
`Isaac S. Behnawa, Bar No. 342441 (Pro Hac
`Vice)
`ibehnawa@orrick.com
`777 South Figueroa Street
`Suite 3200
`Los Angeles, CA 90017
`Telephone: +1 213 629 2020
`Facsimile: +1 213 612 2499
`
`
`11
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 16 of 17
`
`
`
`Sten Jensen, Bar No. 443300 (Pro Hac Vice)
`sjensen@orrick.com
`Chris Childers, Bar No. 1719610 (Pro Hac Vice)
`cchilders@orrick.com
`Columbia Center
`1152 15th St NW
`Washington, DC 20005
`Telephone: +1 202 339 8400
`Facsimile: +1 202 339 8500
`
`Attorneys for Defendant Zynga Inc.
`
`
`
`12
`
`
`
`Case 6:21-cv-00331-ADA Document 214 Filed 03/17/23 Page 17 of 17
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on March 9, 2023, all counsel of record who are deemed to have
`
`consented to electronic service are being served with a copy of this document (and any
`
`declarations, exhibits, and proposed orders filed concurrently herewith) via email.
`
`
`
`
`
`/s/
`
`Mark D. Siegmund
`Mark D. Siegmund
`
`
`
`13
`
`