Case 6:21-cv-00569-ADA Document 118 Filed 12/13/22 Page 1 of 11
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`TOUCHSTREAM TECHNOLOGIES, INC.,
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`Plaintiff,
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`v.
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`GOOGLE LLC,
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`Defendant.
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`Civil Case No. 6:21-cv-569-ADA
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`JURY TRIAL DEMANDED
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`U.S. District Judge Alan Albright
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`PUBLIC - REDACTED VERSION
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`TOUCHSTREAM TECHNOLOGIES, INC.’S OBJECTIONS TO AND APPEAL FROM
`NOVEMBER 29, 2022 MAGISTRATE JUDGE’S ORDER
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`INTRODUCTION
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`It is undisputed that Google designs, develops, engineers, and tests in the United States the
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`same infringing software methods that are used by its devices abroad. Damages associated with
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`Google’s foreign activities are recoverable because the domestic infringement is the but-for cause
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`of the activities occurring outside the United States. Touchstream has shown an ample nexus
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`between Google’s domestic infringement and foreign activities. In such cases, foreign damages
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`are recoverable, as has been held by the weight of authority applying WesternGeco LLC v. ION
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`Geophysical Corp., 138 S. Ct. 2129 (2018), to method claims infringing under § 271(a).
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`On November 29, 2022, Magistrate Judge Gilliland ruled to the contrary as a matter of law,
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`finding generally that foreign damages are not recoverable where a patentee asserts method claims
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`and ties to foreign sales. Accordingly, Judge Gilliland denied Touchstream’s motion to compel
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`Google to produce usage metrics on foreign devices. See ECF No. 111, portion relating to global
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`usage metrics. Pursuant to Federal Rule of Civil Procedure 72(b), Local Court Rule Appx. C-4(b),
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`and 28 U.S.C. § 636(b)(1),1 Plaintiff Touchstream Technologies, Inc. (“Touchstream”)
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`respectfully objects to that ruling, and asks the Court to sustain the objection and order production
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`of global usage metrics.2
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`FACTUAL AND PROCEDURAL BACKGROUND
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`Touchstream alleges in this lawsuit that Google’s Chromecast technology infringes
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`Touchstream’s patents, which are directed at “software that enables content to be wirelessly cast
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`(e.g., accessed, displayed, and controlled) from a personal computer or mobile device to a second
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`display screen or audio device (e.g., TV, computer monitor, table, speaker, etc.).” Compl. ¶ 32.
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`Google’s Chromecast technology infringes these patents by performing methods through
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`operation of Google’s Chromecast devices and third-party devices implementing Chromecast
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`built-in technology. Id. ¶ 48.
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`Google has stated that “
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`” ECF No. 26 at 1.
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` ECF No. 27-1 at 1-4. Google employees have
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`1 But, if the Court decides that this is not an appeal from a dispositive motion but rather is a
`nondispositive motion, then Touchstream objects to and appeals from the Magistrate’s Order under
`Rule 72(a) and Local Court Rule Appx. C-4(a).
`2 Touchstream notes that it has filed a motion to reconsider before Judge Gilliland. (ECF No. 107.)
`That motion is fully briefed. If Judge Gilliland were to grant Touchstream’s motion to reconsider,
`then Touchstream’s objection pursuant to Rule 72, addressed herein, would be mooted.
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`2
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`further testified that the infringing methods were “dogfooded”—that is, internally tested and
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`used—by Google employees in California (including by Google’s current CEO). Further, the
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`Google code that performs the infringing methods is distributed from California to the rest of the
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`world. In short, but for Google’s domestic infringement, Google could not have rolled out its
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`infringing functionality to the rest of the world.
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`On November 14, 2022, Touchstream filed its motion to compel Google to produce, among
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`other things, global usage metrics relevant to its damages assessment related to foreign devices.
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`Ex. 1. As Touchstream explained, global usage metrics are relevant and should be produced
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`because Touchstream will “prove at trial that there is a sufficient nexus between Google’s
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`infringement in the United States and damages associated with global devices.” Id. at 2-3, citing,
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`e.g., WesternGeco, 138 S. Ct. at 2139.
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`On November 16, 2022, Magistrate Judge Gilliland heard oral argument on Touchstream’s
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`request to compel global usage metrics. Ex. 2 at 25:16-33:17. At the hearing, Judge Gilliland stated
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`that he was “going to deny the request for global revenues.” Id. at 33:16-17. In reaching this
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`conclusion, he reasoned, “method patents only infringe when the method’s practiced and it’s got
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`to be practiced within the border of the U.S. for a method to be infringed.” Id. at 33:14-16.
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`On November 18, 2022, Touchstream filed a motion asking Judge Gilliland to reconsider
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`his ruling denying Touchstream’s motion to compel production of global usage metrics, on the
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`purely legal basis stated by the Court at the hearing. (ECF No. 107.) That motion is fully briefed
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`and remains pending. See ECF Nos. 110 (Google’s 11/28/22 response), and 112 (Touchstream’s
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`12/1/22 reply).
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`On November 29, Judge Gilliland entered an order denying Touchstream’s motion to
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`compel production of global usage metrics “[as] set forth on the record at the November 16, 2022
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`hearing.” ECF No. 111 at 7-8. Pursuant to Federal Rule of Civil Procedure 72, Touchstream timely
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`files its objection to that ruling 14 days after being served with it by the Court’s electronic filing
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`system.
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`LEGAL STANDARD
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`Federal Rule of Civil Procedure 72 governs the review of a magistrate judge’s ruling.
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`Under Rule 72, this Court should review the disputed ruling de novo for two reasons. First, to the
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`extent the ruling is nondispositive, this Court must modify or set it aside if it “is contrary to law.”
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`Fed. R. Civ. P. 72(a). The ruling here—foreign damages are categorically precluded when method
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`claims are asserted—is a pure legal conclusion reviewed de novo. See, e.g., Hydranautics v.
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`Filmtec Corp., 2003 WL 23358187, at **1-2 (S.D. Cal. July 23, 2003) ( “the ‘contrary to law’
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`standard authorizes the district court’s independent review of a magistrate judge’s purely legal
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`conclusions”); Haines v. Liggett Group, Inc., 975 F.2d 81, 91 (3d Cir. 1992) (“the phrase ‘contrary
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`to law’ indicates plenary review as to matters of law”); Medical Imagining Centers of America v.
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`Lichtenstein, 917 F. Supp. 717, 719 (S.D. Cal. 1996) (“de novo review by the district court on
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`issues of law”); Lipian v. University of Michigan, 2020 WL 2513082, at *2-4 (E.D. Mich. May 15,
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`2020) (“independent judgment with respect to the legal conclusions reached by the Magistrate
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`Judge”).
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`Moreover, the Court should find the ruling potentially dispositive, and therefore subject to
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`de novo review under Rule 72(b), unless Google represents in response to Touchstream’s objection
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`that Google will not use Touchstream’s lack of the very type of information Google refuses to
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`produce to argue (1) that Touchstream cannot meet its burden of proof; or (2) that Touchstream’s
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`expert opinions are unreliable. Absent such representations, the ruling would be dispositive and
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`therefore subject to de novo review under Rule 72(b). See Fed. R. Civ. P. 72(b)(3) (“The district
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`judge must determine de novo any part of the magistrate judge's disposition that has been properly
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`objected to”); Flam v. Flam, 788 F.3d 1043, 1046 (9th Cir. 2015) (“To determine whether a motion
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`is dispositive, we have adopted a functional approach that look[s] to the effect of the motion, in
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`order to determine whether it is properly characterized as ‘dispositive or non-dispositive of a claim
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`or defense of a party”) (quotation marks omitted); Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d
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`1458, 1462 (10th Cir. 1988) (“motions not designated on their face as one of those excepted in
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`subsection (A) are nevertheless to be treated as such a motion when they have an identical effect”).
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`ARGUMENT
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`I.
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`Foreign Damages Are Recoverable Where Domestic Infringement Is Sufficiently Tied
`To Foreign Activity.
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`Touchstream seeks to recover reasonable royalties for, among other things, Google’s
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`domestic acts of infringement under 35 U.S.C. § 271(a) that are the but-for cause of devices located
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`abroad to practice the same methods. As described above, the Magistrate’s November 29, 2022
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`order held that legal theory not viable and on that basis alone declined to order production of global
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`usage metrics. Ex. 2 at 25:16-33:17. Respectfully, that ruling was contrary to the law and should
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`be reversed in light of the recent Supreme Court case of WesternGeco LLC v. ION Geophysical
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`Corp., 138 S. Ct. 2129 (2018), and subsequent case law interpreting that opinion as applied to
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`§ 271(a) claims.
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`In WesternGeco, the plaintiff owned patents relating to a system it developed for surveying
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`the ocean floor. Id. at 2135. The defendant manufactured components of a competing system and
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`shipped them abroad to be sold and used outside the United States. Id. The plaintiff sued for patent
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`infringement under 35 U.S.C. § 271(f)(2). Id. A jury found in favor of plaintiff and awarded
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`damages associated with foreign sales. Id. The Supreme Court upheld this verdict, reasoning that
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`domestic acts of infringement were the cause of foreign damages:
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`Section 271(f)(2) focuses on domestic conduct. It provides that a
`company “shall be liable as an infringer” if it “supplies” certain
`components of a patented invention “in or from the United States”
`with the intent that they “will be combined outside of the United
`States in a manner that would infringe the patent if such combination
`occurred within the United States.” The conduct that § 271(f)(2)
`regulates—i.e., its focus—is the domestic act of “suppl[ying] in or
`from the United States”. . .
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`In sum, the focus of § 284, in a case involving infringement under §
`271(f)(2), is on the act of exporting components from the United
`States. In other words, the domestic infringement is “the objec[t] of
`the statute’s solicitude” in this context. Morrison, 561 U.S., at 267,
`130 S.Ct. 2869. The conduct in this case that is relevant to that focus
`clearly occurred in the United States, as it was [defendant]’s
`domestic act of supplying the components that infringed [plaintiff]’s
`patents.
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`138 S. Ct. at 2137-38. In conclusion, the Supreme Court held that damages associated with foreign
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`sales are recoverable “when the patent owner proves infringement under § 271(f)(2).” Id. at 2139.
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`As the Court also explained, to hold otherwise would be to “wrongly conflate[] legal injury with
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`the damages arising from that injury.” Id. at 2138.
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`The reasoning and holding of WesternGeco apply here. In WesternGeco, defendant
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`engaged in acts of domestic infringement by supplying from the United States infringing hardware
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`components, which were then incorporated abroad into devices sold and used abroad. 138 S. Ct.
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`at 2135, 2137-38. In other words, the domestic infringement was sufficiently tied to the foreign
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`damages. Similarly here, Google engaged in acts of domestic infringement when it practiced the
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`infringing methods in the United States before shipping that same software abroad to practice the
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`same methods. Just as in WesternGeco, damages associated with foreign sales are recoverable so
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`long as Touchstream proves that the domestic infringement is tied to the foreign damages in this
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`case, creating the infringing software components—and practicing them (via development and
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`testing) in the United States. 35 U.S.C. § 271(a). To hold otherwise would be to “wrongly
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`conflate[] legal injury with the damages arising from that injury.” Id. at 2138.
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`Moreover, this Court and others have found, citing and relying upon WesternGeco, that
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`foreign damages are recoverable not just for infringement under § 271(f), but also § 271(a):
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`“WesternGeco does suggest that foreign damages are compensable for domestic
`infringement under § 271(a), just as they are compensable for domestic
`infringement under § 271(f)(2). For example, a plaintiff might prove that a product
`made in the United States was sold abroad, [etc.] Each of these instances would
`constitute infringement under § 271(a), and thus, under the reasoning of
`WesternGeco, would be compensable even if the sale causing damage ultimately
`occurred abroad.”
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`W.H. Wall Fam. Holdings LLLP v. CeloNova Biosciences, Inc., 2020 WL 1644003, at *3 & n.2
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`(W.D. Tex. Apr. 2, 2020) (granting motion to compel foreign sales activity), quoting Plastronics
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`Socket Partners, Ltd. v. Dong Weon Hwang, 2019 WL 4392525, at *5 (E.D. Tex. June 11, 2019)
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`(finding a genuine dispute of fact existed as to whether plaintiff suffered damages abroad as a
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`result of Defendants’ domestic acts of infringement under § 217(a), stating, “WesternGeco does
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`suggest that foreign damages are compensable for domestic infringement under § 271(a), just as
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`they are compensable for domestic infringement under § 271(f)(2) . . . ”); see also ArcherDX, LLC
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`v. Qiagen Scis., LLC, 2022 WL 4597877, at **12-13 (D. Del. Sept. 30, 2022) (affirming verdict
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`for foreign damages under § 217(a) in case involving infringement of method claims, stating,
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`“Although in . . . the present case, infringement was found under § 271(a), ‘the conduct relevant
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`to the statutory focus ... is domestic’ . . . Therefore, by allowing the jury to calculate damages for
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`domestic infringement by using sales made abroad related to that infringement, the Court is not
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`implicitly finding that infringement occurred abroad but rather is allowing the patentee to recover
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`fully for harm committed in the United States”) (quoting WesternGeco, 138 S. Ct. at 2137).
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`Cases decided before WesternGeco also support the conclusion that foreign damages are
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`recoverable where domestic infringement under § 271(a) is tied to foreign activity:
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`“[I]t makes no sense to insist that the action respecting the product being used for
`measurement itself be an infringing action. Thus, here the claim is a method claim,
`but the damages-measuring product practices the method in its normal intended
`use . . . In these circumstances, the inquiry is whether any of the § 271(a)‐listed
`activities with respect to that product occur domestically.”
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`Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., 807 F.3d 1283, 1306-07, 1310 (Fed. Cir. 2015)
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`(upholding instruction permitting jury to consider any sales of chips manufactured and sold
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`abroad) (emphasis omitted); see also GE Healthcare Bio-Sciences AB v. Bio-Rad Laboratories,
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`Inc., 2015 WL 7582967, at *2 (S.D.N.Y. Nov. 25, 2015) (sustaining objection to the magistrate
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`judge’s order denying plaintiff’s motion to compel foreign revenue information and stating,
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`“discovery of foreign sales information . . . is relevant to [plaintiff]’s claim for damages for
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`allegedly infringing activities in the United States [under § 271(a)] since it has, at a minimum,
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`implications for the valuation of the invention.”); see also McGinley v. Luv N’ Care, Ltd., 2018
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`WL 9814589, at *5 (W.D. La. Sept. 10, 2018) (“While [defendant]’s activities may ultimately not
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`give rise to liability under U.S. patent law [§ 271(a)], [plaintiff] is entitled to discover the extent
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`to which [defendant] has engaged in foreign sales activities.”).
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`II.
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`Google’s Cases Are Inapposite.
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`In the underlying briefing, Google has heavily relied upon Power Integrations, Inc. v.
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`Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348 (Fed. Cir. 2013), and Bel Power Solutions v.
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`Monolithic Power Systems, 6-21-CV-00655-ADA, ECF No. 63 (W.D. Tex. 2022). That reliance
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`is misplaced. Power Integrations was decided before WesternGeco, which controls. Moreover,
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`even in that case, the Court acknowledged that WesternGeco “implicitly overruled the Federal
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`Circuit’s Power Integrations opinion . . . Section 271(a) vindicates domestic interests no less than
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`Section 271(f) . . . Moreover, the Federal Circuit’s WesternGeco I decision was based almost
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`entirely on the Federal Circuit's Power Integrations decision. It logically follows that when the
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`Supreme Court expressly overruled WesternGeco I it also implicitly overruled Power
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`Integrations.” Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 2018 WL 4804685,
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`at *1 (D. Del. Oct. 4, 2018) (“Power Integrations II”) (quotation marks omitted).
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`Bel Power also does not apply. In Bel Power, this Court did not address whether foreign
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`damages are recoverable when tied to domestic infringement under 35 U.S.C. § 271(a)—which is
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`the issue here. Instead, the Court in Bel Power Solutions denied a motion to compel foreign
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`damages because Plaintiff’s theory was based on foreign damages tied to a “design win,” see id.
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`at 2, not to domestic infringement. Nor did the Bel Power decision address (or have occasion to
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`address) any of the authorities above finding that domestic infringement tied to foreign sales may
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`warrant recovery of foreign damages. See, e.g., WesternGeco, 138 S. Ct. at 2139; ArcherDX, 2022
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`WL 4597877, at *13; W.H. Wall, 2020 WL 1644003, at *3 & n.2; Plastronics, 2019 WL 4392525,
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`at *5; Carnegie Mellon, 807 F.3d at 1306-07.
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`CONCLUSION
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`For the foregoing reasons, Touchstream respectfully requests that the Court overturn the
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`portion of the Magistrate Judge’s November 29, 2022 order denying Touchstream’s motion to
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`compel production of global usage metrics, and order production of the global usage metrics.
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`Date: December 13, 2022
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`
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`Michael W. Gray (TX Bar No. 24094385)
`Fiona A. Bell (TX Bar No. 24052288)
`Andrew M. Long (TX Bar No. 24123079)
`SHOOK, HARDY & BACON L.L.P.
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`Respectfully submitted,
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`TOUCHSTREAM TECHNOLOGIES, INC.
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`By:
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` /s/ Justin R. Donoho
`One of Its Attorneys
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`Ryan D. Dykal, pro hac vice
`B. Trent Webb, pro hac vice
`Jordan T. Bergsten, pro hac vice
`SHOOK, HARDY & BACON L.L.P.
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`
`2555 Grand Boulevard
`Kansas City, MO 64108
`(816) 474-6550
`Fax: (816) 421-5547
`Email: rdykal@shb.com
`Email: bwebb@shb.com
`Email: jbergsten@shb.com
`
`
`600 Travis Street, Suite 3400
`Houston, TX 77002
`(713) 227-2008
`Fax: 713-227-9508
`Email: mgray@shb.com
`Email: fbell@shb.com
`Email: amlong@shb.com
`
`Gary M. Miller, pro hac vice
`Justin R. Donoho, pro hac vice
`SHOOK, HARDY & BACON L.L.P.
`111 S. Wacker Drive, Suite 4700
`Chicago, IL 60606
`(312) 704-7700
`Fax: 312-558-1195
`Email: gmiller@shb.com
`Email: jdonoho@shb.com
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`
`
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`Counsel for Plaintiff Touchstream Technologies, Inc.
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`Case 6:21-cv-00569-ADA Document 118 Filed 12/13/22 Page 11 of 11
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`CERTIFICATE OF SERVICE
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`Pursuant to the Federal Rules of Civil Procedure and the Local Rules for the Western
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`District of Texas, I hereby certify that on the 13 day of December, 2022, I served the foregoing to
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`the following counsel of record via the e-mail addresses shown below:
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`Michael E. Jones
`Patrick C. Clutter
`Shaun William Hassett
`Potter Minton PC
`110 N College, Suite 500
`Tyler, TX 75702
`Tel: 903-597-8311
`Email: mikejones@potterminton.com
`Email: patrickclutter@potterminton.com
`Email: shaunhassett@potterminton.com
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`Evan M. McLean, pro hac vice
`Michael C. Hendershot, pro hac vice
`Tharan Gregory Lanier, pro hac vice
`Jones Day
`1755 Embarcadero Road
`Palo Alto, CA 94303
`Tel: (650) 739-3939
`Email: emclean@jonesday.com
`Email: mhendershot@jonesday.com
`Email: tglanier@jonesday.com
`
`Edwin O. Garcia, pro hac vice
`Jones Day
`51 Louisiana Avenue, N.W.
`Washington, DC 20001
`Tel: (202) 879-3695
`Email: edwingarcia@jonesday.com
`
` /s/ Justin R. Donoho
`Attorney for Plaintiff
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