Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 1 of 34
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`
`TOUCHSTREAM TECHNOLOGIES, INC.,
`
`Plaintiff,
`
`v.
`
`GOOGLE LLC,
`
`Defendant.
`
`Civil Case No. 6:21-cv-569-ADA
`
`JURY TRIAL DEMANDED
`
`U.S. District Judge Alan Albright
`
`REDACTED - PUBLIC VERSION
`
`PLAINTIFF TOUCHSTREAM TECHNOLOGIES, INC.’S OPPOSITION TO
`DEFENDANT GOOGLE LLC’S DAUBERT MOTION TO EXCLUDE CERTAIN
`OPINIONS OF DAMAGES EXPERT MARK J. CHANDLER
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 2 of 34
`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 2 of 34
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`TABLE OF CONTENTS
`
`Page
`
`TABLE OF AUTHORITIES-.20.2......0..cescesccesceseecescesesseseeseeseseeseesessescescsseseeseeseseeseeseeseseeseeseeeeeeees ill
`
`INTRODUCTION 0000... .ecccceccccceccsceseseeseeseseseceeeeesesaeneee cee seeseseeeseeesseeseaseeeeeeecaeeseeeseeaeeaeeeaeeeeeeeeees 1
`
`FACTUAL BACKGROUND..00.......ccsesesceseesesessesseseseseeseesessesecsesseseesecsesesecseesesecsecseeseseeseeaeeeeeeeae 1
`
`I.
`
`AND
`PATENTING,
`DEVELOPMENT,
`TOUCHSTREAM’S
`LICENSING OF CASTING TECHNOLOGY....2002...2..2-2:ccscescecceecesceseeseeeeseeseeeees 1
`
`BE. I Rea0innikeisiscsescescisncrnestssiessorcnnsvertbanrncis a
`
`Il.
`
`BENEFITS OF THE INVENTION TO GOOGLE....002.0200.02.0.2.0.0cescesceseeceteeeeeess 3
`
`TV.
`
`UNAVAILABILITY OF GOOGLE’S RECORDS....022....0..0..0..cescecesceseeceteeseteeees 4
`
`V.
`
`MARK CHANDLER’S EXPERTOPINIONS ...200......ce-cescecesceseecesceseeseeeseeeeeeees 5
`
`LEGAL STANDARDS 0... oeececececsceecsssseseeseeseesesesessnesesaeseessesesacsesseaesecseesesaesecseeaeaeseeaeeeeeeeaeeees 10
`
`ARGUMENT ..0ooo sc ce sc sc ice scesesceseeseeseseeseeseseeseesesseseeseessssesseseeseesesseseesesaeseeseeaeeeeseeseeaeeeseeateeeeees 10
`
`MR. CHANDLER RELIABLY ACCOUNTED FOR DIFFERENCES
`
`I.
`
`BETWEEN
`
`THE [QM AGREEMENT
`
`AND
`
`THE
`
`HYPOTHETICAL NEGOTIATION. ...0o..o......ecccesceccecesceceecesceseeceseeseeseeeeseeseeeeseees 10
`
`A.
`
`B.
`
`C.
`
`Mr. Chandler Explained and Accounted For Differences........................ 11
`
`Mr. Chandler’s Treatment ofthe Agreement Goes Beyond
`What Courts Require .............ccccccceeseeseeeeceseeceeeeceeeeeenseeeseeeeseeeeeeeseneeeeees 12
`
`The Cases Cited by Google Only Reinforce the Appropriateness of
`Mr. Chandler’s Opinions on thei Agreement..................::0:0- 14
`
`IL.
`
`MR. CHANDLER RELIABLY APPORTIONED THE AMOUNT OF
`DAMAGES BASED ON THE VALUE ATTRIBUTABLE TO THE
`PATENTEDINVENTION....o..o.eocesccseecescseeseeseseeseesesseseeseeeeseeseeseeseseeseeseeeseeseeaees 17
`
`Il. MR.CHANDLER RELIABLY OPINED ABOUT ALTERNATIVE,
`AGGREGATE REVENUE-BASED APPROACHES AND A ROYALTY
`RATE APPLICABLE TO A ROYALTY RATE UNDER SUCH
`APPROACHESo.oo. ceccsessseesesseseeseesesee sees ceesee seas ceceeseeaeseeaeeaeeesseeaeeeeeeeseesseaeeeeaeets 24
`
`TV.
`
`MR. CHANDLER RELIABLY OPINED ON FOREIGN DAMAGES.............. 25
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 3 of 34
`
`V.
`
`GOOGLE’S MISCELLANEOUS OBJECTIONS LACK MERIT ...................... 25 
`
`CONCLUSION ............................................................................................................................. 26 
`
`Page
`
`ii
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`

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`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 4 of 34
`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 4 of 34
`
`TABLE OF AUTHORITIES
`
`Page
`
`Cases
`
`Acceleration Bay LLCv. Activision BlizzardInc.,
`No. 16-00453, 2019 WL 4194060 (D.Del. Sept. 4, 2019) .........ececeeececceeeeeeeeeseeteeeteeeees 12, 13
`
`ActiveVideo Networks, Inc. v. Verizon Comme’ns, Inc.,
`694 F.3d 1312 (Fed. Cir. 2012).0......cccccceccccceeccescceescceseeessecesecesseceseceeeceseceeaecesecesseeeeeeees 11,14
`
`Arigna Tech. Ltd. v. Nissan Motor Co., Ltd.,
`No. 222CV00126JRGRSP, 2022 WL 14318049 (E.D. Tex. Oct. 24, 2022)... eee20
`
`Bd. ofRegents Univ. of Texas Sys. v. Bos. Sci. Corp.,
`18-392, 2022 WL 17584180 (D. Del. Dec. 12, 2022) ........eecceeeceeecceecceeeceeseeetseeeseeeseeees 19, 20
`
`Bio-Rad Lab’ys, Inc. v. 10X Genomics Inc.,
`967 F.3d 1353 (Fed. Cir. 2020)..0......cccceccccccescceseceeseeeseeeeecesecessecescecsceceseeeeeceaeeeseeeeeeesseeeaees 15
`
`Bio-Rad Labs, Inc. v. 10X Genomics, Inc.,
`15-152, 2018 WL 4691047 (D.Del. Sept. 28, 2018) ........eceeceecceeeceseeeceeeeeeeeeeeeeeeneeeeeees 14, 15
`
`Chrimar Holding Co., LLC v. ALE USA Inc.,
`732 Fed. App’x 876 (Fed. Cir. 2018)..........ccccccccccccceecceescceseeeesecesseceseceseeceseceseeceseeesseeeseeeees 18, 19
`
`Content Guard Holdings, Inc. v. Amazon.com, Inc.,
`13-1112, 2015 WL 11089749 (E.D. Tex. Aug. 6, 2015) ........ecceecececceecceeeceescceseeeeeceeseeeeseeeees 19
`
`Daubert v. Merrell Dow Pharms., Inc.,
`509 U.S. 579 (1993) ....ecccecccesccceccescceesceesseceseeesseesecesscesecesscessecessceesecesseeeaecesasessecesseeeeeeees 10, 23
`
`Ericsson, Inc. v. D-Link Sys., Inc.,
`773 F.3d 1201 (Fed. Cir. 2014)..0....cccccccccccccccecceccecceescceseecceeeseeceseceeeceaeeeeecsseeeseeseaeeeses 11, 23
`
`Exmark Mfg. Co. Inc. v. Briggs & Stratton Power Prod. Grp., LLC,
`879 F.3d 1332 (Fed. Cir. 2018).0....0ccccccccccccecceesccecceesecesscesecesseeesecessceeseceseensecesseeeseeesseeeseee22
`
`Georgia-Pacific Corp. v. U.S. Plywood Corp.,
`318 F. Supp. 1116 (S.D.N-Y. 1970)... cccccecccccceecceseceeseceseeceseceseeceseeesseceseceseeseseessseessees6, 7, 26
`
`Info-Hold, Inc. v. Muzak LLC,
`11-283, 2013 WL 4482442 (S.D. Ohio Aug. 20, 2013) .......ceeceeececcecceeecceeeceesceeesceeseeeeseeeees 17
`
`Interactive Pictures Corp. v. Infinite Pictures, Inc.,
`274 F.3d 1371 (Fed. Cir. 2001)........0cceccecccccccescceeccceseceseessecessecesecessecesecesseceseeesseeseeeseeeeeeeees25
`
`ill
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 5 of 34
`
`Page
`
`Johnson v. Arkema, Inc.,
`685 F.3d 452 (5th Cir. 2012) ...................................................................................................10
`
`Lam, Inc. v. Johns-Manville Corp.,
`718 F.2d 1056 (Fed. Cir. 1983)....................................................................................21, 24, 25
`
`Malibu Boats, LLC v. Natique Boat Co., Inc.,
`13-656, 2015 WL 11017799 (E.D. Tenn. Jan. 26, 2015) ........................................................20
`
`Mirco Motion, Inc. v. Exac Corp.,
`761 F. Supp. 1420 (N.D. Cal. 1991) ........................................................................................25
`
`MLC Intellectual Property, LLC v. Micron Tech., Inc.,
`10 F.4th 1358 (Fed. Cir. 2021) ..........................................................................................11, 15
`
`Network-1 Techs., Inc. v. Alcatel-Lucent USA, Inc.,
`11-492, 2017 WL 4020591 (E.D. Tex. Sept. 13, 2017) ...........................................................20
`
`O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc.,
`420 F. Supp. 2d 1070 (N.D. Cal. 2006),
`aff’d, 221 F. App’x 996 (Fed. Cir. 2007).................................................................................16
`
`Omega Patents, LLC v. CalAmp Corp.,
`13 F.4th 1361 (Fed. Cir. 2021) ..........................................................................................15, 16
`
`PerdiemCo, LLC v. Industrack LLC,
`15-726, 2016 WL 6611488 (E.D. Tex. Nov. 9, 2016) .......................................................22, 23
`
`ROY-G-BIV Corp. v. ABB, Ltd.,
`No. 11-622, 2014 WL 12465449 (E.D. Tex. Aug. 1, 2014) ....................................................23
`
`Sensonics, Inc. v. Aerosonic Corp.,
`81 F.3d 1566 (Fed. Cir. 1996)......................................................................................21, 24, 25
`
`SimpleAir, Inc. v. Google Inc.,
`77 F. Supp. 3d 569 (E.D. Tex. 2014) ...........................................................................22, 24, 25
`
`Snellman v. Ricoh Co.,
`862 F.2d 283 (Fed.Cir.1988)....................................................................................................25
`
`Sprint Commc’ns Co., L.P. v. Mediacom Commc’ns Corp.,
`17-1736, 2021 WL 982734 (D. Del. Mar. 16, 2021) ...............................................................20
`
`SSL Servs., LLC v. Citrix Sys., Inc.,
`769 F.3d 1073 (Fed. Cir. 2014)................................................................................................13
`
`iv
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`

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`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 6 of 34
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`Page
`
`Studiengesellschaft Kohle, m.b.H. v. Dart Indus., Inc.,
`862 F.2d 1564 (Fed. Cir. 1988)................................................................................................26
`
`Summit 6, LLC v. Samsung Elecs. Co., Ltd.,
`802 F.3d 1283 (Fed. Cir. 2015)................................................................................................10
`
`Tek Global, S.R.L. v. Sealant Sys. Int’l, Inc.,
`920 F.3d 777 (Fed. Cir. 2019)..................................................................................................16
`
`US Salt v. Broken Arrow,
`563 F. 3d 687 (8th Cir. 2009) ..................................................................................................17
`
`Via Vadis, LLC v. Blizzard Ent., Inc.,
`No. 1:14-CV-00810-LY, 2021 WL 5908599 (W.D. Tex. Dec. 14, 2021) ..............................25
`
`Virnetx, Inc. v. Cisco Sys., Inc.,
`767 F.3d 1308 (Fed. Cir. 2014)................................................................................................14
`
`VLSI Tech. LLC v. Intel Corp.,
`6:21-057-ADA, 2022 WL 1477725 (W.D. Tex. May 10, 2022) .............................................26
`
`v
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 7 of 34
`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 7 of 34
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`INTRODUCTION
`
`Google does not challenge the economic and patent licensing expertise of Touchstream’s
`
`damages expert, Mark Chandler. Mr. Chandler’s opinions leveraging that expertise carefully
`
`follow Federal Circuit law andare sufficiently reliable for a jury. Google, in an attempt to avoid
`
`paying the full and fair price for its years of infringement, omits and in some cases outright
`
`misrepresents steps outlined in Mr. Chandler’s report to try to shoe-horn his analysis into narrow
`
`lines ofcases where courts have excluded opinions. For example, Google asserts that Mr. Chandler
`
`Po (Mot. at 10). Not true. Mr. Chandler consideredthe relative
`
`bargaining powerof the parties and reduced the license fee because Google would claim that its
`
`“large base of customers and advertisers justify a substantial discount.” Mot. Ex. 1 at 93; see also
`
`id. at 91, 92. Google also incorrectly claims that Mr. Chandlerrelies “sole[ly]” on Touchstream’s
`
`CEOin analyzing a comparable license agreement, not the agreement itself (Mot. at 11 n.4), and
`
`purportedly gives “superficial recitation” to the Georgia-Pacific factors. Mot. 13. Neither claim is
`
`true. Mot. Ex. 1 at 67-69; id. at 63-85, 137-153; Mot. Ex. 2 158:3-12.
`
`On an accurate record, Mr. Chandler’s opinions fall well within the bounds of what courts
`
`routinely allow to be presented to a jury, and Google’s complaints are at best fodder for cross-
`
`examination. Touchstream respectfully submits that the Court should deny Google’s motion to
`
`exclude Mr. Chandler’s expert opinions on damages.
`
`FACTUAL BACKGROUND
`
`I.
`
`TOUCHSTREAM’S DEVELOPMENT, PATENTING, AND LICENSING OF
`CASTING TECHNOLOGY
`
`Touchstream invented a method that enables content like videos to be wirelessly “cast,” or
`
`sent, from a mobile device to a second display screen or audio device. Mot. Ex. 1 at 10-12, 141.
`
`

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`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 8 of 34
`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 8 of 34
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`Touchstream developed software practicing this method and received numerous awards and
`
`recognitions for its imovation in this field, including in 2011 and 2014. Jd. On August 21, 2011,
`
`Touchstream’s inventor filed the patent application from which the Touchstream Patents claim
`
`priority. Jd. at 10. Touchstream committed to licensing the rights to its patented cast technology.
`
`Id. at 141. Touchstream licensed rights to practice the Touchstream Patents to several companies,
`
`ne1 5.75.
`u.
`(RRR AGREEMENT
`On July 3, 2013, Touchstream entered into a licensing agreement with Po
`Pe. Mot. Ex.
`1 at 66; Mot. Ex. 4. aa was a mid-sized European
`
`company providing entertainment and connectivity services in the hospitality industry. Mot. Ex. 1
`
`6-7
`
`Mot. Ex. 2 at 46:19-25, 47:7-49:21.
`
`Touchstream agreed to providePe
`ee
`EE Mot. Ex. 1 at 68; Mot. Ex. 4991.1,5.1.
`ee
`P| Mot. Ex. | at 68; Mot. Ex. 4 Schedule 1.
`Touchstream also agreed to provideP|
`
`a B
`
`x. 1at67; Mot Ex. 49% 11,95
`EE Mot. Ex. 1 at 66, 67; Mot. Ex. 2 at 140:8-24; Mot. Ex. 4 999.1,
`22).as
`ee
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 9 of 34
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` Id. ¶ 10.1.
`
` Mot. Ex. 1 at 66, 67; Mot. Ex. 2 at 47:1-6, 147:7-16. In exchange for
`
`. Mot. Ex. 1 at 67; Mot. Ex. 2 at
`
`134:21-135:1, 136:8-16, 142:25-143:11, 159:3-14; Mot. Ex. 4 ¶ 9.3 & Schedule 1.
`
`Schedule 1; Mot. Ex. 2 at 144:11-146:17, 156:25-158:12, 159:18-160:7. See, e.g., id. at 158:3-12
`
` Mot. Ex. 4 ¶¶ 1.1, 9.1, 9.3, 10.1, 21.2(a),
`
`Ex. A,
`
`. This is supported by the fact that
`
`; id. at 146:11-17
`
`; accord
`
`.
`
`Mot. Ex. 2 at 156:25-158:12; Mot. Ex. 4 Schedule 1.
`
`III.
`
`BENEFITS OF THE INVENTION TO GOOGLE
`
`Google is a multi-billion dollar global technology company. Mot. Ex. 1 at 12. It has developed
`
`a wide ecosystem of many products and services. Id. at 12-13, 21-30, 48-57. In 2020, Google
`
`generated almost $183 billion in revenue. Id. at 13, 21.
`
` Id. at 14, 17, 61-63.
`
` Id. at 14-16, 61-62.
`
`3
`
`

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`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 10 of 34
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` Id. at 17, 63.
`
` Mot. Ex. 1 at 63, 66.
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`31, 32-36.
`
` Id. at
`
` Id. at 31, 36-40.
`
` Id. at 21-30, 48-57.
`
`IV.
`
`UNAVAILABILITY OF GOOGLE’S RECORDS
`
`Google has not produced at least the following evidence
`
` Mot.
`
`4
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 11 of 34
`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 11 of 34
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`Ex. 1 at 101-36; Mot. Ex. 3; see also ECF No. 111 (granting in part, and denyingin part, motion
`
`to compel production of portions of the foregoing information).PO
`
`Mot. Ex. 1 at 101-36; Mot. Ex. 3.
`
`V.
`
`MARK CHANDLER’S EXPERT OPINIONS
`
`Mot. Ex. 1 at 76-78, 140.
`
`Mr. Chandler’s qualifications are undisputed. He has been engagedin the patent valuation and
`
`licensing business for over 25 years. Mot. Ex. 1 at 2. He was Global VP of a publicly traded patent
`
`licensing company (8 years), and Managing Director and IP Transactions practice leader of a
`
`national consulting firm specializing in complex financial matters (6 years). Jd. at 2-3. During his
`
`career, he analyzed well over 2,000 patent license agreements. Jd. at 3. He personally negotiated
`
`over 100 such agreements. Jd. He conducted patent and technology valuations in many contexts.
`
`Id. He has numerousrelevant certifications and recognitions. Jd. at 3-4.
`
`In his report, Mr. Chandler first provided his understanding of the Touchstream Patents. Mot.
`
`Ex. 1 § IV & p. 154. He explained that, based on his discussions with Touchstream’s technical
`
`expert Dr, ehcc
`Mr. Chandler then addressed his understanding of Touchstream andPo
`
`Mr. Chandler next addressed the streaming media device market as a whole, anda
`
`pn
`
`5
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 12 of 34
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`. Id. Mr. Chandler also addressed the
`
`, id.,
`
`. Id.
`
`With this background, Mr. Chandler attempted to reconstruct the hypothetical negotiation
`
`between Touchstream and Google. Mr. Chandler began by opining that the hypothetical
`
`negotiation date occurred on
`
`. Mot. Ex. 1 at 60, 85.
`
`Turning next to the determination of a royalty, Mr. Chandler opined on three separate
`
`approaches: (1) a per-unit approach; (2) an aggregate revenue approach based on quantifiable
`
`revenues; and (3) an aggregate revenue approach based on
`
` Id. at 79-136. As for the
`
`per-unit approach, Mr. Chandler concluded that it would be the simplest, least risky, and most
`
`advantageous approach for both Google and Touchstream and that both parties would have agreed
`
`to this approach in the hypothetical negotiation. Id. at 86-90. As to the two aggregate revenue
`
`approaches, Mr. Chandler concluded that such approaches could not be used to compute aggregate
`
`revenues with any reasonable degree of accuracy given the unavailability of information produced
`
`in this case about quantifiable revenues and
`
`. Id. at 101-136; Mot. Ex. 3.
`
`Under the per-unit approach, Mr. Chandler determined the royalty base by including
`
`. Mot. Ex. 1 at 89-90. Mr. Chandler next considered each of the factors set out in
`
`Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970), to
`
`determine an appropriate royalty rate. Mot. Ex. 1 at 137-54. As to the first factor—“royalties
`
`received by the patentee for the licensing of the patent in suit, proving or tending to prove an
`
`established royalty,” Georgia-Pacific, 318 F. Supp. at 1120, Mr. Chandler considered
`
`Touchstream’s license agreement with
`
` and found it to be economically comparable to
`
`6
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`

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`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 13 of 34
`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 13 of 34
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`the license of the hypothetical negotiation, technologically comparable, and the most relevant
`
`license agreement to consider in a hypothetical negotiation. Mot. Ex. 1 at 66-69, 138-39; see also
`
`Section II, above. Mr. Chandler opined that Touchstream would have sought the sameF|
`
`ee. Id. at 90-91, 98. Mr. Chandler acknowledgedthat the
`222: 90.1. Novctictes, he
`
`concluded that both parties to the hypothetical license agreement would not include such a
`
`limitation. Jd. He further concluded that the concept of a fF is comparable since both
`parties understood thati Id.
`
`As to the second factor—“[t]he rates paid by the licensee for the use of other patents
`
`comparable to the patent
`
`in suit,” Georgia-Pacific, 318 F. Supp. at 1120—Mr. Chandler
`
`determined that the GooglePo produced by Google were not comparable or
`informative to the hypothetical negotiation, and that GooglePe
`
`Considering underthe third factor “[t]he nature and scope of the license, as exclusive or non-
`
`exclusive,” Georgia-Pacific, 318 F. Supp. at 1120, Mr. Chandler determined thatP|
`
`Mr. Chandler also analyzed a number of additional Georgia Pacific factors and found them
`
`' Google’s expert Christopher Martinez opines that only one of Google’s produced license
`agreements (with
`is comparable to the hypothetical negotiation. As to that agreement,it
`
`is a
`and, thus,
`is unreliable and should be excluded under established
`
`
`precedent. See ECF No. 133.
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 14 of 34
`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 14 of 34
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`all to show that Google
`
`Po on Mr. Chandler’s analysis of factors 6 (derivative and convoyedsales),
`
`7 (remaining life of patents), 8 (profitability, commercial success, and popularity of product), 9
`
`(utility and advantage of invention), 10 (nature of invention), and 11 (infringer’s use of invention).
`
`Mot. Ex. 1 at 19-58, 85, 143-46.
`
`Mr. Chandlerfurther accounted for additional Georgia Pacific factors, including factors 4
`
`(reasonable royalty does not include attributable to preserving a patent monopoly), 5 (reasonable
`
`royalty includes competitive considerations), and 12
`
`Based on (i) Mr. Chandler’s consideration ofall the Georgia Pacific factors, (11) the parties’
`
`bargaining positions,(111) the hypothetical negotiation, (iv) Mr. Chandler’s experience, and OO)
`
`a. Mr. Chandleropined that the parties would have agreed:
`
`, see Mot. Ex. 1 at 91-95, 98: Mot. Ex. 2 at 50:2-55:15; Mot. Ex. 3; see also Mot.
`
`Ex. 1 at 66-69, 79-91, 137-53;
`
`1 at 91-95, 98, 101-03, 117-20, 135, 149, 157-58, Rpt. Ex. 8A; Mot. Ex. 2 at 72:18-81:25; Mot.
`
`toa Nad
`
`, see Mot. Ex.
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 15 of 34
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`98; see also Ex. B,
`
`
`
`, Mot. Ex. 1 at
`
`; Mot. Ex. 1 at 32, 34, 35-36; and
`
`99, 132; Mot. Ex. 2 at 82:1-92:14; Mot. Ex. 3.
`
`To compute a damages figure for June 2015 through 2022, Mr. Chandler applied the foregoing
`
` See Mot. Ex. 1 at 91-95, 98-
`
`royalty rate
`
`. Mot. Ex. 1 at 99, 157, & Ex. 8A.
`
`Mr. Chandler also computed an estimate of the royalties that would be payable based on
`
`activations of Chromecast-enabled devices outside the United States. Since foreign activations
`
`(denying motion to compel production of global usage metrics). Mr. Chandler also applied an
`
`. Mot. Ex. 1 at 99-100; see also ECF No. 111
`
`. Id. Using this approach, Mr. Chandler computed a royalty
`
`for foreign devices at
`
`. Id. at 100, 157, & Ex. 8B.
`
`Mr. Chandler further concluded that the parties to the hypothetical negotiation for a license to
`
`the Patents-in-suit would have agreed to a reasonable royalty rate of
`
`9
`
`

`

`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 16 of 34
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`Pacific factors. Mot. Ex. 1 at 150-53; see also 66-76, 137-51. Thus,
`
` and all of the Georgia-
`
`. Mot. Ex. 2 at 179:12-182:14.
`
`LEGAL STANDARDS
`
`The proponent of expert testimony “need not prove to the judge that the expert’s testimony is
`
`correct, but she must prove by a preponderance of the evidence that the testimony is reliable.”
`
`Johnson v. Arkema, Inc., 685 F.3d 452, 459 (5th Cir. 2012) (quoting Moore v. Ashland Chem.,
`
`Inc., 151 F.3d 269, 276 (5th Cir. 1998) (en banc). “[T]he question of whether the expert is credible
`
`or the opinion is correct is generally a question for the fact finder, not the court.” Summit 6, LLC
`
`v. Samsung Elecs. Co., Ltd., 802 F.3d 1283, 1296 (Fed. Cir. 2015). “Vigorous cross-examination,
`
`presentation of contrary evidence, and careful instruction on the burden of proof are the traditional
`
`and appropriate means of attacking shaky but admissible evidence.” Daubert v. Merrell Dow
`
`Pharms., Inc., 509 U.S. 579, 596 (1993).
`
`ARGUMENT
`
`I.
`
`MR. CHANDLER RELIABLY ACCOUNTED FOR DIFFERENCES BETWEEN
`THE
` AGREEMENT AND THE HYPOTHETICAL NEGOTIATION
`
`Mr. Chandler, in discussing the relevance to damages of an agreement between Touchstream
`
`and
`
`, did exactly what the Federal Circuit requires. He carefully discussed the differences
`
`between that agreement and the hypothetical negotiation in this case (
`
`affect the ultimate outcome (such as Google successfully refusing the fifty percent license fee on
`
`), and explained how those differences would
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`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 17 of 34
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`advertising revenue that agreed to). Mot. Ex. 1 at 66-69, 90-95, 98. These explanations
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`easily satisfy the Daubert standard. In its brief, Google misleadingly omits the explanations and
`
`adjustments made by Mr. Chandler, apparently trying to shoe-horn this case into a narrow line of
`
`cases excluding opinions that do nothing at all to analyze the differences between a real-world
`
`agreement and the hypothetical negotiation in a patent case. The handful of cases cited by Google
`
`on this point stand in stark contrast to Mr. Chandler’s opinions, and only highlight the reliability
`
`ofhis use ofthe agreement.
`
`The Federal Circuit has “approved the use of comparable licenses to account
`
`for
`
`apportionment.” MLC Intellectual Property, LLC v. MicronTech., Inc., 10 F.4th 1358, 1374 (Fed.
`
`Cir. 2021). “Prior licenses. ..are almost never perfectly analogousto the infringement action” and
`
`“may cover more patents than are at issue in the action, include cross-licensing terms, [or] cover
`
`foreign intellectual property rights[.|” Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 1227
`
`(Fed. Cir. 2014). The “degree of comparability of [the agreements] as well as any failure on the
`
`part of [the expert] to control for certain variables are factual issues best addressed by cross
`
`examination and not by exclusion.” ActiveVideo Networks, Inc. v. Verizon Commce’ns, Inc.,
`
`694 F.3d 1312, 1333 (Fed. Cir. 2012).
`
`A.
`Mr. Chandler Explained and Accounted For Differences
`Here, Mr. Chandler explains whyhefinds thea agreement informative in computing
`
`damages, and he also explains the differences in circumstances and how they would affect a
`
`reasonable royalty in this case. The aa agreement was entered on ae. the same
`month as the agreed hypothetical negotiation date ona. Mot. Ex. 1 at 63, 66; Mot.
`Ex. 4. That agreement addressed an implementation byiii that is very similar to Google’s
`
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`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 18 of 34
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`. Mot. Ex. 1 at 66-69, 138-39.
`
`agreement required
`
` The
`
`Mr. Chandler then employed his considerable training and experience in economics and patent
`
`licensing to opine that these differences supported certain adjustments, such as the parties agreeing
`
`to
`
`. Id. Mr. Chandler then made more subtractions from this rate on a product-by-product
`
`basis to further account for apportionment to the patented footprint and to address
`
` which would be an element of the hypothetical negotiation.
`
`B. Mr. Chandler’s Treatment of the
`Courts Require
`
` Agreement Goes Beyond What
`
`Google ignores most of these facts, and does not try to specifically analogize the facts of this
`
`case to any case where an expert opinion was excluded for lack of comparability. Nor could it
`
`persuasively do so. For instance, Mr. Chandler’s use of the
`
` agreement here stands on
`
`much stronger ground than in Acceleration Bay LLC v. Activision Blizzard Inc., No. 16-00453,
`
`2019 WL 4194060, at *1 (D. Del. Sept. 4, 2019), where the court denied a motion to exclude a
`
`license for lack of comparability. There the damages expert used the 12% license rate from an
`
`agreement that was entered eight years before the hypothetical negotiation date. Id. at *6. At the
`
`time of that agreement, none of the asserted patents had issued, and defendant pointed out that the
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`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 19 of 34
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`allegedly inventive aspect of the patent had not yet been addedto the claims in prosecution. Jd.
`
`This agreementalso “included copyrights, trade secrets, and trademarks,” but plaintiff's damages
`
`expert “addresse[d] this issue by noting his understanding, based on conversations with [a named
`
`inventor] that the other property was less important [] and attributing [other payments in the
`
`contract] to the non-patented property.” Jd.
`
`The court declined to exclude this agreement on comparability grounds, illustrating that the
`
`alleged differences identified by Google here are issues for cross-examination, not exclusion. The
`
`court noted that the concepts in the asserted patent claims were present in the specification of the
`
`patent applications as they existed at the time of the agreementin question, and explainedthat“[i]t
`
`is not a requirementoftechnical comparability that the technology be identical.” Jd. The court also
`
`noted that while the “economic differences” identified by defendant offered “potentially good
`
`impeachment,” they were “not significant enough to render [the] opinion so unreliable as to be
`
`inadmissible.” Jd.
`
`That reasoning applies with even more force here, where one ofthe asserted patents existed
`
`at the time of the agreement, where the agreement is from the same month as the hypothetical
`
`negotiation, and where the damages expert made multiple modifications to accountfor differences
`
`in the parties and products. While Google makes muchofits claim that the}| agreement
`dealtwith rather than patents, this same argument was madeandrejected in Acceleration
`
`Bay, and here Mr. Chandler dealt withit in similar fashion as the expert in that case: by confirming
`
`with a knowledgeable witness that patent rights dominated the deal and that other payments in the
`
`agreement covered unpatented aspects, as also supported by documentary evidence, such as the
`
`agreementitself and the MOUleadingto it, Mr. Chandler’s explanations and adjustments thus fall
`
`well within what courts have allowed. See also, SSL Servs., LLC v. Citrix Sys., Inc., 769 F.3d 1073,
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`1093 (Fed. Cir. 2014) (affirming admission of agreements that “only supplied [defendant] with
`
`distribution rights to the Smartgate software product and provided no patent
`
`license” as
`
`“sufficiently probative of the circumstances which would surround a hypothetical negotiation”
`
`(applying Fifth Circuit law).”
`
`Cc.
`
`The Cases Cited by Google Only Reinforce the Appropriateness of
`Mr. Chandler’s Opinions on thei Agreement
`
`The cases relied on by Google do not help Google’s position, and only reinforce that the
`
`P| agreement and Mr. Chandler’s use ofit fall well within what courts find sufficiently
`
`reliable for a jury. For instance, Google cites Bio-Rad Labs, Inc. v. 10X Genomics, Inc., 15-152,
`
`2018 WL 4691047 (D.Del. Sept. 28, 2018), but that case only helps Touchstream. There, the court
`
`rejected a Daubert challenge to one agreement, where defendant’s expert explained that the
`
`“agreement is comparable as it ‘includes relevant parties to the hypothetical negotiation, grants
`
`rights to the patents-in-suit for a field of use applicable to [defendant] as a licensee, was executed
`
`aroundthe time of the hypothetical negotiation, and is an agreement between two-non-competing
`
`parties.”” Jd. at *4. Here, Mr. Chandler’s descriptions of comparability are similar if not more
`
`robust, and they thus pass muster even underthis case relied on by Google. That court also rejected
`
`a challenge on comparability of agreementsrelied on by plaintiffs expert, simply explaining that
`
`the expert “provides reasonable and specific explanations for selecting the agreements he did.” Jd.
`
`at *7. So too here.
`
`The Bio-Rad court found that plaintiff's expert did not sufficiently apportion those
`
`agreements, but that holding also does not help Google. There the expert merely stated in
`
`> See also Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1330-31 (Fed. Cir. 2014) (permitting
`expert testimony on a software plus patent license agreement involving the patent-in-suit and
`related technology); ActiveVideo, 694 F.3d at 1333 (rejecting argument that it was improper for
`expert to rely on agreementthat “covered[plaintiffs] patents and software services”as the “degree
`of comparability” is “best addressed by cross examination and not by exclusion”).
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`Case 6:21-cv-00569-ADA Document 162 Filed 01/13/23 Page 21 of 34
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`conclusory fashion that the parties to each of these agreements “would have” considered
`
`apportionmentalready, and the court found such “cursory analysis” to be insufficient. Jd. at *8.
`
`Here, there is no such problem, as Mr. Chandlerspecifically discusses the differences and accounts
`
`for and apportions them. Further, Google fails to point out that it appears this plaintiff's expert was
`
`ultimately allowed to present his theories on these comparable agreements to the jury, which
`
`accepted his opinions and entered a jury verdict that was affirmed on appeal over challenges on
`
`comparability grounds. See Bio-Rad Lab'ys, Inc. v. 10X Genomics Inc., 967 F.3d 1353, 1376 (Fed.
`
`Cir. 2020). Mr. Chandler’s opinions are therefore far more like the allowed opinions in Bio-Rad
`
`than the excluded ones.
`
`The other two comparability cases relied on by Google are simply inapplicable, and merely
`
`demonstrate a low bar thatis easily passed by the opinions here. MLCIntell. Prop. v. Micron Tech.,
`
`Inc., 10 F.4th 1358 (Fed. Cir. 2021), bears no relation to these facts. There the expert opinedthat
`
`two agreements “reflect[ed]” a 0.25% royalty rate, but that opinion “rest[ed] on an inference from
`
`[a clause of the contract] that goes well beyond what the clause implies and is incompatible with
`
`the [relevant] agreement as a whole.” Jd. at 1368.’ It is thus unsurprising that the Federal Circuit
`
`found the challenged opinion did not properly apportion when the expert “provided no evidence
`
`or explanation for how the 0.25% royalty rate he derived from the [relevant] agreement accounts
`
`for apportionment of [defendant’s] accused products.” Jd. at 1374-75. Nothing like those issues
`
`exists here.
`
`Google also cites Omega Patents, LLC v. CalAmp Corp., 13 F.4" 1361 (Fed. Cir. 2021), which
`
`3 Even with these problems, the Federal Circuit explained that the expert’s “testimony may well
`have been proper had he merely asserted that he considered the 0.25% royalty rate...to reflect a
`relevant consideration for evaluating a reasonabl