Case 6:21-cv-00569-ADA Document 171 Filed 01/19/23 Page 1 of 8
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`
`TOUCHSTREAM TECHNOLOGIES, INC.,
`
`
`
`
`
`GOOGLE LLC,
`
`
`
`
`
`
`
`
`
`
`
`Defendant.
`
`Plaintiff,
`
`
`
`v.
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`
`
`
`
`
`Civil Case No. 6:21-cv-569-ADA
`
`JURY TRIAL DEMANDED
`
`
`
`
`DEFENDANT GOOGLE LLC’S OPPOSITION TO PLAINTIFF’S MOTION TO
`EXCLUDE CERTAIN OPINIONS AND TESTIMONY OF DEFENDANT’S DAMAGES
`EXPERT CHRISTOPHER A. MARTINEZ
`
`
`
`
`
`
`
`
`
`
`
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 171 Filed 01/19/23 Page 2 of 8
`
`
`
`
`
`
`
`
`
`
`
`Abbreviation
`Touchstream
`Google
`Asserted Patents
`
`Asserted Claims
`
`TABLE OF ABBREVIATIONS
`
`Definition
`Touchstream Technologies, Inc.
`Google LLC
`U.S. Patent Nos. 8,356,251 (the “’251 Patent”); 8,782,528 (the
`“’528 Patent”); and 8,904,289 (the “’289 Patent”)
`Claims 1, 5, and 7-9 of the ’251 Patent; claims 1, 5, 8, 11, 12, 14,
`and 28 of the ’528 Patent; and claims 1, 2, 6, 7, and 8 of the ’289
`Patent.
`
`TABLE OF EXHIBITS
`
`Exhibit
`Ex. 1
`
`Description
`Deposition of Christopher A. Martinez, December 21, 2022
`
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 171 Filed 01/19/23 Page 3 of 8
`
`
`Touchstream seeks exclusion of Mr. Martinez’s reasonable royalty opinion based on a
`
`single critique that he “relies heavily on the royalty rate from a litigation settlement to opine on
`
`damages.” (Dkt. 133 at 1.)1 But Touchstream’s motion is based on two false premises: (1) that
`
`the
`
`license was the result of a litigation settlement; and (2) that Mr. Martinez
`
`did not account for differences between that patent license and the hypothetical negotiation.
`
`Touchstream’s motion should be denied because it misrepresents both the circumstances
`
`surrounding the
`
`license, and Mr. Martinez’s opinions regarding it.
`
`I.
`
`ARGUMENT
`
`A. Mr. Martinez’s Opinions Regarding The
`
` License
`
`Mr. Martinez analyzed the
`
` license under Georgia-Pacific factors 2 and
`
`15. (Dkt. 133-2 at 28-32, 48-52; Ex. 1 at 84:17-85:3.) He also analyzed the other agreements
`
`produced by both Google and Touchstream in this litigation. Mr. Martinez opined that the
`
` license was the most comparable to the hypothetical negotiation of all the agreements
`
`produced, but he acknowledged that “it’s not perfect and there is never – at least in my experience
`
`there’s never a perfect license from a comparability perspective…” (Ex. 1 at 87:9-88:6.)
`
`To reach his conclusion regarding comparability, Mr. Martinez relied on the opinions of
`
`Dr. Mayer-Patel, Google’s technical expert, regarding the technical comparability of the patents-
`
`at-issue in the
`
` license agreement—opinions that Touchstream has not
`
`challenged. (Dkt. 133-2 at 29-30.) He also analyzed the terms of that agreement, as well as
`
`information he learned from discussions with
`
`s. (Id.) Mr.
`
`
`1 Emphasis added throughout unless otherwise noted.
`
`1
`
`
`
`
`
`
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 171 Filed 01/19/23 Page 4 of 8
`
`
`
`
`
`
`
`
`. (Id.) Mr.
`
`Martinez scaled that amount to approximately
`
` based on the potentially relevant revenue
`
`for the hypothetical negotiation, which he concluded “is a relevant data point that would be
`
`considered by the parties at the hypothetical negotiation.” (Dkt. 133-2 at 32.)
`
`B.
`
`Touchstream’s Motion Should Be Denied.
`
`Touchstream’s myopic challenge to Mr. Martinez’s reliance on the
`
`
`
`license fails for multiple reasons. First, the
`
` license is not, as Touchstream
`
`claims repeatedly, a “litigation settlement” agreement. There was no pending litigation between
`
`at the time the parties began negotiations prior to
`
`
`
`. Indeed, Exhibit 4 to Touchstream’s motion is a list of litigations from
`
` involving
`
` (the
`
`Nest License was
`
`), and neither Nest nor Google is a party to
`
`any of those cases. (Dkt. 133-4.) Touchstream’s word choice is no accident, as evident by its
`
`repeated reference to the Federal Circuit being “hostile toward using litigation settlement
`
`agreements in proving a reasonable royalty.” (Dkt. 133 at 2, 3.) But Touchstream’s cases requiring
`
`analysis of the litigation underlying an allegedly comparable settlement agreement are
`
`inapposite—there was no such litigation for Mr. Martinez to analyze here. See Baltimore Aircoil
`
`Co., Inc. v. SPX Cooling Techs. Inc., 2016 WL 4426681, at *24 (D. Md. 2016); Sprint Commc’ns
`
`Co. v. Comcast IP Holdings, LLC, 2015 WL 456154, at *2 (D. Del. 2015); M2M Sols. LLC v.
`
`Enfora, Inc., 167 F. Supp. 3d 665, 678 (D. Del. 2016). He could not assess “the amount of damages
`
`ultimately sought in the litigation,” “would the issue of willfulness have been tried, with the
`
`possibility of treble damages,” or “had sanctions been imposed” because litigation never
`
`2
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 171 Filed 01/19/23 Page 5 of 8
`
`
`commenced. See AVM Techs., LLC v. Intel Corp., 927 F.Supp.2d 139, 143 (D. Del. 2013).
`
`What is more, Touchstream admits that “there is no per se rule barring reference to
`
`settlements simply because they arise from litigation.” (Dkt. 133 at 3 (citing AstraZenecaAB v.
`
`Apotex, 782 F.3d 1324, 1336 (Fed. Cir. 2016).) Courts regularly permit reliance on such
`
`agreements when, as in this case, a showing of comparability is made. See ResQNet.com, Inc. v.
`
`Lansa, Inc., 594 F.3d 860, 872 (Fed. Cir. 2010) (noting that “the most reliable license in this record
`
`arose out of litigation,”); Elbit Sys. Land & C4I Ltd. v. Hughes Network Sys., LLC, 927 F.3d 1292,
`
`1300 (Fed. Cir. 2019) (“Mr. Martinez relied on a prior settlement and appropriately accounted for
`
`differences between the circumstances of that settlement and the present circumstances.”); Colibri
`
`Heart Valve LLC v. Medtronic CoreValve LLC, 2021 WL 7285995, at *7 (C.D. Cal. 2021)
`
`(denying motion to exclude because “Medtronic’s arguments as to Dr. Vellturo’s reliance on the
`
`Edwards Settlement Agreement go to the weight of those opinions rather than admissibility”).
`
`Second, regardless of what Touchstream calls it, Mr. Martinez properly analyzed and
`
`accounted for the differences between the
`
` license agreement and the
`
`hypothetical negotiation, including any threat of litigation leading up to it. (Dkt. 133-2 at 28-32;
`
`Ex. 1 at 83:4-15, 83:22-84:16, 85:4-86:3.) Touchstream selectively quotes and distorts sound bites
`
`from Mr. Martinez’s deposition regarding alleged differences in an attempt to discredit his
`
`analysis. (Dkt. 133 at 2-3.) For example, Mr. Martinez testified that he did consider the disclaimer
`
`of validity and infringement in the
`
` license, and that “the assumption of validity
`
`and infringement in the hypothetical negotiations would have a – would generally have an upward
`
`impact on a reasonable royalty. However there are other influences on the reasonable royalty
`
`which would have a downward impact.” (Ex. 1 at 83:22-84:11.) Touchstream also truncates Mr.
`
`Martinez’s response to whether an agreement without a disclaimer of validity and infringement
`
`3
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 171 Filed 01/19/23 Page 6 of 8
`
`
`would be more economically comparable; his full response was: “Well, all factors being equal I
`
`– think that’s a fair assessment. However, we don’t have that in this case...” (Ex. 1 at 87:9-88:6.)
`
`Moreover,
`
`
`
`
`
` (Dkt. 133-2 at 29-30.)
`
`Other factors Mr. Martinez considered and accounted for in his analysis include the
`
`structure and scope of the license, Mr. Mayer-Patel’s opinions regarding the technical
`
`comparability of the licensed patents, the overlap in products covered by the license, and the
`
`bargaining positions of the parties. (Dkt. 133-2 at 29-32, 49-51; Ex. 1 at 73:24-74:10, 76:1-78:17.)
`
`Google has made more than the threshold showing of comparability required, and Touchstream’s
`
`mere disagreement with Mr. Martinez’s reliance on the
`
` license goes, at most,
`
`to the weight of his opinions, not their admissibility.2 Elbit Sys., 927 F.3d at 1300.
`
`II.
`
`CONCLUSION
`
`For the foregoing reasons, Google respectfully requests that the Court deny Touchstream’s
`
`motion to exclude Mr. Martinez’s opinions relying on the
`
` license agreement.
`
`
`2 Touchstream’s attack on Mr. Martinez’s opinion stands in marked contrast to Google’s challenge
`to Mr. Chandler’s opinion—the two are apples and oranges. (Dkt. 129.) Whereas Touchstream’s
`complaints are unfounded and in any event matters that Touchstream can explore on cross-
`examination, Mr. Chandler’s opinion is fundamentally flawed, warranting exercise of the Court’s
`gatekeeping role to exclude testimony that is not sufficiently reliable or relevant. As Google’s
`motion shows, Mr. Chandler’s opinion—that a reasonable royalty in this case is upwards of $1
`billion—is not based on a patent license, but rather on a software development agreement for which
`Mr. Chandler did not conduct any analysis to demonstrate why such an agreement would be
`relevant to the hypothetical negotiation. (Id.) Yet, he admittedly adopted its royalty rate without
`adjustment, and then he applied three wholly arbitrary “apportionment factors” to reach his
`reasonable royalty conclusion. (Id.) That method is unsubstantiated by evidence and contrary to
`fundamental requirements for reliable expert testimony.
`
`4
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 171 Filed 01/19/23 Page 7 of 8
`
`
`Respectfully submitted,
`
`By: /s/ Tharan Gregory Lanier, with
`
`permission by Michael E. Jones
` Tharan Gregory Lanier
`
`JONES DAY
`Tharan Gregory Lanier (Admitted pro hac vice)
`CA State Bar No. 138784
`E-mail: tglanier@jonesday.com
`Michael C. Hendershot (Admitted pro hac vice)
`CA State Bar No. 211830
`E-mail: mhendershot@jonesday.com
`Evan M. McLean (Admitted pro hac vice)
`CA State Bar No. 280660
`E-mail: emclean@jonesday.com
`1755 Embarcadero Road
`Palo Alto, CA 94303
`Telephone: (650) 739-3939
`Facsimile:
`(650) 739-3900
`
`POTTER MINTON PC
`Michael E. Jones
`TX State Bar No. 10929400
`E-mail: mikejones@potterminton.com
`Shaun W. Hassett
`TX State Bar No. 24074372
`E-mail: patrickclutter@potterminton.com
`102 N. College Ave., Suite 900
`Tyler, TX 75702
`Telephone:
` (903) 597-8311
`Facsimile:
` (903) 593-0846
`
`Attorneys for Defendant
`GOOGLE LLC
`
`Dated: January 12, 2023
`
`
`
`
`
`
`
`
`
`
`5
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 171 Filed 01/19/23 Page 8 of 8
`CONFIDENTIAL - OUTSIDE ATTORNEYS’ EYES ONLY
`
`CERTIFICATE OF SERVICE
`I hereby certify that all counsel of record who have consented to electronic service are
`
`being served with a copy of this document via electronic mail on January 12, 2023.
`
`I also hereby certify that all counsel of record who have consented to electronic service
`are being served with a notice of filing of this document, under seal, pursuant to L.R. CV-5(a)(7)
`on January 12, 2023.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`/s/ Michael E. Jones
`
`
`
`
`
`
`
`
`CERTIFICATE OF AUTHORIZATION TO FILE UNDER SEAL
`I certify that the foregoing document is authorized to be filed under seal pursuant to the
`
`Protective Order in this case and Judge Albright’s Amended Standing Order Regarding Filing
`Documents Under Seal in patent Cases and Redacted Pleadings.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`/s/Michael E. Jones
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`6
`
`