Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 1 of 18
`
`
`
`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 REPLY IN SUPPORT OF DAUBERT MOTION TO
`EXCLUDE CERTAIN OPINIONS OF DAMAGES EXPERT MARK J. CHANDLER
`
`
`
`
`
`
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 2 of 18
`
`TABLE OF CONTENTS
`
`
`
`Page
`INTRODUCTION ............................................................................................................. 1
`ARGUMENT ..................................................................................................................... 2
`A.
`Mr. Chandler Fails To Apportion His Per Unit Reasonable Royalty. ................... 2
`1.
`Input (1) – The
`Agreement: ....................................................... 3
`2.
`Input (2) - The 33% Compromise Discount: ............................................. 5
`3.
`Input (3) – The 50/50 Split: ....................................................................... 6
`4.
`Input (4) – The 25% “Sub-Licensing Fee”: ............................................... 8
`5.
`Touchstream Cannot Blame Google For Mr. Chandler’s Failure To
`Apportion. .................................................................................................. 9
`Mr. Chandler’s Per Unit Royalty On Foreign Devices Must Be Excluded. ........ 11
`Mr. Chandler’s Revenue And Lifetime Value Approaches Must Be
`Excluded Because He Admits They Are Unreliable............................................ 11
`Mr. Chandler Should Be Precluded From Presenting Legally Irrelevant
`And Prejudicial Materials To The Jury. ............................................................... 12
`CONCLUSION ................................................................................................................ 13
`
`B.
`C.
`
`D.
`
`-i-
`
`
`
`I.
`II.
`
`III.
`
`
`
`
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 3 of 18
`
`
`
`TABLE OF ABBREVIATIONS
`
`Abbreviation
`Touchstream
`
`Definition
`Touchstream Technologies, Inc.
`
`Google
`
`Google LLC
`
`Asserted Patents
`
`Asserted Claims
`
`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
`Ex. 2
`Ex. 3
`
`Ex. 4
`
`Ex. 5
`
`Description
`Expert Report of Mark J. Chandler (“Chandler Rep.”)
`Deposition of Mark J. Chandler, December 22, 2022 (“Chandler Dep. Tr.”)
`Supplemental Expert Report of Mark J. Chandler and Exhibits 22 to 23
`(“Chandler Supp. Rep.”)
`Amended and Restated Software Development and Licence
`Agreement (“
`Agmt.”)
`TS-00912235-TS-00912275
`Deposition of Mark J. Chandler, December 22, 2022 (“Chandler Dep. Tr.”)
`[Additional citations, continued from Ex. 2]
`
`
`
`
`
`
`
`
`
`
`
`
`-ii-
`
`
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 4 of 18
`
`
`I.
`
`INTRODUCTION
`
`Google identified several flaws in Mr. Chandler’s opinions warranting their exclusion.
`
`(Dkt. 129.) Touchstream fails to respond to these criticisms.
`
`Failure to Apportion. Touchstream does not explain how Mr. Chandler’s per unit royalty
`
`rates are tied to the incremental value the patented invention adds to the accused devices. Finjan,
`
`Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1311 (Fed. Cir. 2018). Touchstream also does not
`
`repudiate Mr. Chandler’s admission in his report and during deposition that he did not determine
`
`“the total amount of benefits Google has received from its use of the Patents-in-suit through its
`
`deployment of Chromecast technology.” (Dkt. 129 at 1.) That is tantamount to an admission that
`
`Mr. Chandler’s damages award is not apportioned to the value of the patented invention. Instead,
`
`Touchstream relies on general assertions that Mr. Chandler analyzed large amounts of evidence
`
`and the Georgia-Pacific factors, and then relied on his industry experience to come up with each
`
`of the inputs to his royalty rate analysis. That is insufficient to demonstrate proper apportionment.
`
`See, e.g., Open Text S.A. v. Box, Inc., No. 13-cv-04910-JD, 2015 WL 349197, at *5-6 (N.D. Cal.
`
`Jan. 23, 2015); GPNE Corp. v. Apple, Inc., No. 12-CV-02885-LHK, 2014 WL 1494247, at *2-6
`
`(N.D. Cal. Apr. 16, 2014).
`
` Improper Inclusion of Foreign Damages. Touchstream refuses to drop its bid for foreign
`
`damages. The Court rejected Touchstream’s request to compel foreign metrics on the grounds that
`
`it lacked “a basis to allow discovery on foreign usage concerning products that allegedly perform
`
`the accused method outside the United States.” (Dkt. 120 at 5; Dkt. 146 at 3.) Apparently unfazed
`
`by that ruling, Touchstream argues that Mr. Chandler should still be able to include foreign devices
`
`in his per unit reasonable royalty opinion because “he was able to use other available data” to
`
`approximate a global royalty. The Court should preclude these opinions for the same reasons it
`
`denied Touchstream’s prior motion.
`
`1
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 5 of 18
`
`
`Admittedly Unreliable Alternative Approaches. Touchstream does not dispute the
`
`unreliability of Mr. Chandler’s revenue-based and “lifetime value” approaches. Nor could it. Mr.
`
`Chandler admits that he “could not reliably calculate a damages award” using either approach.
`
`Yet, Touchstream insists that Mr. Chandler be able to present those opinions to the jury. Doing so
`
`will only confuse the jury.
`
`Unable
`
`to defend Mr. Chandler’s unreliable opinions, Touchstream resorts
`
`to
`
`mischaracterizations of the record and Google’s production in an attempt to shift the blame to
`
`Google. Contrary to Touchstream’s assertion, the flaws in Mr. Chandler’s analyses are not
`
`Google’s fault. Touchstream sought discovery from Google, including through motions to compel.
`
`The Court considered and ruled on those motions. Google complied with those rulings. That is
`
`the record in this case.
`
`Mr. Chandler should not be permitted to present an opinion that a reasonable royalty in this
`
`case is over
`
` based on an allegedly comparable license involving total payments of
`
`approximately
`
`of Touchstream’s claim, without meeting the threshold requirement of tying
`
`that number to the incremental value of the patented invention to the accused products. His
`
`unreliable opinions should be excluded.
`
`II.
`
`ARGUMENT
`
`A. Mr. Chandler Fails To Apportion His Per Unit Reasonable Royalty.
`
`Federal Circuit precedent is clear: “[T]he governing rule is that the ultimate combination
`
`of royalty base and royalty rate must reflect the value attributable to the infringing features of the
`
`product, and no more.” Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 1226 (Fed. Cir. 2014)
`
`(citing VirnetX, Inc. v. Cisco Sys., 767 F.3d 1308, 1326 (Fed. Cir. 2014)). Touchstream admits
`
`that Mr. Chandler did not apportion his royalty base. (Dkt. 156-1 at 23-24.) Accordingly, the
`
`required apportionment must be done in the four inputs to Mr. Chandler’s per unit royalty: (1) the
`
`2
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 6 of 18
`
`
`rate from the
`
`agreement; (2) a
`
`compromise discount; (3) a
`
`discount for
`
`multiuse Google devices; and (4) a
`
`for third party multiuse devices.
`
`Touchstream’s opposition confirms that none of those inputs are based on evidence apportioning
`
`between patented and unpatented features of the accused devices. LaserDynamics, Inc. v. Quanta
`
`Comput., Inc., 694 F.3d 51, 67 (Fed. Cir. 2012)
`
`1.
`
`Input (1) – The Quadriga Agreement:
`
`Touchstream mischaracterizes Google’s challenge to Mr. Chandler’s reliance on the
`
`agreement. It is not merely an issue of comparability that can be addressed on cross
`
`examination.
`
` Mr. Chandler expressly opined that the Quadriga agreement “captured
`
`apportionment of value with respect to the Patents-in-suit.” (Ex. 1, Chandler Rep. at 68-69; Ex. 2,
`
`Chandler Dep. Tr. at 48:18-49:3, 49:14-21.) Based on that opinion, he did not make any
`
`adjustments to the per room rate in that agreement to account for differences from the technology
`
`and products that are the subject of a hypothetical negotiation between Google and Touchstream.
`
`(Ex. 2, Chandler Dep. Tr. at 49:14-18.) But Mr. Chandler admitted that
`
`did not sell any
`
`physical devices like Google’s Chromecast devices. (Ex. 5, Chandler Dep. Tr. at 131:18-132:5.)
`
`He further admitted that he did not know how the parties came up with the figure of
`
`
`
` and he did not know whether or how it accounted for patented and unpatented
`
`features of the software applications that were the subject of the license. (Ex. 2, Chandler Dep.
`
`Tr. at 159:18-160:13.)
`
`Touchstream does not address Mr. Chandler’s admissions or provide any additional
`
`explanation regarding how the parties reached the
`
`to support his opinion of built-in
`
`apportionment. Rather, Touchstream summarily claims that “[i]n exchange for
`
`
`
`
`
`
`
`3
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 7 of 18
`
`
`There are several problems with this assertion.
`
`First, as explained in Google’s Motion In Limine No. 3, filed concurrently herewith, Touchstream
`
`has no basis to claim that the software application subject to this agreement actually practiced the
`
`asserted patents. Mr. Chandler admitted that he had “no idea one way of the other” whether anyone
`
`had analyzed if the licensed software application provided to
`
` used the asserted patents.
`
`(Ex. 2 Chandler Dep. Tr. at 146:25-148:18.) Accordingly, Mr. Chandler has no basis to assume
`
`that the
`
`were paid for the patents. Second, the
`
`
`
`as Touchstream contends.
`
`Touchstream relies on Schedule 1 of the agreement to show that
`
`
`
`all described in different sections. (Dkt. 156-1 at 3.) Touchstream fails to mention that Schedule
`
` because they are
`
`1 also includes a separate section for
`
`Agmt., at TS-00912270-71.) What is more,
`
`(Ex. 4,
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Touchstream also has no answer to Google’s authority requiring that an opinion of “built-
`
`in apportionment” be supported by more than the vague allegations of comparability of a particular
`
`agreement. (Dkt. 129 at 8-12.) Touchstream’s attempt to distinguish Bio-Rad Labs misses the
`
`point. (Dkt. 156-1) at 14.) The court declined to exclude the reasonable royalty opinion on the
`
`basis that the three agreements used were not comparable, but granted to motion to exclude for
`
`4
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 8 of 18
`
`
`failure to apportion. Like Mr. Chandler, the expert relied on a cursory allegation that the
`
`agreements had built-in apportionment. Bio-Rad Labs., Inc. v. 10X Genomics, Inc., No. 15-152-
`
`RGA, 2018 WL 4691047, at *8 (D. Del. Sept. 28, 2018). Touchstream never addresses the
`
`reasoning cited by Google, which applies equally here: “[T]he fact that the parties to each
`
`agreement incorporated the concept of apportionment into their reasonable royalties does not itself
`
`show that the same royalty rates apply here.” Id., at *8. Mr. Chandler made no attempt to explain
`
`how the
`
`was apportioned in a comparable fashion to the
`
`contribution of the patented technology to the accused Google and third party devices.
`
`Accordingly, his opinion that this agreement has “built-in apportionment” should be excluded.
`
`Touchstream’s authority does not require a different result.1
`
`2.
`
`Input (2) - The
`
` Compromise Discount:
`
`Touchstream mischaracterizes Google’s approach to apportionment as an “overly rigid
`
`insistence on an exact quantitative source for every apportionment calculation.” (Dkt. 156-1 at
`
`22.) Contrary to Touchstream’s assertion, Google’s challenge is not limited to the admitted lack
`
`of an explicit mathematical analysis supporting Mr. Chandler’s arbitrary
`
`It is based
`
`on Mr. Chandler’s inability to articulate any sound economic and factual basis supporting his
`
`
`
`1 Touchstream relies heavily on Acceleration Bay LLC v. Activision Blizzard Inc. (Dkt.
`156-1 at 12-13.) In that case, the court declined to exclude opinions relying on a 12% royalty rate
`from an allegedly comparable agreement. 2019 WL 4194060, at *6-7 (D. Del. Sept. 4, 2019).
`Touchstream fails to mention that the court also found that the expert did not tie his apportionment
`analysis to that 12% rate, and excluded the reasonable royalty opinion for failure to apportion. Id.
`at *4-6. Touchstream’s reliance on SSL Services, LLC v. Citrix Sys., Inc. is similarly unpersuasive.
`(Dkt. 156-1 at 13-14.) The agreements at issue were prior software development agreements
`between defendant Citrix and V-One, the owner of the asserted patent at the time. The agreements
`specifically referenced the asserted patent as intellectual property relevant to the technology
`underlying the agreements. Both side’s damages experts used these agreements in their analyses.
`The Court held that in these circumstances, allowing reliance on such agreements was not an abuse
`of discretion. Those circumstances do not exist here.
`
`5
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 9 of 18
`
`
`choice of
`
` as opposed to a different number. (Dkt. 156-1 at 13.) While absolute precision is
`
`not required, apportionment cannot be “a black box into which data is fed at one end and from
`
`which an answer emerges at the other.” NetFuel, Inc. v. Cisco Sys. Inc., No. 5:18-cv-02352-EJD,
`
`2020 WL 1274985, at *2 (N.D. Cal. Mar. 17, 2020) (excluding reliance on various unsupported
`
`apportionment factors). There must be some discernable methodology, and Mr. Chandler has
`
`none. There is only a single sentence regarding the
`
`discount in Mr. Chandler’s report. He
`
`provides no explanation as to how he reached that figure or what it is intended to be an adjustment
`
`for. Like the expert excluded in Netfuel, Mr. Chandler’s
`
`discount appears to have been
`
`plucked out of thin air. Id.
`
`Touchstream attempts to bolster the alleged support for this discount by claiming, without
`
`any supporting citations, that Mr. Chandler chose a
`
`reduction based on an analysis of “the
`
`agreement, Touchstream’s other license agreements, his conversations with Mr.
`
`Mitschele on the background of Touchstream’s licenses, documents about things like Google’s
`
`size and business model relative to Touchstream’s licensees, and many other facts as part of his
`
`Georgia-Pacific analysis.” (Dkt. 156-1 at 20.) This conclusory attorney argument still fails to
`
`provide any discernable methodology as to how Mr. Chandler arrived at his conclusion that a
`
`
`
`discount applied across all devices. It does not explain how any of the foregoing documents or
`
`conversations weighed in his determination, and it is not tied to any analysis of patented or
`
`unpatented features of the devices. It cannot save Mr. Chandler’s arbitrary discount from
`
`exclusion. Netfuel, 2020 WL 1274985, at *7; Open Text S.A., 2015 WL 349197, at *5-6; GPNE,
`
`2014 WL 1494247, at *2-6.
`
`3.
`
`Input (3) – The 50/50 Split:
`
`Touchstream’s attempt to defend Mr. Chandler’s
`
` all multi-use Google
`
`products is equally unavailing. Mr. Chandler admits that this category includes a variety of
`
`6
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 10 of 18
`
`
`different products with a variety of different features. He also admits that all of these devices have
`
`“substantial functionality beyond the accused casting functionality.” (Dkt. 129 at 14.) Not only
`
`does he fail to provide any explanation as to why he applied the same reduction to all the different
`
`products in this category, he admits that he was unable to calculate an apportionment factor based
`
`on the value of the patented invention to the specific devices in this category. (Dkt. 129 at 15.)
`
`Like his
`
`he provided no discernable methodology for his
`
`it is
`
`another black box. Netfuel, 2020 WL 1274985, at *7.
`
`Touchstream has no response to Google’s criticisms. Instead, Touchstream asserts that the
`
` generally supported by all of the same evidence that supported the previous
`
`
`
`as well as conversations with Dr. Almeroth, his understanding of the patented and unpatented
`
`features, evidence of the price of these devices relative to pure Chromecast devices, and testimony
`
`of fact witnesses. (Dkt. 156-1 at 21.) But Touchstream also fails to provide any explanation
`
`regarding how any of this evidence allegedly led Mr. Chandler to conclude that a
`
`discount
`
`was appropriate for all devices in this category. Nor does it explain which features make up the
`
`other
`
`of the alleged value of the devices in this category.
`
`The holding in Acceleration Bay LLC v. Activision Blizzard Inc., a case on which
`
`Touchstream relies, demonstrates why Mr. Chandler’s opinion should be excluded. 2019 WL
`
`4194060 (D. Del. Sept. 4, 2019). In Acceleration Bay, the excluded an expert’s reasonable royalty
`
`opinion for failure to properly apportion between the patented and unpatented features of the
`
`accused video game. The apportionment factor used by the expert in that case had far closer ties
`
`to the facts than Mr. Chandler does here. The expert relied on a survey asking consumers “which
`
`game play mode(s) were behind your decision to purchase” the accused game to opine that 57%
`
`of revenue associated with that game was attributable to the allegedly infringing multiplayer mode.
`
`7
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 11 of 18
`
`
`The court excluded reliance on that survey as a means to apportion to the value of the patented
`
`invention because the “questions assumed that the gameplay mode is the exclusive driver of a
`
`consumer’s decision to buy the game,” and it “d[id] not attempt to discern what portion of a
`
`gamer’s decision to buy the game is driven by the multiplayer functionality versus all of the other
`
`unpatented features.” Id. at *4. Like the expert in Acceleration Bay, Mr. Chandler admits that
`
`there the multi-use Google and third party devices have “substantial functionality” in addition to
`
`the accused casting functionality, and Mr. Chandler’s analysis likewise “accounts for none of those
`
`features.”2 Id. at *5.
`
`4.
`
`Input (4) – The 25% “Sub-Licensing Fee”:
`
`Touchstream has no response at all to Google’s argument that Mr. Chandler’s sub-licensing
`
`fee violates Federal Circuit precedent prohibiting application of a
`
` Uniloc USA,
`
`Inc. v. Microsoft Corp., 632 F.3d 1292, 1312-1315 (Fed. Cir. 2011); see also LaserDynamics, 694
`
`F.3d at 69. Indeed, Touchstream wholly ignores Mr. Chandler’s concession that his
`
`
`
`based solely on general industry practices and his experience; he admittedly did not compare any
`
`data produced in this case to that so-called “industry norm.” (Dkt. 129 at 16-18.) That admission
`
`alone requires exclusion of Mr. Chandler’s opinions regarding third-party multi-use devices.
`
`Setting aside the improper application of a general rule of thumb, Mr. Chandler’s blanket
`
`application of the same reduction to all third-party multi-use devices suffers from the same
`
`deficiencies as his
`
`for Google-branded multi-use devices. (Dkt. 129 at 16-17.) The
`
`
`
`2 Chrimar Holding Co., LLC v. ALE USA Inc., 732 Fed. App’x 876, 888 (Fed. Cir. 2018)
`is inapposite. (See Dkt. 156-1 at 18.) That case involved standard essential patents, and the
`testimony of technical expert weighing the importance of patented and unpatented features of the
`standard, as well as other features in the accused products. Mr. Chandler does not rely on any such
`testimony regarding the value of patented and unpatented features of multi-use products.
`
`8
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 12 of 18
`
`
`only alleged evidence that Touchstream cites in support of the
`
`figure is unidentified
`
`“documents reflecting Google’s relationships with those third parties and [Mr. Chandler’s]
`
`experience in reviewing and negotiating thousands of patent licensing agreements.” (Dkt. 156-1
`
`at 21.) Mr. Chandler’s experience, however, does not constitute sufficient facts or data or reliable
`
`principles and methods. Netfuel, 2020 WL 1274985, at *7; GPNE, 2014 WL 1494247, at *5 (“‘30
`
`years of experience’ cannot be tested or ‘subjected to peer review and publication,’ nor is there a
`
`‘known or potential rate of error’”).
`
`5.
`
`Touchstream Cannot Blame Google For Mr. Chandler’s Failure To
`Apportion.
`
`Mr. Chandler must put forth non-speculative evidence supporting his alleged
`
`apportionment between patented and unpatented features. LaserDynamics, 694 F.3d at 67. He
`
`cannot blame Google for his admitted failure to determine “the total amount of benefits and value
`
`that Google has received from its use of the Patents-in-suit through its deployment of Chromecast
`
`technology.” (Ex. 3, Chandler Supp. Rep. at 17.) Contrary to Touchstream’s suggestion, Google
`
`complied with its discovery obligations in this case, it did not withhold or destroy relevant evidence
`
`or otherwise impede Mr. Chandler’s ability to conduct a proper apportionment analysis. Indeed,
`
`Mr. Chandler relied on usage data produced by Google to determine his royalty base of total device
`
`activations. (Dkt. 129 at 16.) Touchstream belatedly and significantly expanded the scope of this
`
`case. When Touchstream sought additional revenue and usage information regarding its expanded
`
`contentions, Google produced what was kept in the ordinary course of business pursuant to the
`
`Court’s order. (Dkt. 111.) That included additional revenue data and usage metrics concerning
`
`cast versus non-cast usage of multi-use devices and certain applications. (Id. at 7) Touchstream
`
`never asserted that Google failed to comply with the discovery order. Inexplicably, Touchstream
`
`now claims that Google’s production is deficient because it “declined to produce anything other
`
`9
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 13 of 18
`
`
`than what it was specifically ordered to produce.” (Dkt. 156-1 at 4.) The real issue is not that
`
`Google’s production is lacking, but that the data Google produced demonstrates how rarely casting
`
`is used. That does not support Mr. Chandler’s inflated royalty rate and plucked out of thin-air
`
`“apportionment” factors of
`
`Accordingly, he dismissed it as inaccurate and
`
`inconsistent. Mr. Chandler chose not to rely on the data produced by Google, but that should not
`
`excuse him from meeting the threshold apportionment requirement. See Open Text S.A., 2015 WL
`
`349197, at *4 (rejecting argument that failure to apportion be excused because defendant did not
`
`provide sufficient data).
`
`Touchstream fails to point to a single case where a patentee was relieved of the requirement
`
`to provide non-speculative evidence apportioning damages to the value of the patented invention
`
`for any reason, including allegations of a deficient production. Touchstream’s cases are
`
`inapposite. In Sensonics,Inc. v. Aerosonic Corp., the plaintiff sought lost profits damages, and the
`
`defendant had purposefully destroyed its manufacturing records after the litigation began. 81 F.3d
`
`1566, 1572-73 (Fed. Cir. 1996). During the bench trial, a question arose as to the total number of
`
`infringing devices subject to the lost profits claim, and the district court extrapolated using the best
`
`evidence available. Id. The Federal Circuit rejected the defendant’s challenge to the district
`
`court’s assessment of the number of infringing devices, holding that it was appropriate to resolve
`
`doubts against the defendant under the circumstances. Id. at 1573. This case does not present
`
`analogous circumstances.
`
`Similarly, Lam v. Johns-Manville Corp. involved a lost profits claim and a dispute as to
`
`the actual number of infringing devices sold during the accounting phase of a bench trial. 718
`
`F.2d 1056, 1065 (Fed. Cir. 1983). The district court adopted what it found to be the most credible
`
`evidence and discounted the resulting damages figure to account for the uncertainty in the amount
`
`10
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 14 of 18
`
`
`of devices. Id. Finally, the expert in SimpleAir, Inc. v. Google, Inc. sought to compare usage of
`
`the accused product to usage of the product subject to a previous license agreement for the asserted
`
`patent in order to scale the amount paid in that agreement to the hypothetical negotiation. 77 F.
`
`Supp. 3d 569, 576 (E.D. Tex. 2014). The expert compared worldwide usage data for the two
`
`products, because U.S.-only usage data was not available, and from that estimated the companies’
`
`comparative U.S. infringement that he used as a benchmark. This estimate was not an attempt to
`
`apportion between patented and unpatented features of the accused products. Moreover, unlike
`
`Mr. Chandler, the expert in SimpleAir based his estimate on actual data produced by Google. Mr.
`
`Chandler admits that his apportionment figures are not “data-driven.” (See Dkt. 129 at 15.)
`
`B. Mr. Chandler’s Per Unit Royalty On Foreign Devices Must Be Excluded.
`
`This Court has already denied Touchstream’s request for information to support a foreign
`
`damages claim multiple times, holding that Touchstream “fail[ed] to identify a basis to allow
`
`discovery on foreign usage concerning products that allegedly perform the accused method outside
`
`the United States.” (Dkt. 146 at 3; Dkt. 120 at 5.) Mr. Chandler’s inclusion of foreign devices in
`
`his royalty base contravenes the Court’s orders and must be excluded. (Dkt. 130 at 33-36.)
`
`C. Mr. Chandler’s Revenue And Lifetime Value Approaches Must Be Excluded
`Because He Admits They Are Unreliable.
`
`Expert testimony that is unreliable must be excluded. ProTradeNet, LLC v. Predictive
`
`Profiles, Inc., Civ. No. 6:18-CV-00038-ADA, 2019 WL 6499488, at *2 (W.D. Tex. Oct. 11, 2019).
`
`Mr. Chandler described two additional “possible” damages approaches in his report, a revenue-
`
`based approach and a “lifetime value approach.” (Dkt. 129 at 19-22.) But he admitted that he
`
`“could not reliably calculate a damages award” using either approach. (See id. (citing Ex. 2 at
`
`32:4-22).) He even titled the exhibits to his report relating to the revenue-based approach
`
`“Incomplete and Unreliable Revenue Analysis – For Demonstration Purposes Only.” (Dkt. 129 at
`
`11
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 15 of 18
`
`
`20.) And the
`
`proffered in that approach is based on agreements that Mr. Chandler
`
`himself opined are “not comparable” to the hypothetical negotiation. Dkt. 129 at 20-21; Open
`
`Text S.A., 2015 WL 34917, at *5 (excluding testimony regarding a range of royalty rates based on
`
`licenses affirmatively rejected as non-comparable). Touchstream does not argue that these two
`
`approaches are reliable, and that should end the inquiry.
`
`Instead, Touchstream argues that Mr. Chandler should be allowed to present his admittedly
`
`unreliable and incomplete analyses under the revenue-based and “lifetime value” approaches to
`
`the jury to show “the unavailability of sufficient Google revenue information.” (Dkt. 156-1 at 6,
`
`24.) In other words, the “point” is to disparage Google and suggest that it intentionally withheld
`
`relevant information in an effort to improperly skew the jury’s damages determination in
`
`Touchstream’s favor.3 Mr. Chandler is not qualified to opine regarding Google’s intent or its
`
`conduct during the discovery process. Allowing Mr. Chandler to present this testimony is unduly
`
`prejudicial to Google and will undoubtedly confuse the jury.
`
`D. Mr. Chandler Should Be Precluded From Presenting Legally Irrelevant And
`Prejudicial Materials To The Jury.
`
`Mr. Chandler should also be precluded from presenting testimony or opinions to the jury
`
`regarding (1) Google’s size, wealth, or total revenue or profits; (2) the sufficiency of Google’s
`
`production or other discovery issues; and (3) non-comparable license agreements. With respect to
`
`
`
`3 This tactic is confirmed by Touchstream’s proposed jury instruction that “[a]ny doubts
`you may have on the issue of damages due to Google’s failure to keep or make available proper
`records should be decided in favor of Touchstream. Any confusion or difficulties caused by
`Google’s records also should be held against Google, not Touchstream.” Permitting Mr. Chandler
`to present opinions regarding alleged deficiencies in Google’s production would require Google
`to respond with its own evidence and arguments regarding Touchstream’s improper expansion of
`the case in violation of an express agreement between the parties and therefore without leave of
`Court, which would only further confuse the issues.
`
`12
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 16 of 18
`
`
`the first two issues, Google refers to its Motions in Limine, filed concurrently herewith for further
`
`discussion of the impropriety of such opinions in this case.
`
`Regarding the third issue, Touchstream contends that previous Google settlement
`
`agreements with
`
` “relevant to showing that Google would have been willing
`
`to accept a running royalty structure as opposed to a lump sum … and are further relevant and
`
`informative as Google’s licensing history and practices.” (Dkt. 156-1 at 26.)4 But Mr. Chandler
`
`admitted that he does not know what patents were at issue in the litigation resolved by those
`
`agreements; he has not seen the Google agreements so does not know their specific terms or
`
`structure; and that he has no basis to opine that they are comparable to the hypothetical negotiation.
`
`(Dkt. 129 at 24-25.) Moreover, Touchstream’s unsupported assertion that these agreements have
`
`a “running royalty structure” is contradicted by the press release Mr. Chandler cites regarding the
`
` agreement, which indicates that Google agreed to
`
`. (Ex.
`
`1, Chandler Rep. at 77-78.) Mr. Chandler also has no basis to opine that these unknown
`
`agreements constitute Google’s “usual licensing approach,” as Touchstream contends. (Dkt. 156-
`
`1 at 26.) These agreements are not relevant, and allowing Mr. Chandler to present purely
`
`speculative testimony regarding them would be unduly prejudicial to Google.
`
`III. CONCLUSION
`
`For the foregoing reasons, Google respectfully requests that the Court grant Google’s
`
`motion to exclude Mr. Chandler’s opinions.
`
`
`
`
`
`4 The sole basis for Touchstream’s challenge to Mr. Martinez’s reliance on a Google
`agreement with a lump sum royalty payment of
`dollars for a license to technically
`comparable patents was its alleged status as a “litigation settlement agreement.” (Dkt. 133.) Now
`that the shoe is on the other foot, Touchstream argues that Mr. Chandler should be able to rely on
`these litigation settlement agreements, even though he has never seen them and has no basis to
`opine on technical or economic comparability.
`
`13
`
`PUBLIC VERSION
`
`

`

`Case 6:21-cv-00569-ADA Document 193 Filed 01/26/23 Page 17 of 18
`
`
`Respectfully submitted,
`
`By: /s/ Michael E. Jones, with permission by
`
`Tharan Gregory Lanier
` 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: shaunhassett@potterminton.com
`102 N. College Ave., Suite 900
`Tyler, TX 75702
`Telephone:
` (903) 597-8311
`Facsimile:
` (903) 593-0846
`
`Attorneys for Defendant
`GOOGLE LLC
`