Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 1 of 30
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`Civil Case No. 6:21-cv-569-ADA
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`JURY TRIAL DEMANDED
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`§§§§§§§§§§
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`TOUCHSTREAM TECHNOLOGIES, INC.,
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`GOOGLE LLC,
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`Plaintiff,
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`v.
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`Defendant.
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`GOOGLE LLC’S OPPOSITION TO TOUCHSTREAM TECHNOLOGIES, INC.’S
`OPPOSED RULE 59(e) MOTION TO AMEND THE JUDGMENT TO INCLUDE
`SUPPLEMENTAL DAMAGES, ONGOING ROYALTIES, AND INTEREST
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 2 of 30
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`TABLE OF CONTENTS
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`Page
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`TABLE OF AUTHORITIES ......................................................................................................... ii
`TABLE OF ABBREVIATIONS .................................................................................................. vi
`TABLE OF EXHIBITS ............................................................................................................... vii
`INTRODUCTION ......................................................................................................................... 1
`BACKGROUND ........................................................................................................................... 3
`LEGAL STANDARD .................................................................................................................... 4
`ARGUMENT ................................................................................................................................. 5
`BECAUSE THE JURY AWARDED A FULLY-PAID-UP LUMP SUM ....................... 5
`The Record Demonstrates The Jury Awarded A Fully-Paid-Up Lump Sum ........ 6
`Touchstream’s Unsupported Implied Royalty Rate Should Be Rejected .............. 9
`ROYALTIES SHOULD BE DENIED FOR ADDITIONAL REASONS ...................... 10
`Damages ............................................................................................................... 10
`Touchstream Is Not Entitled To A 50% Enhancement ........................................ 11
`PREJUDGMENT INTEREST SHOULD BE DENIED.................................................. 15
`THE POST-COMPLAINT PERIOD AND TO THE ONE-YEAR T-BILL RATE ....... 18
`CONCLUSION ............................................................................................................................ 20
`
`I.
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`TOUCHSTREAM IS NOT ENTITLED TO ANY FURTHER ROYALTY
`
`A.
`B.
`TOUCHSTREAM’S REQUESTS FOR SUPPLEMENTAL AND ONGOING
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`II.
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`Touchstream Did Not Make A Timely Request For Supplemental
`
`A.
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`B.
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`III.
`IV. AT MOST, ANY PREJUDGMENT INTEREST SHOULD BE LIMITED TO
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`-i-
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 3 of 30
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`TABLE OF AUTHORITIES
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`Page
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`CASES
`
`ACCO Brands, Inc. v. Am. Power Conversion Corp.,
`No. 2:02-cv-113-TJW, 2004 WL 5698341 (E.D. Tex. Apr. 27, 2004) ...................................19
`
`Apple, Inc. v. Samsung Elecs. Co.,
`926 F. Supp. 2d 1100 (N.D. Cal. 2013) .............................................................................19, 20
`
`Cioffi v. Google, Inc.,
`No. 2:13-cv-103, 2017 WL 4011143 (E.D. Tex. Sept. 12, 2017), rev’d on
`other grounds, No. 18-1049, 2023 WL 2981491 (Fed. Cir. Apr. 18, 2023),
`petition for cert. filed on other grounds (Oct. 16, 2023) ...............................................5, 12, 14
`
`Conceptus, Inc. v. Hologic, Inc.,
`No. 09-02280-WHA, 2012 WL 44064 (N.D. Cal. Jan. 9, 2012) .............................................16
`
`Creative Internet Advertising Corp. v. Yahoo! Inc.,
`674 F. Supp. 2d 847 (E.D. Tex. 2009) ...................................................................................5, 6
`
`Crystal Semiconductor Corp. v. TriTech Microelecs. Int’l, Inc.,
`246 F.3d 1336 (Fed. Cir. 2001)................................................................................5, 16, 17, 18
`
`EcoFactor, Inc. v. Google LLC,
`No. 6:20-cv-00075-ADA, 2022 WL 2380332 (W.D. Tex. May 26, 2022) .............................19
`
`Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co.,
`No. 2:15-cv-1202-WCB, 2017 WL 3034655 (E.D. Tex. July 18, 2017), aff’d,
`739 F. App’x 643 (Fed. Cir. 2018) ....................................................................................13, 14
`
`Galen Med. Assocs. v. United States,
`369 F.3d 1324 (Fed. Cir. 2004)................................................................................................11
`
`Gaus v. Conair Corp.,
`No. 94-civ-5693-FM, 2003 WL 223859 (S.D.N.Y. Feb. 3, 2003), rev’d on
`other grounds, 363 F.3d 1284 (Fed. Cir. 2004) .......................................................................18
`
`Gen. Motors Corp. v. Devex Corp.,
`461 U.S. 648 (1983) .............................................................................................................5, 16
`
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`-ii-
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 4 of 30
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`TABLE OF AUTHORITIES
`(continued)
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`Page
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`Genband US LLC v. Metaswitch Networks Corp.,
`No. 2:14-cv-00033-JRG, 2018 WL 11357619 (E.D. Tex. Mar. 22, 2018) ..............................14
`
`Godo Kaisha IP Bridge 1 v. TCL Comm’cn Tech. Holdings Ltd.,
`No. 15-634-JFB, 2019 WL 1877189 (D. Del. Apr. 26, 2019) .................................................10
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
`579 U.S. 93 (2016) ...................................................................................................................13
`
`Imaginal Systematic, LLC v. Leggett & Platt, Inc.,
`No. 10-cv-07416, 2013 WL 12129858 (C.D. Cal. July 3, 2013).............................................20
`
`Kaneka Corp. v. SKC Kolon PI, Inc.,
`198 F. Supp. 3d 1089 (C.D. Cal. 2016) ...................................................................................16
`
`Laitram Corp. v. NEC Corp.,
`115 F.3d 947 (Fed. Cir. 1997)..................................................................................................20
`
`LaserDynamics, Inc. v. Quanta Computer, Inc.,
`694 F.3d 51 (Fed. Cir. 2012)....................................................................................................11
`
`Lighting Ballast Control, LLC v. Phillips Elecs. N. Am. Corp.,
`814 F. Supp. 2d 665 (N.D. Tex. 2011), rev’d on other grounds, 498 F. App’x
`986 (Fed. Cir. 2013) ...............................................................................................................6, 7
`
`Lucent Techs., Inc. v. Gateway, Inc.,
`580 F.3d 1301 (Fed. Cir. 2009)..................................................................................................5
`
`Mars, Inc. v. Coin Acceptors, Inc.,
`513 F. Supp. 2d 128 (D.N.J. 2007) ..........................................................................................20
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`Mass Engineered Design, Inc. v. Planar Sys., Inc.,
`No. 3:16-cv-1510-SI, 2018 WL 6059375 (D. Or. Nov. 19, 2018) ..........................................14
`
`Milwaukee Elec. Tool Corp. v. Snap-On Inc.,
`288 F. Supp. 3d 872 (E.D. Wis. 2017) .....................................................................................18
`
`Oiness v. Walgreen Co.,
`88 F.3d 1025 (Fed. Cir. 1996)..................................................................................................18
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`-iii-
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 5 of 30
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`TABLE OF AUTHORITIES
`(continued)
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`Page
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`Pers. Audio, LLC v. Apple, Inc.,
`No. 9:09-cv-111, 2011 WL 3269330 (E.D. Tex. July 29, 2011) ...............................................8
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`Prism Techs. LLC v. Sprint Spectrum L.P.,
`849 F.3d 1360 (Fed. Cir. 2017)............................................................................................6, 10
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`Roland Corp. v. inMusic Brands, Inc.,
`No. 17-22405-civ, 2023 WL 2441356 (S.D. Fla. Jan. 20, 2023) .............................................16
`
`Saint-Gobain Autover USA, Inc. v. Xinyi Glass N. Am., Inc.,
`707 F. Supp. 2d 737 (N.D. Ohio 2010) ....................................................................................16
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`Smith & Nephew Inc. v. Arthrex, Inc.,
`603 F. App’x 981 (Fed. Cir. 2015) ........................................................................................5, 6
`
`SRI Int’l, Inc. v. Cisco Sys., Inc.,
`14 F.4th 1323 (Fed. Cir. 2021) ................................................................................................15
`
`Summit 6, LLC v. Samsung Elecs. Co.,
`802 F.3d 1283 (Fed. Cir. 2015)..................................................................................................8
`
`Telcordia Techs., Inc. v. Cisco Sys., Inc.,
`612 F.3d 1365 (Fed. Cir. 2010)..................................................................................................4
`
`Touchstream Techs., Inc. v. Vizbee, Inc.,
`No. 1:17-cv-06247-PGG (S.D.N.Y. filed Aug. 17, 2017) .........................................................3
`
`Transocean Offshore Deepwater Drilling, Inc. v. GlobalSantaFe Corp.,
`No. H-03-2910, 2006 WL 3227315 (S.D. Tex. Nov. 6, 2006) ..........................................19, 20
`
`Vectura Ltd. v. GlaxoSmithKline LLC,
`No. 16-638-RGA, 2019 WL 4346502 (D. Del. Sept. 12, 2019) ..............................................14
`
`VLSI Tech. LLC v. Intel Corp.,
`No. 6:21-cv-57-ADA, 2022 WL 1477728 (W.D. Tex. May 10, 2022) ...................................19
`
`WhitServe, LLC v. Computer Packages, Inc.,
`694 F.3d 10 (Fed. Cir. 2012)................................................................................................6, 10
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 6 of 30
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`TABLE OF AUTHORITIES
`(continued)
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`Page
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`STATUTES
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`28 U.S.C. § 1961 ..............................................................................................................................1
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`35 U.S.C. § 284 ..................................................................................................................13, 14, 15
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`-v-
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 7 of 30
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`TABLE OF ABBREVIATIONS
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`I Abbreviation
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`Definition
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`I T ouchstream
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`Touchstream Technologies, fuc.
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`I Google
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`Google LLC
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`asserted patents
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`U.S. Patent Nos. 8,356,251 (PTX-865), 8,782,528 (PTX-885), and
`8,904,289 (PTX-883)
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`I JMOL
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`I Quadriga
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`I T-bill rate
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`judgment as a matter of law
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`Quadriga Worldwide Ltd.
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`Treasmy bill rate
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`T ouchstream-Quadriga
`agreement
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`Amended and Restated Software Development and License
`Agreement between Touchstream and Quadriga (PTX-567)
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`Tr.
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`Trial Transcript, located at:
`Dkt. 259 (Day 1, pp. 1-244);
`Dkt. 260 (Day 2, pp. 245-647);
`Dkt. 262 (Day 3, pp. 648-1028);
`Dkt. 264 (Day 4, pp. 1029-131 0); and
`Dkt. 266 (Day 5, pp. 131 1-1376).
`Certain po1tions of the Trial Transcript are and remain under seal.
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`* All emphasis in this brief is added unless othenvise noted.
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`- Vl-
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 8 of 30
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`TABLE OF EXHIBITS
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`Trial Exhibit
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`Description
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`PTX-567
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`PTX-865
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`PTX-883
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`PTX-885
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`Touchstream-Quadriga agreement
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`U.S. Patent No. 8,356,251
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`U.S. Patent No. 8,904,289
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`U.S. Patent No. 8,782,528
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`Opposition Exhibit
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`A
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`B
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`C
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`D
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`E
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`Description
`Declaration of Christopher A. Maitinez in Suppo1t of Google
`LLC's Opposition to Touchstream's Rule 59(e) Motion to Amend
`the Judgment (Oct. 18, 2023)
`Original Expe1t Repo1t ofMru·k Chandler (Nov. 14, 2022)
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`Trial Demonstratives of Mark Chandler
`Declaration of Luke Halliwell in Suppo1t of Google LLC 's
`Opposition to Touchstream's Rule 59(e) Motion to Amend the
`Judgment (Oct. 17, 2023)
`Original Expe1t Repo1t of Christopher A. Martinez (Dec. 12, 2022)
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`-vn-
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 9 of 30
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`INTRODUCTION
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`
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`Touchstream asked the jury for nearly a billion dollars based on a flawed damages theory
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`that relied on a noncomparable software-development and license agreement, failed to apportion
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`to the claimed invention, and disregarded the evidence showing the parties would have agreed to
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`a paid-up lump sum, not a running royalty. The jury awarded $338,760,000. Touchstream now
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`asks the Court to increase that award to a total closer to the astronomical request that the jury
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`rejected, based on theories that no interpretation of the verdict or the evidence can support. As an
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`initial matter, Touchstream’s motion is premised on the verdict being upheld. As explained in
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`Google’s motions for JMOL and a new trial, Dkts. 275, 276, the verdict was fundamentally flawed.
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`Granting either motion would moot the relief Touchstream requests here. But even if the Court
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`upholds the verdict, Touchstream’s attempt to multiply its award vastly overreaches on both the
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`law and the facts. Google does not dispute that Touchstream would be entitled to post-judgment
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`interest pursuant to 28 U.S.C. § 1961. The remainder of Touchstream’s motion, however, bears
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`no resemblance to the jury’s damages verdict or the evidence, and should be denied.
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`First, the Court should reject Touchstream’s requests to enlarge the jury’s award with
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`“supplemental” or “ongoing” royalties. The jury awarded a fully-paid-up lump sum. Touchstream
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`assumes—without even attempting to show why—that the jury awarded damages in the form of a
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`running royalty at an “implied rate” of “35.98%” of the $941,419,212 that Touchstream sought.
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`But the verdict itself and the evidence make clear the jury awarded a lump sum through patent
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`expiration, precluding any further royalties. The jury’s round-number award is typical for lump
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`sums, which must estimate future infringement rather than exactly multiply specific quantities of
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`products by specific royalty rates. The jury’s award also reflects the evidence showing that Google
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`would have preferred a lump-sum structure and that Touchstream itself entered into a lump-sum
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`structure for the asserted patents with another party. Moreover, Touchstream’s assumption about
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 10 of 30
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`the verdict is not credible. The verdict was not, as Touchstream repeatedly calls it, “35.98%” of
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`$941,419,212, but instead 35.9839692755282%—a percentage that extends to the ten-trillionth
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`decimal place—and in any event neither that percentage nor Touchstream’s has an evidentiary
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`basis. The jury plainly did not award a running royalty at a fraction of Touchstream’s request.
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`Instead, consistent with the evidence, it awarded a lump sum for all past, present, and future sales.
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`Second, Touchstream’s demands for supplemental and ongoing royalties should be rejected
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`for additional, independent reasons. Touchstream forfeited supplemental damages by not timely
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`requesting them. Touchstream suggests Google withheld data regarding activations after October
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`9, 2022. Not so. Touchstream did not seek that information at any point before trial, or even for
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`weeks afterward. Whether Touchstream deliberately refrained to avoid having to present an
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`untenable billion-dollar-plus damages request to the jury or sat on its hands for some other reason,
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`its delay in seeking this information until weeks after the trial concluded, and even after the Court
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`entered judgment on the jury’s verdict at Touchstream’s request, forfeited any claim for
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`supplemental damages. As for any post-verdict ongoing royalty if the Court nevertheless makes
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`such an award, Touchstream is not entitled to 150% of its implied 35.98% rate. Touchstream and
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`its expert rely on purportedly “new” considerations for a 2023 hypothetical negotiation, but
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`Touchstream’s expert already considered these “new” developments when opining on the 2013
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`hypothetical negotiation at trial. At the same time, Touchstream and its expert disregard post-
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`verdict developments that are actually new, and that would require a downward adjustment.
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`Third, the Court should deny prejudgment interest. Touchstream seeks prejudgment
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`interest at a rate that would increase the jury award by nearly 25%. But Touchstream has no right
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`to such a windfall; the jury award is more than sufficient compensation. Besides, Touchstream is
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`solely responsible for the passage of years since the first alleged infringement. It delayed suing
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 11 of 30
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`Google for nearly a decade, even though it sued another company on these patents in the meantime,
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`and even though it knew Google was continuing to develop the accused Chromecast technology
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`and exponentially expanding the damages base. Prejudgment interest should be denied entirely.
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`Fourth, if the Court awards any prejudgment interest, Touchstream’s delay in filing suit
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`should at least limit interest to the post-complaint period. Further, the one-year T-bill rate should
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`apply. Touchstream again demands more, seeking the prime rate. But the sole agreement allegedly
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`showing it borrowed near the prime rate is irrelevant in both time and amount: it was from two
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`years before the alleged infringement began and involved a tiny fraction of the jury’s award.
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`BACKGROUND
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`Touchstream obtained its patents beginning in 2013, but it did not file this lawsuit until
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`2021. Dkt. 1. Touchstream had reached out to Google in 2011, and the parties had brief meetings
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`then and in early 2012. Those meetings, though, were before the asserted patents existed, and had
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`nothing to do with the later-alleged infringement. Touchstream witnesses admitted they had no
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`record of sharing any particular technical information with Google, Tr. 125:11-14 (Strober), Tr.
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`189:17-22, 191:2-10 (Rinzler), Tr. 287:1-20 (Mitschele), and, until Touchstream filed suit,
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`Touchstream never even suggested to Google it believed Google was infringing, Tr. 293:12-
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`294:16; see also Dkt. 276 (Google’s Rule 59 motion). Meanwhile, Touchstream sued another
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`company (Vizbee, Inc.) on the same patents. Touchstream Techs., Inc. v. Vizbee, Inc., No. 1:17-
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`cv-06247-PGG (S.D.N.Y. filed Aug. 17, 2017).
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`At trial, Touchstream presented its damages case through its expert Mark Chandler, and
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`Google offered a rebuttal case through its expert Christopher Martinez. Both experts considered
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`a hypothetical negotiation in 2013, but they presented significantly different analyses of what the
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`parties would have considered and agreed to as a reasonable royalty for the alleged infringement.
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`Mr. Chandler opined that the parties at the 2013 hypothetical negotiation would have agreed to a
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 12 of 30
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`running royalty based on specific per-activation fees for the three categories of products ($15.36,
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`$7.68, and $3.84), resulting in the amount of $941,419,212 through October 2022. Tr. 653:13-
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`654:1, 656:12-21. He based his opinions on the Touchstream-Quadriga agreement that involved
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`a monthly licensing fee per hotel room. Tr. 622:24-626:13, 633:2-636:1; see also PTX-567. Mr.
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`Martinez, by contrast, opined that the parties would have agreed on a lump sum of $8.98 million
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`for the life of the patents. Tr. 1097:14-20, 1117:10-14. In support, he discussed and described
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`numerous licenses that Google had entered into in the relevant time period, all of which were lump-
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`sum licenses. Tr. 1116:20-1117:4. As Mr. Martinez explained, no Google license produced in the
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`case provided for a running royalty. Tr. 1117:1-4. The jury also heard about Touchstream’s lump-
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`sum license to Vizbee covering the same patents-at-issue here. Tr. 1088:11-15.
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`The jury was thus charged with determining the structure of any damages it awarded. As
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`the Court instructed, “[r]easonable royalty awards may take the form of a running royalty” or “the
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`form of a lump-sum payment” “covering all the sales of the licensed product, both past and future,”
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`and it was “up to” the jury, “based on the evidence, to decide what type of royalty, if any, is
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`appropriate.” Tr. 1305:9-1306:2; Dkt. 246 at 42 (“Damages–Running Royalty vs. Lump Sum”
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`instruction). The parties jointly submitted the verdict’s damages question, which asked: “What is
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`the total amount of damages you find for Google’s infringement of the Asserted Patent(s)?” Dkt.
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`247 at 4. The form did not ask the jury to specify the structure or a time period for the damages it
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`was awarding. See id. On July 21, 2023, the jury awarded “$338,760,000” in damages. Id. At
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`Touchstream’s request, the Court entered judgment on the verdict on August 23, 2023. Dkt. 256.
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`LEGAL STANDARD
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`“District courts have broad discretion to interpret an ambiguous verdict form, because
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`district courts witness and participate directly in the jury trial process.” Telcordia Techs., Inc. v.
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`Cisco Sys., Inc., 612 F.3d 1365, 1378 (Fed. Cir. 2010). Touchstream bore (and still bears) the
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 13 of 30
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`burden of proving entitlement to its requested relief. See, e.g., Lucent Techs., Inc. v. Gateway,
`
`
`
`Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009) (“The burden of proving damages falls on the
`
`patentee.”); Smith & Nephew Inc. v. Arthrex, Inc., 603 F. App’x 981 (Fed. Cir. 2015) (noting the
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`patentee’s burden with respect to supplemental damages); Creative Internet Advertising Corp. v.
`
`Yahoo! Inc., 674 F. Supp. 2d 847, 855 (E.D. Tex. 2009) (Where “the Court ... considers whether
`
`an infringer should pay an ongoing royalty, the Court finds that the burden of proving damages
`
`remains with the patentee.”). Touchstream also bears the burden of proving that its “heightened”
`
`ongoing royalty rate is appropriate. Cioffi v. Google, Inc., No. 2:13-cv-103, 2017 WL 4011143,
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`at *9 (E.D. Tex. Sept. 12, 2017), rev’d on other grounds, No. 18-1049, 2023 WL 2981491 (Fed.
`
`Cir. Apr. 18, 2023), petition for cert. filed on other grounds (Oct. 16, 2023).
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`District courts have discretion to “limit” or “deny” prejudgment interest entirely where
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`there is “some justification for withholding such an award.” Gen. Motors Corp. v. Devex Corp.,
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`461 U.S. 648, 655-57 (1983). When they award prejudgment interest, district courts have
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`discretion in determining the rate and any compounding to apply. See Crystal Semiconductor
`
`Corp. v. TriTech Microelecs. Int’l, Inc., 246 F.3d 1336, 1346 (Fed. Cir. 2001).
`
`ARGUMENT
`
`I.
`
`TOUCHSTREAM IS NOT ENTITLED TO ANY FURTHER ROYALTY BECAUSE
`THE JURY AWARDED A FULLY-PAID-UP LUMP SUM
`
`The jury awarded a paid-up lump sum. Touchstream is not entitled to any further royalty.
`
`As an initial matter, Touchstream does not even attempt to establish it is entitled to further
`
`royalties. Instead, Touchstream assumes that the jury’s award “only covers the period of 2015
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`through 2022,” based on Mr. Chandler’s testimony as to that time period and the jury instruction
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`that a reasonable royalty may “tak[e] the form of a running royalty.” Dkt. 274 (“Mot.”) at 7. But
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`“[t]he burden of proving damages falls on the patentee.” Lucent, 580 F.3d at 1324. That burden
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 14 of 30
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`applies to supplemental damages, see Smith & Nephew, 603 F. App’x at 989-91, and to ongoing
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`
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`royalties, see Creative Internet Advertising, 674 F. Supp. 2d at 855 (citing Federal Circuit
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`authorities). Touchstream fails to make any showing that the jury awarded a running royalty, and
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`it entirely disregards that the form of a license was squarely in dispute, with evidence supporting
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`Google’s position that the parties would have agreed to a fully-paid-up lump-sum license.
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`Touchstream likewise ignores that the Court’s “Damages–Running Royalty vs. Lump Sum”
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`instruction charged the jury with awarding either a running royalty or a royalty in “the form of a
`
`lump sum payment” covering “past and future” sales. Dkt. 246 at 42; Tr. 1305:9-1306:2. Because
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`Touchstream, notwithstanding its burden, has made no showing the jury adopted a running royalty
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`instead of a lump sum, its supplemental-damages and ongoing-royalty requests should be rejected.
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`WhitServe, LLC v. Computer Packages, Inc., 694 F.3d 10, 35 (Fed. Cir. 2012) (A district court has
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`“discretion to conclude that no forward-looking relief is appropriate in the circumstances.”).
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`In any event, as discussed next, the best and only reasonable interpretation of the evidence
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`and the verdict is that the jury awarded a fully-paid-up lump sum.
`
`A.
`
`The Record Demonstrates The Jury Awarded A Fully-Paid-Up Lump Sum
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`The verdict and record show that the jury adopted Google’s position that any royalty would
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`be in the form of a fully-paid-up lump sum—not Touchstream’s proposed running royalty.
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`When a verdict does not expressly specify which form of royalty was awarded, courts
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`consider whether the jury’s award itself suggests one format or another and whether such a
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`preference can be imputed from the record evidence such as the parties’ licensing practices and
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`the structures of licenses in evidence. See, e.g., Prism Techs. LLC v. Sprint Spectrum L.P., 849
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`F.3d 1360, 1377-79 (Fed. Cir. 2017) (reviewing the trial record and affirming “the district court’s
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`finding that the jury awarded damages for past, present, and future infringement”); Lighting Ballast
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`Control, LLC v. Phillips Elecs. N. Am. Corp., 814 F. Supp. 2d 665, 693 (N.D. Tex. 2011)
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 15 of 30
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`(construing verdict as awarding a lump sum), rev’d on other grounds, 498 F. App’x 986 (Fed. Cir.
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`2013). Here, the jury’s round-number award, the parties’ licensing practices, and other trial
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`evidence all indicate that the jury awarded a paid-up lump sum.
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`First, like Google’s proposed lump sum, the jury’s award was an even, round number.
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`Compare Tr. 1097:19-20 (Martinez), with Dkt. 247 at 4. Paid-up lump sums include future sales
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`that cannot be quantified exactly, see Tr. 1305:9-1306:2 (instructing that a lump sum is “a single
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`price for a license covering both past and future infringing sales”), and therefore are typically
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`estimated using round numbers. As Mr. Martinez explained, a lump sum avoids having to calculate
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`an “ongoing cost for every single unit that goes out after the first.” Tr. 1116:18-19. Indeed, when
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`Touchstream entered into a paid-up lump-sum agreement with Vizbee (discussed further below),
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`that amount was a round number, $2.31 million. Tr. 1088:11-15.
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`The jury’s award bears no resemblance to a running royalty like Touchstream sought. See
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`supra pp. 3-4. Touchstream multiplied specific quantities of past activations by royalty rates that
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`were specific down to the cent: $15.36 for Chromecast dongles, $7.68 for Google Chromecast-
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`enabled devices, and $3.84 for third-party devices. Similarly, Touchstream’s total request was
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`specific to the dollar: $941,419,212. The only reasonable interpretation of the jury’s round
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`number is that it did not adopt a running royalty based on specific per-activation fees. Touchstream
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`bears the burden of proving entitlement to additional damages, and it has utterly failed to show
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`that the jury used its proposed running-royalty rates or any fraction thereof, nor shown how the
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`award can be distributed to each of the categories based on any evidence presented at trial.
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`Second, although the jury found infringement, it rejected Touchstream’s nearly billion-
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`dollar request and instead awarded an amount much closer to Google’s $8.98 million proposal.
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`Third, the jury heard evidence concerning Google’s consistent preference of entering into
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 16 of 30
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`lump-sum licenses. Tr. 1093:21-1098:3, 1116:7-1117:14 (Martinez). Indeed, it was undisputed
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`that Google’s “strong preference” at the time of the hypothetical negotiation was a lump-sum
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`structure. Tr. 1116:20-25 (Martinez); see also Tr. 1117:1-4 (Martinez); Tr. 696:12-19 (Chandler).
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`Fourth, the jury heard both sides’ damages experts testify that they reviewed “all of the
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`licenses produced by Google in this case,” and that “all” of these Google licenses “provided only
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`lump sum agreements,” not a running royalty. Tr. 696:12-19 (Chandler); accord Tr. 1117:1-4
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`(Martinez, noting that he and Chandler “agree” that “all the relevant Google licenses [they] have
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`seen in this case” are “lump-sum agreements”). The fact that all of these past Google license
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`payments used a lump-sum structure is strong evidence that the jury awarded a lump sum. See
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`Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283, 1301 (Fed. Cir. 2015) (in upholding the
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`verdict as a lump sum, noting that all licenses introduced into evidence “were lump-sum licenses”).
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`Fifth, Touchstream itself entered into a lump-sum license for the asserted patents. The
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`Touchstream-Vizbee license was the only bare patent license in evidence involving the asserted
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`patents, and it was in the form of a lump sum. See Tr. 674:12-674:15 (Chandler); Tr. 1117:5-9
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`(Martinez); Tr. 306:4-307:1 (Mitschele). Moreover, Touchstream agreed to that lump-sum
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`structure after Touchstream learned of Google’s alleged use of its technology. A patentee’s offer
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`to license, after the alleged use of its claimed technology is known, is probative of how the patentee
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`would approach the hypothetical negotiation because it shows the patentee made the offer with the
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`“opportunity to consider the potential of his invention” and was not “tricked or forced into
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`accepting a nominal sum before realizing the full value of the patented technology.” Pers. Audio,
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`LLC v. Apple, Inc., No. 9:09-cv-111, 2011 WL 3269330, at *11 (E.D. Tex. July 29, 2011).
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`Given the evidence and the verdict itself, the Court should find the verdict reflects a fully-
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`paid-up lump sum.
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 17 of 30
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`Touchstream’s Unsupported Implied Royalty Rate Should Be Rejected
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`B.
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`Touchstream’s assumption that the jury blindly followed its damages theory and awarded
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`an “implied royalty rate” of “35.98%” of its $941,419,212 request is pure conjecture. Neither
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`party suggested the jury should award “35.98%” of Touchstream’s request or anything like it. And
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`there is simply no reliable way to arrive at the damages verdict using Touchstream’s running-
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`royalty structure. Ex. A (Martinez Decl.) ¶¶ 5-8 & n.3.
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`In fact, Touchstream’s assumption rests on several fallacies. To start, the verdict was not
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`“35.98%” of Touchstream’s request. The actual percentage would go out to the ten-trillionth
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`decimal place: 35.9839692755282%. Id. ¶ 6. Touchstream never acknowledges this, nor does it
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`attempt to justify such a specific percentage as grounded in any evidence. It likewise never
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`acknowledges that it truncates its assumed per-activation fees; the fees are not “$5.53,” “$2.76,”
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`and “$1.38,” see Mot. at 5, but instead amounts specific to fractions of a cent: $5.526528,
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`$2.763264, and $1.381632. Those amounts cannot reasonably be attributed to the jury, nor does
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`Touchstream even try. See Ex. A (Martinez Decl.) ¶¶ 5-8 & n.3. Further, even applying the
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`truncated $5.53, $2.76, and $1.38 rates would not total the verdict for the number of activations
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`Touchstream invokes (instead totaling $338,600,131.41). See Dkt. 274-12 (Chandler Decl.)
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`¶¶ 7-8. Again, Touchstream never acknowledges nor explains this discrepancy between its
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`assumption and the verdict. Nor does it provide any basis for assuming the jury discounted its
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`requests for all products by the same “35.98%.” As just one example, if the jury found no proof
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`of divided infringement for certain third-party products, e.g., Dkt. 275 at 13, it cannot be “implied”
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`that the jury awarded “35.98%” of Touchstream’s request for the third-party-product category.
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`Instead, Touchstream’s argument rests on the contention that “the jury’s verdict ‘by
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`definition covers only past harm.’” Mot. at 7 (citing WhitServe, 694 F.3d at 35). That not only
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`fails to carry its burden, but misstates the law. The law is clear, and this Court instructed, that
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`Case 6:21-cv-00569-ADA Document 285 Filed 10/24/23 Page 18 of 30
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`juries may award a fully-paid-up lump sum. And “trial courts have discretion to interpret verdict
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`forms” to assess whether a lump sum or running royalty was awarded. WhitServe, 694 F.3d at 35.
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`In WhitServe, the verdict “by definition cover[ed] only past harm” because both parties in that case
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`“limite