Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 1 of 24
`
`IN THE UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`
`ALMONDNET, INC.,
`
`Plaintiff,
`
`v.
`
`AMAZON.COM, INC., AMAZON.COM
`SERVICES LLC, and AMAZON WEB
`SERVICES, INC.,
`
`Defendants.
`
`Civil Action No. 6:21-cv-00898-ADA
`
`JURY TRIAL DEMANDED
`
`PUBLIC VERSION
`
`DEFENDANTS’ OPPOSITION TO PLAINTIFF ALMONDNET, INC.’S OPPOSED
`MOTION TO ENTER FINAL JUDGMENT
`
`

`

`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 2 of 24
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`INTRODUCTION ....................................................................................................1
`
`BACKGROUND FACTS ........................................................................................2
`
`III. ARGUMENT ...........................................................................................................4
`
`A.
`
`B.
`
`C.
`
`AlmondNet is not entitled to prejudgment interest prior to filing suit due
`to its own self-serving delay. .......................................................................6
`
`Any prejudgment interest should, at most, apply the T-Bill rate. ..............10
`
`Corrected Calculations ...............................................................................15
`
`IV.
`
`CONCLUSION ......................................................................................................15
`
`
`
`
`
`
`ii
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 3 of 24
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`
`
`CASES
`
`Accuscan, Inc. v. Xerox Corp.,
`No. 96 Civ. 2579 (HB), 2000 WL 280005 (S.D.N.Y. Mar. 15, 2000) ....................................12
`
`Acticon Techs. v. Heisei Elecs. Co., Ltd.,
`No. 06-CV-4316 (KMK), 2008 WL 356872 (S.D.N.Y. Feb. 5, 2008) ....................................13
`
`Alberti v. Klevenhagen,
`896 F.2d 927 (5th Cir. 1990) ...................................................................................................11
`
`Apple Inc. v. Samsung Elecs. Co.,
`926 F. Supp. 2d 1100 (N.D. Cal. 2013) ...................................................................................13
`
`Beatrice Foods Co. v. New England Printing & Lithographing Co.,
`923 F.2d 1576 (Fed. Cir. 1991)..................................................................................................9
`
`BIC Leisure Prods., Inc. v. Windsurfing Int’l, Inc.,
`761 F. Supp. 1032 (S.D.N.Y. 1991) .........................................................................................13
`
`Bio-Rad Labs., Inc. v. Nicolet Instrument Corp.,
`807 F.2d 964 (Fed. Cir. 1986)..................................................................................................10
`
`Comcast IP Holdings I LLC v. Sprint Commc’ns Co., L.P.,
`850 F.3d 1302 (Fed. Cir. 2017)................................................................................................10
`
`Conceptus, Inc. v. Hologic, Inc.,
`No. C 09-02280 WHA, 2012 WL 44064 (N.D. Cal. Jan. 9, 2012)..........................................13
`
`Cornell Univ. v. Hewlett-Packard Co.,
`No. 01-CV-1974, 2009 WL 1405208 (N.D.N.Y. May 15, 2009) ............................................11
`
`Crystal Semiconductor v. Tritech Microelectronics,
`246 F.3d 1336 (Fed. Cir. 2001)........................................................................................ passim
`
`Datascope Corp. v. SMEC, Inc.,
`879 F.2d 820 (Fed. Cir. 1989)..................................................................................................12
`
`Ecofactor, Inc. v. Google LLC,
`No. 6:20-cv-75-ADA, Dkt. 244 (W.D. Tex. May 26, 2022) ...................................................11
`
`Exmark Mfg. Co. v. Briggs & Stratton Corp.,
`830 F. App’x 305 (Fed. Cir. 2020) ..........................................................................................14
`
`iii
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`

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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 4 of 24
`TABLE OF AUTHORITIES
`(CONTINUED)
`
`Page(s)
`
`Finjan, Inc. v. Blue Coat Sys., Inc.,
`No. 13-cv-03999-BLF, 2016 WL 3880774 (N.D. Cal. July 18, 2016) ....................................12
`
`Gen. Motors Corp. v. Devex Corp.,
`461 U.S. 648 (1983) ...................................................................................................................5
`
`Gorenstein Enters., Inc. v. Quality Care-USA, Inc.,
`874 F.2d 431 (7th Cir. 1989) ...................................................................................................14
`
`Hynix Semiconductor Inc. v. Rambus Inc.,
`No. CV-00-20905 RMW, 2006 WL 2522506 (N.D. Cal. 2006) .............................................13
`
`Imperium IP Holdings (Cayman), Ltd. v. Samsung Elecs. Co.,
`No. 4:14-cv-371, 2017 WL 1716589 (E.D. Tex. Apr. 27, 2017) ............................................10
`
`Jiaxing Super Lighting Elec. Appliance Co. v. CH Lighting Tech. Co.,
`No. 6:20-cv-00018-ADA, 2022 WL 3371630 (W.D. Tex. Aug. 16, 2022) ........................5, 11
`
`Juno Therapeutics, Inc. v. Kite Pharma, Inc.,
`No. 2:17-cv-07639 SJO-KS, 2020 WL 2844410 (C.D. Cal. 2020) .........................................13
`
`Kaneka Corp. v. SKC Kolon PI, Inc.,
`198 F. Supp. 3d 1089 (C.D. Cal. 2016) .....................................................................................5
`
`Kaufman v. Microsoft Corp.,
`34 F.4th 1360 (Fed. Cir. 2022) ..................................................................................................7
`
`Kowalski v. Mommy Gina Tuna Res.,
`No. 05-679, 2009 WL 855976 (D. Haw. Mar. 30, 2009) ........................................................13
`
`Laitram Corp. v. NEC Corp.,
`115 F.3d 947 (Fed. Cir. 1997)..................................................................................................13
`
`LaserDynamics, Inc. v. Quanta Comput., Inc.,
`694 F.3d 51 (Fed. Cir. 2012)......................................................................................................9
`
`Mars, Inc. v. Coin Acceptors, Inc.,
`513 F. Supp. 2d 128 (D.N.J. 2007) ..........................................................................................12
`
`Milwaukee Elec. Tool Corp. v. Snap-On Inc.,
`288 F. Supp. 3d 872 (E.D. Wis. 2017) .......................................................................................9
`
`Mondis Tech Ltd. v. LG Elecs., Inc.,
`No. 15-4431 (SRC), 2023 WL 3749992 (D.N.J. June 1, 2023) ...........................................5, 12
`
`iv
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 5 of 24
`TABLE OF AUTHORITIES
`(CONTINUED)
`
`Page(s)
`
`NCS Multistage Inc. v. Nine Energy Serv., Inc.,
`No. 6:20-cv-277-ADA, 2023 WL 149071 (W.D. Tex. Jan 9, 2023) .......................................14
`
`Nickson Indus., Inc. v. Rol Mfg. Co.,
`847 F.2d 795 (Fed. Cir. 1988)..................................................................................................10
`
`Oiness v. Walgreen Co.,
`88 F.3d 1025 (Fed. Cir. 1996)............................................................................................11, 13
`
`Packet Intelligence LLC v. NetScout Sys., Inc.,
`No. 2:16-cv-230-JRG, 2018 WL 7508613 (E.D. Tex. Sept. 7, 2018) ...............................11, 12
`
`Pavo Sols. LLC v. Kingston Tech. Co., Inc.,
`No. 8:14-cv-01352-JLS-KES, 2021 WL 1912392 (C.D. Cal. Mar. 16, 2021) ........................14
`
`Probatter Sports, LLC v. Sports Tutor, Inc.,
`586 F. Supp. 3d 80 (D. Conn. 2022) ........................................................................................14
`
`Roland Corp. v. inMusic Brands, Inc.,
`No. 17-22405-CIV, 2023 WL 2441356 (S.D. Fla. Jan. 20, 2023) .........................................5, 8
`
`Saint Lawrence Commc’ns LLC v. Motorola Mobility LLC,
`No. 2:15-cv-351-JRG, 2017 WL 6268735 (E.D. Tex. Dec. 8, 2017) ......................................11
`
`Solutran, Inc. v. U.S. Bancorp.,
`No. 13-cv-02637, 2019 WL 405513 (D. Minn. Jan 18, 2019) ................................................14
`
`Till v. SCS Credit Corp.,
`541 U.S. 465 (2004) .................................................................................................................11
`
`Transocean Offshore Deepwater Drilling, Inc. v. GlobalSantaFe Corp.,
`No. H-03-2910, 2006 WL 3227315 (S.D. Tex. Nov. 6, 2006) ................................................12
`
`TransPerfect Global, Inc. v. MotionPoint Corp.,
`No. C 10-2590 CW, 2014 WL 6068384 (N.D. Cal. Nov. 13, 2014) .......................................11
`
`Trustees of Boston Univ. v. Everlight Elecs. Co.,
`187 F. Supp. 3d 306 (D. Mass. 2016) ......................................................................................10
`
`Uniroyal, Inc. v. Rudkin-Wiley Corp.,
`939 F.2d 1540 (Fed. Cir. 1991)................................................................................................14
`
`Verinata Health, Inc. v. Ariosa Diagnostics, Inc.,
`809 F. App’x 965 (Fed. Cir. 2020) ..........................................................................................11
`
`v
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`

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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 6 of 24
`TABLE OF AUTHORITIES
`(CONTINUED)
`
`Page(s)
`
`VLSI Tech. LLC v. Intel Corp.,
`No. 6:21-cv-57-ADA, 2022 WL 1477728 (W.D. Tex. Apr. 21, 2022) .............................11, 14
`
`Whirlpool Corp. v. TST Water, LLC,
`No. 2:15-cv-1528-JRG, 2018 WL 1536874 (E.D. Tex. Mar. 29, 2018) ..................................11
`
`STATUTES
`
`35 U.S.C. § 284 ..........................................................................................................................5, 11
`
`35 U.S.C. § 286 ................................................................................................................................9
`
`
`
`vi
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 7 of 24
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`
`
`I.
`
`INTRODUCTION
`
`The jury in this case declined to award AlmondNet the damages it requested, instead
`
`awarding $121.95 million, roughly half of the amount AlmondNet’s damages expert Mr. Bergman
`
`estimated. AlmondNet and Mr. Bergman, however, now seek to inflate that award, asking the
`
`Court to give it what the jury would not. It seeks $87.61 million—more than 70% of the jury’s
`
`verdict—in pre-judgment interest, which would cause the total damage award to balloon to $210
`
`million. To arrive at this inflated number, AlmondNet and Mr. Bergman disregard binding Federal
`
`Circuit case law regarding the appropriate time period for interest and the rate to apply.
`
`AlmondNet calculates compounded prime rate interest on the $121.95 million verdict for
`
`12 years—from August 2012 to August 2024. But courts deny or limit prejudgment interest
`
`awards where, as here, the plaintiff exercised undue delay in filing suit that prejudiced the accused
`
`infringer. See Crystal Semiconductor v. Tritech Microelectronics, 246 F.3d 1336, 1362 (Fed. Cir.
`
`2001) (affirming district court’s denial of prejudgment interest in light of plaintiff’s two-year
`
`tactical delay in filing suit). Amazon launched the accused Demand Side Platform (DSP) in 2012.
`
`Rather than file this lawsuit or even provide notice to Amazon then, AlmondNet made the tactical
`
`decision to license its patents and, in the alternative, sue other DSP providers first before finally
`
`sending Amazon a notice letter in 2019 and filing this lawsuit in 2021—9 years after Amazon’s
`
`alleged first infringement. AlmondNet’s delay enabled it to obtain damages more than 20 times
`
`what Amazon’s DSP competitors paid for actual licenses to AlmondNet’s entire 150-patent
`
`portfolio between 2013 and 2019.
`
`AlmondNet further inflates its prejudgment interest request by requesting use of the prime
`
`rate, compounded quarterly for 12 years. But this Court and other district and circuit courts
`
`commonly award the one-year Treasury-Bill (“T-Bill”) rate as the least speculative method for
`
`compensating plaintiffs, particularly where, as here, there is no evidence that the plaintiff needed
`
`1
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 8 of 24
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`or attempted to borrow money, or that it would have earned a higher rate of return using its money
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`than with the T-Bill rate. Accordingly, if the Court is inclined to grant prejudgment interest at all,
`
`prejudgment interest should run from the date AlmondNet finally filed this lawsuit, August 27,
`
`2021, at the one-year T-Bill rate, compounded annually. Under this correct analysis, the Court
`
`should award, at most, $14,485,732.
`
`II.
`
`BACKGROUND FACTS
`
`The Patent Office issued the asserted 639 patent to AlmondNet on October 26, 2010. (JX-
`
`003.) The parties agree that the earliest alleged infringement occurred in August 2012 when
`
`Amazon launched its accused DSP service. (Trial Tr. at 396:25–397:2 (Bergman); id. at 749:5–8
`
`(Houh).)
`
`1050:20–1051:8, 1055:13–1056:12 (Bakewell).) In 2013, AlmondNet experienced “near financial
`
`collapse” and to stay solvent, licensed its entire patent portfolio of 150 patents (including the two
`
`patents asserted at trial) to Google for $8.0 million. (PTX-146 at 5; Trial Tr. at 94:6-97:3 (Shkedi);
`
`id. at 473:9–475:21, 479:2–19 (Bergman).)
`
` (Trial Tr.
`
` (Trial Tr. at 97:4–98:21
`
`(Shkedi).) For example,
`
` (PTX-197 at 11; Trial Tr. at 480:22–482:10 (Bergman).) In March 2016, AlmondNet
`
`sued Yahoo! for patent infringement, asserting the same 639 and 139 patents asserted in this case.
`
`(Ware Decl. ¶ 2, Ex. 1.)
`
` (PTX-199 at 8; Trial Tr. at 482:19–484:12 (Bergman).) AlmondNet
`
`then leveraged its 5 licenses and Yahoo! litigation to launch a wave of demand letters and, later,
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`2
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 9 of 24
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`
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`lawsuits.
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`Seven years after Amazon launched its DSP, AlmondNet sent Amazon an infringement
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`notice letter asserting that its patents cover DSPs and that it had licenses with “major advertising
`
`companies” including Google, Yahoo!/Oath, Nielsen, Sizmek, and Tremor Video. (Dkt. No. 283-
`
`4 (PTX-122) at 2.) It sent nearly identical infringement notice letters that same month to about 40
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`companies with digital advertising services, including, for example, Facebook. (Ware Decl. ¶ 3,
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`Ex. 2 (ALMONDNET-AMAZON-0003188–3191).)
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`After a follow-up letter in October 2019, AlmondNet ended communications with Amazon.
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`(Dkt. No. 158-9; Ware Decl. ¶ 4.) Then just under two years later—nine years after Amazon
`
`launched the accused DSP—AlmondNet filed this lawsuit on August 27, 2021. (Dkt. No. 1.)
`
`
`
`
`
`
`
` (Trial Tr. at 1050:20–1051:8, 1055:13–1056:12 (Bakewell).)
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`At trial, AlmondNet’s damages expert Mr. Bergman relied on both parties’ documents and
`
`financial information that did not exist until 2020 and beyond, for some more than a decade after
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`Amazon’s DSP launch. For example, for his damages calculation Mr. Bergman relied on
`
`
`
`
`
`at 431:1–432:13 (Bergman).) Using this data, he estimated Amazon’s profits from the accused
`
`services through expiration of the 139 patent in June 2027. (Trial Tr. at 452:8–453:19 (Bergman).)
`
` (PTX-225; Trial Tr.
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`Mr. Bergman then relied on
`
`
`
`
`
` (PTX-195; PTX-211; PTX-213; PTX-215; PTX-217; PTX-220;
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`Trial Tr. at 448:17–450:11 (Bergman); id. at 92:18–93:5 (Shkedi).) From this, Mr. Bergman
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`3
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 10 of 24
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`
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`calculated damages from 2015 (6 years prior to the complaint) through 2027 and discounted this
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`amount payable as a lump sum at the August 2012 hypothetical negotiation. (Trial Tr. at 453:8–
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`454:3 (Bergman).) Based on the bargaining split derived from Intent IQ agreements, Mr. Bergman
`
`told the jury that Amazon should pay AlmondNet a reasonable royalty of $243.9M to $348.4M.
`
`(Id. at 454:15–21 (Bergman).)
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`AlmondNet’s counsel, in both attorney argument before the jury and cross-examination of
`
`Amazon witnesses, latched onto the fact that, under the so-called “Book of Wisdom,” the parties
`
`to the 2012 hypothetical negotiation would know about and consider Amazon’s future revenues
`
`and documents not available until a decade later. For example, counsel sought to confirm in its
`
`cross examination of Amazon’s damages expert, Chris Bakewell, that the parties would have had
`
`Amazon’s recent “revenue information” at the 2012 hypothetical negotiation. (Trial Tr. at 1106:2–
`
`16 (Bakewell).) Counsel then argued that “AlmondNet would know that Amazon would make
`
`billions of dollars from this specific system that they added in 2012, and you’re telling the jury to
`
`just give them $8 million, that AlmondNet would have voluntarily taken 8 million, correct?” (Id.
`
`at 1106:2–6.) The jury ultimately awarded AlmondNet $121.9 million based at least in part on
`
`information that did not exist until a decade after Amazon launched its DSP. (Dkt. No. 279.)
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`III. ARGUMENT
`
`The Court should deny AlmondNet’s unreasonable request for 12 years of prejudgment
`
`interest at the prime rate given AlmondNet’s undue delay in filing suit and the unfair prejudice
`
`this delay caused Amazon. The Court should instead exercise its discretion and either deny
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`prejudgment interest entirely or, at most, award prejudgment interest limited to the time after
`
`AlmondNet filed its complaint on August 27, 2021. Moreover, the Court should use the one-year
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`T-Bill rate, compounded annually, which this Court has held “is well-accepted in federal courts
`
`and is a reasonable method of placing [Plaintiffs] in a position of where [they] would have been
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`4
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 11 of 24
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`
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`had there been no infringement by [Defendants].”Jiaxing Super Lighting Elec. Appliance Co. v.
`
`CH Lighting Tech. Co., No. 6:20-cv-00018-ADA, 2022 WL 3371630, at *20 (W.D. Tex. Aug. 16,
`
`2022) (quoting VLSI Tech. LLC v. Intel Corp., No. 6:21-cv-57-ADA, 2022 WL 1477728, at *2
`
`(W.D. Tex. Apr. 21, 2022), vacated on other grounds, 87 F.4th 1332, 1345–49 (Fed. Cir. 2023)).
`
`The Supreme Court has held that courts should award prejudgment interest where
`
`“necessary to ensure that the patent owner is placed in as good a position as he would have been
`
`in had the infringer entered into a reasonable royalty agreement.” Gen. Motors Corp. v. Devex
`
`Corp., 461 U.S. 648, 655 (1983). Section 284, however, “leaves the court some discretion” in
`
`whether to award prejudgment interest “where the patent owner has been responsible for undue
`
`delay in prosecuting the lawsuit.” Id. at 656–57. District courts have exercised this discretion to
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`deny prejudgment interest outright or award only partial prejudgment interest from the date of suit,
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`where, as here, the delay prejudiced the defendant. See, e.g., Mondis Tech Ltd. v. LG Elecs., Inc.,
`
`No. 15-4431 (SRC), 2023 WL 3749992, at *11–12 (D.N.J. June 1, 2023) (defendants “should not
`
`be made to compensate Plaintiff” for a decision made for plaintiff’s own benefit, awarding T-Bill
`
`rate from date of suit) (citing Crystal Semiconductor, 246 F.3d at 1362)); Kaneka Corp. v. SKC
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`Kolon PI, Inc., 198 F. Supp. 3d 1089, 1124 (C.D. Cal. 2016) (denying prejudgment interest where
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`patentee delayed filing suit for four years despite awareness that defendant was infringing,
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`“caus[ing] damages to escalate”); Roland Corp. v. inMusic Brands, Inc., No. 17-22405-CIV, 2023
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`WL 2441356, at *1 (S.D. Fla. Jan. 20, 2023) (denying plaintiff's motion to amend judgment to add
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`prejudgment interest because plaintiff’s four-year delay in filing suit “economically prejudiced”
`
`defendant in light of defendant’s expansion of its business during that time). The Federal Circuit
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`has affirmed denial of prejudgment interest where the delay was a tactical litigation decision that
`
`prejudiced defendant. See e.g., Crystal Semiconductor, 246 F.3d at 1361–62 (denying
`
`prejudgment interest due to patentee’s two-year tactical delay that prejudiced defendant).
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`5
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 12 of 24
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`
`
`A.
`
`AlmondNet is not entitled to prejudgment interest prior to filing suit due to
`its own self-serving delay.
`
`The Court should decline to award pre-suit, prejudgment interest because it punishes
`
`Amazon and rewards AlmondNet for AlmondNet’s own nine-year delay in filing suit. Amazon
`
`launched DSP in August 2012. (Trial Tr. at 396:25–397:2 (Bergman).) AlmondNet then waited
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`seven years to notify Amazon of its patents (Dkt. No. 1, ¶ 13) and delayed another two years before
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`finally filing this lawsuit. (Dkt. No. 1.) AlmondNet now seeks prejudgment interest amounting
`
`to 71.8% of the $121.95 million lump sum damages award based on calculations from nine years
`
`of actual Amazon revenues and another four years of Amazon’s future estimated revenues. (Trial
`
`Tr. at 452:14–454:21 (Bergman).) This would increase the verdict to up to $209.6 million.
`
`Courts have found prejudice and denied prejudgment interest for far shorter delays than
`
`AlmondNet’s. In Crystal Semiconductor, the Federal Circuit affirmed Judge Sparks’ denial of
`
`prejudgment interest, citing the patentee’s two-year delay in filing suit. See Crystal
`
`Semiconductor, 246 F.3d at 1361–62. During those two years, plaintiff sent letters to other
`
`companies while “building its case” against the defendant. Id. at 1362. Plaintiff offered evidence
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`that it waited to file suit because (1) it believed defendants were aware of plaintiff’s patents and
`
`(2) plaintiff was working to establish a business relationship with a third party already doing
`
`business with defendants. Id. The Federal Circuit found that “Crystal’s two year delay in
`
`initiating . . . suit caused the damages owed by [defendants] to escalate” and found there was
`
`“sufficient evidence for the district court to determine that Crystal’s delay was self-serving and
`
`resulted in prejudice to defendants.” Id.
`
`The Federal Circuit recently explained its holding in Crystal Semiconductor, emphasizing
`
`that the court there credited the defendant’s evidence that plaintiff’s delay was undue including
`
`that the “two-year delay was a ‘litigation tactic’” as part of a multi-staged litigation campaign.
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`6
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 13 of 24
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`
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`Kaufman v. Microsoft Corp., 34 F.4th 1360, 1374–75 (Fed. Cir. 2022) (quoting Crystal
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`Semiconductor, 246 F.3d at 1362). The Kaufman court distinguished those circumstances with
`
`those in its case, holding that the district court erred in denying prejudgment interest because the
`
`defendant there failed to present evidence that plaintiff’s five-year delay was “undue” (i.e., a
`
`“litigation tactic”) or that it was prejudiced. Id. at 1375 (“to show that delay was undue, a
`
`defendant must, at least generally, show that it was prejudiced”).
`
`The record shows that AlmondNet’s choice to delay filing this lawsuit nine years after
`
`Amazon launched the accused DSP was a litigation tactic similar to (but even more egregious
`
`than) what the Federal Circuit found was “undue delay” in Crystal Semiconductor.
`
`
`
`
`
`
`
` (Dkt. No. 283-4
`
`(PTX-122) at 2; PTX-146; PTX-197; Trial Tr. at 94:6–97:3 (Shkedi); id. at 473:9–475:21, 479:2–
`
`19, 480:22–482:10 (Bergman).) It sued only a single DSP-provider, Yahoo!, in March 2016.
`
`(Ware Decl. ¶ 2, Ex. 1.) AlmondNet then waited until July 2019, after its settlement agreement
`
`with Yahoo!, to leverage these agreements in a subsequent demand letter campaign against other
`
`digital advertising providers, including Amazon, Facebook, and at least 40 other companies. (See
`
`Dkt. No. 283-4 (PTX-122) at 2; Ware Decl. ¶ 3, Ex. 2.) AlmondNet then delayed two more years
`
`before filing this lawsuit. AlmondNet’s timing to file this lawsuit was a litigation tactic, which
`
`constitutes undue delay. Crystal Semiconductor, 246 F.3d at 1362; Kaufman, 34 F.4th at 1375.
`
`AlmondNet’s nine-year delay in filing this lawsuit unfairly prejudiced Amazon in several
`
`ways. First, if AlmondNet had notified Amazon of infringement soon after Amazon’s 2012 DSP
`
`launch, when AlmondNet was in a weakened financial condition, Amazon would have had greater
`
`leverage then to negotiate a license or defend against a lawsuit. Indeed, AlmondNet’s CEO
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`7
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 14 of 24
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`
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`testified that
`
` (Trial Tr. at 94:10–14 (Shkedi).)
`
`
`
`
`
` (PTX-146; Trial Tr. at 475:4–24 (Bergman).) If
`
`AlmondNet had timely notified Amazon of its infringement, Amazon could have entered into a
`
`full-term license for a similar amount or designed around the asserted patents. Instead, AlmondNet
`
`sat on its claims against Amazon while it licensed with other online advertisers, allowing damages
`
`and interest to pile up. Now AlmondNet seeks an $87.61 million windfall for its own delay.
`
`AlmondNet’s delay also “economically prejudiced” Amazon because the economic
`
`circumstances of Amazon’s DSP business changed significantly during the period of delay. See
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`Roland Corp., 2023 WL 2441356, at *1.
`
`
`
`
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` (Trial Tr. at 1050:23–1051:8 (Bakewell).) Thus, Amazon would have likely paid a much
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`lower amount around 2012 than
`
`
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` (Trial Tr. 1050:20–1051:8 (Bakewell).)
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`AlmondNet’s delay also prejudiced Amazon because AlmondNet’s damages expert relied
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`on evidence that did not exist until nearly a decade after Amazon launched its DSP to arrive at his
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`reasonable royalty calculation of $243.9M to $348.4M. He relied on documents from 2023 and
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`2024 that showed a significant increase in profits for the accused services after 2020 and used
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`these to project future profits through 2027. (PTX-225; Trial Tr. 431:1–432:13 PTX-126, Trial
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`Tr. 452:8–453:19 (Bergman).) Mr. Bergman also relied on revenue share agreements from 2020–
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`2024 from AlmondNet’s subsidiary, Intent IQ, to arrive at his 35% to 50% reasonable royalty
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`“bargaining split.” (PTX-195, PTX-211, PTX-213, PTX-215, PTX-217, PTX-220; Trial Tr.
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`448:17–450:11 (Bergman); id. at 92:18–93:5 (Shkedi).) It does not matter here that Mr. Bergman
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`applied this evidence to a 2012 hypothetical negotiation using a “Book of Wisdom” approach.
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`8
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 15 of 24
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`
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`(Trial Tr. at 402:8–15 (Bergman).) This evidence did not exist until a decade after Amazon
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`launched the accused DSP, and AlmondNet gained a tactical advantage by waiting for Amazon’s
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`DSP commercial success and Intent IQ business relationships to unfold before filing suit. Indeed,
`
`
`
`
`
` (Trial Tr. at 1106:2–6
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`(Bakewell).) But AlmondNet would not have known this if it had filed the lawsuit around 2012
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`rather than waiting nine years.
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`AlmondNet’s nine-year delay also unfairly prejudiced Amazon by “caus[ing] the damages
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`owed [by Amazon] to escalate” through the potential award prejudgment interest itself. Crystal
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`Semiconductor, 246 F.3d at 1362. At least one district court held that a “massive amount [$5.5
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`million] of potential prejudgment interest [was] prejudice enough” to deny pre-suit prejudgment
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`interest. Milwaukee Elec. Tool Corp. v. Snap-On Inc., 288 F. Supp. 3d 872, 906–7 (E.D. Wis.
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`2017). AlmondNet’s request for $87.61 million prejudgment interest on top of the jury’s damages
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`award is exponentially more “massive” than in the Milwaukee case.
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`AlmondNet’s request for prejudgment interest starting three years before the six-year
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`statute of limitations on damages further demonstrates prejudice to Amazon. Under our patent
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`laws, “no recovery shall be had for any infringement committed more than six years prior to the
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`filing of the complaint.” 35 U.S.C. § 286. Prejudgment interest, by definition, is interest on the
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`“primary or actual” portion of a damages award. Beatrice Foods Co. v. New England Printing &
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`Lithographing Co., 923 F.2d 1576, 1580 (Fed. Cir. 1991). Indeed, the Federal Circuit has
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`instructed courts to be “careful to distinguish the hypothetical negotiation date from other dates
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`that trigger infringement liability.” LaserDynamics, Inc. v. Quanta Comput., Inc., 694 F.3d 51, 67
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`(Fed. Cir. 2012).
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`9
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 16 of 24
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`
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`AlmondNet initiated this action in August 2021. (Dkt. No. 1.) The parties agreed that the
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`hypothetical negotiation for calculating a reasonable royalty would have occurred in August 2012,
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`but that the damages period began in August 2015. (See Trial Tr. at 396:25–397:2 (Bergman).) It
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`would make little sense to allow interest to accrue from before a jury could award damages because
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`the interest on zero damages would be zero. And although the Federal Circuit has yet to squarely
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`address the issue, district courts confronting the question have refused to award prejudgment
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`interest stretching beyond the six-year statutory limit. See, e.g., Imperium IP Holdings (Cayman),
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`Ltd. v. Samsung Elecs. Co., No. 4:14-cv-371, 2017 WL 1716589, at *4 (E.D. Tex. Apr. 27, 2017)
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`(prejudgment interest can only apply to actual damages portion of the judgment so plaintiff cannot
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`recover interest from before the statutory cutoff); Trustees of Boston Univ. v. Everlight Elecs. Co.,
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`187 F. Supp. 3d 306, 322–23 (D. Mass. 2016) (rejecting the argument that interest should accrue
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`from the date of the hypothetical negotiation if before the six-year damages cutoff).1
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`B.
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`Any prejudgment interest should, at most, apply the T-Bill rate.
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`AlmondNet is not entitled to any prejudgment interest. But if the Court in its discretion
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`elects to award prejudgment interest, it should award interest at the one-year T-Bill rate,
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`compounded annually, from when AlmondNet filed this lawsuit on August 27, 2021. Under this
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`analysis, the Court should award, at most, $14,485,732. (Dkt. No. 1.)
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`District courts have discretion to set the prejudgment interest rate. This Court has found
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`that “[t]he T-Bill rate is well-accepted in federal courts and is a reasonable method of placing
`
`
`1 AlmondNet’s cited cases do not help it. (See Mot. at 8–9.) In each instance, the hypothetical
`negotiation or date of first infringement fell within the six-year statutory damages period. See,
`e.g., Comcast IP Holdings I LLC v. Sprint Commc’ns Co., L.P., 850 F.3d 1302 (Fed. Cir. 2017)
`(prejudgment interest award dating to hypothetical negotiation in 2006 when complaint was filed
`in 2012); Nickson Indus., Inc. v. Rol Mfg. Co., 847 F.2d 795, 800 (Fed. Cir. 1988) (complaint filed
`in 1982 when defendant knew of patents since 1977, five years earlier); Bio-Rad Labs., Inc. v.
`Nicolet Instrument Corp., 807 F.2d 964, 967 (Fed. Cir. 1986) (infringement activity began in 1980,
`complaint filed 1981).
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`10
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`Case 6:21-cv-00898-ADA Document 304 Filed 08/13/24 Page 17 of 24
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`
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`[plaintiff] in a position of where it would have been had there been no infringement by
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`[defendant].” Jiaxing Super Lighting, 2022 WL 3371630, at *20 (Albright, J.); VLSI Tech., 2022
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`WL 1477728, at *2 (Albright, J.); accord Cornell Univ. v. Hewlett-Packard Co., No. 01-CV-1974,
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`2009 WL 1405208, at *3 (N.D.N.Y. May 15, 2009) (former Federal Circuit Chief Judge Rader,
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`sitting by designation, finding same and rejecting higher prime rate).2 The T-Bill rate aligns with
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`the purpose of § 284. “Prejudgment interest has no punitive, but only compensatory, purposes.
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`Interest compensates the patent owner for the use of its money between the date of injury and the
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`date of judgment.” Oiness v. Walgreen Co., 88 F.3d 1025, 1033 (Fed. Cir. 1996).
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`Indeed, the one-year T-Bill rate is widely accepted as the authoritative measure on
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`compensation for the use of money. Institutional and individual savers agree, which is why courts
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`nationwide—including this and other courts sitting in the Fifth Circuit and the Federal Circuit on
`
`appeal—have long calculated prejudgment interest using the T-Bill rate, particularly where a
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`prevailing plaintiff presents no evidence that it should be entitled to a higher rate.3
`
`
`2 AlmondNet’s argument for using the prime rate is unsupported. (Mot. at 3, 4, 7.) Its cited
`case, Alberti v. Klevenhagen, involved municipal bonds and did not address pre-judgment interest.
`896 F.2d 927, 938 (5th Cir. 1990). The Alberti case only references pre-judgment interest in out-
`of-circuit trademark infringement and admiralty cases where the prime rate is used in specific
`contexts not applicable here. Id. Similarly, Till v. SCS Credit Corp. addressees bankruptcy and
`does not address pre-judgment interest. 541 U.S. 465, 479 (2004). Further, Till mentions the
`Supreme Court uses the prime rate in relation to the debtor’s nonpayment risks, but requires
`adjustment of the prime rate by the bankr