Case 1:20-cv-00393-LMB-TCB Document 1398-5 Filed 07/20/22 Page 1 of 5 PageID# 34891
`Case 1:20-cv-00393-LMB-TCB Document 1398-5 Filed 07/20/22 Page 1 of 5 PagelD# 34891
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`EXHIBIT 5
`EXHIBIT 5
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`Case 1:20-cv-00393-LMB-TCB Document 1398-5 Filed 07/20/22 Page 2 of 5 PageID# 34892
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`Transcript of Ryan Sullivan, Ph.D.
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`Date: May 11, 2021
`Case: RAI Strategic Holdings, Inc. -v- Altria Client Services, LLC, et al.
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`Planet Depos
`Phone: 888.433.3767
`Email:: transcripts@planetdepos.com
`www.planetdepos.com
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`WORLDWIDE COURT REPORTING & LITIGATION TECHNOLOGY
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`Case 1:20-cv-00393-LMB-TCB Document 1398-5 Filed 07/20/22 Page 3 of 5 PageID# 34893
`Transcript of Ryan Sullivan, Ph.D.
`Conducted on May 11, 2021
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`7 (25 to 28)
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` A. I have not done a search for those
`words. I don't recall them being in there.
` I suppose one of the benefits of being
`on the Zoom is I have an electronic version, I can
`always do a -- a search, if that's helpful.
` Q. Sitting here right now, you don't recall
`the words "nexus" or "secondary considerations" of
`non-obviousness or objective -- "evidence of
`non-obviousness" being in any of your reports;
`right, sir?
` A. I think I have a view on that. I'm
`looking right now.
` I don't recall. It's going really slow.
`I'm not sure why.
` But, you know, I don't recall using the
`terms "nexus" or "secondary considerations." Yet,
`as I noted, the work that I did does bear upon
`those issues.
` Q. Your reports do not include any opinion
`that there is a nexus or there is not a nexus
`between any of the asserted claims and any
`objective evidence of non-obviousness; correct?
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`patent.
` Q. Right.
` And just so we're clear, you haven't
`performed any infringement analysis to determine
`whether any Reynolds products practices a patent
`owned by a third party; correct?
` A. For the reasons I just mentioned, that
`is correct.
` Q. And the same is true for any Nu Mark
`product; correct?
` A. Yes, that's right, I have not performed
`an independent determination of infringement.
` Q. And you're not offering any opinions on
`the enforceability or validity of the asserted
`patents; correct?
` A. Not on the enforceability and not on
`validity in terms of ultimate conclusions on
`validity.
` However, somewhat similar to what we
`were talking about earlier, I have performed work
`in analyses that can bear upon secondary
`considerations of non-obviousness.
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` Q. Your report, sir, doesn't mention
`anything about secondary consideration of
`non-obviousness; correct?
` A. I -- I disagree.
` I have research that I provided in my
`reports that bear upon those issues. I've not
`undertaken a separate analysis of secondary
`considerations. Yet, the analysis I performed
`bears upon those issues.
` Q. And you didn't discuss with any Reynolds
`technical expert any issues relating to secondary
`considerations; correct?
` A. I would not put it that way.
` They have provided me with
`understandings of contributions of technologies
`and, you know, issues surrounding alternatives and
`prior art. And those type of issues bear upon
`nexus issues as it would relate to secondary
`considerations.
` Q. So the words "nexus" and "secondary
`consideration" never appear in any of your
`reports; correct?
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` A. I have not made a separate determination
`of nexus in terms of a binary outcome, like, you
`know, meaning there is a nexus or there's not a
`nexus. Yet, as I talked about, for example, in
`Section 7 of my report, I have addressed those
`issues.
` Q. Understood.
` Let's shift gears and talk a little bit
`about your reasonable royalty opinions in the
`case, and starting with the royalty structure.
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`Okay?
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` A. Okay.
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` Q. Now, you and Mr. Meyer agree that a
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`running royalty is the economically-appropriate
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`royalty structure for each of the five asserted
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`patents; correct?
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` A. I do recall that is Mr. Meyer's opinion.
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`And I agree that a running royalty structure is
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`the most likely outcome. It is economically
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`reasonable in this case.
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` Q. Now, as a hypothetical negotiation for
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`each asserted patent, it's your opinion that the
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`Case 1:20-cv-00393-LMB-TCB Document 1398-5 Filed 07/20/22 Page 4 of 5 PageID# 34894
`Transcript of Ryan Sullivan, Ph.D.
`Conducted on May 11, 2021
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`8 (29 to 32)
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` A. Yes.
` Q. Okay. Do you agree with Mr. Meyer that
`RJRV would be the licensee at each hypothetical
`negotiation?
` Is that true?
` A. I do not recall Mr. Meyer having a
`different view on that than I do.
` As I've explained in my report, that I
`view RJRV as the licensee. And that to the extent
`RAI is involved, I do not see that being impactful
`to the hypothetical negotiations.
` Q. Now, I think it's important here, just
`to be clear -- so you said "RAI." You're
`referring to RJRV's parent company, Reynolds
`American, Incorporated; is that right?
` A. Yes.
` Q. There is also another party in this
`case, RAISH, or RAI Strategic Holdings. Is that
`your understanding, sir?
` A. Yes.
` Q. And you don't criticize Mr. Meyer --
`well, let me take a step back.
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`patent owner and RJRV would agree to a license
`that includes a running royalty rate based on net
`sales; correct?
` A. I believe that is economically
`reasonable, yes.
` Q. And a running royalty can either be
`expressed as a percentage of a net sales or a
`per-unit royalty; right?
` A. The evidence here lends itself to a
`percentage-based running royalty. Yet, one could,
`if done appropriately, think about that in terms
`of a per unit.
` Q. You expressed that -- the reasonable
`royalty for each patent in both a percentage of
`net sales as well as a per-unit royalty; correct?
` A. Yes, I have done so.
` Q. Why is a running royalty the appropriate
`structure of damages in this case, in your
`opinion?
` A. I address that in various parts of my
`report, including Section 11.4.
` In my view, it's not the structure in
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`and of itself that is determinative of the
`reasonable royalty but, rather, it's the amount of
`the royalty.
` The structure of a running royalty
`enables the royalty to scale with the use of the
`technology, or lack of use, and the benefits, or
`lack of benefits of the technology. And in my
`view, that's important.
` Q. And you and Mr. Meyer both used what's
`commonly referred to as the "hypothetical
`negotiation framework" to determine a reasonable
`royalty for each of the five patents asserted in
`this case; is that fair?
` A. Very close.
` I -- Mr. Meyer combines three of the
`patents into a single hypothetical negotiation,
`and I looked at five separate hypothetical
`negotiations.
` Q. But you and Mr. Meyer both rely on the
`hypothetical negotiation framework to determine a
`reasonable royalty for the asserted patents;
`correct?
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` In your view, is RAISH at the
`hypothetical negotiations for the asserted
`patents?
` A. I'm sorry. I missed that.
` Q. Sure.
` You testified earlier that, in your
`view, RJRV is the licensee at the hypothetical
`negotiation. And my question is: In your view,
`is RAISH included in any of the hypothetical
`negotiation?
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` A. I do not think of them as being a
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`participant to the hypothetical negotiations.
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`Yet, I also, similar to RAI, would not view that
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`to be impactful.
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` Q. So you wouldn't criticized Mr. Meyer if
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`he included RAI or RAISH at the hypothetical
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`negotiation; is that true?
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` A. Not in and of itself.
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` You know, to the extent that there's
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`implications there that are inappropriate,
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`certainly I would give those consideration. But
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`not in and of itself.
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`Case 1:20-cv-00393-LMB-TCB Document 1398-5 Filed 07/20/22 Page 5 of 5 PageID# 34895
`Transcript of Ryan Sullivan, Ph.D.
`Conducted on May 11, 2021
`325
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`82 (325 to 328)
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` any questions?
` MR. VITT: No.
` The entire transcript should be treated
` as confidential, business information under
` the protective order.
` THE VIDEOGRAPHER: Yes, sir.
` Okay. With that, this then concludes
` the deposition. The time, 8:53 p.m. Eastern
` Standard. We're going off the video record.
`
` AND FURTHER THIS DEPONENT SAITH NOT.
` SIGNATURE RIGHTS RESERVED.
`(Videotaped Deposition concluded at 8:53 p.m. EST)
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` * * * * *
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`STATE OF NORTH CAROLINA:
`COUNTY OF MECKLENBURG :
` I, April Reid, Court Reporter and Notary
`Public in and for the State of North Carolina,
`and whose commission expires March 4, 2025,
`do certify that the aforementioned appeared
`before me, was sworn by me, and was thereupon
`examined by counsel; and that the foregoing is a
`true, correct, and full transcript of the
`testimony adduced.
` I further certify that I am neither
`related to nor associated with any counsel or
`party to this proceeding, nor otherwise interested
`in the event thereof.
` Given under my hand and notarial seal in
`Charlotte, North Carolina, this 13th day of May,
`2021.
`
` _____________________________________
` April Reid, RPR, CRR, Notary Public
` State of North Carolina, County of Mecklenburg
` Notary Registration No. 20012210079
`
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