Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 1 of 21 PagelD #: 47298
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`ARENDIS.A.R.L.,
`
`Plaintiff,
`
`v.
`
`LG ELECTRONICS, INC,
`LG ELECTRONICSU.S.A., INC., and
`LG ELECTRONICS MOBILECOMM
`U.S.A., INC.,
`
`Defendants.
`
`ARENDIS.A.R.L.,
`
`Plaintiff,
`
`v.
`
`BLACKBERRY LIMITED and
`BLACKBERRY CORPORATION,
`
`Defendants.
`
`ARENDIS.A.R.L.,
`
`Plaintiff,
`
`v.
`
`MOTOROLA MOBILITY LLC
`f/k/a MOTOROLA MOBILITY,INC.,
`
`Defendant.
`
`C.A. No. 12-1595-LPS
`
`C.A. No. 12-1597-LPS
`
`C.A. No, 12-1601-LPS
`
`
`
`
`
`
`
`

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`Case 1:13-cv-00919-VAC Document 398
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`Filed 04/08/22 Page 2 of 21 PagelD #: 47299
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`ARENDIS.A.R.L.,
`
`Plaintiff,
`
`v.
`
`SONY MOBILE COMMUNICATIONS
`(USA) INC.,, fik/a SONY ERICSSON
`MOBILE COMMUNICATIONS(USA) INC.,
`SONY CORPORATION, and SONY
`CORPORATION OF AMERICA,
`
`Detendants.
`
`ARENDIS.A.R.L.,
`
`Plaintiff,
`
`v.
`
`GOOGLELLC,
`
`Defendant.
`
`ARENDIS.A.R.L.,
`
`Plaintiff,
`
`¥.
`
`OATH HOLDINGSINC, and
`OATH INC.,
`
`Defendants.
`
`C.A. No. 12-1602-LPS
`
`C.A. No. 13-919-LPS
`
`C.A. No. 13-920-LPS
`
`
`
`
`
`
`
`
`
`

`

`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 3 of 21 PagelD #: 47300
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`Neal C. Belgam and Eve H. Ormerod, SMITH, KATZENSTEIN & JENKINS LLP, Wilmington,
`DE
`Seth Ard, Beatrice Franklin, and Max Straus, SUSMAN GODFREY, LLP, New York, NY
`John Lahad, Ibituroko-Emi Lawson, Robert Travis Korman, and Brenda Adimora, SUSMAN
`GODFREY, LLP, Houston, TX
`Kalpana Srinivasan, SUSMAN GODFREY,LLP, Los Angeles, CA
`Kemper Diehl, SUSMAN GODFREY,LLP, Seattle, WA
`
`Attorneysfor Plaintiff
`
`Jeremy D. Anderson, FISH & RICHARDSONP.C., Wilmington, DE
`Steven R. Katz and Jacob Pecht, FISH & RICHARDSONP.C., Boston, MA
`R. Andrew Schwentker, FISH & RICHARDSONP.C., Washington DC
`Eda Stark, FISH & RICHARDSONP.C., Atlanta, GA
`
`Attorneysfor Defendants LG Electronics Inc., LG Electronics U.S.A., Inc., and LG
`Electronics Mobilecomm U.S.A., Inc.
`
`Kenneth L. Dorsney and Cortlan S. Hitch, MORRIS JAMES LLP, Wilmington, DE
`Brian C. Riopelle and David E. Finkelson, MCGUIREWOODSLLP, Richmond, VA
`Jason W. Cook, MCGUIREWOODSLLP, Dallas, TX
`
`Attorneysfor Defendants BlackBerry Limited and BlackBerry Corporation
`
`David E. Moore, Bindu A. Palapura, and Stephanie E. O’Byrne, POTTER ANDERSON &
`CORROONLLP, Wilmington, DE
`Robert W. Unikel, Michelle Marek Figueiredo, John Cotiguala, and Matt Lind, PAUL
`HASTINGSLLP, Chicago, IL
`Robert R. Laurenzi, PAUL HASTINGS LLP, New York, NY
`Ariell Bratton, PAUL HASTINGS LLP, San Diego, CA
`Ginger Anders, MUNGER, TOLLES & OLSON LLP, Washington, DC
`
`Attorneysfor Defendant Motorola Mobility LLCfik/a Motorola Mobility, Inc.
`
`Rodger D. Smith Il, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE
`Jeffri A. Kaminski, Justin E. Pierce, and Calvin R. Nelson, VENABLE LLP, Washington, DC
`Neha Bhat, VENABLE LLP, New York, NY
`
`Attorneysfor Defendants Sony Mobile Communications (USA) Inc. f/k/a Sony Ericsson
`Mobile Communications (USA) Inc., Sony Corporation, and Sony Corporation of USA
`
`
`
`
`
`

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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 4 of 21 PagelD #: 47301
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`David E. Moore, Bindu A. Palapura, and Stephanie E. O’Byrne, POTTER ANDERSON &
`CORROON LLP, Wilmington, DE
`Robert W. Unikel, Michelle Marek Figueiredo, John Cotiguala, and Matt Lind, PAUL
`HASTINGSLLP, Chicago, IL
`Robert R. Laurenzi and Chad J. Peterman, PAUL HASTINGS LLP, New York, NY
`Ariell Bratton, PAUL HASTINGSLLP, San Diego, CA
`Ginger Anders, MUNGER, TOLLES & OLSON LLP, Washington, DC
`
`Attorneysfor Defendant Google LLC
`
`Jack B. Blumenfeld, Brian P. Egan, and Anthony D. Raucci, MORRIS, NICHOLS, ARSHT &
`_ TUNNELL LLP, Wilmington, DE
`Frank C, Cimino Jr, Megan S. Woodworth, Jeffri A. Kaminski, Calvin R. Nelson, and Neha
`Bhat, VENABLE LLP, Washington, DC
`
`Attorneysfor Defendants Oath Holdings Inc. and Oath Inc.
`
`
`MEMORANDUM OPINION
`
`
`
`
`
`
`
`
`
`REDACTED PUBLIC VERSION (ISSUED April 8, 2022)
`March 31, 2022
`Wilmington, Delaware
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`

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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 5 of 21 PagelD #: 47302
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`Tous P. des
`
`STARK,U.S. Circuit Judge:
`
`On November 29, 2012 and May 22, 2013, Plaintiff Arendi S.A.R.L.(“Plaintiffor
`
`“Arendi”) initiated 10 patent infringement cases against a series of defendants (“Defendants”).
`
`These cases and the corresponding defendant(s) in each case are listed below:
`
`e CA. No. 12-1595 (the “LG Action”): LG Electronics Inc., LG Electronics U.S.A.,Inc.,
`and LG Electronics Mobilecomm U.S.A., Inc. (collectively, “LG”);
`
`e C.A, No. 12-1596 (the “Apple Action”): Apple Inc. (“Apple”);
`
`e CA. No. 12-1597 (the “BlackBerry Action”): BlackBerry Limited and BlackBerry
`Corporation (collectively, “BlackBerry”);
`
`e C.A.No. 12-1598 (the “Samsung Action”): Samsung Electronics Co. Ltd., Samsung
`Electronics America Inc., and Samsung Telecommunications America LLC (collectively,
`“Satnsung”’);
`
`e C.A. No. 12-1599 (the “Microsoft Mobile Action”): Microsoft Mobile, Inc, (“Microsoft
`Mobile”);
`
`® C.A. No. 12-1600 (the “HTC Action”): HTC Corporation (“HTC”),
`
`e C.A. No. 12-1601 (the “Motorola Action”): Motorola Mobility LLC f/k/a Motorola
`Mobility, Inc. (“Motorola”);
`
`
`
`* C.A.No, 12-1602 (the “Sony Action”): Sony Mobile Communications (USA)Inc. f/k/a
`Sony Ericsson Mobile Communications (USA)Inc., Sony Corporation, and Sony
`Corporation of USA (collectively, “Sony”);
`
`¢ CA. No. 13-919 (the “Google Action”): Google LLC (“Google”);
`
`e C.A. No. 13-920 (the “Oath Action”): Oath Holdings Inc. and Oath Ine.(collectively,
`“Oath”).
`
`Arendi asserted one or moreofthe following five patents against each Defendant: U.S.
`
`Patent Nos. 6,323,853 (the “’853 patent”), 7,496,854 (the “"854 patent”), 7,917,843 (the "843
`
`patent”), 7,921,356 (the “’356 patent”), and 8,306,993 (the “’993 patent”). These patents are
`
`entitled “method, system and computer readable medium for addressing handling from”either “a
`
`computer program”or “an operating system.”
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`

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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 6 of 21 PagelD #: 47303
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`These cases were stayed between 2014 and 2018,as the parties engaged in multiple infer
`
`partes review (“IPR”) proceedings before the Patent Trial and Appeal Board (“PTAB”). After
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`these IPR proceedings and the appeals from them concluded, the only remaining patent asserted
`
`in any ofthe cases is the ’843 patent.'
`
`The Apple Action, the Samsung Action, and the Microsoft Mobile Action havesettled.
`
`(See C.A. No. 12-1596 D1. 421; C.A. No. 12-1598 D.L. 103; C.A. No. 12-1599 D.I. 204) The
`
`HTC Actionis stayed pending the outcomeofthe Google Action. (See C.A. No. 12-1600 D.I.
`
`195 at 4)
`
`Pending before the Court are a total of 36 motionsfiled by the parties in the six
`
`remaining active,cases, consisting of 21 motions to exclude expert testimony (“Daubert
`
`motions”); 14 motions for summary judgment; and a motion for leaveto file supplemental
`
`infringementcontentions, re-open discovery, and file a supplemental brief. (C.A. No. 12-1595
`
`D.I. 256, 260, 263, 266, 268, 270, 333; C.A. No. 12-1597 D.I. 190, 193, 195, 200, 203, 207; C.A.
`
`No. 12-1601 DL. 265, 268, 271, 277, 279, 282; C.A. No. 12-1602 D.L 223, 226, 230, 231, 236,
`
`C.A. No. 13-919 DI. 269, 272, 275, 281, 283, 286; C.A. No. 13-920 D.L. 233, 236, 238, 240,
`
`241, 246)
`
`The Court has considered the voluminous briefs and other materials submitted by the
`
`parties in connection with this large number of motions. The Court also held a consolidated
`
`hearing on July 29, 2021, in which the Court heard oral argument on the pending motionsin all
`
`six cases. (C.A. No. 12-1595 DI. 346; C.A. No. 12-1597 D.L. 271; C.A. No. 12-1601 D.I. 378;
`
`C.A. No, 12-1602 D.I. 294; C.A. No. 13-919 D.E. 385; C.A. No. 13-920 D.I. 319) (Tr.”)
`
`! The details of these IPR proceedingsand their respective outcomes are documentedin a joint
`status report filed on August 6, 2018, docketed in each of the cases.
`(See, e.g., C.A. No. 12-1595
`D.L. 81)
`
`
`
`
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`

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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 7 of 21 PagelD #: 47304
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`This memorandum opinion will address the following 15 motions:
`
`Daubert motions:
`
`« Arendi’s motion to exclude portions of Dr. Thomas Vander Veen’s expert report
`(C.A. No. 12-1595 D.I. 268)
`
`* Arendi’s motion to exclude portions of Ms. Michele Riley’s expert report (C.A. No.
`13-920 D.I. 238)
`
`« Defendants’ motions to excludeopinions and testimony of Dr, M. Laurentius Marais
`(C.A. No, 12-1595D.L 266; C.A. No. 12-1597 D.I. 200; C.A..No. 12-1601 DE. 279;
`C.A. No, 12-1602 D.1 230; C.A. No. 13-919 D.L 283; C.A. No, 13-920 D.E. 241)
`» Defendants’ motions to exclude testimony ofMr. Roy Weinstein (C.A. No. 12-1595
`D.I. 270; C.A. No. 12-1597 D.I. 203; C.A. No. 12-1601 D.I. 282; C.A. No, 12-1602
`D.I. 236; C.A. No. 13-919 D.L 286; C.A, No. 13-920 D1. 246)
`Motion forsummary judgment:
`~
`|
`« BlackBerry’s motion for summary judgmentof no pre-suit damages (C.A. No.12-
`1597 D.i. 207).
`
`lL.
`
`LEGAL STANDARDS
`
`A.
`
`Daubert AndFederal Rule OfEvidence 702
`
`In Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993), the Supreme Court
`
`explained that Federal Rule of Evidence 702 creates “a gatekeepingrole for the [trial] judge” in
`
`order to “ensur[e] that an.expert’s testimonyboth rests on a reliable foundation and is relevant to
`
`the task at band.” The rule requires that expert testimony “help the trier of fact to understand the
`evidence orto determine a fact in issue.” Fed. R. Evid. 702(a). Expert testimony is admissible
`only if“the testimony is.based on sufficient factsor data,” “the testimony is the product of
`reliable principles and methods,” and “the expert has reliably applied the principles and methods
`to the facts ofthe case.” Fed. R. Evid. 702(b)-(d). There are three distinct requirements for
`
`admissible expert testimony: (1) the expert must be qualified; (2) the opinion must be reliable;
`
`and (3) the expert’s opinion mustrelate to the facts. See generally Eleock v. Kmart Corp., 233
`
`
`
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`

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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 8 of 21 PagelD #: 47305
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`F.3d 734, 741-46 (3d Cir. 2000). Rule 702 embodies a “liberal policy of admissibility.” Pineda
`
`y. Ford Motor Co., 520 F.3d 237, 243 (3d Cir. 2008). Motions to exclude evidence are
`committed to the Court’s discretion. See In re Paoli R. R. YardPCB Litig., 35 F.3d 717, 749 (3d
`
`Cir, 1994).
`
`B.
`
`Summary JudgmentAnd Federal Rule Of Civil Procedure 36
`
`“The court shall grant summary judgmentif the movant showsthat there is no genuine
`dispute as to any material fact and the movantis entitled to judgmentas a matter oflaw.” Fed.
`
`R.Civ. P. 56(a). The moving party bears.the burden of demonstrating the. absence of a genuine
`
`.
`
`issue ofmaterial fact. See Matsushita Elec. Indus. Ca., Ltd. v. ZenithRadio Corp., 475 US. $74,
`586 n.10-(1986). An assertion thata fact cannot be — or, alternatively, is ~genuinely disputed —
`must be supportedeitherby citing to“particularparts ofmaterials inthe record, including
`depositions, documents,electronically stored information,affidavits or declarations,stipulations
`
`(including those madefor the purposes of the motion only),admissions, interrogatory answers,
`
`or other materials,”or by “showing that the materials cited do not establish the absence or
`
`presence of a genuine dispute,or thatan adverse party cannot produce admissible evidence to
`
`support the fact.” Fed. R. Civ. P. 56(c)(1)(A) & (B). Ifthe moving party has carriedits burden,
`the nonmovantmust then “comeforwardwith specific facts showingthatthere isa genuine issue
`for trial.” Matsushita, 475 U.S. at 587 (internal quotation marks and emphasis omitted). The
`Court will “draw all reasonable inferencesin favor ofthe nonmevingparty, and it may not make
`
`credibility determinations or weighthe evidence.” Reeves v. Sanderson Plumbing Prods., Inc.,
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`530 U.S. 133, 150: (2000).
`
`To defeat a motion for summary judgment, the non-moving party must “do more than
`
`simply show that there is some metaphysical doubt as to the material facts.” Matsushita, 475
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`

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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 9 of 21 PagelD #: 47306
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`U.S.at 586; see also Podohnik v, U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir, 2005) (stating
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`party opposing summary judgment “mustpresent more than just bare assertions, conclusory
`
`allegations or suspicions to show the existence of a genuine issue”) (internal quotation marks
`
`omitted). However, the “mere existence of some alleged factual dispute between the parties will
`
`not defeat an otherwise properly supported motion for summary judgment,” and a factual dispute
`
`is genuine only where “the evidenceis such that a reasonable jury could return a verdictfor the
`
`nonmoving party.” Anderson y. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). “If the
`
`evidence is merely colorable,or is not significantly probative, summary judgment may be
`
`granted.” Jd. at 249-50 (internalcitations omitted); see also Celotex Corp. v. Catrett, 477 U.S.
`
`317, 322 (1986) (stating entryof summary judgment is mandated “against a party who fails to
`
`make a showing sufficient to establish the existence of an element essential to that party’s case,
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`and on which that party will bear the burden ofproofat trial”), Thus, the “mere existence of a
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`scintilla of evidence” in support of the non-moving party’s position is insufficient to defeat a
`
`motion for summary judgment; there must be “evidence on which the jury could reasonably
`
`find” for the non-moving party. Anderson, 477 U.S. at 252.
`
`II.
`
`DISCUSSION
`
`A.
`
`Daubert Motions
`
`1.
`
`Vander Veen
`
`Arendi seeks to exclude Dr. Vander Veen’s royalty rate opinionsthat rely on three LG
`
`licenses. Arendi contends that Dr. Vander Veen’s opinions fail to provide “any reliable evidence
`
`or analysis that ties” the licensed technologies to the technology claimed in the °843 patent, and
`
`that Dr. Vander Veen’s opinions on technological comparability are “contradicted by the
`
`testimony of LG’s own corporate representative.” (C.A. No. 12-1595 D.I. 273 at 3-6)
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`
`
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`

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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 10 of 21 PagelD #: 47307
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`This portion of Arendi’s motion will be denied. The Court agrees with LG that Dr.
`
`Vander Veen’s expert report adequately accountsfor the similarities and differences between the
`
`technologies covered underthe three LG licenses and Arendi’s technology at issue in this case.
`
`For example,in considering the{J agreement, Dr. Vander Veen opinesthat:
`
`
`
`Ud. DL 275 Ex. 147) Dr.Vander Veen then concludes thata
`
`SS (12) tn his report, Dr. Vander Veen alsoincludes
`similar analyses for the other two challenged agreements:SIs
`MS (See, ¢.c., ia. 19 48-53)
`Dr.Vander Veen’s consideration ofthethree licenses in his royalty rate analysis is not
`unreliable. Arendi’s. challenges to Dr. Vander Veen’s comparability analysis, including those
`
`with respect to the purported inconsistency between Dr. Vander Veen’s opinions and the
`testimony ofLG’s corporate representative, go to the weight thefactfinder might choose to
`
`accord these opinions; they do not go to their admissibility.
`
`Arendi also seeks to exclude Dr. Vander Veen’s opinions regarding non-infringing
`
`alternatives, contending that the opinions lack “evidence to support the proposition that LG had
`
`the know-how and experience to implement LG’s alleged non-infringing alternatives.” (/d. D.I.
`
`273 at 7)
`
`

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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 11 of 21 PagelD #: 47308
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`This portion of Arendi’s motion will also be denied. Dr. Vander Veen properly
`
`considered his discussions with Dr. Rosing, LG’s retained technical expert, in forming his own
`
`opinions concerningthe availability of non-infringing alternatives. (See id. D.I. 293 at 16; see
`
`also id, D.I. 275 Ex. | 9959 & n.139) Arendi does not seek to exclude Dr. Rosing’s opinions as
`
`unreliable? Dr. Vander Veen’s opinions regarding non-infringing alternatives are sufficiently
`
`grounded in a reliable foundation and, thus, will not be excluded.
`
`2.
`
`Riley
`
`Arendi seeks to exclude portions of Ms. Riley’s opinions relying on seven Yahoo licenses
`
`and theMM license. (See C.A. No. 13-920 DI. 239 at 1) Arendi contendsthat
`
`these licenses are not technologically comparable to the technology disclosed in the "843 patent.?
`
`(Id. at 3-5) Oath acknowledgesthat “Ms. Riley in fact admits that she did not perform a
`
`technical comparability analysis” (Jd D.I. 271 at 5), but insists that no such analysis is necessary
`
`because “Ms. Riley neither relies on the Yahoo Agreements to prove the reasonable royalty rate
`
`and damages that she determines, nor associates the rates or damagesin the prior Yahoo
`
`Agreements to the hypothetical negotiation between Arendi and Oath.” (/d. at 3) Oath further
`
`asserts that “Ms. Riley’s discussion of the Yahoo Agreements serves neither to ‘check’ her
`
`reasonable royaltyanalysis, .. . nor to ‘confirm’ herroyalty rate determination.” (/d.)
`
`The Court will grant Arendi’s motion and exclude Ms. Riley’s opinions that rely on the
`
`eight licenses at issue. Oath’s attempt at distancing these licenses from Ms. Riley’s royalty rate
`
`2 Although Arendi contends that Dr. Rosing “cites no one but herself’ (C.A. No. 12-1595 D.L.
`273 at 7), in fact she refers explicitly to a conversation with an LG employee (See id, D.I. 275
`Ex. 4€257).
`
`3 For the Xobni-MetricStream license, Arendi additionally observes that the license “does not
`involve either party or the patent in suit.” (C.A, No. 13-920 D.1. 239 at 1)
`
`7
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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 12 of 21 PagelD #: 47309
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`
`
`|
`
`ne
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`analysis is belied by Ms. Riley’s expert report in which, as correctly pointedout by Arendi (see
`
`id. D.1. 298 at 5-10), she cites to these licenses as, for example, providing “a range of reference
`
`points” and “an appropriate framework from which to begin to conducta Georgia-Pacific
`
`analysis.” (Id. D.I. 252 Ex. 14179) Also, contrary to Oath’s representation, Ms. Riley appears
`
`to rely on these licenses to “check” and “confirm”her royalty rate determination. (See id.
`
`167, 222) Under these circumstances, Ms. Riley’s admittedfailure to account forthe
`
`technological comparability of the eight licenses at issue precludes her from relying on them as.
`evidence to support her reasonable royalty rate analysis.* See, ¢.g., BiscottiInc. y. Microsoft
`Corp., 2017 WL 2607882,at *3 (E.D. Tex. May 25, 2017) (“[A] complete failure to provide any
`analysis regarding technological comparability warrants exclusion.”).
`—
`3.
`Marais
`|
`All Defendantsseek to exclude Dr. Marais’ opinions regarding the value ofthe “patented
`
`ability” to consumers, contending theopinions are “highly misleading and unduly prejudicial”
`
`and “do not — and cannot — flow from” the survey conducted by Dr. Marais and Dr. Wecker.
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`(C.A. No. 12-1595 D.L267 at 1-2) Defendants contend that Dr. Marais’ opinions would not
`
`assist the jury in assessing the value ofthe claimed invention of the ’843 patent because “the
`
`survey is not adequately tied to the asserted claims.” (/d. at 8) In Defendanis’ view, since the
`
`survey only asked consumers about consumerfacing limitations — and not “under the hood”
`
`limitations, which are also part of what the asserted claims are directed to — the purported
`
`“consumereffect” tested by the survey “may be created with or withoutthe claimed invention;”
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`4 Oath’s justifications for Ms. Riley’s use ofthe licenses are unpersuasive. The facts that these
`licenses were requested and produced during discovery, and that Arendi’s expert, Mr. Weinstein,
`discussed these licenses in his expert report (see C.A. No. 13-920 D.I. 271 at 4-5), do not open
`the door to Ms. Riley using these licenses in the way she does in her expert report.
`
`8
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`

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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 13 of 21 PagelD #: 47310
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`thus, “the alleged ‘patented ability’ described in the survey is not a proxy for the claimed
`
`invention.” (/d. at 10)
`
`Arendi counters that the purported defects of Dr. Marais’ opinions are issues relating to
`
`the weight, and not admissibility, of these opinions, because (amongother things) the survey
`
`“identifies the specific benefits of the invention.” (/d. D.1. 297 at 1) Arendi also contendsthat
`
`Defendants provide no authority to support the proposition that a survey is unreliable just
`
`because it does not ask respondents about an “under the hood”claim limitation “that is not part
`
`of the consumer experience.” (/d. at 5)
`
`Forall Defendants other than BlackBerry,’ the Court will deny Defendants’ motion and
`will not exclude Dr. Marais’ opinions. Defendants do not dispute that the survey conducted by
`Dr. Marais and Dr. Wecker captures the consumerfacing features of the asserted claims, and Dr.
`
`Marais explained that the omission from the survey of the “underthe hocd”claim limitations
`
`was because “something the consumer was wholly unaware ofcould not be a matter of
`
`importance to the consumer” and “consumers do not generally know about the software inside
`
`their smartphone that makes features work.” (/d. D.I. 269 Ex. B at 48-49) In the Court’s view,
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`the survey is sufficiently tied to the claimed invention of the ’843 patent, and Dr. Maraisis
`
`justified to rely on the survey in forming his consumervaluation opinions.
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`The scope of “patented ability,” an issue that is fiercely contested by Defendants, appears
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`to be fertile ground for cross-examination, which the jury will be permitted to evaluateafterit
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`hears evidence about the status of prior art and the availability of non-infringing alternatives.
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`The Court is not persuaded by Defendants’ contention that “[t]o survive Daubert, Arendi would
`
`5 BlackBerry additionally contends that the survey and Dr. Marais’ opinions fail to address
`“BlackBerry, BlackBerry products, BlackBerry customers, or BlackBerry operating systems.”
`(C.A. No, 12-1595 D.1. 267 at 12)
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`|
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`have to show, at a minimum,that the claimed invention includingall the “under the hood’
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`limitations was the only way to producethe user-facing features tested in the survey.” (Ud D.I1.
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`267 at 11) The cases relied on by Defendants concern infringement surveys, where the courts
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`excluded testimony of survey experts because “there [was] no evidence that the survey
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`respondents used [the accused product] in a manner that necessarily infringe(d] the claimed
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`methods.” Parallel Network Licensing, LLC v. Microsoft Corp., 777 F. App’x 489, 493 (Fed.
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`Cir. 2019); see also Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1326 (Fed. Cir. 2009)
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`(finding district court erred in excluding survey that tested use of accused device that “would
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`necessarily infringe”). Defendants cite no authority to support the notion that consumer
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`valuation opinions must meetthe samecriteria when they are related to damages.®
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`Defendants’ suggestion that “[t]he survey should be excluded at least because Arendi
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`concedes that it serves no purposein this case” (C.A. No. 12-1595 D.I. 317 at 7) misrepresents
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`Arendi’s position. Arendi has stated that the survey serves “as a useful benchmark” for Mr.
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`Weinstein’s damages opinions. (/d. D.1. 297 at 3) The Court finds no meritoriousbasis for
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`excluding Dr. Marais’ opinions in al] Defendants’ cases.
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`The one exception is the BlackBerry Action. BlackBerry’s Daubert motion with respect
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`to Dr. Marais will be granted. Arendi agrees that the survey does not include BlackBerry
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`products, consumers, or operating systems. It requests that the Court nonetheless deny
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`BlackBerry’s motion, arguing “{b]ecause Dr. Marais has offered no opinions with respect to
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`® Unlike Fractus, S.A. v. Samsung, 2011 WL 7563820,at *1 (E.D. Tex. Apr. 29, 2011), in which
`the patent-in-suit claimed “one type of internal antenna that purportedly provides advantages
`such as multiband functionality and reduced size,” and the survey at issue “was intended to
`determine the relative importance of internal antennas in cell phones” compared to external
`antennas — and, hence, failed to “measure how consumers value the purported advantages
`provided by [the patentee’s] technology,” here the survey ignored any features of the claims not
`affecting consumer experience.
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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 15 of 21 PagelD #: 47312
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`BlackBerry, there is nothing to exclude.” (/d. at 9 n.9) The Court agrees with BlackBerry,
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`however, that because Arendi has neither explicitly withdrawn Dr. Marais’ opinions from the
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`BlackBerry Action norarticulated their relevance in that action, the Court should (and will) enter
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`an order to exclude them.
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`4,
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`Weinstein
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`All Defendants seek to exclude Mr. Weinstein’s royalty rate opinions because his per-
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`unit rate calculation for the 2011 settlement agreement between Arendi and Microsoft
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`Corporation (“Microsoft”) relies on “unsupported and unreliable sales information for Microsoft
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`products”(id, D.I. 272 at 10-13) and he applied an arbitrary 4X multiplier to the royalty rate to
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`accountforlitigation risk (see id. at 13-16).’ In response, Arendi contends that Mr. Weinstein’s
`reliance on Mr. Hedloy’s estimate offutureMicrosoft unit sales is reasonable (see id. D.I. 295 at
`8-12) and thathis litigation risk adjustments are “sufficiently tied to the facts” of the cases (id. at
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`12-17).
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`The Court will not exclude Mr. Weinstein’s opinions.
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`With respectto royalty rate, as Arendi correctly points out,it is appropriate for damages
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`experts to “use sales projections to calculate a reasonable royalty when a license agreement
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`would bestructured as a lump sum payment.” (/d. at 9) The fact that a negotiating party “did
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`not subsequently meet those projectionsis irrelevantto [that party’s] state of mindat the time of
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`the hypothetical negotiation.” Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d
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`1371, 1385 (Fed. Cir. 2001). Thus, in forming his reasonable royalty opinions, Mr. Weinstein
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`reasonably relied on Mr. Hedloy’s projected sales unit numberat the time of licensing. The
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`7 To the extent Defendants argue “Mr. Weinstein admittedly ignored several other obvious
`factors from his analysis” (C.A. No. 12-1595 D.I. 272 at 6 n.10), these purported deficiencies go
`to the weight, and not the admissibility, to be accorded to Mr. Weinstein’s opinions.
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`purported “contradiction” that Mr. Hedloy did not “know Microsoft’s actual sales numbersas it
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`related to the accused products” (C.A. No. 12-1595 D.L 272 at 11) does not render Mr.
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`Weinstein’s opinions unreliable. See Interactive Pictures, 274 F.3d at 1385 (finding that
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`difference between projected sales and actualsales illustrates “element of approximation and
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`uncertainty inherent in future projections”) (intemal quotation marks omitted). Mr. Weinstein’s
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`alleged failure to corroborate Mr. Hedloy’s projected sales numbers with contemporaneous
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`documents (see C.A. No. 12-1595 D.I. 272 at 12) goes to the weight to be accorded to Mr.
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`Weinstein’s opinions, not their admissibility,
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`The Court agrees with Arendi that Mr. Weinstein’s litigation risk adjustment (4X
`multiplier) is “tied .
`.
`. to the facts ofArendi’s litigation history.” (id. D.I. 295 at 12) Royalty
`rates may be adjusted upwardly to reflect the uncertainty oflitigation. See, e.g., Saint Lawrence
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`Commce’ns LLC v. ZTE Corp., 2017 WL 679623, at *2 (E.D. Tex. Feb. 21, 2017) (finding that
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`“experts may increase royalty rates derived from prior licenses to account for discounts
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`attributable to litigation risks and costs”); Robocast, Inc. v. Microsoft Corp., 2014 WL 202399, at
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`*3 (D. Del. Jan. 16, 2014) (noting it may be proper “to adjust the reasonable royalty upwards”
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`due to uncertainty); see also generally Spectralytics, Inc. v. Cordis Corp., 649 F.3d 1336, 1347
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`(Fed. Cir. 2011) (affirming award of higher royalty rate based on, amongotherthings,litigation-
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`risk-discountreflected in prior asset sale), abrogated on other grounds by Halo Elecs., Inc.v.
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`Pulse Elecs., Inc., 579 U.S. 93 (2016). Mr. Weinstein has sufficiently accounted for the facts
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`specific to each of the settlement agreements he considered in his royalty rate opinions and
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`adjusted the rates accordingly.
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`(See C.A. No. 12-1595 D.L 295 at 14-15; see also id. DI. 271
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`Ex. A ff] 60-68) Thus, contrary to Defendants’ contention, Mr. Weinstein’s application ofthe
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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 17 of 21 PagelD #: 47314
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`4X multiplier does not constitute anarbitrary “rule of thumb”(or something similar to it) devoid
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`of factual basis.
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`B.
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`BlackBerry’s Motion For Summary Judgment Of No Pre-Suit Damages
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`BlackBerry contends that Arendiis not entitled to any pre-suit damages becauseit has
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`failed to comply with the marking requirement under 35 U.S.C. § 287. (See C.A. No. 12-1597
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`D.I. 208 at 1) “Pursuant to 35 U.S.C. § 287(a), a patentee who makesorsells a patented article
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`must mark his articles or notify infringers of his patent in order to recover damages.” Arctic Cat
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`Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350, 1365 (Fed. Cir. 2017) (“Aretie Cat
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`r’). In the eventoffailure to mark, “no damages shall be recovered by the patentee in any action
`for infringement, except on proofthat the infringer was notified ofthe infringement and
`continued to infringe thereafter, in which event damages may be recovered only for infringement
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`occurring after such notice.” 35 U.S.C. § 287(a). The burden of proving compliance with the
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`marking requirement“is and at all times remains on the patentee.” Arctic Cat J, 876 F.3d at
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`1367. “[A]n alleged infringer who challenges the patentee’s compliance with § 287 bears an
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`initial burden of production to articulate the products it believes are unmarked ‘patented articles’
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`subject to § 287.” Id. at 1368. The Federal Circuit has characterized this burden of production
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`as “a low bar.” Jd. “Oncethe alleged infringer meets its burden of production, .
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`.
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`. the patentee
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`bears the burden to prove the products identified do not practice the patented invention.” Jd
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`According to BlackBerry, Arendi sued Microsoft in February 2009 (Arendi S.A.R.L. v.
`Microsoft Corp., C.A. No. 09-119-LPS (D. Del.)), and explicitly alleged in its 2011 infringement
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`contentions that Microsoft’s “Additional Actions” and “Smart Tags” features in the Microsoft
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`Office suite infringed the °843 patent. (See C.A. No. 12-1597 D.1. 208 at 3-4) In November
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`2011, Arendi and Microsoft entered into a settlement and license agreement(the “Microsoft
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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 18 of 21 PagelD #: 47315
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`Agreement”), in which Arendi granted Microsoft a license to[ES
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`RN Se ic.) BlaciBery insists that, due to
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`noncompliance with the marking requirement, Arendiis not entitled to any damages accruing
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`before it provided actual notice to BlackBerry, which was November 29, 2012, when Arendi
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`filed the complaint in the BlackBerry Action. (See id. at 3)
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`In response, Arendi contends that summary judgmentofno pre-suit damagesis
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`unwarranted because there is a genuine dispute of material facts as to whether the products sold
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`under the Microsoft Agreementpracticed the 843 patent.
`(Id. D,L 233 at 19-22) Arendi further
`argues that “[e]ven ifa marking obligation existed, it did not arise until November 28,2011,” the
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`date of the Microsoft Agreement; thus, damagesarestill available to Arendi before November
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`28, 2081. Ud at 22-24)
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`For the reasons and to the extent explained below, BlackBerry’s motion will be granted
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`in part and deniedin part.
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`BlackBerry hassatisfied its initial “low bar” burden of production. “The alleged
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`infringer need only put the patentee on notice that he or his authorized licensees sold specific
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`unmarked products whichthe alleged infringer believes practice the patent.” Arctic Cat I, 876
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`F.3d at 1368. BlackBerry provided an email notice to Arendi in August 2019, stating that the
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`Microsoft Office products were not marked and had continuedto be sold after the execution of
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`the Microsoft Agreement. (See C.A. No. 12-1597 D.I. 208 at 4; see also id. D.I. 209 Ex. 9)
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`The burden then shifted to Arendi to prove that the products identified by BlackBerry do
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`not practice the ’843 patent. Arendi has failed to meet this burden. The only record evidence
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`Arendi points to is the Microsoft Agreement,SS
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`Case 1:13-cv-00919-VAC Document 398 Filed 04/08/22 Page 19 of 21 PagelD #: 47316
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`ST:
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`conclusory statement denying infringement made by an accused infringer, with no evidentiary
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`support, does not provide a sufficient basis from which a reasonable jury could concludethat the
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`accused Microsoft products do notpractice the °843 patent. See Finjan, Inc. v. Juniper
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`Networks, Inc., 387 F. Supp. 3d 1004, 1017 (N.D. Cal. 2019) (“[W]hether a licensee does not
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`believe it is practicing t