Judge Alsup not only granted Google's motion, he appeared to level a good bit of criticism at Oracle's counsel, calling the attempt to introduce the Serwin report a "highly unusual maneuver." Judge Alsup also said that "in twelve years of using this form of case management scheduling order, this is the first time anyone has suggested [that reply reports were not explicitly limited to the authors of the opening reports]." He went on to say: "Oracle’s argument that Google has not been prejudiced is meritless. As explained above, the practice urged by Oracle is inherently unfair and frustrates important case-management objectives." Turn out the lights, the Serwin party is over.

The other issue disposed of by Judge Alsup was Google's motion for partial summary judgment limiting damages because of Oracle's failure to mark their (and their licensee's) products for patents. In a second order issued yesterday, Judge Alsup ruled that the issue was to be deferred to trial. (621 [PDF; Text]) The reasons for denying the motion at this time were that Google failed to establish that Oracle and its licensees never marked any devices embodying the patents, that the devices alleged to require marking actually practiced any of the claims asserted by Oracle against Google, or that those devices had been offered for sale in the U.S. prior to the July 20, 2010 date.

Because the judge's decision in this instance was without prejudice, Google may attempt to prove these "facts" at trial and re-assert this defense at that time. Certainly not the worst possible outcome for Google.

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Docket

621 – Filed and Effective: 11/15/2011
ORDER
Document Text: ORDER DENYING MOTION FOR PARTIAL SUMMARY JUDGMENT LIMITING DAMAGES BASED ON PATENT-MARKING STATUTE by Judge Alsup denying 552 Motion for Summary Judgment (whalc1, COURT STAFF) (Filed on 11/15/2011) (Entered: 11/15/2011)

622 – Filed and Effective: 11/15/2011
ORDER
Document Text: ORDER STRIKING IMPROPER REPLY EXPERT REPORTS by Judge Alsup granting 554 Motion to Strike (whalc1, COURT STAFF) (Filed on 11/15/2011) (Entered: 11/15/2011)

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Documents

621

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA

ORACLE AMERICA, INC.,
Plaintiff,
v.
GOOGLE INC.,
Defendant.

No. C 10-03561 WHA

ORDER DENYING
MOTION FOR PARTIAL
SUMMARY JUDGMENT
LIMITING DAMAGES
BASED ON PATENTMARKING
STATUTE

_______________________________

INTRODUCTION

In this patent and copyright infringement action, defendant moves for partial summary judgment limiting damages for infringement of certain patents based on plaintiff’s supposed failure to mark patented products. For the reasons stated below, the motion is DENIED.

STATEMENT

The facts of this action have been set forth in previous orders (see Dkt. Nos. 137, 230, 433). The instant motion concerns five of the six asserted patents that remain in the action. Defendant Google Inc. now argues that it is not liable to plaintiff Oracle America, Inc. for any alleged infringement of those patents that took place before July 20, 2010 — the date when Oracle attorneys met with Google attorneys and accused Google of patent infringement (Van Nest Exh. D at ¶ 5). According to Google, Oracle may not collect damages for infringement that pre-dated that meeting, because Oracle failed to mark products that practiced the relevant patents. Oracle opposes the motion. This order follows expedited briefing (see Dkt. No. 529).

ANALYSIS

Summary judgment is proper when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FRCP 56(a). In this analysis, all reasonable inferences must be drawn in the light most favorable to the non-moving party. Johnson v. Racnho Santiago Cmty. Coll. Dist., 623 F.3d 1011, 1018 (9th Cir. 2010). Where the party moving for summary judgment would bear the burden of proof at trial, that party bears the initial burden of producing evidence that would entitle it to a directed verdict if uncontroverted at trial. See C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000). If the moving party does not satisfy its initial burden, then the non-moving party has no obligation to produce anything and summary judgment must be denied. Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102–03 (9th Cir. 2000).

Here, Google raises a defense based on the patent-marking statute. That statute, 28 U.S.C. 287(a), provides (emphasis added):

Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or by fixing thereon the word “patent” or the abbreviation “pat.” together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

Thus, in order to limit patent-infringement damages to infringement that post-dated actual notice, Google must show that Oracle failed to mark patented articles offered for sale, sold, or imported into the United States before July 20, 2010. See Texas Digital Sys., Inc. v. Telegenix, Inc., 308 F.3d 1193, 1212–20 (Fed. Cir. 2002) (explaining that the actual-notice requirement of Section 287 applies only after it is triggered by a patentee’s opportunity and failure to mark

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patented articles in commerce). Google has made no such showing. Google therefore is not entitled to partial summary judgment on this issue.

Google’s motion explicitly rests on only “four undisputed facts” (Br. 2):

1. Oracle alleges that Google infringed apparatus claims in the patents-at-issue.
2. Oracle has identified many products that, it contends, practice the asserted claims of the patents-at-issue.
3. Oracle and its licensees never marked any articles that practice the patents-at-issue.
4. Oracle first gave Google actual notice of Oracle’s specific infringement claims on July 20, 2010.

These facts and the evidentiary record presented by Google do not establish that Oracle failed to mark patented articles offered for sale, sold, or imported into the United States before July 20, 2010.

Google supports fact two only by citing Oracle’s second supplemental disclosure of asserted claims and infringement contentions. Those contentions listed various “instrumentalities” which Oracle claimed to “practice the asserted claims” of the asserted patents. That is all. The contentions did not state that any of the listed “instrumentalities” had been offered for sale, sold, or imported into the United States before July 20, 2010, or indeed that any of them even existed or practiced the asserted claims before that time.

The date of the contentions themselves was not included in the excerpt Google provided, nor in the declaration authenticating the excerpt (Van Nest Decl. ¶ 3 and Exh. B). Incidentally, Oracle’s second supplemental disclosure of asserted claims and infringement contentions was served in April 2011 (see Dkt. No. 464 at 2). There were 132 asserted claims from seven patents in play at that time (see Dkt. No. 137 at 4). Oracle now intends to try 26 claims from six patents to the jury (Dkt. No. 471 at 6). The April 2011 contentions did not identify which of the 132 patent claims then asserted supposedly were practiced by particular Oracle products, so it is unclear whether any of the 26 claims to be tried was practiced.

An admission by Oracle in April 2011 that various instrumentalities “practice” [present tense] unspecified claims of its asserted patents does not establish that any patented articles

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(whether or not marked as such) were [past tense] offered for sale, sold, or imported into the United States before July 20, 2010. Nothing in the instant summary judgment record presented by Google closes that gap. Oracle’s opposition brief alerted Google to this “temporal aspect to the marking issue,” but Google declined to address the problem in its reply brief (Opp. 5).

Google has failed to produce evidence establishing acts by Oracle that would trigger the damages limitation in the patent-marking statute. Because Google did not show that the statute applies, no burden of production is shifted to Oracle, and summary judgment must be denied. This order need not reach the parties’ arguments concerning whether the motion was premature or whether other material facts are disputed.

CONCLUSION

For the foregoing reasons, defendant’s motion for partial summary judgment limiting damages for infringement of certain patents based on plaintiff’s supposed failure to mark patented products is DENIED without prejudice to litigating this point at trial.

The Court is concerned over whether this issue will devolve into an “infringement” type analysis at trial of various Oracle products and methods to determine if they practiced any of the claims to be tried, throwing yet another complication into the trial. By NOON ON NOVEMBER 30, 2011, each side is requested to please file a five-page statement explaining the extent to which this will be so and how the complication can be mitigated.

IT IS SO ORDERED.

Dated: November 15, 2011.

/s/William Alsup
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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622

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA

ORACLE AMERICA, INC.,
Plaintiff,
v.
GOOGLE INC.,
Defendant.

No. C 10-03561 WHA

ORDER STRIKING
IMPROPER REPLY
EXPERT REPORTS

_______________________________

INTRODUCTION

In this patent and copyright infringement action, the instant issue is whether, after the opening damages report and the opposition damages report, may a reply to the opposition be served by a brand-new expert in addition to a reply by the original opening expert. The answer is no. This litigation maneuver will not be allowed and the reply by the new expert will be stricken.

STATEMENT

The facts of this action have been set forth in previous orders (see Dkt. Nos. 137, 230, 433). The November 2010 case management scheduling order provided the following general guidance regarding expert reports (Dkt. No. 56 at 2):

Subject to the exception in the next paragraph, the last date for designation of expert testimony and disclosure of full expert reports under FRCP 26(a)(2) as to any issue on which a party has the burden of proof (“opening reports”) shall be JULY 29, 2011. Within FOURTEEN CALENDAR DAYS of said deadline, all other parties must disclose any expert reports on the same issue (“opposition reports”). Within SEVEN CALENDAR DAYS thereafter, the party with the burden of proof must disclose any reply reports rebutting specific material in opposition reports. Reply reports must be limited to true rebuttal and should be very brief. They should not add new material that should have been placed in the opening report and the reply material will ordinarily be reserved for the rebuttal or sur-rebuttal phase of the trial.

The “exception in the next paragraph” provided more specific guidance regarding damages experts (id. at 3):

Any party seeking monetary damages must serve all of its damages report SEVENTY CALENDAR DAYS before the other non-damages opening reports are due. Within FOURTEEN CALENDAR DAYS of receipt of such damages reports, the opposing side must file any Daubert or other motion directed at the methodology, reliability or other defect, said motion to be heard on a normal 35-day track. The opposition report will be due FOURTEEN CALENDAR DAYS after the ruling on such motion with any reply due SEVEN CALENDAR DAYS thereafter. One purpose of this timing is to give the party seeking damages a brief window in which to cure (if possible) any flaws in the study.

Plaintiff Oracle America, Inc. served the opening damages report of Dr. Iain Cockburn in May 2011. No other opening damages report was served. Defendant Google Inc. challenged the Cockburn report with a Daubert motion, which was largely granted in July 2011. The July 2011 order on that motion allowed Oracle an opportunity to cure the defects of the Cockburn report (Dkt. No. 230 at 15–16):

Oracle’s revised damages report limited to the claims actually to be tried will be due 35 DAYS before the final pretrial conference and any responsive defense report will be due FOURTEEN DAYS before the final pretrial conference. The author of the report must, of course, sit for another deposition.

The order did not address the possibility of any additional damages reports, but did not disturb the case management scheduling order’s provision for a “very brief” reply report.

In August 2011, a conference was held with counsel for the parties and with candidates to serve as an independent damages expert pursuant to FRE 706. At that conference, counsel for

2

Oracle stated that Oracle might present a second damages expert in addition to Dr. Cockburn (Dkt. No. 350 at 32):

THE COURT: So who are the experts we will be critiquing here?

MR. HOLTZMAN: Our original expert was Professor Iain Cockburn, Boston University. We may or may not add a second expert, who would most likely be Ken Serwin.

THE COURT: Ken Who?

MR. HOLTZMAN: Serwin, S-E-R-W-I-N. Those would be the primary damage-related experts.

Oracle, however, never served any opening damages report by Dr. Serwin. Oracle served the revised opening damages report of Dr. Cockburn in September 2011; no other opening damages report was served.

During the four days following service of the revised opening Cockburn report, the parties exchanged several rounds of correspondence concerning whether Oracle was entitled to serve any reply report on damages and, if so, when it would be due. At various times, Oracle referred to “the reply report” and “our submission of damages reply/rebuttal reports, should we elect to submit any” (Purcell Exhs. A, B). At no point during this exchange did Oracle state an intent to submit any damages report from an expert other than Dr. Cockburn (Purcel Decl. ¶ 9).

On October 3, 2011, Google served two opposition damages reports by two different experts. One report addressed the alleged copyright infringement, and the other addressed the alleged patent infringement. On October 7, Oracle served its list of trial witnesses. It identified Dr. Serwin as “an expert retained by Oracle who may testify as a rebuttal witness regarding damages” (Dkt. No. 491-1 at 12).

Three days later, Oracle served four more expert reports on damages. There were two reply reports by Dr. Cockburn, one addressing each of Google’s damages reports. There were also two “rebuttal” reports by Dr. Serwin, likewise one addressing each of Google’s damages reports. These were the first reports by Dr. Serwin served in this matter (Purcell Decl. ¶ 2).

Google now moves to strike the “rebuttal” reports of Dr. Serwin as improper. Oracle opposes. This order follows expedited briefing (see Dkt. No. 530).

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ANALYSIS

The issue presented is whether a new expert who did not serve any opening report may nonetheless make a reply submission attacking the opposition reports served by the other side. Neither party has identified any controlling authority on this point. This order therefore addresses the question as a matter of case management and finds that the answer is no.

The case management scheduling order emphasized the limited nature of reply reports (i.e., those reports responding to opposition reports). For example, it noted that reply reports “should be very brief” and “must be limited to true rebuttal” (Dkt. No. 56 at 2):

Within SEVEN CALENDAR DAYS thereafter, the party with the burden of proof must disclose any reply reports rebutting specific material in opposition reports. Reply reports must be limited to true rebuttal and should be very brief. They should not add new material that should have been placed in the opening report and the reply material will ordinarily be reserved for the rebuttal or sur-rebuttal phase of the trial.

It established a system for exchanging expert reports that placed a full up-front disclosure duty upon the party with the burden of proof on a given issue. This system contemplated a narrowing of issues through the service of opening, then opposition, then reply reports (if at all), similar to the order of proof at trial or the examination of a particular witness at trial. It was designed to forestall “sandbagging” by a party with the burden of proof who wishes to save its best points for reply, when it will have the last word, a common litigation tactic.

True, reply reports were not explicitly limited to the authors of the opening reports. The Court thought this was already clear and in twelve years of using this form of case management scheduling order, this is the first time anyone has suggested to the contrary. The case management scheduling order cannot fairly be read to bless expansion of the expert roster at the reply stage. The reply, if made at all, must expressly be very short. There is no opportunity provided for a deposition of the reply expert for the obvious reason that the expert was already deposed earlier after the opening report. There is no way, moreover, that all of the Rule 26(a)(2)(B) mandatory items could be provided in a “very brief” document. It is impossible

4

to imagine and explicitly preclude every possible litigation trick ahead of time. Any reasonable reading of the case management scheduling order counsels against what Oracle is now trying to do.

A party with the burden of proof on an issue should not be allowed to secretly prepare an army of “rebuttal” experts to attack the opposition reports like Odysseus and the Greeks springing forth from their wooden hideout in Troy. If they were allowed to do so, their work would not be subject to a direct response from any opposing expert. This immunity, combined with the element of surprise, would be unfair. Moreover, the late addition of new experts would frustrate case-management objectives by complicating the task of planning and preparing the case for trial.

Here, Oracle served two reply reports attacking each of Google’s two opposition reports on damages — one by Dr. Cockburn, the original expert who authored Oracle’s opening report on damages, and one by Dr. Serwin, the new expert who crept out of the woodwork only for this purpose. Both are economists. Oracle does not claim that Dr. Cockburn would have been unqualified to make the Serwin reply points. Nor has Oracle identified any issue raised by Google’s opposition reports whose rebuttal might require or be enhanced by some specialty of Dr. Serwin. Yet Dr. Serwin’s reply reports were 46 and 27 pages long, respectively. Each one was about 40% as long as the corresponding opposition report (see Opp. 2). Thus, Dr. Serwin took on a substantial role in attacking Google’s experts on damages, in addition to the rebuttal in Dr. Cockburn’s reply reports, which were 54 and 33 pages long, respectively.

Oracle has identified no facts or law that would justify this highly unusual maneuver. First, the silence of the case management scheduling order as to the authorship of reply reports did not entitle Oracle to serve the Serwin reports. This point was explained above.

Second, the reference in the case management scheduling order to multiple “reply reports” simply acknowledged the fact that expert reports might be served on multiple issues. It did not imply that an expert who offered no opening report on a given issue could then attack the opposition reports served on that issue.

Third, contrary to Oracle, FRCP 26 does not require such an unusual tactic. Rule 26 in fact makes no reference at all to the authorship of various types of expert reports. Oracle emphasizes that Rule 26(a)(2)(D)(ii) mentions expert testimony “intended solely to contradict or

5

rebut evidence on the same subject matter identified by another party.” Any party offering expert testimony on an issue on which it does not bear the burden of proof would need to serve an opposition report fitting this description. This does not refer to reply reports. This categorical description in Rule 26 does not bless Oracle’s introduction of a brand-new expert by way of a reply to an opposition on an issue on which it bears the burden of proof.

Fourth, the parties’ previous litigation conduct does not support Oracle’s decision to serve the Serwin reports. To the extent the parties’ conduct and supposed understandings are relevant to this analysis at all, they counsel against allowing the reports. Oracle did not disclose its intent to use a rebuttal-only expert on the issue of damages until three days before it served the disputed Serwin reports. Moreover, neither party suggested or attempted using such an expert on any other issue.

Fifth, Oracle’s argument that Google has not been prejudiced is meritless. As explained above, the practice urged by Oracle is inherently unfair and frustrates important case-management objectives.

CONCLUSION

In sum, Google’s motion to strike the “rebuttal” reports of Dr. Serwin is GRANTED. The two reports by Dr. Serwin served on October 10, 2011, are STRICKEN, and Dr. Serwin will not be permitted to testify at trial.

IT IS SO ORDERED.

Dated: November 15, 2011.

/s/William Alsup
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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