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Oracle v. Google - Stay or Not to Stay, That Is the Question - Redux
Tuesday, October 04 2011 @ 07:45 PM EDT

Each of the parties has now come forward and filed an additional Case Management Statement (Google Statement - 480 [PDF]; Oracle Statement - 481 [PDF]) on the issues of the patent reexaminations; whether the case should be stayed pending those reexaminations; the amount of time required for direct and cross-examination at trial, and the issue of damages. Not surprisingly, the positions of the parties are diametrically opposed.

Both parties report the identical status of the pending reexaminations. (Do those tables look vaguely familiar?) However, while Google argues the case should be stayed pending the outcome of the reexaminations, Oracle argues the opposite.

Google's strongest arguments for staying the case:

  • Oracle has not sufficiently reduced the number of claims in contention to permit the trial to be conducted within the time allotted;
  • Oracle's "mirrored claim" argument overlooks the differences between direct and indirect infringement and will require all 26 of the patent claims to be addressed at trial, not just 15;
  • The substantial majority of the claims Oracle is asserting have been (or may yet be) rejected in first office actions by the USPTO; and
  • Oracle is incorrect under the law when it states that a trial decision in this matter would terminate the inter partes reexaminations (They would not end until all appeals were exhausted.).

Oracle's strongest arguments are:

  • Their copyright claims are independent and should not be stayed.

Really, that's it. Most of the rest of the arguments Oracle sets forth are either incorrect or shadings of the truth. Oracle is not correct that the reexaminations will take longer than a decision through the courts - Oracle ignores how long it may take to resolve these issues if the case goes up on appeal. Oracle baldly states that Google has done nothing to reduce its invalidity contentions when, in fact, Google has complied with the instructions of the court to limit its contentions per claim; it is simply the fact that Oracle has asserted so many claims that has increased the number of Google invalidity contentions.

With respect to the amount of time required at trial, Oracle states that it can complete its direct and cross-examination of at least 36 witnesses in 28-30 hours. Google says it will be closer to 75 hours for them, emphasizing not only the number of witnesses but the number of questions (110) that Oracle wishes to put before the jury. Using Google's 5-hour of trial time per day estimate, the direct and cross-examination estimates of the two parties combined equate to a minimum of 21 days, or more than four weeks, and that does nothing to allow for other motions, jury arguments, jury deliberations, etc. Further, those estimates are only for the patent issues and do not include time estimates with respect to the copyright issues or the issue of damages. In other words, this trial cannot be completed within the allotted three weeks on Judge Alsup's calendar.

Of course, among Oracle's outrageous statements (or more accurately, Boies Schiller's, since they have developed quite a reputation for outrageous statements) is this one: "Google has all but confessed that portions of Android were derived from Oracle’s Java API specifications and source code." Google has made no such confession. What Google has argued, albeit unsuccessfully on summary judgment, is that what Oracle seeks to protect with copyright is largely not protected by copyright. But don't confuse us with the facts.

In today's other filing, Oracle filed a précis 479 [PDF] seeking permission to file a motion for reconsideration of Judge Alsup's ruling excluding any new Android devices not included in the original pleadings.


*************

Docket

476 – Filed and Effective: 10/03/2011
Declaration
Document Text: Declaration of Daniel Purcell in Support of 466 Administrative Motion to File Under Seal ORACLE AMERICA, INC.'S ADMINISTRATIVE MOTION TO FILE UNDER SEAL PORTIONS OF PLAINTIFFS OPPOSITION TO DEFENDANTS MOTION FOR RELIEF FROM NON-DISPOSITIVE ORDER OF MAGISTRATE JUDGE filed by Google Inc.. (Attachments: # 1 Proposed Order)(Related document(s) 466) (Purcell, Daniel) (Filed on 10/3/2011) (Entered: 10/03/2011)

477 – Filed and Effective: 10/03/2011
ORDER
Document Text: ORDER GRANTING MOTION TO FILE OPPOSITION BRIEF UNDER SEAL, Order by Hon. William Alsup granting 466 Administrative Motion to File Under Seal.(whalc1, COURT STAFF) (Filed on 10/3/2011) (Entered: 10/03/2011)

478 – Filed and Effective: 10/03/2011
Order
Document Text: DOCUMENT E-FILED UNDER SEAL re 477 Order on Administrative Motion to File Under Seal PLAINTIFFS OPPOSITION TO DEFENDANTS MOTION FOR RELIEF FROM NON-DISPOSITIVE ORDER OF MAGISTRATE JUDGE by Oracle America, Inc.. (Norton, William) (Filed on 10/3/2011) (Entered: 10/03/2011)

479 – Filed and Effective: 10/03/2011
Letter
Document Text: Letter from Michael A. Jacobs Oracle Precis Requesting Leave to file Motion for Reconsideration of Order Striking Android Devices. (Jacobs, Michael) (Filed on 10/3/2011) (Entered: 10/03/2011)

480 – Filed and Effective: 10/04/2011
Case Management Statement
Document Text: CASE MANAGEMENT STATEMENT Google's Response to the Court's Order Regarding Reexamination, Stay, and Time for Trial filed by Google Inc.. (Banner, Brian) (Filed on 10/4/2011) (Entered: 10/04/2011)

481 – Filed and Effective: 10/04/2011
Case Management Statement
Document Text: CASE MANAGEMENT STATEMENT Oracle's Response to the Court's Order Regarding Reexamination, Stay, and Time for Trial filed by Oracle America, Inc.. (Jacobs, Michael) (Filed on 10/4/2011) (Entered: 10/04/2011)


***************

Documents

479:

[Morrison & Foerster letterhead]

October 3, 2011

The Honorable William Alsup
U.S. District Court, Northern District of California
450 Golden Gate Avenue
San Francisco, California 94102

Re: Oracle America, Inc. v. Google, Inc., Case No. 3:10-cv-03561-WHA

Dear Judge Alsup:

Oracle submits this précis to request leave to file a motion for reconsideration of the “Section 1 – Accused Products” portion of the Court’s Order partially granting Google’s motion to strike portions of Prof. Mitchell’s report (Dkt. No. 464), or in the alternative, to supplement Oracle’s infringement contentions as to accused products. In addressing the scope of the products Oracle could accuse in connection with its claim against Google of indirect patent (but not copyright) infringement, the Court stated that “Oracle’s infringement theories may be directed only toward accused products that were specifically named in its April 2011 disclosure of infringement contentions.” (Dkt. No. 464 at 4.)

I. Request for Reconsideration

Pursuant to Civil Local Rule 7-9(b)(2), Oracle submits that new material law exists in that the Court’s ruling does not distinguish between the infringement contention requirements for a party’s infringement and for indirect infringement. The applicable version of the Patent Local Rules is itself rather new, having gone into effect only on December 1, 2009, and there are few decisions applying these rules.

The relevant difference in the patent local rules is between the disclosure that is required in the case of an accused infringer’s “instrumentalities” and the disclosure of alleged indirect infringement. For the former, Patent Local Rule 3-1(b) requires specificity (emphasis added):

The Honorable William Alsup
October 3, 2011
Page Two

Separately for each asserted claim, each accused apparatus, product, device, process, method, act, or other instrumentality (“Accused Instrumentality”) of each opposing party of which the party is aware. This identification shall be as specific as possible. Each product, device, and apparatus shall be identified by name or model number, if known.
As noted, this paragraph requires the identification of the accused infringer’s alleged infringement to be “as specific as possible,” and mandates identification of model names and numbers. Oracle complied by enumerating all Google “Accused Instrumentalities” – in particular, the identified Google phones (the Google Nexus One and the Google Nexus S).

For indirect infringement, however, there is no “as specific as possible” requirement, and no obligation to list third party infringing devices. Patent Local Rule 3-1(d) requires the following (emphasis added):

For each claim which is alleged to have been indirectly infringed, an identification of any direct infringement and a description of the acts of the alleged indirect infringer that contribute to or are inducing that direct infringement. Insofar as alleged direct infringement is based on joint acts of multiple parties, the role of each such party in the direct infringement must be described.
Rule 3-1(d)’s requirement of “an identification of any direct infringement” is not the same as Rule 3-1(b)’s requirement to list accused instrumentalities as specifically as possible. Oracle identified the direct infringement of third parties who infringe the patents-in-suit in the manner described in Oracle’s claim charts because they “copy, sell, distribute, re-distribute, and use products that embody or incorporate” infringing portions of Android. Oracle identified representative third-party Android devices, but that was neither required nor limiting.

As to the bulk of the third party infringing devices, Oracle referred to “other mobile devices running Android.” That was sufficient under Patent Local Rule 3-1(d). Notably, Google articulated this category itself in its Answer and Counterclaims to Oracle’s Complaint (emphasis added):

The Android Platform has been a success in the mobile handset industry. Although Android was a latecomer to the smartphone market – first becoming generally available in late 2008 – there are currently approximately ninety different Androidbased mobile devices made by over twenty different manufacturers available for

The Honorable William Alsup
October 3, 2011
Page Three

purchase in dozens of countries. Indeed, approximately 200,000 Android-based handsets are activated every day on over fifty different wireless carriers. Android Market – a store where developers can sell applications (“apps”) that they create for Android-based devices – has over 80,000 apps available for download.
(Dkt. No. 51 at 19 ¶ 20; Dkt. No. 32 at 17 ¶ 20.) In addressing Rule 3-1(d), Oracle adopted the category of Android devices that Google itself specified. That should be sufficient under the rule.

II. Request for Leave to Supplement Infringement Contentions

If the Court denies Oracle leave to file a motion for reconsideration, Oracle asks permission to move to amend Oracle’s infringement contentions to include Android devices that currently exist. Given the language of the Local Rules, Oracle did not appreciate that it was required to assemble a list of Android devices and attach it to its infringement contentions. Google will not be prejudiced by this amendment because Google has apprehended this category since the beginning of this case. As noted above, Google’s Answer and Counterclaims to Oracle’s Complaint defined the category. (Dkt. No. 51 at 19 ¶ 20; Dkt. No. 32 at 17 ¶ 20.) Moreover, Google’s counsel told this Court (emphasis added):

MR. WEINGAERTNER: In the months that have gone by since filing this lawsuit, Android devices, which are accused, have become the fastest-selling smartphones in the world. Oracle’s point here is that that is somehow due to Java technology.
(4/6/2011 Hr’g Tr. 35:11-15; see also id. at 36:23-37:4 (Motorola, Samsung, HTC as “better-known ones”).) Having adopted the same category of accused devices as Oracle did, Google should not be able to escape liability for indirect infringement under the guise of alleging Oracle’s lack of specificity, and Oracle should be allowed to seek leave to amend its contentions.

For these reasons, Oracle asks the Court to grant its request for leave to file a motion for reconsideration, or in the alternative, to supplement its infringement contentions.

Respectfully submitted,

/s/ Michael A. Jacobs

Michael A. Jacobs

480:

KEKER & VAN NEST LLP
ROBERT A. VAN NEST - #84065
[email]
CHRISTA M. ANDERSON - #184325
[email]
[address, phone, fax]

KING & SPALDING LLP
SCOTT T. WEINGAERTNER (Pro Hac Vice)
[email]
ROBERT F. PERRY
[email]
BRUCE W. BABER (Pro Hac Vice)
[email]
[address, phone, fax]

KING & SPALDING LLP
DONALD F. ZIMMER, JR. - #112279
[email]
CHERYL A. SABNIS - #224323
[email]
[address, phone, fax]

IAN C. BALLON - #141819
[email]
HEATHER MEEKER - #172148
[email]
GREENBERG TRAURIG, LLP
[address, phone, fax]

Attorneys for Defendant
GOOGLE INC.

___________________

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

ORACLE AMERICA, INC.,

Plaintiff,

v.

GOOGLE INC.,

Defendant.

____________________

Case No. 3:10-cv-03561-WHA (DMR)

GOOGLE’S CASE MANAGEMENT
STATEMENT ON THE STATUS OF THE
PTO REEXAMINATIONS, THE VALUE
OF A STAY, AND AN ESTIMATE OF
TIME NEEDED FOR TRIAL

Dept.: Courtroom 9, 19th Floor
Judge: Hon. William Alsup

Date Comp. Filed: October 27, 2010
Trial Date: October 31, 2011

Pursuant to the Court’s September 26, 2011 request, Defendant Google Inc. (“Google”) hereby presents its case management statement regarding the status of the PTO reexaminations, an update on Google’s views as to whether this case should be stayed pending completion of the reexaminations, a statement on the extent to which plaintiff’s latest damage study rests on copyright issues, and a statement regarding time needed for trial of the remaining issues.

Months ago, the Court encouraged Oracle to narrow its claims in a manner that would allow this case to be tried in a reasonable fashion. As the Court has noted, “the larger the number of patents and patent claims asserted, [] the more practical it will then seem to simply stay this case and see which claims survive PTO reexamination.” (Dkt. 147 at 1:21–23.) Indeed, the Court has suggested that something on the order of three patent claims would be appropriate for trial in this case. (Dkt. 131 at 1:22–24.) The Court also indicated that if Oracle was not willing or able to properly narrow the case, “trial will either be put over until it is trial-ready and/or a trial stay pending re-examination will be entered.” (Dkt. 147 at 2:5–7.) Just last week, the Court requested that Oracle explain how many claims it continues to assert and “explain why the total number of such claims is consistent with prior representations made to the Court.” (Dkt. 458 at 1:23–26.)

Oracle’s September 29, 2011 case management statement (Dkt. 471) simply ignores the Court’s instruction to reduce the asserted claims to a manageable and triable number, positing instead a case management train wreck featuring 26 claims from 6 unrelated patents and a separate, complex copyright case, presented by more than 35 witnesses – many of them experts. The accompanying proposed verdict form contains more than 100 separate questions for the jury, spread across six technology areas. Such an undertaking – even if it could be made understandable to a jury – could not possibly be conducted within the time allotted by the Court. Given this, the alternative of staying the case to allow the PTO to complete its work is more practical, and the PTO should therefore be given the opportunity to separate the wheat from the chaff in the first instance.

If the case is to proceed as it currently exists, Google requests at least 75 hours of trial time to properly try all liability issues covering the alleged infringement of 26 separate claims of

2

six unrelated patents, the invalidity of those patents (which involves almost two dozen distinct prior art references), the alleged infringement of copyrights unrelated to the patents, and Google’s waiver, estoppel, and other equitable defenses.

I. THE REEXAMINATIONS ARE LIKELY TO NARROW THE SET OF
ASSERTED CLAIMS SIGNIFICANTLY.

The reexaminations of five of the six patents in suit remain ongoing, with roughly two thirds of the currently asserted claims standing rejected. Indeed, eighty percent of the asserted claims as to which the PTO has issued an office action as part of the reexamination process have been rejected. As of this date, the PTO has rejected all of the asserted claims of four of the six patents; the PTO has not yet issued an office action with respect to one of the patents; and the PTO has confirmed the patentability of the asserted claims of only a single patent over the cited art.

The table below shows the current status of the reexaminations as to the asserted patents:

3

II. A STAY PENDING REEXAMINATION IS THE MOST PRACTICAL CASE
MANAGEMENT APPROACH.

Oracle’s assertion of 26 separate claims of six unrelated patents, in addition to its assertion of copyrights that are not related to any of the patents, render this case untriable within a reasonable amount of time in its current form. Oracle’s recent case management statement (Dkt. 471) barely reduced the number of patent claims for trial, and did almost nothing to reduce the number of patents at issue in the case.1 Indeed, Oracle has moved backwards from its previous representations to the Court. In May of this year, Oracle proposed that it would narrow its patent case by September 1 to “no more than 21 asserted claims” (from 132 previously asserted claims). Not only did Oracle fail to reduce the number of claims by that date, it is now asserting more than 21 separate claims. (Dkt. 144 at 2:4–7; see also Dkt. 133 at 4:10–11.)

Through its current rejection of the majority of the asserted claims, the PTO is on course to meaningfully narrow the scope of this case through the reexamination process, something Oracle has not done despite multiple invitations by the Court. Allowing the PTO to continue the reexamination process through to completion would promote judicial efficiency and lower the costs to all involved by weeding out invalid claims that Oracle has so far refused to drop and to flush out more fully Oracle’s positions on patentability.

The alternative - proceeding to trial on all 26 separate patent claims, along with Oracle’s copyright infringement allegations - invites a case management disaster.

A. The Time Needed to Try This Case Far Exceeds the Three Weeks Allotted.

This Court has already questioned whether this case could be tried in the available three week period,2 yet Oracle insists on attempting to try 26 separate claims across 6 unrelated

4

patents, in addition to separate copyright infringement claims. Oracle’s “narrowing” to 26 separate claims removes all doubt that the liability phase of the case is not triable in that period. Oracle’s verdict form has over 110 questions of fact for the jury. Oracle’s “will call” witness list includes 24 live witnesses, while Google’s non-overlapping witnesses on its “will call” list could add a dozen more. The parties’ “may call” lists would expand the number of witnesses even further. Finally, because Oracle has refused to narrow the number of patents in any significant way, Google’s shortened list of prior art references still contains 21 references. Instead of proceeding to trial with an unworkable number of issues, witnesses, and fact questions for the jury to resolve, this Court should exercise its discretion to stay the case long enough to allow the examiners in the pending reexamination proceedings to complete their reviews of the asserted claims to final rejection or confirmation of patentability.

Oracle argues that it is presenting fewer claims than it appears, asserting that its set of 26 separate asserted claims amount to 15 “effective” claims. Yet it concedes that the different types of claims “ha[ve] different consequences for direct versus indirect infringement.” (Dkt. 471 at 4:15-16.) Because of various infirmities in Oracle’s infringement claims for the different patents as to both direct and indirect infringement, Google anticipates that it will need to offer differing evidence in opposition to Oracle’s various theories under these various patents. Yet rather than confront this problem of its own making, Oracle asks Google to stipulate that infringement of one of a set of so-called “mirrored” claims will result in a finding of infringement as to each of that set of claims. (Dkt. 471 at 5.) This tactic is an attempt by Oracle to forego the need to reduce the asserted claims, while at the same time seeking to avoid Oracle’s burden of proof on issues of direct and indirect infringement. A so-called “mirrored” claim set – including a system claim, a method claim, and a computer-readable medium claim – is claimed by Oracle to represent an opportunity to save time at trial, but this is extremely misleading. Each type of claim targets differing infringing acts (performed by differing actors) and presents unique questions of proof that will eliminate any perceived time savings. For example, it appears that Oracle aims to circumvent its proof problems by simply pointing to the GIT repository (a third-party source code server to which third-party developers can submit changes to Android source

5

code) as evidence of infringement of the computer-readable medium claims and then to ask the jury to infer that non-parties duplicate that code in each Android device. No such inference is possible because handset makers are free to modify any Android source code before compiling it and installing it on any accused handsets. Even assuming, without conceding, that Oracle can prove that the code on the GIT repository (a third-party source code server) satisfies the computer-readable medium claims (which it cannot), Oracle must further prove acts by nonparties that infringe method and systems claims as a precondition to its indirect infringement case. And it will also need to present sufficient proof of other issues unique to indirect infringement, such as knowledge and intent. Oracle’s suggestion that Google agree to treat infringement of one of what it calls the “mirrored claims” as a finding of infringement on all such claims is nothing more than an attempt to relieve itself of its burden of proof.

Even if the Court accepts Oracle’s position that it reduced the number of asserted claims to an “effective” number of 15, Oracle continues to assert many claims of different types from six totally unrelated patents alongside its copyright allegations. No matter how the number of asserted claims are counted in view of Oracle’s recent submission to the Court, the parties would need to educate the jury on:

  • six different technology areas, ranging from internal virtual machine modifications to compilers, security mechanisms, and data compression;
  • at least eight3 separate infringement theories;
  • multiple accused products (and even the extent of the products accused in this case is still not clear, given Oracle’s precis letter filed late last night seeking leave to amend its infringement contentions to inject additional products into the case at the eleventh hour);
  • invalidity theories based on 21 highly-technical prior art references;
  • statutory invalidity theories; and

6

  • the numerous contested issues concerning the copyright claims.
For the liability phase of this trial, the 26 separate claims across the 6 unrelated patents asserted in this case will require roughly 6 to 7 weeks (or 150 to 175 trial hours) and the copyright claims will take an additional non-trivial amount of time. Oracle could have tightly focused its case, but chose instead to proceed with a shotgun approach that has resulted in wasted effort by the parties and the Court.4

A stay pending completion of all the reexamination proceedings will allow this case to proceed efficiently and with the full benefit of the PTO’s decisions and an awareness of Oracle’s responses and their effects on the construction, validity, infringement and enforceability of the claims. These reexaminations – which have already resulted in the rejection of a majority of the asserted claims – may narrow significantly the number of patents involved in the case, as well as narrow the permissible scope of any damages. Indeed, should this case be narrowed to only a few claims modified in the course of the reexamination, any damages claim would be materially limited by, among other things, the doctrine of intervening rights. See Marine Polymer Techs, Inc. v. Hemcon, Inc., ___ F.3d ____, 2011 WL 4435986, at *7–8 (Fed. Cir. Sept. 26, 2011) (reversing judgment of infringement based on absolute intervening rights flowing from patentee arguments during a co-pending reexamination). Such a narrowed case will also eliminate the need for those efforts specifically directed at the claims rejected through reexamination, including motion practice and trial preparation, as well as make it more likely that the parties could reach an informal resolution of the matter. In short, both the parties and the Court would benefit from a stay pending reexamination.

B. The Pending Reexaminations May Significantly Narrow the Case.

As can be seen from the table above, the pending reexaminations of the asserted patents have rejected nearly two thirds of the asserted claims and may yet bring that total to 85% when the first office action is issued for the ‘104 patent. The reexaminations may narrow the case by

7

eliminating claims through final rejection. Even if they confirm the patentability of some claims, they could streamline the case by precluding infringement where Oracle has narrowed the scope of its claims by argument or amendment. Of the 26 presently asserted claims in this case, the only claims that have come through reexamination are the remaining four claims of the ‘520 patent – a patent to which Oracle’s own damages expert assigned a minuscule value of the overall value of the asserted patents – but even these claims have not survived intact, as explained below.

While the PTO is actively reexamining the asserted claims, this Court may exercise its discretion to stay the case to allow for further developments at the PTO with respect to the asserted claims. The claims may change in scope as a result of a final rejection,5 but may also result from an amendment or an unequivocal argument made by the patent holder in the reexamination proceeding, as confirmed by a very recent Federal Circuit holding. See Marine Polymer, 2011 WL 4435986, at *5 (Fed. Cir. Sept. 26, 2011) (holding that unambiguous arguments for narrower scope in a reexamination acts as an immediately effective disavowal of any broader scope even if the examiner does not accept the argument). The reexamination records already show at least one such narrowing argument. In the reexamination of the ‘520 patent, Oracle made statements that should be considered in view of Marine Polymer. Specifically, Oracle argued that “an instruction” – a claim term of significance in the infringement analysis – should be limited to exactly one instruction to avoid reading on the prior art.

Nor is it correct to assert, as Oracle has previously argued, that a decision by this Court affirming the validity of the patents subject to inter partes reexamination (i.e., the ‘720 and ‘205 patents) would cause those reexamination proceedings to terminate. This argument is simply incorrect on the law. A decision by this Court regarding the validity of either of those patents

8

would not be final for the purposes of 35 U.S.C. § 317(b) until Google no longer has a right to further appeal. Bettcher Indus., Inc. v. Bunzl USA, Inc., ___ F.3d ____, 2011 WL 4537797, at *14 (Fed. Cir. Oct. 3, 2011).6

III. ORACLE'S COPYRIGHT CLAIM WILL ADD FURTHER COMPLEXITY AND REQUIRE ADDITIONAL TRIAL TIME.

Oracle’s revised damages expert opinion depends significantly on its copyright claims. After this Court struck Oracle’s initial damages estimate, which offered a median $2.6 billion figure for patent damages and no calculation of copyright damages, Oracle and its expert Dr. Iain Cockburn recalculated, though their bottom-line number is about the same – a total of $2.7 billion. Out of this total, $404.9 million is attributable to patent damages ($201.8 million in royalties up to 2011 and $203.1 million more for 2012). The remaining $2.3 billion is copyright damages, broken out as follows: (1) $823.9 million, for all of Google’s gross revenue on Android advertising and applications through 2011; (2) $1.2 billion in projected Google gross Android revenue for 2012; (3) $136.2 million in actual damages for alleged lost profits; and (4) $102.6 million in alleged lost fair-market licensing fees through 2011, and an equal amount in alleged lost licensing fees for 2012. Cockburn acknowledges that a copyright plaintiff may not doublerecover the same amounts under different damages theories, but offers no methodology for separating out these different amounts and avoiding double-counting. Neither does he offer any opinion on the amount of future damages, other than a bare conclusion that future damages would be even larger than past damages.

The copyright damages calculation will require significant expert testimony and careful attention at trial. Under 17 U.S.C. § 504(b), a plaintiff may recover the infringer’s wrongful profits, subject to deductible expenses proven by the defendant and a further deduction for portions of the profits attributable to other factors besides the infringement. Cockburn took the position that he did not have to address the apportionment issues in his initial report, deeming it

9

to be rebuttal to Google’s expert report. Yesterday, Google served its report, covering the apportionment issue, among other points.

IV. GOOGLE ESTIMATES IT WILL NEED APPROXIMATELY 75 HOURS FOR DIRECT AND CROSS EXAMINATION.

As discussed above, Oracle is asserting 26 separate claims across 6 patents in addition to copyright claims. There are dozens of witnesses on the parties’ “will call” lists alone. The parties will need to put on evidence of numerous theories of liability, and of invalidity. Multiple expert witnesses will be needed to provide the jury with the proper context for determinations on the issues of infringement and validity of the patents. And all of that leaves aside the need to mount proper affirmative and defensive cases on copyright issues. As explained above, Oracle’s own proposed verdict form underscores the complexity of the case, since it presently lists some 110 separate questions to be answered by the jury. In light of the complexity of the case as it currently stands, Google anticipates that it will need approximately 75 hours, or approximately 15 days at 5 hours per trial day, for its direct and cross examinations.

DATED: October 4, 2011

KEKER & VAN NEST LLP

By: s/ Robert A. Van Nest
ROBERT A. VAN NEST
Attorneys for Defendant
GOOGLE INC.

________________________
1 Oracle will no doubt point to its decision to drop the ’447 patent from the case as progress. However, as Oracle has conceded previously, the ’447 and the ’476 patent “have similar specifications,” (Dkt. 129 at 3:8), and thus there is little, if any, reduction achieved by removing one of a pair of similar patents.

2 Copyright Mot. Summ. J Hr’g Tr. 26:5–20 (Sept. 15, 2011) (“How long is it going to take? You know, you told me you will try this case, both sides, three weeks. That’s 15 days counting everything. How much of your case are you going to take up with the copyright part? Because you are only going to get half of that time. . . . It won’t be worked out by more time.”).

3 Oracle is asserting two different infringement theories for both the ‘104 and ‘205 patents, and is asserting infringement via the doctrine of equivalents for the latter.

4 Oracle’s expert on damages, Dr. Iain M. Cockburn, has opined that two of the asserted patents - the ‘476 patent and the ‘520 patent - each amount to a tiny fraction of the aggregate portfolio reasonable royalty.

5 Although a final rejection of a claim during a reexamination is not a final decision that is binding on this Court until a reexamination certificate issues confirming the invalidity of that claim, the presence of a final rejection should send a strong signal to the Court that litigating the claim may not be a good use of judicial and private resources.

6 While this authority is new, the result is not surprising in view of preexisting authority. See Sony Computer Entm’t Am. Inc. v. Dudas, No. 1:05-cv-1447, 2006 WL 1472462, at *6 (E.D. Va. May 22, 2006); M.P.E.P. § 2686.04 (preventing an examiner from terminating an inter partes reexamination unless “the Federal Court decision [was] a final decision[] after all appeals”).

10


481:

MORRISON & FOERSTER LLP
MICHAEL A. JACOBS (Bar No. 111664)
[email]
MARC DAVID PETERS (Bar No. 211725)
[email]
DANIEL P. MUINO (Bar No. 209624)
[email]
[address, phone, fax]

BOIES, SCHILLER & FLEXNER LLP
DAVID BOIES (Admitted Pro Hac Vice)
[email]
[address, phone fax]
STEVEN C. HOLTZMAN (Bar No. 144177)
[email]
[address, phone fax]

ORACLE CORPORATION
DORIAN DALEY (Bar No. 129049)
[email]
DEBORAH K. MILLER (Bar No. 95527)
[email]
MATTHEW M. SARBORARIA (Bar No. 211600)
[email]
[address, phone, fax]

Attorneys for Plaintiff
ORACLE AMERICA, INC.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

ORACLE AMERICA, INC.,

Plaintiff,

v.

GOOGLE INC.,

Defendant.

_____________________

Case No. 3:10-cv-03561-WHA (DMR)

ORACLE AMERICA, INC.’S CASE
MANAGEMENT STATEMENT

Dept.: Courtroom 8, 19th Floor
Judge: Honorable William H. Alsup

Pursuant to the Court’s September 26, 2011 Order, Oracle America, Inc. hereby presents the status of the patent reexamination proceedings, the reasons why a stay of this case for reexamination is not beneficial, its statement of the number of hours needed for direct and cross-examination, and the extent to which its damages study rests on copyright versus patent issues.

I. STATUS OF THE REEXAMINATIONS

For the Court’s information, we provide the current status of the reexaminations of the six asserted patents in suit. As of today, the PTO has confirmed the patentability of the asserted claims of one of the patents (the ’520); the PTO has not yet issued a first office action with respect to one of the patents (the ’104); and the PTO has tentatively rejected the asserted claims of the remaining four patents (the ’205, ’720, ’702, and ’476). The table below shows the current status of the reexaminations as to each of the six asserted patents:

II. THE CASE SHOULD NOT BE STAYED IN WHOLE OR IN PART

Since the parties last reported to the Court on the status of the reexaminations, almost nothing has happened at the PTO. Certainly there has been no dramatic action that shifts the balance towards a stay. The PTO issued a Notice of Intent to Issue a Reexamination Certificate in the ’520 patent reexamination, after having confirmed the patentability of the asserted claims over Google’s prior art references. The PTO issued a first office action in the ’205 patent

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reexamination, tentatively accepting Google’s argument with respect to one prior art reference, but flatly rejecting Google’s argument with respect to another.

Oracle and Google have prepared to try this case, at significant expense. They have exchanged their pretrial materials—motions in limine, exhibit lists, witness lists, proposed jury instructions, and so on. They have also spent a great deal of time with Magistrate Judge Grewal in mediation discussions. It would be wasteful to lose the investment the parties have made in their time, energy, money, and executive attention by now putting the case on hold.

In addition, Oracle has a compelling case of copyright infringement—Google has all but confessed that portions of Android were derived from Oracle’s Java API specifications and source code—that has nothing whatsoever to do with the pending reexamination proceedings. It would be unjust for the Court to stay the case and permit Google to continue to enjoy the fruits of its illegal copying.

The slow progress of the patent reexaminations means that there is no good reason to stay this case even if only the patent infringement claims were at issue. The PTO has yet to issue a first office action for the ’104 patent and has confirmed all the asserted claims of the ’520 patent. The two inter partes reexaminations (of the ’205 and ’720 patents) should not be considered for a stay because the PTO will be required to dismiss them before they conclude. 35 U.S.C. § 317 provides that, after a final federal court decision on the merits, “an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office.” 35 U.S.C. § 317; MANUAL OF PATENT EXAMINING PROCEDURE § 2686.04. This case would almost certainly reach final judgment before the inter partes reexaminations are finished because the pendency of appeals at the Board of Patent Appeals and Interferences is currently 32 months from the filing of the notice of appeal to decision. See http:// www.uspto.gov/ip/boards/bpai/stats/perform/ FY_2011_Performance.jsp. This also shows that it would be unjust to stay the case pending reexamination when such a stay would likely last for years.

With respect to the final two patents, the ’702 and ’476 patents, Google’s actions with respect to the ’520 patent show that the Court will not benefit much from a stay. The only path

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for these two ex parte reexaminations to finish quickly is for the PTO to allow the claims over the cited art. But that is what the PTO has done in the ’520 patent reexamination, and Google insists on presenting its failed invalidity defense to the jury instead of accepting its loss. The Court should expect Google to do the same for the ’702 and ’476 patents, so there is little to be gained from a stay.

Google’s October 3 statement identifying its invalidity defenses demonstrates that the patent claims that Oracle has selected are in fact triable. The invalidity grounds that Google intends to try are not dependent on the number of asserted patent claims, because Google basically asserts the same defenses against every claim in a patent: it asserts the same three grounds of invalidity against every claim of the ’104 patent, the same two grounds of invalidity against every claim of the ’520 patent, the same two grounds of invalidity against every claim of the ’702 patent, the same four grounds of invalidity against every claim of the ’205 patent, the same two grounds of invalidity against every claim of the ’720 patent, and three grounds of invalidity against the one claim of the ’476 patent. There are only a few extra invalidity grounds that are not common to all claims of a patent, and these defenses are marginal. At this point in the case, can it really be true that Google cannot decide which two out of four invalidity defenses for the ’104 and ’205 patents are the strongest? And a number of Google’s defenses have been rejected by the PTO, and yet it maintains them in the litigation.

If there is any difficulty in trying the patents-in-suit, it is one of Google’s own making. Although Google complains about Oracle’s assertion of 26 claims, Google’s invalidity contentions do not vary with the “mirrored claims.” Nor do Google’s noninfringement contentions vary with the “mirrored claims.” Yet when Oracle requested in a meet and confer that Google accept the stipulation offered in its September 29 case management statement to apply the jury’s finding on infringement and validity in common among mirrored claims, Google refused. Oracle respectfully suggests that Google has not made an effort comparable to that made by Oracle to prepare the case for trial. Since Oracle selected asserted claims in June according to the Court’s May 23 Order, Oracle has dropped about half of those claims. Google’s efforts to reduce the number of its asserted defenses do not compare.

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III. TIME NEEDED FOR DIRECT AND CROSS EXAMINATION

Oracle anticipates a minimum of 28-30 hours for its direct and cross examination, with additional time for the opening and closing.

IV. COPYRIGHT VERSUS PATENT DAMAGES

Professor Cockburn’s September 2011 damages report addresses both copyright and patent damages, and does so in separate sections of the report that rest on separate evidence and analysis. In contrast, Professor Cockburn’s May 2011 report addressed copyright damages, including both actual damages and infringer’s profits, by referring back to a single hypothetical license analysis which considered patent and copyright licensing together as part of a portfolio license.

Professor Cockburn applies a hypothetical license approach to analyze the reasonable royalties that should correspond to each of the patent infringement claims. Consistent with the Court’s July 22 Daubert order, Professor Cockburn starts with the 2006 license value, applies downward adjustments to apportion to the specific patents in suit and account for domestic revenues, and applies an upward adjustment to account for the significant difference between the 2006 “starting point” license (Java-compatible) and the hypothetical license (incompatible). Professor Cockburn also notes that both the substantial anticipated harm to Sun and Oracle from fragmentation of Java and a “litigation premium” for the assumption of patent validity and infringement, neither of which can be readily quantified, would have placed upward pressure on the reasonable royalties that should be applied through the time of trial for the patents in suit. The hypothetical patent license does not include any amount for the copyright claims.

For copyright infringement, consistent with the copyright statute, Professor Cockburn elaborates on and separately analyzes (1) “actual damages,” using (in the alternative) a lost profits approach and the hypothetical license approach generally described above (but subject to a separate apportionment analysis for copyright); and (2) Google’s profits from the copyright infringement. With respect to infringer’s profits, consistent with the statute, Professor Cockburn limits his initial analysis to the fact that “the copyright owner is required to present proof only of the infringer’s gross revenue.” 17 U.S.C. § 504(b). It is Google’s burden to “prove his or her

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deductible expenses and the elements of profit attributable to factors other than the copyrighted work.” Id. Professor Cockburn intends to address Google’s analysis in his reply report and/or at deposition.

Because they rest on separate apportionment analyses that limit damages to each category of claims independently, the patent and copyright damages estimates included in Professor Cockburn’s September report are independent and are not duplicative. Substantial and irreparable future harm from the patent and copyright infringement, including harm from fragmentation of Java, will also warrant injunctive relief.

Dated: October 4, 2011

MICHAEL A. JACOBS
MARC DAVID PETERS
DANIEL P. MUINO
MORRISON & FOERSTER LLP

By: /s/ Michael A. Jacobs

Attorneys for Plaintiff
ORACLE AMERICA, INC.

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