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Oracle v. Google - Opposing Positions (to Motions)
Monday, October 31 2011 @ 11:00 AM EDT

Last Friday was the day for both parties to get their negative mojo on as they each filed oppositions to the motions of the other. The three motions addressed are:



In opposing Google's motion to limit past damages Oracle's primary argument is that the motion is premature, i.e., that it depends on the court sorting out the facts as to whether (a) Oracle's Java products practice the asserted patents and (b) Google infringes the asserted apparatus claims of those patents. (577 [PDF; Text]) According to Oracle, if the Oracle products do not practice the patents or Google does not infringe the asserted apparatus claims, then there was no duty to mark and July 2010 is not the earliest date of notice for determining past damages for patent infringement.

To support its argument that no marking is required, Oracle cites to Hanson v. Alpine Valley Ski Area, Inc. 718 F.2d 1075, 1083 (Fed. Cir. 1983) (holding that the failure to mark products did not limit damages-even though the patent contained apparatus claims . . .). Oracle states, "Hanson remains binding precedent on this point." What Hanson does not address is whether any of the apparatus claims were actually asserted.

What Oracle does not address is the American Medical case, American Med. Sys., Inc. v. Medical Eng'g Corp., 6 F.3d 1523, 1538-39 (Fed. Cir. 1993), cited by Google. American Medical held that marking is required where "both apparatus and method claims . . . [are] asserted and there [is] a physical device produced by the claimed method that [is] capable of being marked." In addition, the American Medical decision was rendered after Hanson and was also rendered by the Federal Circuit, so it is just as binding and supercedes Hanson. In fact, American Medical addresses Hanson and finds it does not apply where both method claims and apparatus claims are asserted. From American Medical [emphasis added]:

B. Patent Marking Relating to Method Claims

AMS argues that the district court erred in limiting its recoverable damages from the infringed method claims of the '765 patent pursuant to section 287(a). The law is clear that the notice provisions of section 287 do not apply where the patent is directed to a process or method. Bandag, Inc. v. Gerrard Tire Co., Inc., 704 F.2d 1578, 1581, 217 USPQ 977, 979 (Fed. Cir. 1983) (citing Wine Ry. Appliance Co. v. Enterprise Ry. Equip. Co., 297 U.S. 387, 80 L. Ed. 736, 56 S. Ct. 528 (1936)); Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075, 1083, 219 U.S.P.Q. (BNA) 679, 685 (Fed. Cir. 1983) (noting that section 287(a) does not apply where only method claims are infringed). The district court, however, relied on Devices for Medicine, Inc. v. Boehl, 822 F.2d 1062, 3 U.S.P.Q.2D (BNA) 1288 (Fed. Cir. 1987), in holding that "where there are both product and method claims being claimed infringed, the patentee must mark the product." 794 F. Supp. at 1391, 26 U.S.P.Q.2D (BNA) at 1095.

In Devices for Medicine, the court noted that in Bandag and Hanson, a distinction was made between cases "in which only method claims are asserted to have been infringed" and cases where a patentee alleges infringement of both the apparatus and method claims of the same patent. Devices for Medicine, 822 F.2d at 1066, 3 U.S.P.Q.2D (BNA) at 1292 . The Devices for Medicine court further stated that because the method claims of the patent were directed to the use of the claimed product, "having sold the product unmarked, [the patentee] could hardly maintain entitlement to damages for its use by a purchaser uninformed that such use would violate [patentee's] method patent." Id., 3 U.S.P.Q.2D (BNA) at 1292.

AMS contends that Devices for Medicine is inapposite, because in that case the patent contained product claims and claims covering the use of the same product. AMS asserts that the sale of a product carries an implied license to use it as a matter of law; therefore failing to mark a patented product rationally creates an expectation of receiving a right from the seller to use it for its customary purposes. By contrast, AMS argues that the '765 patent involves methods of making and sterilizing the patented product and that sale of a product does not grant any implied license to make an additional product or to use a particular manufacturing process to make it. Therefore, AMS asserts that the rationale of Devices for Medicine should not apply and that section 287(a) has no application to the instant method claims.

We find AMS's distinction of the claims in Devices for Medicine from those in the present action to be meaningless within the context of section 287(a). The purpose behind the marking statute is to encourage the patentee to give notice to the public of the patent. The reason that the marking statute does not apply to method claims is that, ordinarily, where the patent claims are directed to only a method or process there is nothing to mark. Where the patent contains both apparatus and method claims, however, to the extent that there is a tangible item to mark by which notice of the asserted method claims can be given, a party is obliged to do so if it intends to avail itself of the constructive notice provisions of section 287(a).

In this case, both apparatus and method claims of the '765 patent were asserted and there was a physical device produced by the claimed method that was capable of being marked. Therefore, we conclude that AMS was required to mark its product pursuant to section 287(a) in order to recover damages under its method claims prior to actual or constructive notice being given to MEC.

So it would appear that the only issue is whether Google can rely on Oracle's admissions that neither Oracle or its licensees marked physical devices that embody the asserted patents even if Google disputes the fact that those devices, in fact, embody the patents at issue. In any case, this motion does not appear to be any more premature than Google's earlier motion to limit its liability under Section 271(f) of the Patent Act, a motion on which Google won.

Next up are the Serwin "rebuttal" reports. Google contends that such rebuttal reports have not been permitted by the court. (Google Loses Lindholm Email Battle) Google's argument is that Oracle blindsided Google and violated the court's scheduling orders by submitting a "rebuttal" report from a new expert instead of a "reply" report from the original Oracle damages expert. The scheduling order provides for an original report from the party bearing the burden of proof (here Oracle on damages by Dr. Cockburn), an opposition report (here Google by Drs. Leonard and Cox), and a reply report (here Oracle, which should have come from Dr. Cockburn, according to Google). Instead, Oracle submitted a report from Dr. Serwin, thus, according to Google, circumventing the order and doing so at a time and manner which prevented Google from deposing Serwin. From Google's motion:

In opposing Google’s précis letter requesting permission to file this motion, Oracle cited Federal Rule of Civil Procedure 26(a)(2)(D), which does not expressly prohibit rebuttal reports by experts who had not served opening reports. But nothing in Rule 26(a)(2)(D) provides an express right to new rebuttal experts, either—and in any event that rule “only governs in the absence of a scheduling order.” Hynix Semiconductor v. Rambus, No. CV- 00-20905 RMW, 2008 U.S. Dist. LEXIS 12195 at *17 (N.D. Cal. Feb. 3, 2008). In this case, the Court has issued not one but two detailed scheduling orders, which would override any default rule in Rule 26(a)(2)(D). In fact, even where a scheduling order is silent as to the parties’ entitlement to rebuttal experts, that scheduling order overrides Rule 26. “The critical question … is whether the court has spoken on the subject of expert disclosures generally, not whether it has specifically substituted its own deadlines for those proposed in” Rule 26(a)(2)(D). Int’l Bus. Machines Corp. v. Fasco Indus., Inc., C-93-20326 RPA, 1995 WL 115421 (N.D. Cal. Mar. 15, 1995). It would be “mistaken” to read into Rule 26(a)(2)(D) “a substantive right to supplement an initial witness disclosure with rebuttal experts.” Id. at *2.
It is this Google argument, that the reply report must come from the expert submitting the original report, that Oracle challenges. (578 [PDF; Text]) Oracle cites to the scheduling order, which, on its face, does not clearly come down of Google's side of this argument:

Within SEVEN CALENDAR DAYS thereafter [following submission of opening reports], 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.
This would appear to be a point for Oracle. On the other hand, Oracle seems to go too far when it says Google has not been prejudiced. Oracle has undertaken a cleverly-timed sleight-of-hand with the apparent intent of placing Google in a position where it could not depose Dr. Serwin. Did Oracle disclose Serwin as a possible witness? It would appear so. Did Google have any reason to schedule Serwin for a deposition when it was within the time limits to do so? No, because, when Serwin did not submit an original damages report, Google did not believe it had a reason to anticipate any report from Serwin.

In deference to both parties, it would appear fair to allow the Serwin report but to now allow Google to depose Serwin.

Turning now to Oracle's motion to exclude portions of the Leonard and Cox reports submitted by Google, Oracle argues extensively that "Drs. Leonard and Cox fail to tie their damages opinions – including but not limited to their core opinions regarding supposed non-infringing alternatives – to the contemporaneous evidence or even the sworn testimony of witnesses." (Google Loses Lindholm Email Battle) On the surface, this Oracle argument appears to be a corollary of the Google argument with respect to Serwin, i.e., that Google did not adequately identify the witnesses on which Leonard and Cox relied as to permit Oracle the opportunity to depose those witnesses. Oracle further argues that, absent reliance on such "spoon-fed "facts," neither Leonard nor Cox has the technical expertise on which to base their economic arguments.

Google responds here in opposition that: (a) the witnesses on which Leonard and Cox relied were identified; (b) those witnesses will have to testify at trial prior to any testimony by Leonard and Cox and will, as a consequence, be available for Oracle to cross-examine; and (c) Oracle has repeatedly taken statements out of context in the Leonard and Cox reports to substantiate Oracle's points. (581 [PDF; Text])

In this instance Google argues that Oracle not only had access to the technical experts on which Leonard and Cox relied, Oracle deposed them. The fact that Oracle did not anticipate that Google's damages experts would be relying on these same technical experts, Google asserts, is not Google's fault.

To the extent Oracle has not had an opportunity to depose one of the technical experts, Google says that it has proposed to the court and Oracle that Oracle be permitted a limited (2 hours) deposition of each. But this does not appear to be enough for Oracle which wants to reopen depositions of four Google witnesses who Oracle had thoroughly deposed (3 days, 2 days, 1 day, and a half-day, respectively) earlier.

So this dispute would seem ripe for resolution by the court if it adopts Google's recommendation and permits the proffered depositions.

Finally, in the last item for today, we turn to a request filed by counsel for the court's independent damages expert. Most of our readers already have a pretty good idea of just how complicated patent infringement litigation can be, but for those who don't, here is a little insight. Dr. James Kearl was appointed the independent damages expert by the court. His primary role is to sift through and assess the damages reports of the parties and present an independent report that should help the court (and jury) understand and apply the better arguments of each party when ultimately determining damages (assuming infringement has been found). The schedule under which Dr. Kearl is to file his reports (an initial report and a final report) has been in flux because of delays in the damages reports of the parties and because of movement of the trial calendar. Counsel for Dr. Kearl now requests a new schedule for those reports (574 [PDF; Text]). What is telling about the complexity of this litigation is the following statement:

... 1) the record in this matter which will be considered in preparing his report is 22 million pages, much larger than was contemplated at the outset of this engagement; 2) the reports of the parties damages experts and rebuttal experts, as well as those of the technical experts, are each several hundreds of pages long; 3) motions in limine are presently pending which address damages issues that Dr. Kearl must take into account in preparing his report; 4) as of this date the deposition of at least one rebuttal damages expert, Dr. Serwin who filed two reports, has not been taken or scheduled; ...
22 million pages!

How does one person even begin to digest all of that information?

Skip To Comments


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

Docket

574 – Filed and Effective: 10/28/2011
Letter
Document Text: Letter from John Cooper on behalf of Dr. James Kearl dated October 28, 2011. (Cooper, John) (Filed on 10/28/2011) (Entered: 10/28/2011)

575 – Filed and Effective: 10/28/11
ORDER
Document Text: ORDER GRANTING EXTENSION OF TIME FOR RULE 706 EXPERT TO FILE REPORT re 574 Letter filed by John Lee Cooper. Signed by Judge Alsup on October 28, 2011. (whalc1, COURT STAFF) (Filed on 10/28/2011) (Entered: 10/28/2011)

576 – Filed and Effective: 10/28/2011
Document Text: Declaration of Reid Mullen in Support of 557 Administrative Motion to File Under Seal ORACLE AMERICA, INC.S ADMINISTRATIVE MOTION TO FILE UNDER SEAL PORTIONS OF ORACLES MOTION TO EXCLUDE PORTIONS OF THE EXPERT REPORTS OF GREGORY K. LEONARD AND ALAN J. COX filed by Google Inc. (Attachments: # 1 Proposed Order)(Related document(s) 557 ) (Mullen, Reid) (Filed on 10/28/2011) (Entered: 10/28/2011)

577 – Filed and Effective: 10/28/2011
RESPONSE
Document Text: RESPONSE (re 552 MOTION for Summary Judgment (Partial) that Google is not Liable for Damages for Alleged Patent Infringement that Occurred before July 20, 2010 MOTION for Summary Judgment (Partial) that Google is not Liable for Damages for Alleged Patent Infringement that Occurred before July 20, 2010 MOTION for Summary Judgment (Partial) that Google is not Liable for Damages for Alleged Patent Infringement that Occurred before July 20, 2010 ) filed by Oracle America, Inc. (Attachments: # 1 Declaration Declaration of Marc Peters, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F)(Jacobs, Michael) (Filed on 10/28/2011) (Entered: 10/28/2011)

578 – Filed and Effective: 10/28/2011
RESPONSE
RESPONSE (re 554 MOTION to Strike DEFENDANT GOOGLE INC.'S NOTICE OF MOTION AND MOTION TO STRIKE TWO "REBUTTAL" DAMAGES REPORTS BY DR. KENNETH SERWIN ) OPPOSITION OF ORACLE AMERICA, INC. TO GOOGLE INC.S MOTION TO STRIKE TWO REBUTTAL DAMAGES REPORTS BY DR. KENNETH SERWIN filed by Oracle America, Inc. (Holtzman, Steven) (Filed on 10/28/2011) (Entered: 10/28/2011)

579 – Filed and Effective: 10/28/2011
Declaration
Declaration in Support of 578 Opposition/Response to Motion, DECLARATION OF BEKO RICHARDSON IN SUPPORT OF OPPOSITION OF ORACLE AMERICA, INC. TO GOOGLE INC.S MOTION TO STRIKE TWO REBUTTAL DAMAGES REPORTS BY DR. KENNETH SERWIN filed by Oracle America, Inc. (Attachments: # 1 Exhibit EXHIBIT 1)(Related document(s) 578 ) (Holtzman, Steven) (Filed on 10/28/2011) (Entered: 10/28/2011)

580 – Filed and Effective: 10/28/2011
Administrative Motion
Document Text: Administrative Motion to File Under Seal filed by Google Inc. (Attachments: # 1 Declaration Declaration of Reid Mullen in Support of Google's Administrative Motion to File Documents Under Seal, # 2 Proposed Order Proposed Order to Seal Portion of Google's Opposition to Motion to Exclude Portions of the Expert Reports of Gregory K. Leonard and Alan J. Cox and Exhibits to Declaration of David Zimmer in Support of Google's Opposition)(Purcell, Daniel) (Filed on 10/28/2011) (Entered: 10/28/2011)

581 – Filed and Effective: 10/28/2011
RESPONSE
RESPONSE (re 558 MOTION to Strike ORACLE AMERICA INC.S MOTION TO EXCLUDE PORTIONS OF THE EXPERT REPORTS OF GREGORY K. LEONARD AND ALAN J. COX - REDACTED ) filed by Google Inc. (Attachments: # 1 Declaration in Support of Google's Opposition to Motion to Exclude Portions of the Expert Reports of Gregory K. Leonard and Alan J. Cox, # 2 Declaration of David Zimmer in Support of Google's Opposition to Motion to Exclude Portions of the Expert Reports of Gregory K. Leonard and Alan J. Cox, # 3 Exhibit A, # 4 Exhibit B, # 5 Exhibit C, # 6 Exhibit D, # 7 Exhibit E, # 8 Exhibit F, # 9 Exhibit G, # 10 Exhibit H, # 11 Exhibit I, # 12 Exhibit J, # 13 Exhibit K)(Van Nest, Robert) (Filed on 10/28/2011) (Entered: 10/28/2011)


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

Documents

574

[FARELLA BRAUN + MARTEL LLP letterhead]

October 28, 2011

The Honorable William Alsup
United States District Court
Northern District of California
450 Golden Gate Avenue
San Francisco, California 94102

Re: Oracle America, Inc. v. Google Inc., No. 3:10-CV-03561-WHA (N.D. Cal.)

Dear Judge Alsup:

I write on behalf of Dr. James Kearl, the independent damages expert appointed by the Court in this action pursuant to Rule 706 of the Federal Rules of Evidence. The purpose of this letter is to request an extension of the dates on which Dr. Kearl is to file his expert reports. This request is made in light of the Proposed Trial Plan issued by the Court on October 26, 2011, has been reviewed by counsel for the parties and they have no objection.

Dr. Kearl requests in the alternative, that the Court allow one of the following schedules:

1) Dr. Kearl prepare and file a single report on January 19, 2012 which will be in compliance with both paragraph 4 of the September 9, 2011 Order and paragraph 1 of the October 12, 2011 Order; or in the alternative,

2) In the event the Court desires that Dr. Kearl file two reports, on December 23, 2011 Dr. Kearl will file a first report in compliance with paragraph 4 of the September 9, 2011 Order and on January 19, 2012 will file a second report in compliance with paragraph 1 of the

The Honorable William Alsup
October 28, 2011
Page 2

October 12, 2011 Order. These reports will be based on data and information in the extant record; Dr. Kearl will not independently seek out and obtain data and information outside of the record in this matter.

This schedule was addressed at the October 19, 2011 hearing where it was resolved that on November 14, 2011 Dr. Kearl would file a first report in compliance with paragraph 4 of the September 9, 2011 order and on January 19, 2012 would file a second report in compliance with paragraph 1 of the October 12, 2011 order. These reports would be based on data and information in the extant record in this matter.

It is our understanding that the original schedule contemplated in the September 9, 2011 order has now been vacated due to the Court's criminal trial requirements. The Proposed Trial Plan issued by the Court on October 26, 2011 proposes a three phase trial, only the last phase of which would include damages that are the subject of Dr. Kearl's reports. That order requests responses to the proposed trial plan by November 18, which is 4 days after Dr. Kearl is scheduled to file his first report as resolved at the October 19, 2011 hearing. In light of this change it does not appear necessary or useful for Dr. Kearl to file his first report on November 14, 2011.

Dr. Kearl's reasons for requesting this extension include: 1) the record in this matter which will be considered in preparing his report is 22 million pages, much larger than was contemplated at the outset of this engagement; 2) the reports of the parties damages experts and rebuttal experts, as well as those of the technical experts, are each several hundreds of pages

The Honorable William Alsup
October 28, 2011
Page 3

long; 3) motions in limine are presently pending which address damages issues that Dr. Kearl must take into account in preparing his report; 4) as of this date the deposition of at least one rebuttal damages expert, Dr. Serwin who filed two reports, has not been taken or scheduled; 5) given that the schedule for this trial has been extended it does not appear necessary for Dr. Kearl to file his first report on November 14, and allowing the requested extensions will permit Dr. Kearl to provide more thorough and complete damages analysis in his reports.

Dr. Kearl respectfully requests the extensions of time in which to file his damages reports. The present request is not opposed by the parties. Dr. Kearl will file a motion making the present request if the Court so desires.

Sincerely yours,
/s/John L. Cooper
John L. Cooper


577

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

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

Case No. CV 10-03561 WHA

ORACLE’S OPPOSITION TO GOOGLE’S
MOTION FOR PARTIAL SUMMARY
JUDGMENT THAT GOOGLE IS NOT LIABLE
FOR DAMAGES FOR ALLEGED PATENT
INFRINGEMENT THAT OCCURRED BEFORE
JULY 20, 2010

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

I. INTRODUCTION

Google’s motion is a classic case of a litigant wanting to “have its cake and eat it too.” For purposes of its motion for summary judgment to limit damages, Google relies on Oracle’s contention that Google infringes the asserted non-method patent claims, even though Google disputes that it infringes. But if Google were found to infringe only method claims, then there was no duty to mark, and there can be no limitation on recovering damages. In addition, Google relies on Oracle’s contention that its Java products practice the patents. E.g., Google’s undisputed “fact” no. 2: “Oracle has identified many ‘markable’ products that, it contends, practice the asserted claims of the patents-at-issue.” (Mot. at 2 (emphasis added).) But Google refuses to stipulate to that contention for all purposes in the case. In other contexts—such as the remarkable commercial success of Oracle’s Java, which shows non-obviousness of the patents and demand for the inventions—Google disputes that Oracle’s Java products practiced the asserted claims of the patents-in-suit. If the products do not practice the patented inventions, then there was no marking obligation. Google cannot contend that Oracle did practice the patents for purposes of the marking statute and also contend Oracle did not practice the patents for other purposes.

Given the disputed facts regarding Oracle’s practice of the patents and Google’s infringement, it would be improper on the present record to decide as a matter of law that the marking statute limits damages. The proof of the relevant facts must wait for trial. Google’s motion for partial summary judgment should be denied.

II. THERE IS A GENUINE DISPUTE ABOUT WHETHER GOOGLE
INFRINGES THE NON-METHOD CLAIMS

It is possible that the jury will find that, for a given patent, only the method claims are infringed. If the jury so finds, then there would have been no marking obligation. Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075, 1083 (Fed. Cir. 1983) (holding that the failure to mark products did not limit damages—even though the patent contained apparatus claims— because “[t]he only claims that were found infringed in this case, however, were claims 1, 2, and 6 of the Hanson patent, which are drawn to ‘[t]he method of forming, distributing and depositing

1

snow upon a surface....’”). Hanson remains binding precedent on this point. See Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563 (Fed. Cir. 1991) (“To the extent that Kennecott conflicts with Wilder, we note that decisions of a three-judge panel of this court cannot overturn prior precedential decisions.”). Accordingly, Google’s motion is premature.

In a footnote, Google tries to brush this off. But to do so, Google draws factual inferences in its favor, which is forbidden. To support its motion, Google points to Oracle’s contention that “its apparatus, computer-readable-medium, and method claims ‘mirror’ each other, contain essentially ‘identical limitations,’ and are all necessarily infringed whenever Android software is loaded onto a phone and used.” (Mot. at 7 n.13.) For inferences to be drawn in Oracle’s favor, the Court must instead turn to Google’s contention that “[e]ach type of claim targets differing infringing acts (performed by differing actors) and presents unique questions of proof . . . .” (ECF No. 480 at 5, Google’s Case Management Statement (Oct. 4, 2011).) So, although Oracle strongly disagrees with Google’s incorrect position, the fact that Google makes it means that the Court must infer—for purposes of this motion—that the jury will find for Google on the nonmethod claims, which relieves Oracle of any marking obligation. Hanson, 718 F.2d at 1083. Were Google to concede that if one claim in a “mirror” pair or triple were infringed, then they all are, the result could be different.

III. THERE IS A GENUINE DISPUTE ABOUT WHETHER ORACLE’S JAVA
PRODUCTS ARE “PATENTED ARTICLES” UNDER THE MARKING STATUTE

A. Google’s Failure to Concede That Oracle’s Products Practice The
Patents Prevents Summary Judgment
Google is trying to hedge its bets. Google has been unwilling to concede that Oracle’s Java products practice each of the asserted claims, because it does not want to face the consequences that flow from that admission. Instead, it bases its motion on Oracle’s contentions. But Oracle’s contentions are not sufficient to grant summary judgment—the law requires that there be no dispute over a material fact. In deciding this motion, the Court must draw factual inferences in Oracle’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). This means that, even though Oracle contends otherwise, the Court must infer that Oracle’s Java

2

products are not covered by the five patents, meaning that Section 287 does not limit Oracle’s damages recovery.

B. Google Disputes That Oracle’s Products Practice The Asserted Patent
Claims
Whether or not Oracle’s Java products practice any of the asserted claims of the patents is an issue of fact. Google must establish that there is no genuine dispute over that factual issue in order to obtain summary judgment. But Google has so far been trying to avoid making that concession. Google’s experts, in particular, have been maintaining an ambiguous position on the point, apparently to allow Google the flexibility to try to gain advantage on the marking issue but avoid the negative consequences that follow from the evidence of remarkable commercial success of Oracle’s Java products, which shows non-obviousness of the patents and demand for the inventions. Google cannot have it both ways.

The ’702 patent provides a good example of Google’s unwillingness to take a position on whether Oracle’s Java products are “patented articles.” Oracle’s infringement contentions identify the following Java products as practicing the asserted claims of the ’702 patent: CDC RI, CDC-HI, CDC AMS, CLDC RI, CLDC-HI, among others. CDC and CLDC are the two main configurations for Java ME, Oracle’s Java platform for mobile devices such as consumer products, embedded devices, and smartphones. See Java ME Technology Overview, available at http://www.oracle.com/technetwork/java/javame/java-me-overview-402920.html (attached as Exhibit A to the Declaration of Marc Peters (“Peters Decl.”) in Support of Oracle’s Opposition to Google’s Motion for Partial Summary Judgment). Yet Google’s invalidity expert John Levine, according to his report, will testify that “Sun never incorporated this functionality [the ’702 patent] into its mainstream Java products.” Expert Reply Report of John R. Levine, Ph.D. Regarding Invalidity of U.S. Patent Nos. 5,966,702 and 6,061,520 ¶ 25 (Peters Decl. Ex. B). Dr. Levine’s argument contradicts the position Google has taken in this motion. So there appears to be a genuine dispute over whether Oracle’s mainstream Java products (which include Java ME) are “patented articles” or not.

3

The ’104 patent is another example of how Google’s experts dance around the issue. Oracle contends that, from the beginning, its Java virtual machines have used the ’104 patented technology. Not long after the first Java commercial release, the ’104 patent inventor James Gosling extolled the advantages of the Java interpreter’s storing and reusing numeric references resulting from symbolic reference resolution, rather than resolving symbolic references more than once:

The Java compiler doesn’t compile references down to numeric values—instead, it passes symbolic reference information through to the byte code verifier and the interpreter. The Java interpreter performs final name resolution once, when classes are being linked. Once the name is resolved, the reference is rewritten as a numeric offset, enabling the Java interpreter to run at full speed.
James Gosling & Henry McGilton, White Paper, The Java Language Environment § 5.1.2 (May 1996), available at http://java.sun.com/docs/white/langenv/ (Peters Decl. Ex. C). A comparison of Dr. Gosling’s white paper to his ’104 patent specification shows the direct relationship between the two. Based on this and other evidence, Oracle’s validity expert Benjamin Goldberg will testify that the inclusion of the ’104 patented technology in Java virtual machines increased their execution speed, just as described by Dr. Gosling. See Expert Report of Dr. Benjamin F. Goldberg Regarding Validity of Patents-In-Suit ¶¶ 423-25 (Peters Decl. Ex. D). The asserted claims are directly connected to Oracle’s Java technology. For example, asserted claim 40 of the ’104 patent requires that “data from a storage location identified by a numeric reference is thereafter used for the operation when the instruction contains a symbolic field reference, the numeric reference having been resolved from the symbolic field reference.” (ECF No. 36-5 (’104 Patent) at 12:30-34.) “Thereafter” in the claim means that the interpreter obtains data based on the stored numeric reference on the second and subsequent times the instruction is interpreted. Thus there is a direct relationship between the language of claim 40 and the feature of the Java virtual machine as described by Dr. Gosling.

But Google’s invalidity expert Dennis Allison will—apparently—testify to the contrary. But on this point, Dr. Allison maintains as much ambiguity as he can. In reference to Dr. Goldberg’s discussion of the Gosling white paper, Dr. Allison stated in his reply report that “none of the asserted claims require that the interpreter obtains data a second time based on the stored

4

numeric reference. Yet this requirement is the basis for Dr. Goldberg’s conclusion that the ’104 patent results in faster interpretation. Because none of the claims actually claim this feature, there is no basis to conclude that a nexus exists between the claimed features of the ’104 patent and the alleged commercial success of the Java virtual machine.” Expert Reply Report of Dennis Allison Regarding the Invalidity of U.S. Patent No. RE38,104 ¶ 53 (Peters Decl. Ex. E). While the evidence shows that Dr. Allison is mistaken about what the ’104 patent claims, he sidesteps the question of whether Oracle’s Java virtual machines are embodiments of the ’104 patent claims, and whether the ’104 claimed technology is what enables the Java interpreter to performs resolution only once, and thereby run at full speed.

So long as Google is unwilling to concede that Oracle’s products embody the asserted claims, there is a genuine dispute of material fact, and summary judgment should be denied.

C. Unmarked Products That Were Not Made Or Sold During The Period
Of Google’s Infringement Do Not Limit Damages Under Section 287
There is a temporal aspect to the marking issue that also prevents summary judgment. The statute only limits damages during the period that the patentee (or its licensees) are making or selling “patented articles.” Texas Digital Sys., Inc. v. Telegenix, Inc., 308 F.3d 1193, 1220 (Fed. Cir. 2002) (“The recovery of damages is not limited where there is no failure to mark, i.e., . . . where there are no products to mark.”); Wokas v. Dresser Indus., Inc., 978 F. Supp. 839, 848 (N.D. Ind. 1997) (holding that failure to properly mark covered products did not preclude recovery of damages for infringement occurring during period of time patentee was not producing any covered products). But not every Oracle Java product was being made and sold during the period of Google’s infringement, which did not occur before Android development began in 2005.

Oracle’s JavaOS product is a good example of a product for which there is evidence that it was not sold during Google’s infringement. Oracle contends that different versions of JavaOS practiced the ’104 and ’702 patents. (The JavaOS product may be particularly pertinent to this motion, because Google may argue that it is a “non-mainstream” Java product that it concedes practiced the ’702 patent, where it disputes that Sun’s “mainstream” Java products also practiced

5

the patent, according to its expert Dr. Levine.) Google sought to establish during deposition that the JavaOS product was cancelled in 1999. See Stephen Shankland, Sun, IBM decaffeinate JavaOS (August 23, 1999), available at http://news.cnet.com/2100-1001-230175.html (Google’s Exhibit DX290 to the Pampuch 30(b)(6) deposition) (Peters Decl. Ex. F). If the Court draws factual inferences in Oracle’s favor, as it must, then whether or not any version of JavaOS was marked with any patent numbers is irrelevant, because there was no product for Oracle to mark when Google started infringing. Oracle’s contention that versions of JavaOS practiced the patents cannot justify summary judgment.

IV. CONCLUSION

Google’s motion remains premature. Because Google disputes its infringement of the non-method claims and has not established that Oracle’s practice of its own patents is an undisputed fact, summary judgment is not warranted.

Dated: October 28, 2011

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

By: /s/ Michael A. Jacobs

Attorneys for Plaintiff
ORACLE AMERICA, INC.

6


578

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

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

Case No. CV 10-03561 WHA

OPPOSITION OF ORACLE AMERICA,
INC. TO GOOGLE INC.’S MOTION TO
STRIKE TWO “REBUTTAL” DAMAGES
REPORTS BY DR. KENNETH SERWIN

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

TABLE OF CONTENTS

I. BACKGROUND ....... 1

II. ARGUMENT ...... 2

A. The Court Has Not Prohibited The Submission Of Rebuttal Reports ...... 3

B. This Court’s Silence On Whether There May Be Rebuttal Reports Does
Not Preclude The Submission Of Rebuttal Reports ...... 3

C. Contrary To Google’s Contention, The Parties’ Actions Support Allowing
Dr. Serwin’s Reports ...... 5

D. Google Has Not Been Prejudiced ...... 6

III. CONCLUSION ...... 7

i

TABLE OF AUTHORITIES

CASES

AMCO Ins. Co. v. Madera Quality Nut LLC,
2006 WL 6849050 (E.D. Cal. July 31, 2006) ...... 4

Chao v. Mazzola,
2006 WL 3251737 (N.D. Cal. Nov. 8, 2006) ...... 7

DeFazio v. Hollister, Inc.,
2008 WL 5113654 (E.D. Cal. Dec. 1, 2008) ...... 7

Hynix Semiconductor v. Rambus,
No. CV-00-20905, 2008 U.S. Dist. LEXIS 12195 ...... 5

In re Katrina Canal Breaches Consolidated Litig.,
2010 WL 1643760 (E.D. La. Apr. 20, 2010) ...... 4

Int’l Bus. Machines Corp. v. Fasco Indus., Inc.,
1995 WL 115421 (N.D. Cal. Mar. 15, 1995) ...... 5

Johnson v. Grays Harbor Cmty. Hosp.,
No. C06-5502BHS, 2007 WL 4510313 (W.D.Wash. Dec. 18, 2007) ...... 4

Knapp v. State Farm Fire & Cas. Co.,
1995 WL 340991 (D. Kan. May 31, 1995) ...... 6

Lindner v. Meadow Gold Dairies, Inc.,
249 F.R.D. 625 (D.Haw. 2008) ...... 4

Mayou v. Ferguson,
544 F.Supp.2d 899 (D.S.D. 2008) ...... 4

Silgan Containers v. Nat’l Union Fire Ins.,
2011 WL 1058861 (N.D. Cal. Mar. 23, 2011) ...... 3, 4

Woodson v. Rodriguez,
2011 WL 1654663 (N.D. Cal. April 28, 2011) ...... 6, 7

RULES

Fed. R. Civ. P. 26(a)(2)(C) ...... 4

Fed. R. Civ. P. 26(a)(2)(C)(ii) ...... 5

Fed. R. Civ. P. 26(a)(2)(D) ...... 3

Fed. R. Civ. P. 26(a)(2)(D)(ii) ...... 3

Fed. R. Civ. P. 37(c) ...... 6

ii

Defendant Google, Inc. (“Google”) has filed a Motion to Strike the Two “Rebuttal” Damages Reports of Dr. Kenneth Serwin, Oracle America, Inc.’s (“Oracle”) rebuttal damages expert (Dkt. No. 554). Google does not challenge Dr. Serwin’s credentials, the scope of his report, his methodology, or the bases for his opinions. The sole challenge Google makes is that there is a nominal difference between a reply and rebuttal report and because no order in this case makes that distinction, the submission of a rebuttal report by a new expert is prohibited, even though both parties’ experts have previously submitted rebuttal reports.

Google’s argument has no legal or factual basis, and its motion should be denied. Rule 26 permits rebuttal reports. Nothing, either express or implied, in this Court’s prior orders supersedes the application of Rule 26 with respect to the submission of rebuttal reports in this case. Indeed, consistent with the rule and with Dr. Serwin’s reports, the parties’ other experts have submitted both reply and rebuttal reports. Oracle timely disclosed Dr. Serwin, and Google knew Oracle was considering serving rebuttal reports by Dr. Serwin. Google has not attempted to show and cannot show any prejudice in connection with Dr. Serwin’s reports. Oracle respectfully requests that the Court deny Google’s motion to strike the expert damages reports of Dr. Serwin.

I. BACKGROUND

On July 27, 2011, Oracle disclosed to Google the names of additional experts for the purpose of accessing AEO information under the Protective Order. The July 27, 2011 list included Dr. Serwin. (Declaration of Beko Richardson Ex. 1 (Letter from Steven C. Holtzman to Scott T. Weingaertner, dated July 27, 2011).) At a hearing before this Court on August 19, 2011, Oracle disclosed Dr. Serwin to the Court and Google as potentially submitting a report in addition to the report of Oracle’s opening damages expert, Professor Cockburn: “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 mostly 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.” (8/19/11 Hearing Tr. at 32:14-20 (Dkt. No. 350).)

On September 16, 2011, as Google points out in its motion (Motion at 4), following the submission of Prof. Cockburn’s revised report, and following e-mails specifically addressing Prof.

1

Cockburn’s “reply” report, Oracle wrote to Google’s counsel: “Just so we’re all clear, we now understand that you will not object to our submission of damages reply/rebuttal reports, should we elect to submit any.” (Purcell Decl. (Dkt. 555) Ex. B at 1 (emphasis added).) Google did not object, either to the disclosure of the possibility of a “rebuttal” report or to the idea that there might be multiple “reports.” Notably, at that time Oracle had submitted only one opening damages report and Google had not disclosed that it was going to submit separate patent and copyright damages reports. And if Oracle’s disclosure was not clear enough, Oracle’s witness list dated October 7, 2011 identified Dr. Serwin as an “expert retained by Oracle who may testify as a rebuttal witness regarding damages.” (Oracle’s Witness List dated October 7, 2011(Dkt 491-1).) Google again said nothing.

On October 10, 2011, seven days after Google submitted the reports of its damages experts, Drs. Leonard and Cox, Oracle submitted Dr. Serwin’s “rebuttal” reports, along with “reply” reports of Dr. Cockburn.

II. ARGUMENT

This Court’s November 19, 2010 Case Management Order (“CMO”) provides:

Within SEVEN CALENDAR DAYS thereafter [following submission of opening reports], 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.
CMO (Dkt. No. 56) at 2 (emphasis added). Dr. Serwin’s rebuttal reports fit the rules set by the Court: they were filed within seven days following the submission of Google’s damages reports that they rebut (one rebutting Dr. Leonard, and one rebutting Dr. Cox); they are solely limited to responses to the opinions and analyses of Google’s damages experts; they do not proffer any new damages theories of their own; and they are brief compared to the reports they rebut (46 pages rebutting Dr. Leonard, compared to Dr. Leonard’s 119-page report; and 27 pages rebutting Dr. Cox, compared to Dr. Cox’s 65-page report). Moreover, as Oracle made clear in its witness list, Dr. Serwin’s testimony is to be reserved for the rebuttal phase of the trial. Google does not contest any of these facts.

Google nonetheless argues that (1) this Court has not expressly or affirmatively provided for any right to submit “rebuttal” reports (Motion at 5); (2) Rule 26, which permits rebuttal reports by experts

2

who did not submit opening reports, applies only in the absence of a scheduling order, including a scheduling order that is silent as to whether the parties may submit rebuttal reports (id. at 5-6); and (3) supposedly consistent with this Court's orders, “neither party ever has served a ‘rebuttal’ report, on any issue, from any expert who had not submitted an opening report.” (Id. (emphasis in original).) None of these arguments has merit.

A. The Court Has Not Prohibited The Submission Of Rebuttal Reports

Rule 26 expressly contemplates rebuttal reports. “Absent a stipulation or a court order, the disclosure must be made . . . if the evidence is intended solely to contradict or rebut evidence on the same subject matter identified by another party under Rule 26(a)(2)(B) within 30 days after the other party’s disclosure.” Fed. R. Civ. P. 26(a)(2)(D)(ii). Although Google is correct that a court order may supersede this provision, the orders issued by this Court do not do so. The Court’s orders nowhere state that the parties may not use rebuttal experts or submit rebuttal reports, or that rebuttal reports may be submitted only by experts who have already submitted an opening report. Instead, the CMO provides that “the party with the burden of proof must disclose any reply reports rebutting specific material in opposition reports.” CMO ¶ 8 (emphasis added). The Order does not limit “reply reports rebutting” opposition reports to the author of an opening report. Similarly, the Court’s July 22, 2011 Daubert Order (Dkt. No. 230), which set a new date for Dr. Cockburn’s opening report and the corresponding opposition report, is silent on reply and rebuttal reports. Nothing in either order suggests that it was intended to supersede Rule 26. Indeed, like this Court’s CMO, Rule 26 itself does not distinguish between “reply” and “rebuttal” reports. See Fed. R. Civ. Proc. 26(a)(2)(D). There is no basis for the distinctions Google wishes to draw, and no basis to strike Dr. Serwin’s reports.

B. This Court’s Silence On Whether There May Be Rebuttal Reports Does Not
Preclude The Submission Of Rebuttal Reports

Google contends that rebuttal reports are impermissible because this Court’s orders do not “provide for” such reports and are “silent as to the parties’ entitlement to rebuttal reports.” (Motion at 5.) Contrary to Google’s suggestion, silence in an order by this Court should not be construed as abridging any right. See Silgan Containers v. Nat’l Union Fire Ins., No. C 09-05971 RS, 2011 WL 1058861, at *8 (N.D. Cal. Mar. 23, 2011) (“The district court’s order is silent on timing of rebuttal

3

disclosures, which means that the Federal Rules govern”); AMCO Ins. Co. v. Madera Quality Nut LLC, No. 1:04–cv–06456–SMS, 2006 WL 6849050, at *2 (E.D. Cal. July 31, 2006) (“[N]o order of the Court expressly governed the disclosure of rebuttal expert witnesses. The disclosure of such witnesses is thus governed by Fed. R. Civ. P. 26(a)(2)(C) . . .”).1 More specifically, in In re Katrina Canal Breaches Consolidated Litigation, No. 05-4182, 2010 WL 1643760, at *2 (E.D. La. Apr. 20, 2010), the court held that where a case management order was “silent as to supplemental and rebuttal disclosures,” Rule 26(a)(2)(D) applied and rebuttal reports submitted within 30 days of adversary’s report were timely. The law is clear that an expert designated solely for rebuttal purposes will not be excluded. See Silgan Containers, 2011 WL 1058861, at *8 (denying motion to strike witnesses that were rebuttal experts only); Lindner v. Meadow Gold Dairies, Inc., 249 F.R.D. 625, 636 (D. Haw. 2008); Johnson v. Grays Harbor Cmty. Hosp., No. C06-5502BHS, 2007 WL 4510313, at *1 (W.D. Wash. Dec. 18, 2007) (“the Court will not exclude Plaintiff’s rebuttal experts from testifying solely because Plaintiff designated only rebuttal experts”).

Here the Court was not completely silent, instead explicitly changing the deadline for “reply reports rebutting specific material in opposition reports” from thirty to seven days. That explicit order supersedes Rule 26 as to the applicable deadline, which Dr. Serwin followed, but nothing in the CMO or any other order of this Court supersedes the ordinary rule that rebuttal (and reply) reports may be filed, whether by the author of an opening report or otherwise. See, e.g., Martin-Hernandez v Butterball, LLC, No. 5:07-cv-174-H, 2010 WL 2089251, at *12-14 (E.D.N.C. May 21, 2010) (“Here, there is a court order on scheduling, but not specifically addressing expert rebuttal disclosures…. Butterball interprets the Rule’s language as requiring exclusion of any expert rebuttal designation when a scheduling order is in place and silent on the issue. But the court finds such interpretation is not required by the language of the Rule or by any controlling or persuasive authority.”); Mayou v. Ferguson, 544 F. Supp. 2d 899, 901 (D.S.D. 2008) (“I disagree with any decision to the effect that, where the stipulation and the scheduling order are silent, such [silence] serves to prohibit any

____________________________

1 Federal Rule of Civil Procedure 26(a)(2)(D) was known as 26(a)(2)(C) until the publication of the 2011 revisions.

4

designation of a rebuttal expert being made by the plaintiff…” interpreting Rule 26 to allow default application of Rule 26(a)(2)(C)(ii)’s deadline).

The only two cases Google cites, both in the last page of its motion, are inapposite. Both Hynix Semiconductor v. Rambus, No. CV-00-20905, 2008 U.S. Dist. LEXIS 12195, at *17 (N.D. Cal. Feb. 3, 2008), and International Business Machines Corp. v. Fasco Indus., Inc., C–93–20326 RPA, 1995 WL 115421, at *2 (N.D. Cal. Mar. 15, 1995) (“IBM”), involve motions to exclude rebuttal experts from trial because of the defendants’ failure to disclose the experts prior to the submission of the reports. Even then, the Hynix court denied the motion to exclude the testimony of the rebuttal expert since there was no substantial prejudice in allowing the testimony. 2008 U.S. Dist. LEXIS 12195, at *17. Furthermore, in IBM, the court held that the case management order controlled the disclosure of rebuttal reports because the case management order was not silent on the issue of rebuttal reports, but rather conflicted with Rule 26 in that complying with Rule 26 would have allowed the party to designate its rebuttal experts twenty-one days after the close of discovery set in the case management order. 1995 WL 115421, at *2. There is no such conflict here. As detailed above, Google has no basis for stating that Oracle failed to disclose Dr. Serwin or that such disclosure was untimely.

C. Contrary To Google’s Contention, The Parties’ Actions Support Allowing Dr. Serwin’s Reports

Google argues that the parties have acted “consistent with” or “relied on” a supposed preclusion of rebuttal reports other than by the authors of opening reports (Motion at 5), but it fails to explain how. Until now, neither party ever suggested that submitting rebuttal reports would be impermissible. Similarly, Google fails to identify any “reliance” on the assumption that it was not permitted to do so. Indeed, Google ignores that Oracle (1) disclosed Dr. Serwin; (2) informed Google and the Court in August that Dr. Serwin might be a second damages expert; (3) identified Dr. Serwin on its witness list as potentially testifying as a damages rebuttal expert despite not having submitted an opening report; and (4) told Google in early October that it may be submitting a rebuttal report from Dr. Serwin. Google cannot credibly claim surprise or mistaken understanding after four months of disclosures met with silence.

5

Google’s argument that the parties have acted on the assumption that rebuttal reports are not permitted in this case is also contradicted by what the parties have done. Google’s own experts have submitted “rebuttal” reports in addition to reply reports, even though the CMO does not expressly authorize this practice. Both in the affidavit accompanying its motion and in a footnote in the motion itself, Google explains why one of its technical experts, Dr. Owen Astrachan, submitted both a “rebuttal” and “reply” report. (Motion at 3 n.2.) The sole distinction it makes is that Dr. Astrachan’s rebuttal report “was in fact an opposition report in response to Dr. Mitchell’s opening report.” (Ibid.) Dr. Serwin’s rebuttal reports are similarly limited in scope, solely responding to issues raised by Google’s damages experts. Google has not claimed otherwise. There is no basis for Google’s argument that either party has somehow acted consistent with or relied on the assumption that there may be no rebuttal reports. Indeed, Google’s own submission of both “reply” and “rebuttal” reports completely undermines its position.

No doubt recognizing this fact, Google invents a distinction between experts who have filed opening reports and experts who have not, insinuating that the former may submit rebuttal reports while the latter may not, but Google cites nothing in support of this distinction. And with good reason:

[Rule 26] does not restrict rebuttal testimony to expert witnesses previously designated to testify in the case in chief. Plaintiffs have cited no authority for the proposition that rebuttal testimony should be so restricted. The court otherwise knows of none.
Knapp v. State Farm Fire & Cas. Co., Civ. A. No. 94–2420–EEO, 1995 WL 340991, at *2 (D. Kan. May 31, 1995). Google points to nothing in this Court’s orders or the law that provides otherwise, either explicitly or implicitly.

D. Google Has Not Been Prejudiced

Federal Rule of Civil Procedure 37(c) permits sanctions such as motions to strike only when there is a failure to disclose or supplement discovery by a party. Here, Oracle fully disclosed Dr. Serwin. Even if it had not, the rule still permits the use of a witness or evidence at trial absent disclosure if “the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c); see, e.g., Woodson v. Rodriguez, No. C 07–04925 CW, 2011 WL 1654663, at *3 (N.D. Cal. April 28, 2011) (denying motion to strike reply report not provided for in case management order where production of

6

report was harmless); Chao v. Mazzola, No. C-04-4949 PJH (EMC), 2006 WL 3251737, at *1-2 (N.D. Cal. Nov. 8, 2006) (denying motion to strike rebuttal report that may not be a true rebuttal where no prejudice resulted); DeFazio v. Hollister, Inc., No. CIV S-04-1358 WBS GGH, 2008 WL 5113654, at *5 (E.D. Cal. Dec. 1, 2008) (“Defendants cannot read the ‘harmless’ or ‘lesser sanctions’ exceptions out of the enforcement rule, Rule 37(c)(1) – especially where the failure to disclose is not accompanied by gamesmanship, bad faith or deliberate disobedience of a court order. Prejudice is a component of any sanctions analysis as is the need to explore the existence of lesser, yet still effective sanctions”).

Google does not even attempt to establish any harm or prejudice from the submission of Dr. Serwin’s rebuttal reports, and Google cannot do so. Google was aware of Dr. Serwin and the possibility that he would be submitting rebuttal reports for at least four months. Oracle has not engaged in gamesmanship or bad faith in submitting Dr. Serwin’s reports. Dr. Serwin has not included new affirmative arguments or analyses in his reports. Google may take Dr. Serwin’s deposition. In these circumstances, Google has suffered no prejudice from the submission of the rebuttal report and has no legal basis for its motion to strike. See Woodson, 2011 WL 1654663, at *3 (denying motion to strike because the fact that defendant refused service of the report it sought to strike did not create prejudice when defendant would have had adequate time to review the report and prepare for deposition and trial when plaintiff attempted service).

III. CONCLUSION

Oracle respectfully requests that the Court deny Google’s motion to strike Dr. Serwin’s rebuttal reports.

Dated: October 28, 2011

BOIES, SCHILLER & FLEXNER LLP

By: /s/ Steven C. Holtzman
Steven C. Holtzman

Attorneys for Plaintiff
ORACLE AMERICA, INC.

7


581

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

GOOGLE'S OPPOSITION TO MOTION
TO EXCLUDE PORTIONS OF THE
EXPERT REPORTS OF GREGORY K
LEONARD AND ALAN J. COX

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

TABLE OF CONTENTS

Page

I. INTRODUCTION ...... 1

II. ARGUMENT ...... 1

A. Dr. Leonard and Dr. Cox do not offer any "technical" expert opinions
of their own ...... 1

B. Dr. Leonard and Dr. Cox appropriately rely on interviews with
witnesses as part of the basis of their opinions ...... 3

1. Experts may rely on witness interviews, and Google has
acknowledged that it must (and will) present the underlying
facts through testimony of percipient witnesses before its
experts may rely on those facts ...... 3

2. Google did not hide the ball from Oracle in discovery and has
proposed reasonably limited additional discovery from
witnesses who have not yet been deposed ...... 5

C. The fact that Oracle may be able to offer evidence to dispute Dr.
Leonard's and Dr. Cox's opinions does not make those opinions
inadmissible ...... 8

D. Google's damages experts do not offer any ipse dixit statements ...... 9

E. Google's damages experts properly discuss the implications of the fact
that the Java platform was stagnant and fragmented before Google's
alleged infringement ...... 10

F. Google's damages experts offer opinions consistent with settled law ...... 13

G. Dr. Leonard is fully qualified to explain why Dr. Shugan's marketing
analysis is unreliable as a matter of basic economics ...... 14

III. CONCLUSION ...... 17

i

TABLE OF AUTHORITIES

Page(s)

Federal Cases

Children's Broad. Corp. v. Walt Disney Co.
357 F. 3d 860 (8th Cir. 2004) ...... 9

Daubert v. Merrell Dow Pharmaceuticals, Inc.
509 U.S. 579 (1993) ...... 1, 4, 8

Geo. M. Martin Co. v. Alliance Machine Sys. Int'l, LLC
No. C 07-00692 WHA, 2008 WL 2008638 (N.D. Cal. May 6, 2008) ...... 3, 4

Hangarter v. Provident Life and Ace. Ins. Co.
373 F.3d 998 (9th Cir. 2004) ...... 8

Inline Connection Corp. v. AOL Time Warner Inc.
470 F. Supp. 2d 435 (D. Del. 2007) ...... 4

Int'l Adhesive Coating Co., Inc. v. Bolton Emerson Int'l Inc.
851 F.2d 540 (1st Cir. 1988) ...... 4

Mackie v. Rieser
296 F.3d 909 (9th Cir. 2002) ...... 14

McLean v. 988011 Ontario, Ltd.
224 F.3d 797 (6th Cir. 2000) ...... 9

Polar Bear Productions, Inc. v. Timex Corp.
384 F.3d 700 (9th Cir. 2004) ...... 13, 14

Stecyk v. Bell Helicopter Textron, Inc.
295 F.3d 408 (3d Cir. 2002) ...... 9

Therasense, Inc. v. Becton, Dickinson & Co.
No. C 04-02123 WHA, 2008 WL 2323856 (N.D. Cal. May 22, 2008) ...... 3, 4, 5, 9

Federal Rules

Federal Rule of Civil Procedure 30(b)(6) ...... 5, 6, 7

Federal Rule of Evidence 703 ...... 4, 9

Federal Rule of Evidence 705 ...... 9, 10

ii

I. INTRODUCTION

Facing a second motion to strike critical parts of its own damages expert's revised-but still arbitrary and result-oriented-expert report, Oracle has filed a tit-for-tat motion to strike portions of the reports of Google's damages experts Dr. Gregory Leonard and Dr. Alan Cox. But none of Oracle's transparent complaints offer any reason to exclude expert testimony under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), or its progeny.

II. ARGUMENT

Oracle offers seven arguments in moving to strike, but each lacks merit. Each argument is either factually or legally mistaken, or both.

A. Dr. Leonard and Dr. Cox do not offer any "technical" expert opinions of their own.

First, Oracle is factually wrong to argue that either Dr. Leonard or Dr. Cox has offered or will offer at trial any "technical" expert opinions on any issue. They do not and will not. Oracle mentions two "technical" issues in its motion: (1) the technical viability of Google's noninfringing alternatives to the allegedly patented functionality and copyrighted materials at issue; and (2) the extent to which Sun's Java mobile platform was "fragmented" prior to Google's introduction of the Android platform. As to both of these issues, both Dr. Leonard and Dr. Cox rely for technical background on the opinions of Google's technical experts, interviews with personally knowledgeable Google and third-party witnesses, and documentary evidence about the mobile-platform market. Dr. Leonard and Dr. Cox then offer their own economic expert opinions based on those underlying facts and technical expert opinions, which they are entitled to do as economists. This is entirely proper, and no different from what Oracle's own expert Dr. Iain Cockburn claims to have done—offer economic opinions based on a technical understanding shaped at least in part by Oracle's technical experts, employees, and documentary evidence.

In fact, if one reads Oracle's motion carefully, it is obvious that Oracle lacks any basis for accusing Dr. Leonard and Dr. Cox of offering "technical" opinions. For example, one of the purported "technical opinions" that Oracle insists must be stricken from Dr. Leonard's testimony is his statement that the opinions of Oracle's technical expert Dr. John Mitchell "are inconsistent with my discussions with Google personnel and the opinions of Google's technical experts."

1

Oracle Mot. at 5:3-4 (citing Dearborn Decl. Ex. 1 (Leonard Report) at 28). That is to say, Oracle is demanding that the court strike a harmless foundational sentence where Dr. Leonard identifies the existence of a factual dispute between the parties and explains the basis of his own economic opinions. Oracle cites no authority to support its apparent belief that Dr. Leonard cannot even tell the jury where the parties disagree or identify the basis of his opinions.

Oracle's other complaints about "technical opinions" are similarly baseless. The quotes from Oracle's own brief make clear that each of the "technical opinions" Oracle ascribes to Dr. Leonard and Dr. Cox are actually either the opinions of Google's technical experts or factual statements by witnesses (including at deposition). In each case, Dr. Leonard and Dr. Cox are plainly relying on this other testimony for foundational technical statements about Google's noninfringing alternatives to the technology at issue. They then do what all experts do, offering their own (economic) opinions based on those foundational statements. Specifically, Oracle objects to Dr. Leonard's statements that:

  • Google could have used a Java-language native compiler instead of using the allegedly infringing Dalvik virtual machine. Oracle Mot. at 4 (citing Leonard Report at 11-13). But this is not based on Dr. Leonard drawing any "technical conclusions" of his own. The statement is partly based on the success of Apple's iPhone, which uses a native compiler and not a virtual machine, and thus proves the viability of the native compiler approach generally. The statement is also based on Dr. Leonard's interviews with and deposition testimony from percipient Google witnesses Andy Rubin and Dan Bornstein—engineers who are familiar both with native compilers generally and Google's consideration and the viability of that approach for Android.
  • Google could have used a programming language other than Java. Oracle Mot. at 4 (citing Leonard Report at 13-19). Here, Dr. Leonard relies on four separate reports from Google's technical experts for the basic proposition that Google could have used other programming languages, then relies on the technical experts and Google witnesses to explain how Google could have made a non-Java-language approach work.
  • Google could have used a virtual machine, but designed around Oracle's patents. Oracle Mot. at 5 (citing Leonard Report at 20-24). Here, Dr. Leonard cites to percipient witness interviews explaining that, in the original releases of Android, the Dalvik virtual machine did not contain most of the allegedly infringing functionality. Dr. Leonard further cites to Google's technical experts to describe how specific non-infringing alternatives would have worked; he does not offer any opinions on that technical issue himself.
None of this is an economist improperly offering opinions on technical computer-science issues, as Oracle claims. These are statements of the foundations of Dr. Leonard's economic opinions.

2

B. Dr. Leonard and Dr. Cox appropriately rely on interviews with witnesses as part of
the basis of their opinions.

1. Experts may rely on witness interviews, and Google has acknowledged that it
must and will present the underlying facts through testimony of percipient
witnesses before its experts may rely on those facts.
Second, Oracle objects generally to Dr. Leonard's and Dr. Cox's reliance on information obtained in interviews with Google employees and third-party witnesses. Oracle argues that permitting Dr. Leonard and Dr. Cox to repeat information allegedly provided by Google employees would be an end run around the hearsay rule. But Google has already explained that it will, and accepts that it must, offer the underlying factual testimony from the percipient witnesses first, before its experts may testify based on those facts. Oracle will have a full and fair opportunity to cross-examine each of the underlying percipient witnesses before Dr. Leonard or Dr. Cox takes the stand.

In support of this part of its motion, Oracle cites this Court's opinions in Therasense, Inc. v. Becton, Dickinson & Co., No. C 04-02123 WHA, 2008 WL 2323856 (N.D. Cal. May 22, 2008), and Geo. M. Martin Co. v. Alliance Machine Sys. Int'l, LLC, No. C 07-00692 WHA, 2008 WL 2008638 (N.D. Cal. May 6, 2008). But those cases endorse the exact procedure outlined above, which procedure Google will follow at trial. As this Court wrote in Therasense:

The traditional and correct way to proceed is for a foundational witness to testify firsthand at trial to the foundational fact or test and to be cross-examined. Then the expert can offer his or her opinion on the assumption that the foundational fact is accepted by the jury. The expert can even testify before the foundation is laid so long as counsel represents in good faith that the foundational fact will be laid before counsel rests. When the foundational fact is tested during fact discovery, as by a deposition, for example, it is often true that opposing counsel forego any objection and allows the expert to summarize the foundation.
Therasense, 2008 WL 2323856, at *2. What Therasense and Alliance Machine condemn is what Google has no intention of doing (and the Court would not permit it to do anyhow): having its experts testify as to "facts" entirely on the say-so of Google witnesses, without allowing Oracle a fair chance to cross-examine those Google witnesses. Oracle's hearsay objection is a straw man; Google has never proposed to offer hearsay at trial.

With that out of the way, Oracle has no valid objection to Dr. Leonard or Dr. Cox using statements by Google employees as part of the factual basis of their opinions. Neither

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Therasense nor Alliance Machine suggests, much less holds, that party employee interviews are an inherently unreliable basis for an expert opinion. And Oracle offers no other case so holding, likely because courts routinely approve of experts using such interviews under Federal Rule of Evidence 703. See Int'l Adhesive Coating Co., Inc. v. Bolton Emerson Int'l. Inc., 851 F.2d 540, 545 (1st Cir. 1988) (approving accounting expert's reliance on plaintiff's "business and financial records" and "interviews with company personnel" because "these are sources of information normally and reasonably relied upon by accountants"); Inline Connection Corp. v. AOL Time Warner Inc., 470 F. Supp. 2d 435, 441-42 (D. Del. 2007) (rejecting challenge to expert's reliance on party employees where plaintiff "was provided the opportunity to depose AOL and EarthLink employees and acquire the information that it needed to prepare for trial").

In fact, the subject matter of the witness interviews here make clear why those interviews constitute facts and data "of a type reasonably relied by experts in the particular field." Fed. R. Evid. 703. In order to offer an opinion on the economic significance of Google's non-infringing alternatives, Dr. Leonard and Dr. Cox had to investigate (1) what alternatives existed; (2) how viable each alternative was; (3) what alternatives Google considered; and (4) the advantages and disadvantages each alternative offered to Google. The best place to go for first-hand, percipient answers to each of these questions is Google's own engineering staff. To the extent Oracle would argue that Dr. Leonard and Dr. Cox could not rely on Google employees, but instead had to rely only on Google's outside technical experts, that would make no sense. It would introduce more hearsay to the proceedings, since the technical experts would have to get the underlying information from the Google employees before relaying it to the economists. Not only was this approach consistent with the law, it was the sensible and efficient one. Oracle is free to cross-examine them about the interviews, but this is not a Daubert objection.

Finally, Oracle undoubtedly will argue in reply that the Court should strike Dr. Leonard's and Dr. Cox's opinions because Dr. Leonard and Dr. Cox accepted as true the statements of Google technical experts and employees that Google had good non-infringing alternatives. According to Oracle, Dr. Leonard and Dr. Cox should have tested the accuracy of those statements by modifying Android phones to replace the allegedly infringing functionality with an

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alternative, then measuring the performance impact. But Oracle is the plaintiff here, not Google. It is fundamentally the job of Oracle and its experts to quantify the impact (if any) of the allegedly infringing functionality on handset performance. Oracle's argument that Dr. Leonard and Dr. Cox should be disqualified for failing to conducts tests to impeach Google's witnesses amounts to an attempt to shift the burden of proof. Oracle is certainly free to point out on cross-examination that Dr. Leonard and Dr. Cox didn't conduct tests, but that should be the extent of it. An expert is entitled to rely on the accuracy of statements of party witnesses regarding matters within those witnesses' personal knowledge, then render opinions based on the assumption that the jury will believe those witnesses—-just as this Court held in Therasense.

2. Google did not hide the ball from Oracle in discovery and has proposed
reasonably limited additional discovery from witnesses who have not yet
been deposed.
Oracle's motion to strike goes so far as to make veiled accusations of discovery abuse, by implying that Google has "ke[pfj the facts secret from the other side until after the close of discovery." Oracle Mot. at 6. Of course, Oracle does not identify a single fact Google "kept secret," or any subject covered by the witness interviews on which Oracle did not actually take discovery. The primary subjects of the witness interviews were Google's non-infringing alternatives to the patents and copyrights at issue and the evolution of the Android software over time. Oracle took ample discovery on both subjects. Those were two of Oracle's 15 allotted Rule 30(b)(6) topics. Declaration of David Zimmer in Support of Google's Opposition ("Zimmer Decl.") Ex. A (June 21, 2011 Rule 30(b)(6) notice). As one would expect given the size of this case and scope of discovery, Oracle also propounded document requests, id. Ex. B (Oracle's Corrected Second Set of Requests for Production) at RFPs 102 & 126, and an interrogatory, id. Ex. C (Oracle's Fourth Set of Interrogatories) at Rogs 20-21, about Google's non-infringing alternatives and how much additional cost they would have imposed. Moreover, as discussed more below, Oracle deposed the very same employees Dr. Leonard and Dr. Cox interviewed on these same subjects.

Likewise, Oracle puts great weight on the fact that some of the interviews took place after the close of discovery. But this is Oracle's own fault, because the expert discovery schedule

5

dictating the timing of the witness interviews. Oracle served its initial damages report on May 21, 2011. Had that report not been so riddled with legal and factual errors that the Court struck it and ordered Oracle back to the drawing board, Google's responsive report would have been due before the July 29, 2011 discovery cutoff, or at worst very shortly thereafter. Any witness interviews would have been conducted earlier. But as things turned out, Oracle did not serve its revised damages report until September 12, 2011—six weeks after fact discovery ended.

Finally, Oracle complained in its precis letter, and again at the recent case management conference, that Dr. Leonard and Dr. Cox had interviewed two witnesses that Google had allegedly failed to disclose—Google employee Tim Bray and third-party witness John Rizzo.1 Oracle mentions this issue only briefly in its motion, Oracle Mot. at 8:4, but Google has taken steps to resolve this issue, as the Court suggested at the case management conference. Because neither Bray nor Rizzo has yet been deposed, Google has proposed that Oracle depose each of them for two hours, as the Court recommended. Rizzo is not under Google's control, but Google has reached out to him and his employer Aplix Corporation of America regarding potential deposition dates, and has agreed to facilitate Oracle's service of a subpoena. Zimmer Deck % 5. Google has proposed deposition dates to Oracle for both Bray and Rizzo. Id.

This is not enough for Oracle, which now insists on depositions of each of the other five witnesses who spoke to Dr. Leonard and/or Dr. Cox, even though all of those witnesses were well known to Oracle since this case began, and four of the five have previously been deposed in this case, often for multiple days. Taking these witnesses one at a time:

  • Andy Rubin. Oracle has already deposed Rubin for three days in this case— for a full day in his personal capacity on April 5, 2011, for a full day in his personal capacity and on three Rule 30(b)(6) topics on July 27, 2011, and then a further examination on the Rule 30(b)(6) topics on August 18, 2011. Zimmer Deck 6. Oracle exhaustively covered the subject matter of Rubin's interview with Google's experts—the existence of non-infringing alternatives with Rubin. E.g., id. Ex. D (April 5, 2011 Rubin Dep.) at 37:1-38:23, 62:5-63:4.
  • Dan Bornstein. Oracle deposed Bornstein for two days in this case—for a full day in his personal capacity on May 16, 2011, and then for a further full day as a Rule 30(b)(6) designee on July 22, 2011. Zimmer Deck % 8. As with

    ___________________________

    1 As Google explained in opposing Oracle's precis, Oracle was wrong—Google had disclosed Bray and Rizzo. Oracle subsequently corrected its precis accusing Google of nondisclosure.

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    Rubin, Oracle examined Bornstein comprehensively about the subject matter of Bornstein's interview with Google's experts-Google's non-infringing alternatives. E.g., id. Ex. F (May 16, 2011 Bornstein Dep.) at 48:14-52:19, 114:3-116:6; id. Ex. E (July 22, 2011 Bornstein Dep.) at 149:5-157:8, 164:2-165:9, 171:13-174:11. In fact, Bornstein was Google's corporate designee on that topic. Id. Ex. E (July 22, 2011 Bornstein Dep.) at 168:25-169:12/
  • Brian Swetland. Oracle deposed Swetland for a full day on July 7, 2011. Zimmer Decl. ¶ 11. Oracle examined Swetland thoroughly about the subject matter of Swetland's interview with Google's experts—Google's noninfringing alternatives and the addition of the allegedly infringing functionality to Android. E.g., id. Ex. G (Swetland Dep.) at 43:24-47:2, 92:1-94:21,150:3-152:16.
  • Aditya Agarwal. Oracle deposed Agarwal for a half day on April 8,2011. Zimmer Decl. ¶ 13. Agarwal is a financial analyst for Android and was Google's Rule 30(b)(6) designee on Android finances. Id. Ex. H (Agarwal Dep.) at 7:14-21, 10:12-11:3. Oracle examined him for three hours on that topic. Agarwal is not cited at all in the Leonard report and is cited only once in the Cox report, for the single factual proposition that "[t]he Engineering category on Google's Android Profit and Loss statements include costs that are entirely and directly attributable to the Android platform." Dearborn Decl. Ex. 2 (Cox Report) at 32 n.l17.
  • Frank Yellin. Yellin is the only one of the five witnesses who has not yet been deposed, but that is only because Oracle made the decision not to depose him. Yellin is a former Sun employee and the lead named inventor on the '520 patent-in-suit, so Oracle has always known that Yellin had potentially relevant information. Further, Yellin is not cited at all in the Cox report and just twice in the Leonard report. Both times, he is cited as one of several sources to support the same proposition—that Sun never incorporated the functionality of the '520 patent into its Java ME platform. Dearborn Decl. Ex. 1 (Leonard Report) at 21 n.61 & 77 n.262. As far as Google knows, the issue is not in dispute. Oracle has never offered any evidence that Sun incorporated the '520 functionality into Java ME. In fact, on August 3, 2011, in response to Google's request for Rule 30(b)(6) testimony on the issue, Oracle's counsel informed Google that "[a]fter diligent inquiry, Oracle cannot locate an Oracle witness to testify based on personal knowledge as to 'actual use' of the" '520 patent. Zimmer Decl. Ex. I (August 3, 2011 Muino e-mail to Francis). At his deposition earlier today, Dr. Leonard testified that he spoke to Yellin for only about five or 10 minutes.
Accordingly, Oracle has already examined Rubin, Bornstein, Swetland, and Agarwal on the subject matter of their interviews with Dr. Cox and Dr. Leonard. As to Yellin, because Dr. Leonard relies on him only for one issue that is not in dispute, there would be no benefit to Oracle from taking his deposition. And Oracle will have a chance to depose Bray and Rizzo prior to trial. Given this, there is no danger of any prejudice to Oracle from Dr. Leonard's and Dr. Cox's entirely appropriate reliance on those witnesses. Further, Oracle has examined both Dr. Cox and Dr. Leonard for a full day apiece. It had a complete opportunity during those

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depositions to collect any discoverable information about all the interviews-including how they were arranged, who was prsent, and what was said.

C. The fact that Oracle may be able to offer evidence to dispute Dr. Leonard's and Dr.
Cox's opinions does not make those opinions inadmissible.

Third, Oracle essentially contends that Dr. Leonard and Dr. Cox should not be allowed to rely on evidence or offer opinions inconsistent with Oracle's case theory and preferred evidence. Oracle chastises Dr. Leonard and Dr. Cox for citing interviews, testimony, documents, and market facts that support Google's position in the case, instead of the material Oracle plans to use for cross-examination. But the existence of factual disputes is not a Daubert issue. If it were, no expert would ever get to testify at any trial (since trials exist to resolve factual disputes). Oracle will get to cross-examine the Google percipient witnesses before Google's experts testify. If Oracle thinks the witnesses have failed to lay a foundation for Google's experts, Oracle can object to the expert testimony. If the Court permits Google's experts to testify, Oracle still will have an opportunity to cross-examine those experts with any evidence it deems meaningful.

As the Supreme Court explained in Daubert itself, this is the way to deal with competing expert testimony at trial—by letting the trier of fact decide whether the expert's testimony is persuasive, not through a motion to strike. The Court specifically stated that "[vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence." Daubert, 509 U.S. at 596 (emphasis added). Obviously, given that the Court identified the "presentation of contrary evidence" as the proper means of discrediting an opposing expert, an expert's mere reliance on disputed facts or evidence cannot be a basis for disqualification.

To the contrary, experts may rely on disputed evidence without risking disqualification. The Ninth Circuit and other circuit courts have followed the Supreme Court's lead and made clear that contrary evidence should be used on cross-examination, not as the basis of a motion to strike. See Hangarter v. Provident Life and Ace. Ins. Co., 373 F.3d 998, 1017 n.14 (9th Cir. 2004) ("The factual basis of an expert opinion goes to the credibility of the testimony, not the admissibility, and it is up to the opposing party to examine the factual basis for the opinion in

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cross-examination.") (quoting Chidlren's Broadcasting Corp. v. Walt Disney Co., 357 F.3d 860, 865 (8th Cir. 2004)); McLean v. 988011 Ontario, Ltd., 224 F.3d 797, 800-01 (6th Cir. 2000) (an "experts conclusions ... must have a basis in established fact and cannot be premised on mere suppositions," but "mere weaknesses in the factual basis of an expert witness' opinion ... bear on the weight of the evidence rather than on its admissibility")(citationomitted); Stecyk v. Bell Helicopter Textron, Inc., 295 F.3d 408, 414 (3d Cir. 2002) ("Rule 705, together with Rule 703, places the burden of exploring the facts and assumptions underlying the testimony of an expert witness on opposing counsel during cross-examination").

Oracle undoubtedly will argue in its reply that the Court should strike Dr. Leonard's and Dr. Cox's opinions because Dr. Leonard and Dr. Cox accepted as true the statements of Google technical experts and employees that Google had good non-infringing alternatives. According to Oracle, Dr. Leonard and Dr. Cox should have tested the accuracy of those statements by modifying Android phones to replace the allegedly infringing functionality with an alternative, then conducting the performance tests and measuring the results. But Oracle is the plaintiff here, not Google. It is fundamentally the job of Oracle and its experts to quantify the impact (if any) of the allegedly infringing functionality on handset performance. Oracle's argument that Dr. Leonard and Dr. Cox should be disqualified for failing to conduct tests to impeach Google's witnesses amounts to an attempt to shift the burden of proof. Oracle is certainly free to point out on cross-examination that Dr. Leonard and Dr. Cox didn't conduct tests, but that should be the extent of it. An expert is entitled to rely on the accuracy of statements of party witnesses regarding matters within those witnesses' personal knowledge, and render opinions based on the assumption that the jury will believe those witnesses—just as this Court held in Therasense.

D. Google's damages experts do not offer any ipse dixit statements.

Fourth, Oracle gins up the accusation that Dr. Leonard and Dr. Cox engage in ipse dixit reasoning, stating conclusions unsupported by evidence. Oracle concocts this criticism by yanking from context individual sentences that happen to lack citations. But each of the supposedly citation-free sentences Oracle identifies is just one part of a broader discussion, in the middle of paragraph or sections with ample citation and support.

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Oracle identifies four instances of alleged ipse dixit by Dr. Leonard. In one-a statement of page 30 of Dr. Leonard's report-Dr. Leonard does in fact cite to evidence. Dearborn Decl. Ex. 1 (Leonard Report) at 30 & n.110. In another case, Oracle has created the illusion of by truncating Dr. Leonard's report to remove the introductory phrase "As discussed above," which makes clear that Dr. Leonard is incroporating statements and citations appearing earlier on that same page. Id. at 25 & nn.85-87. In the other two cases, the statements identified by Oracle are summary sentences in the middle or at the end of a fuller discussion with numerous cited sources. Id. at 11-12 & nn. 18-21; id. at 15-16 & nn.38-40.

The same is true for Oracle's criticism of Dr. Cox. Oracle focuses nearly all its criticisms on a summary section at the end of Dr. Cox's damages analysis discussing the relative contribution to the total Android functionality of the 37 API packages at issue. Dearborn Decl. Ex. 2 (Cox Report) at 27-28. But Oracle ignores that this summary refers to and incorporates the lengthy analysis earlier in the report of the full functionality of Android and the limited role of the API packages therein. Id. at 6-8 & nn.5-10. Similarly, Oracle objects to Dr. Cox's conclusion that the success of Android did not turn on Google's decision to use the Java language, but ignores that Dr. Cox supports that conclusion with a raft of evidence regarding (and citation to) the massive success of Apple's iPhone, which uses a proprietary (not open) architecture and the previously obscure Objective C language (not the well known and widely used Java). Id. at 25-26 & nn.97-101. None of this is ipse dixit; it all has record support.

E. Google's damages experts properly discuss the implications of the fact that the Java
platform was stagnant and fragmented before Google's alleged infringement.

Fifth, Oracle objects to Dr. Leonard and Dr. Cox discussing the extent to which the Java mobile platform was stagnant and "fragmented" before Google ever launched Android, and for reasons having nothing to do with Google. This objection is also misplaced.

With respect to stagnation, Oracle cannot even object that Dr. Leonard and Dr. Cox rely on interviews with Google employees. Instead, Dr. Leonard and Dr. Cox base their opinions about stagnation almost entirely on admissions by Sun's and Oracle's own employees. Both Dr. Leonard and Dr. Cox cite the deposition testimony of former Sun CEO Jonathan Schwartz,

10

former Sun employees Jeet Kaul and Craig Gering, and current Oracle employee Hasan Rizvi, in addition to four separate Oracle documents and third-party commentary. Dearborn Decl. Ex. 1 (Leonard Report) at 31-33 & nn.113-121 (Leonard Report); id. Ex. 2 (Cox Report) at 44-45 & nn.137-146. All of the Sun and Oracle employees and documents confirmed that Sun had failed to update the Java platform and was unable to secure consensus in the Java Community Process, which in turn led to dissatisfaction among carriers, device manufacturers, and developers. All those things created opportunities for other, competing platforms to displace Java. Id. Neither Dr. Leonard nor Dr. Cox cites a single Google employee or document in this discussion. Nor is this discussion "technical" in any sense; it involves strictly economic business issues, on which Dr. Leonard and Dr. Cox are plainly qualified to opine.

With respect to so-called "fragmentation," Oracle once again criticizes Dr. Leonard and Dr. Cox for relying on evidence that Oracle doesn't like. Again, this is a point for cross-examination, not a proper basis of a motion to strike. But when one looks closely at the evidence Dr. Leonard and Dr. Cox did consider, Oracle's complaint is shown to be especially baseless. In particular, Oracle objects to Dr. Leonard's and Dr. Cox's reliance on statements by knowledgeable, percipient, third-party witnesses like: (1) James Gosling, the former Sun employee recognized as "the father of Java," who bemoaned Sun's carelessness in fragmenting Java; and (2) John Rizzo of Aplix, who discussed Sun's habit of creating incompatible fragments of its Java platform for wireless carrier partners, and the fact that Sun's purported compatibility test tested only 70% of Java functionality, leaving the possibility of incompatibility in the remaining 30%. Dearborn Deck Ex. 1 (Leonard Report) at 34-37 & nn.122-135; id. Ex. 2 (Cox Report) at 45-48 & nn. 147-160. Dr. Leonard and Dr. Cox also relied on the deposition testimony of Sun witnesses Schwartz and Vineet Gupta and Sun documents. Id. All these sources are reliable bases for an economic analysis. Neither Dr. Leonard nor Dr. Cox cited any Google employee interviews or documents to support their opinions on fragmentation. Id.

Oracle further objects that Dr. Leonard and Dr. Cox apply no technical methodology that could define what constitutes "fragmentation." This complaint is especially bizarre given that Oracle is the one that has injected "fragmentation" into the case, without ever explaining what

11

the term means or how any alleged fragmentation has supposedly harmed Oracle. Oracle never argues in its motion that Dr. Leonard or Dr. Cox ignored any technical, industry-standard definition of "fragmentation," or even that such a definition exists. Oracle certainly never offers evidence from any of its experts supporting such a definition. Just as Oracle's experts have done, Dr. Leonard and Dr. Cox use "fragmentation" to mean real-world results contrary to Sun's "write once, run anywhere" Java marketing slogan—where applications or operations designed to run in the Java mobile space do not work on a given device or platform. Dearborn Decl. Ex. 1 (Leonard Report) at 34-37 & nn.122-135; id. Ex. 2 (Cox Report) at 45-48 & nn.147-160. Even as Oracle objects to Dr. Leonard's and Dr. Cox's opinions, it never suggests Google's experts are using "fragmentation" incorrectly, much less explains why. Its objection is makeweight.

Indeed, as Google pointed out in its supplemental brief in support of its motion to strike Oracle's damages expert's report, Oracle's "fragmentation" claim is essentially vapor. At his deposition, Dr. Cockburn could not explain how one could determine whether Oracle was being harmed by fragmentation. First he suggested that [REDACTED] Zimmer Decl. Ex. J (Cockburn Dep.) at 139:5-11 (emphasis added). His only factual support for the proposition that fragmentation had harmed Oracle was not Oracle financial data—it was a calculation showing that Java developer message boards have recently been less active, in terms of new threads started, than Android developer message boards. Id. at 143:6-16. In the end, he could not cite a single piece of evidence demonstrating harm from fragmentation:

[REDACTED]

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[REDACTED]
Id. at 156:18-157:10. Dr. Leonard's and Dr. Cox's opinions about fragmentation simply respond to Oracle's own expert economist's opinions on that same subject. Any uncertainty about what constitutes "fragmentation" reflects deeper problems with that aspect of Oracle's case.

F. Google's damages experts offer opinions consistent with settled law.

Sixth, Oracle asserts that Google's experts have offered opinions that misapply governing law. Oracle is wrong.

Oracle first argues that Dr. Leonard may not opine that Oracle's alleged damages should be reduced because Sun and Oracle failed to take reasonable steps to mitigate those damages by developing a commercial product. Oracle Mot. at 12. Oracle criticizes this opinion because "Google pleaded no mitigation defense and it has not offered a jury instruction on mitigation." Id. Oracle either misunderstands or mischaracterizes Dr. Leonard's point (or does both). Dr. Leonard is responding to Dr. Cockburn's upward adjustment of Oracle's patent damages from under $30 million to $176 million, based on the belief that Google's release of the supposedly incompatible Android platform prevented Sun from making millions off a compatible product. Dr. Leonard's point is that nothing about the alleged infringement prevented Sun or Oracle from developing a version of the Java platform that would be compatible with Android. In fact, Sun tried to develop such a product but failed. Dr. Leonard's opinion is that Sun's failure suggests either that there was never much value in a Sun implementation of Android in the first place, or that Sun never could have developed such its own product because of its own lack of engineering skill or executive will. This isn't a contract-style "failure to mitigate" defense; it is a refutation of the factual basis supporting Dr. Cockburn's damages adjustment.

Oracle is also wrong to argue that Polar Bear Productions, Inc. v. Timex Corp., 384 F.3d 700, 708 (9th Cir. 2004), holds that the existence of non-infringing alternatives is irrelevant to how much of a copyright infringer's profits are attributable to the infringement. Polar Bear never addresses that question. In fact, Polar Bear affirms the basic principles that "a causal link between the infringement and the monetary remedy sought is a predicate to recovery of both

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actual damages and profits," that "a plaintiff in a [copyright infringement] action must establish this causal connection, and that this requirement is akin to tort principles of causation and damages." Id.; see also Mackie v. Rieser, 296 F.3d 909, 915-916 ((th Cir. 2002). The existence of non-infringing alternatives tends to disprove the causal link between infringement and profits, by suggesting that the profits are actually attributable to other, non-infringing, creative features added by the alleged infringer. If anything, the Polar Bear principles support the argument that non-infringing alternatives are relevant to a copyright damages analysis.

G. Dr. Leonard is fully qualified to explain why Dr. Shugan's marketing analysis is
unreliable as a matter of basic economics.

Seventh, Oracle argues that Dr. Leonard lacks adequate knowledge and expertise to reply to the opinions of Oracle marketing expert Dr. Steven Shugan. Along with this brief, Google is filing a detailed declaration from Dr. Leonard rebutting each of Dr. Shugan's points. Dr. Leonard's declaration, and the primary sources he cites and quotes, demonstrate that it is Dr. Shugan, not Dr. Leonard, who has mischaracterized the relevant literature and misunderstood the fundamental economic limitations of his marketing analysis.

To begin with, Dr. Shugan wrote a report regarding a "conjoint analysis," which purports to measure the relative importance to consumers of particular features of a product. But his analysis was made-for-litigation in every possible sense. Dr. Shugan did not even participate in the initial one-on-one interviews and focus group that led to the selection of the smartphone features tested in the conjoint analysis; he outsourced that work to Dr. Cockburn's assistants at Analysis Group. Zimmer Decl. Ex. K (Shugan Dep.) at 42:6-50:24. He left it up to Analysis Group to determine which product features mentioned in the initial one-on-one interviews would subsequently be discussed by the focus group. Id. at 46:17-47:7.

Neither Dr. Shugan nor Analysis Group conducted any analysis of the focus group data to identify the particular features that the small focus-group sample identified as most important. Zimmer Deck Ex. K (Shugan Dep.) at 50:5-24. Instead, Dr. Shugan cherry-picked seven smartphone features—e.g., application multitasking, application start time, number of applications, operating system brand, price, screen size, and voice command capabilities—for

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the conjoint analysis, out of dozens of potential features that might be relevant to a consumer in the market for a smartphone. Dr. Shugan was not even the person who made the decision to include five of the seven features. He made the decision to include only the price and operating system brand variables. Dr. Cockburn instructed Dr. Shugan to include the number of applications, while Dr. Cockburn's assistants at Analysis Group instructed Dr. Shugan to include four other product features. Id. at 29:7-30:11. Dr. Shugan admitted at deposition that the decisions as to which features to test were driven by Oracle's litigation needs:
[REDACTED]
Id. at 31:18-25. Dr. Shugan did nothing to account for the possibility that other features—overall design and styling, handset manufacturer brand, wireless carrier, or keyboard type—might be even more important to consumers than the ones he tested. Then, after using the conjoint analysis to test the relative importance of the cherry-picked features, Dr. Shugan in essence concludes that, if 25% of the respondents value application start time most highly of the tested features, a delay in application start time would result in a roughly 25% drop in market share. Id. at 117:9-118:22.

Oracle does not cite a single case where any court accepted the use of a conjoint analysis for any purpose in litigation, let alone as the basis of a damages calculation. It certainly does not identify any case where any court approved what Dr. Shugan has done here—calculate relative consumer preferences for an arbitrary number of randomly selected features, then translate the results into a purported drop in market share, then use that purported decrease in market share to justify a nine- or ten-figure damages award.

Given the shaky ground beneath Dr. Shugan's feet, it is no surprise Oracle is trying to bar Dr. Leonard from telling the jury exactly why Dr. Shugan's analysis—whatever value it might have in helping companies with the guesswork of product design or marketing—is unreliable, as a matter of economics, to estimate damages in litigation. That is the essence of Dr. Leonard's criticism, and it is one Dr. Shugan is not competent to rebut. Dr. Shugan is not an economist; Dr.

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Leonard is. But even as to the marketing aspects of Dr. Shugan's study, Dr. Leonard explains in detail why his criticisms are valid and Dr. Shugan's retorts miss the mark.

  • Dr. Shugan's study was a "stated preference survey," despite Dr. Shugan's rejection of that label. As Dr. Leonard explains, any study that requires consumers to value products or choose between alternatives hypothetically, as Dr. Shugan's did, is a "stated preference survey." This is in contrast to a "revealed preference survey," where consumer preferences are revealed by consumers' actual market actions. Declaration of Gregory K. Leonard in Support of Google's Opposition ("Leonard Decl.") ¶¶ 17-19.
  • Contrary to Dr. Shugan's claim that he is "biased" against survey-based research, Dr. Leonard has both conducted and analyzed hypothetical choice surveys, and published papers about such surveys. He was even hired recently by Oracle's counsel at Boies Schiller to critique a hypothetical choice survey in another litigation. Leonard Decl. ¶¶ 10, 20-24. Dr. Leonard has no bias against surveys; he is just critiquing a badly-designed survey used for an inappropriate purpose.
  • Dr. Shugan is simply wrong when he asserts that the literature on hypothetical choice surveys expresses no concern about hypothetical bias, or that the potential for such bias exists only when evaluating consumer preferences for abstract goods, instead of consumer products like smartphones. In his declaration alone, Dr. Leonard cites and quotes a dozen primary sources directly refuting Dr. Shugan on both of these points. Leonard Decl. ¶¶ 25-30.
  • Dr. Leonard has not cited any articles for propositions they do not contain or that they reject, as Dr. Shugan claims. Dr. Leonard explains why he has accurately characterized the articles he cites. Leonard Decl. ¶¶ 38-46.
  • Dr. Leonard has never denied that conjoint analyses are commonly done and based on years of research. But that is irrelevant. As Dr. Leonard, explains, he is simply pointing out that conjoint analysis is not suited for the use Dr. Shugan has made of it in this case, because of the hypothetical bias problem and other reasons. Leonard Decl. ¶¶ 47-52.
  • Dr. Leonard has properly relied on Professor Min Ding's critique of the sort of conjoint analysis performed by Dr. Shugan. That critique has been repeatedly peer reviewed. While Dr. Shugan calls Professor Ding's critique "controversial," he does not identify any scholarly analysis actually criticizing Professor Ding's approach. Moreover, after decrying Professor Ding's work as "controversial," Dr. Shugan plays the other side, by wrongly arguing that Professor Ding's work supports his analysis. In fact, Professor Ding describes the point Dr. Shugan identifies as supportive as "conjecture" requiring "[fjurther study." Leonard Decl. ¶¶ 53-58.
  • Dr. Shugan defends his survey even though its results indicate that consumers actually prefer higher-priced smartphones to lower-priced ones, all other things being equal. Even the software package Dr. Shugan used describes such results as "nonsense." Dr. Leonard explains that this counter-intuitive finding shows Dr. Shugan's conjoint analysis has failed, because the survey participants are not evaluating certain product attributes—in this case, price— while holding all other product attributes constant. Instead, they are injecting other, undefined attributes into their decision-making process. In other words,

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    they are actually valuing attributes other than the ones being tested, making Dr. Shugan's conclusions valueless. Leonard Decl. ¶¶ 62-65.

  • Dr. Shugan is simply wrong that Dr. Leonard referred to standard robustness tests as tests for hypotehtical bias. Dr. Leonard said the opposite-that such tests had "low power to detect hypothetical bias." Leonard Decl. ¶¶ 66-69.
Oracle has not offered any basis to strike Dr. Leonard's critique of Dr. Shugan; at most, it has identified a dispute between experts. Again, factual disputes or disagreements between experts are not grounds for striking expert testimony. They are the reason we have trials, rather than disposing of cases on summary judgment. For all the reasons stated in Dr. Leonard's report and declaration, Google will show at trial that Dr. Shugan's analysis is litigation-driven, ignores fundamental economic principles, and is unworthy of reliance by the jury.

III. CONCLUSION

For all the above reasons, the Court should deny Oracle's motion to strike in its entirety.

Dated: October 28, 2011

Respectfully submitted,

KEKER & VAN NEST LLP

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

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