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To read comments to this article, go here
Oracle v. Google - Google to Appeal Lindholm Decision; Fight Over Experts
Friday, November 04 2011 @ 12:00 PM EDT

If Google's attempt to shield the Lindholm email had any remaining life in it before the trial court, you could almost hear the last breath going out of it this week. Consequently, Google gave notice (590 [PDF; Text]) that it intends to appeal Judge Alsup's ruling that the email does not constitute a privileged document and asked that, while the appeal is pending, the email remain designated as an ATTORNEYS EYES ONLY document. But Judge Alsup has once again said no on the issue of confidentiality. (596 [PDF; Text]) The point that will undoubtedly remain in contention on appeal derives from this passage in Judge Alsup's order:

To prevail on its motion, Google must show that its challenged confidentiality designations are appropriate. Google has not done so.

The protections conferred by the protective order “do not cover . . . any information that is in the public domain at the time of disclosure to a Receiving Party or becomes part of the public domain after its disclosure to a Receiving Party as a result of publication not involving a violation of this Order, including becoming part of the public record through trial or otherwise” (Dkt. No. 66 at 4) (emphasis added). The content of the Lindholm email and drafts became part of the public record on October 20, when the final version of the email was quoted in its entirety and the drafts were described in a public order issued by the undersigned judge. The issuance of that order did not violate the protective order. Accordingly, the Lindholm email and drafts are not subject to the protections conferred by the protective order.

Google argues that Oracle’s references to the email in open court violated the protective order, and that but for this supposed violation the email would not have become public until October 20. Google, however, does not argue that the October 20 publication violated the protective order or was somehow tainted by Oracle’s earlier supposed violation. Google also does not argue that any of this procedural history removes the documents from the ambit of the exclusionary provision in the protective order quoted above. Indeed, Google does not address that provision at all despite the fact that Oracle cited it in its opposition brief (Opp. 1–2, Reply Br. 1).

The conundrum here is that, according to Google, the email would have never been made public, and certainly not at the October 20 hearing, had Oracle abided by the protective order in the first place. That will likely be one of the issues on appeal, the broader issue being whether the document is subject to privilege.

I do not profess to be an expert on interlocutory appeals (appeals taken during the course of or before trial), but two questions come to mind. Does Google have a right to an interlocutory appeal on this issue? Presuming it does, will the instant proceedings on infringement be stayed until such time as that appeal is heard and acted upon?

In other matters, Google filed its reply to the Oracle response on Google's original motion to strike the Serwin "rebuttal" report (589 [PDF; Text]), and the Google argument strikes me as more clear. Google is not arguing over the naming of the report; it is arguing that Oracle has taken an unapproved bite out of the apple. In other words, Google argues that the scheduling order provided for the following sequence: damages report, opposition report, and reply report from the original expert providing the damages report. With respect to the Serwin reports, Google argues that Oracle has attempted to slip in reply reports from an expert other than the expert providing the original damages report and that this is not permitted under the scheduling order; it makes no difference how that report is denominated (rebuttal vs reply). The key questions here would appear to be whether the scheduling order was sufficiently specific to bar a reply for an expert other than the original expert and, if not, whether anything in Rule 26 of the Federal Rules of Civil Procedure permits such reports. As to this last question, Google and Oracle clearly disagree.

Google has also filed a reply in support of its motion for partial summary judgment on the issue of the date of notice for past infringement. (591 [PDF; Text]) As we anticipated in our earlier article on this motion, Opposing Positions (to Motions), Google attacks the case citations Oracle has used to support its position that mere assertion of apparatus claims does not trigger a marking requirement. Google asserts that since Oracle has asserted apparatus claims among the claims infringed, Oracle was subject to a marking requirement in order to claim an earlier date of notice of infringement. Google also asserts that this issue is, in fact, ripe for a decision.

Oracle erroneously cites Hanson for the proposition that the marking obligation depends on whether an apparatus claim ultimately is found to have been infringed, not on whether an apparatus claim was asserted at the outset of the case.

But Hanson lends no support to Oracle’s “infringed/asserted” distinction, because the plaintiff in Hanson asserted infringement only of the patent’s method claims. Thus, the Hanson court had no opportunity or need to explore what happens to damages when a plaintiff that failed to mark asserts infringement of method and non-method claims, but proves only the latter. Hanson didn’t present those facts. Accordingly, American Medical and Crown Packaging do not conflict with Hanson, and they control here.

Oracle would appear to be in a weak position here, although it could always elect to withdraw the apparatus claims and rely solely on the method claims. Of course, that does nothing for Oracle with respect to establishing a date of notice of infringement earlier than 2010.

Finally, we have Oracle's reply to Google's opposition to Oracle's motion to exclude portions of the Leonard and Cox damages reports (593 [PDF; Text]) as supported by a declaration from Dr. Shugan (595 [PDF; Text]) Oracle repeats its original attack on the reports, bolstered by the fact that it has now deposed Leonard and Cox. Oracle sees no support in the law for the approach Google, through Leonard and Cox, has taken to provide those two economic experts with technical expert opinions upon which to rely.

In a further showing of how sensitive the subject of expertise is, Oracle supplements its reply with the Shugan declaration which goes on a direct attack at Dr. Leonard who, in Google's opposition report, challenged Dr. Shugan's survey methodology as being unsound. To put it mildly, in Dr. Shugan's opinion it is Dr. Leonard who is unsound:

Having reviewed Dr. Leonard’s declaration, I remain of the opinion that he lacks familiarity with the accepted principles, methodologies, and literature that are relevant to conjoint analysis. Dr. Leonard’s declaration suggests that he has surveyed a largely irrelevant body of literature, in search of sound bites that would seem, when presented out of context to jury who are likely unfamiliar with survey methodology, to support some of the opinions he expresses. The declaration suffers from the same principal defect as Dr. Leonard’s report: he is reading the wrong articles about the wrong survey techniques and then citing them for propositions that are wrong, or at best, irrelevant. Dr. Leonard’s declaration does not demonstrate the expertise necessary to critique the 2011 Smartphone Survey in particular or conjoint analysis in general.
With a lot of argument going back and forth on procedures for qualifying experts, defining on what information such expert opinions may rely, and establishing the objectivity of such expert reports, it is a bit hard to see how the Oracle challenge to the Google expert reports will resolve, but this one has the feeling of leaning a bit more in Oracle's direction at this juncture.

Skip To Comments


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

Docket

587 – Filed and Effective: 11/01/2011
ORDER
Document Text: ORDER TO SUBMIT COLOR-CODED HANDOUT OF CLAIMS TO BE TRIED. Signed by Judge Alsup on November 1, 2011. (whalc1, COURT STAFF) (Filed on 11/1/2011) (Entered: 11/01/2011)

588 – Filed and Effective: 11/01/2011
Joint Declination
Document Text: Joint Declination to Proceed Before a U.S. Magistrate Judge by Oracle America, Inc. and Google Inc.. (Jacobs, Michael) (Filed on 11/1/2011) (Entered: 11/01/2011)

589 – Filed and Effective: 11/01/2011
REPLY
Document Text: REPLY (re 554 MOTION to Strike DEFENDANT GOOGLE INC.'S NOTICE OF MOTION AND MOTION TO STRIKE TWO "REBUTTAL" DAMAGES REPORTS BY DR. KENNETH SERWIN ) filed by Google Inc. (Van Nest, Robert) (Filed on 11/1/2011) (Entered: 11/01/2011)

590 – Filed and Effective: 11/01/2011
REPLY
Document Text: REPLY (re 513 MOTION to Retain Confidentiality Designations ) filed by Google Inc. (Van Nest, Robert) (Filed on 11/1/2011) (Entered: 11/01/2011)

591 – Filed and Effective: 11/01/2011
REPLY
Document Text: REPLY (re 552 MOTION for Summary Judgment (Partial) that Google is not Liable for Damages for Alleged Patent Infringement that Occurred before July 20, 2010) filed by Google Inc. (Van Nest, Robert) (Filed on 11/1/2011) Modified on 11/2/2011 (wsn, COURT STAFF). (Entered: 11/01/2011)

592 – Filed and Effective: 11/01/2011
Administrative Motion
Document Text: Administrative Motion to File Under Seal ORACLE AMERICA, INC.S ADMINISTRATIVE MOTION TO FILE UNDER SEAL PORTIONS OF ITS REPLY TO GOOGLE INC.S 593 OPPOSITION TO MOTION TO EXCLUDE PORTIONS OF THE EXPERT REPORTS OF GREGORY K. LEONARD AND ALAN J. COX filed by Oracle America, Inc. (Holtzman, Steven) (Filed on 11/1/2011) Modified on 11/2/2011 (wsn, COURT STAFF). (Entered: 11/01/2011)

593 – Filed and Effective: 11/01/2011
REPLY
Document Text: REPLY (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 ) ORACLE AMERICA, INC.S REPLY TO GOOGLE INC.S OPPOSITION TO MOTION TO EXCLUDE PORTIONS OF THE EXPERT REPORTS OF GREGORY K. LEONARD AND ALAN J. COX (REDACTED) filed by Oracle America, Inc. (Holtzman, Steven) (Filed on 11/1/2011) (Entered: 11/01/2011)

594 – Filed and Effective: 11/01/2011
Declaration
Document Text: Declaration of FRED NORTON in Support of 593 Reply to Opposition/Response, DECLARATION OF FRED NORTON IN SUPPORT OF ORACLE AMERICA, INC.S REPLY TO GOOGLE INC.S OPPOSITION TO MOTION TO EXCLUDE PORTIONS OF THE EXPERT REPORTS OF GREGORY K. LEONARD AND ALAN J. COX filed by Oracle America, Inc. (Attachments: # 1 Exhibit EXHIBITS A-D (EXS. A-C UNDER SEAL))(Related document(s) 593 ) (Holtzman, Steven) (Filed on 11/1/2011) (Entered: 11/01/2011)

595 – Filed and Effective: 11/01/2011
Declaration
Document Text: Declaration in Support of 593 Reply to Opposition/Response, DECLARATION OF STEVEN M. SHUGAN IN SUPPORT OF ORACLE AMERICA, INC.S REPLY TO GOOGLE INC.S OPPOSITION TO MOTION TO EXCLUDE PORTIONS OF THE EXPERT REPORTS OF GREGORY K. LEONARD AND ALAN J. COX filed by Oracle America, Inc. (Related document(s) 593 ) (Holtzman, Steven) (Filed on 11/1/2011) (Entered: 11/01/2011)

596 – Filed and Effective: 11/02/2011
ORDER
Document Text: ORDER DENYING MOTION TO RETAIN CONFIDENTIALITY DESIGNATIONS AND VACATING HEARING by Judge Alsup denying 513 Motion to Retain Confidentiality Designations (whalc1, COURT STAFF) (Filed on 11/2/2011) (Entered: 11/02/2011)

597 – Filed and Effective: 11/02/2011
Minute Entry
Document Text: Minute Entry: Further settlement discussions held. Case did not settle. Further discussions to be scheduled in consultation with parties. (Date Filed: 11/2/2011). (ofr, COURT STAFF) (Date Filed: 11/2/2011) (Entered: 11/02/2011)


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

Documents

587

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

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

No. C 10-03561 WHA

ORDER TO SUBMIT
COLOR-CODED
HANDOUT OF
CLAIMS TO BE TRIED

______________________________

The Court has presided over more than ten patent trials and has worked hard to find ways to assist the jury in comprehending the issues and evidence. One effective way is to use posters and handouts for the jury that isolate the claim phrases in actual contention. Each claim is on a separate page and the few phrases usually alleged to be missing from the accused item (for infringement purposes) and from the prior art reference (for anticipation purposes) are highlighted in colors coded to the respective issues. We will try this in the instant action.

By NOON ON NOVEMBER 8, defendant shall identify to plaintiff in writing its best two references for anticipation purposes as to each of the 26 claims to be tried identified by plaintiff (Dkt. No. 471). It may be that at trial defendant will assert anticipation based on more than two references per claim. In identifying the references for purposes of the poster/handout, however, please pick only the best two. Of course, different references can be asserted against the various claims at trial.

As to each claim to be tried, plaintiff shall highlight in gray each phrase it contends is missing from Reference No. 1 for anticipation purposes and shall highlight in blue each phrase it contends is missing from Reference No. 2 for anticipation purposes. Non-highlighted phrases will be deemed conceded as to those references. This must be done and provided to defendant by NOON ON NOVEMBER 15.

As to each claim to be tried, defendant shall highlight in pink each phrase it contends is missing from the accused device or method. The remainder will be deemed conceded. This must be done and provided to plaintiff by NOON ON NOVEMBER 15.

Counsel then shall meet and confer to create a joint handout that compiles all of this information. Counsel shall use their best judgment as to the most effective way to visually communicate both the infringement and anticipation issues using only one copy of each claim to be tried. For example, in a previous trial, counsel clarified overlap by using red underlining (instead of pink highlighting) to identify phrases disputed as to infringement, while using parallel bands of highlighting to identify phrases disputed as to the two anticipation references. The joint proposed handout must be filed by NOON ON NOVEMBER 18.

In the Court’s experience, very few phrases need be or should be highlighted by either side since almost always all but one or two phrases are clearly present. The Court expects and needs counsel to be candid and keep the highlighting to a minimum. This is important. This will assist everyone by assisting the jury in focusing mainly on phrases and evidence in dispute.

IT IS SO ORDERED.

Dated: November 1, 2011.

/s/William Alsup
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

2


588

[Morrison Foerster letterhead]

November 1, 2011

United States District Court Judge
Northern District of California
United States Courthouse
Courtroom 8 - 19th Floor
450 Golden Gate Avenue
San Francisco, CA 94102

Re: Oracle America v. Google, Inc., Case No. C10-3561 WHA

Dear Judge Alsup,

Responding to the Court’s question at the October 19, 2011 case management conference:

The parties decline to stipulate to a magistrate judge.

Respectfully submitted,

MORRISON & FOERSTER LLP

/s/ Michael A. Jacobs
Michael A. Jacobs
Counsel for Plaintiff Oracle America, Inc.

KEKER & VAN NEST LLP

/s/ Robert A. Van Nest Robert A. Van Nest
Counsel for Defendant Google Inc.

GENERAL ORDER 45 ATTESTATION

I, Michael A. Jacobs, am the ECF User whose ID and password are being used to file this document. In compliance with General Order 45, X.B., I hereby attest that Robert A. Van Nest has concurred in this filing.

/s/ Michael A. Jacobs
Michael A. Jacobs


589

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

REPLY IN SUPPORT OF DEFENDANT
GOOGLE INC.’S MOTION TO STRIKE
TWO “REBUTTAL” DAMAGES
REPORTS BY DR. KENNETH SERWIN

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

TABLE OF CONTENTS

Page

A. Both parties have consistently interpreted the Court’s scheduling
orders as authorizing only reply reports from experts who had
submitted opening reports ...... 1

B. Rule 26 does not authorize Dr. Serwin’s “rebuttal” reports. ...... 3

C. Google was prejudiced by Oracle’s submission of “rebuttal” reports ...... 5

i

TABLE OF AUTHORITIES

Page(s)

Federal Cases

AMCO Ins. Co. v. Madera Quality Nut LLC
No. 1:04-CV-06456-SMS, 2006 WL 6849050 (E.D. Cal. July 31, 2006) ...... 4

Int’l Bus. Machines Corp. v. Fasco Indus., Inc.
C-93-20326 RPA, 1995 WL 115421 (N.D. Cal. Mar. 15, 1995) ...... 4

Knapp v. State Farm Fire & Cas. Co.,
Civ. A. No. 94-2420-EEO, 1995 WL 340991 at *1(D. Kan. May 31, 1995) ...... 4, 5

Martinez-Hernandez v. Butterball, LLC
No. 5:07-CV-174-H, 2010 WL 2089251 (E.D.N.C. May 21, 2010) order aff’d in part, vacated in part 5:07-CV-174-H(2), 2011 WL 4549101 (E.D.N.C. Sept. 29, 2011) ...... 4

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

Silgan Containers v. Nat'l Union Fire Ins.
No. C 09-05971 RS (LB), 2011 WL 1058861 (N.D. Cal. Mar. 23, 2011) ...... 4

Federal Rules

Fed. R. Civ. Proc.

Rule 26 ...... 1, 3, 4, 5
Rule 26(a)(2)(B) ...... 3
Rule 26(a)(2)(D) ...... 3, 4, 5
Rule 26(a)(2)(D)(ii) ...... 3

ii

Oracle wrongly reads the Court’s scheduling orders as giving the parties carte blanche to submit, in response to an expert’s opposition report, as many reports from as many “rebuttal” experts as it would like. In support of this argument, Oracle cites instances where the words “rebuttal” or “rebutting” have appeared in this Court’s orders or the parties’ correspondence, regardless of context. But Google’s complaint is not that Oracle uses the word “rebuttal” in the title of Dr. Serwin’s reports. Google objects to the fact that Oracle improperly introduced the opinion of a new damages expert who did not serve an opening report. This is not authorized by the Court’s scheduling orders, and is inconsistent with the consistent practice of the parties. Moreover, as Oracle admits, Rule 26 confers no independent right to introduce a rebuttal report. The Court should strike Dr. Serwin’s “rebuttal” reports.

A. Both parties have consistently interpreted the Court’s scheduling orders as
authorizing only reply reports from experts who had submitted opening reports.

As Google pointed out in its motion, and Oracle did not (and cannot) dispute, this Court has never authorized either party to submit “rebuttal” reports or opinions from experts who did not submit opening reports. In its initial case management order the Court authorized a “damages report,” an “opposition report,” and “any reply” to the opposition. Dkt. 56 at ¶ 9. In its July 22 order the Court authorized a “revised damages report” and “any responsive defense report.” Dkt. 230 at 15-16. Oracle’s only response is that the Court never explicitly limited the authors of “any reply” to experts who had submitted an opening report. But Oracle offers no reason to dispute the common-sense reading of the Court’s orders that “any reply” would come from the same expert who had submitted an opening “damages report.” That reading would impose reasonable limitations on expert reports and discovery, as opposed to Oracle’s reading, which would permit a party to serve as many “reply” or “rebuttal” reports from as many different experts as any party desired, even if those experts addressed overlapping subject matter or their opinions easily could have been consolidated into a single report.

Further, the parties have consistently only filed reply or rebuttal reports from experts who submitted opening reports. Oracle makes several unsuccessful attempts to dispute this practice. First, Oracle argues that Google submitted a “rebuttal” report from Dr. Astrachan. This is false.

1

Google explained in its motion that, because the parties shared the burden of proof on copyright issues, both sides served opening reports, opposition reports, and replies. Again, the fact that Google used the word “rebuttal” in labeling its expert’s opposition report is meaningless. That report was in fact an opposition in direct response to Dr. Mitchell’s opening report, as this Court’s original case management order expressly contemplated. Put another way, Oracle’s service of the Serwin reports would not suddenly become proper if Oracle used the word “reply” on the cover page rather than “rebuttal.”

Second, Oracle argues that Google knew Oracle intended to introduce a “rebuttal” report from Dr. Serwin, but never objected. This is also incorrect. Oracle argues that it first disclosed Dr. Serwin in the August 19, 2011 hearing. Oracle Opp., at 1. Google doesn’t dispute that Dr. Serwin was disclosed as a potential expert, but that disclosure is irrelevant. Oracle suggested at the hearing that Dr. Serwin might submit a damages report, but it did so before any Oracle expert had submitted a revised damages report under the Court’s July 22, 2011 order. Had both Dr. Cockburn and Dr. Serwin submitted discrete opening reports by the September 12, 2011 deadline, Google would never have brought this motion. Certainly Oracle never suggested at the hearing (or at any other time) that it was planning to hold Dr. Serwin in reserve for “rebuttal” reports never discussed in the Court’s scheduling order.

Oracle then states that it informed Google in a September 16, 2011 email of its intention to submit “damages reply/rebuttal reports.” Again, Oracle is wrong. Even in that single email, Oracle never expressly said it would submit “rebuttal” reports, much less explained what it meant by “rebuttal” reports or how such reports differed from the authorized reply reports. It certainly never asserted a right to do what it eventually did, by serving a “rebuttal” report from a new expert who had never submitted an opening report. Oracle stated only that it assumed Google would “not object to our submission of damages reply/rebuttal reports, should we elect to submit any.” Purcell Decl. In Support of Google Mot. Ex. B. But Google never agreed that Oracle had any right to serve these undefined “rebuttal” reports; to the contrary, Google had taken the position that Oracle had no express right even to serve a damages reply report. To the extent that Oracle’s counsel was trying to moot any objection to Dr. Serwin’s “rebuttal” report

2

by including that single word in his email, that effort must fail. Oracle never clearly articulated its terms and Google never agreed to those terms. In any event, the Court’s orders and the parties’ practice under those orders remain what they are. Oracle cannot amend a Court order through its own unilateral conduct, or change the fact that it had never previously tried to serve any “rebuttal” reports.

Finally, Oracle argues that it listed Dr. Serwin as a rebuttal damages expert on its witness list, and that in response “Google again said nothing.” Oracle Opp. at 2. The witness list on which Oracle relies was submitted only days before Dr. Serwin submitted his “rebuttal” reports on October 10, 2011 Google submitted its précis letter requesting permission to move to strike those reports on October 12, 2011, two business days later. Far from “sa[ying] nothing,” Google acted promptly to assert its rights under the scheduling orders by moving to exclude Dr. Serwin’s “rebuttal” reports within days of receiving notice that Oracle intended to submit such reports.

B. Rule 26 does not authorize Dr. Serwin’s “rebuttal” reports.

Perhaps realizing that the Court’s orders do not authorize “rebuttal” reports from experts who did not submit opening reports, Oracle argues that Rule 26 creates an independent basis for Dr. Serwin’s “rebuttal” reports. Oracle is incorrect.

In discussing Rule 26 and cases analyzing it, Oracle again seizes on the use of the word “rebuttal,” without focusing on the meaning given to that word by the Rule. First, Rule 26(a)(2)(B) requires that, “[u]nless otherwise stipulated or ordered by the court, [the expert witness] disclosure must be accompanied by a written report – prepared and signed by the witness.” Next, Rule 26(a)(2)(D) provides that the 26(a)(2)(B) disclosure must be made “at least 90 days before the date set for trial or for the case to be ready for trial.” To the extent the 26(a)(2)(B) report corresponds to the Court’s orders in this case, it is thus the opening “damages” report (or “revised damages report”). Rule 26(a)(2)(D)(ii) provides a separate deadline “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).” Thus to the extent the “rebuttal” report envisioned by Rule 26(a)(2)(D)(ii) corresponds to anything in the Court’s orders in this case, it is to the opposition report (or responsive defense report), not to Dr. Serwin’s rebuttal.

3

In nearly every case that Oracle cites discussing “rebuttal” reports, those reports were in direct response to opening reports and are closer to what have been termed “opposition reports” (or “responsive defense reports”) under the Court’s orders in this case. See, e.g., Silgan Containers v. Nat'l Union Fire Ins., No. C 09-05971 RS (LB), 2011 WL 1058861, at *8 (N.D. Cal. Mar. 23, 2011); 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); Martinez-Hernandez v. Butterball, LLC, No. 5:07-CV-174-H, 2010 WL 2089251 (E.D.N.C. May 21, 2010) order aff'd in part, vacated in part, 5:07-CV-174-H(2), 2011 WL 4549101 (E.D.N.C. Sept. 29, 2011). These cases stand for the unremarkable proposition that, if a court fails to establish a timeline or procedure for what the Court in this case has termed “opposition reports,” then the timeline in Rule 26 governs as a default. That makes sense, because if Rule 26 did not govern such cases, litigants would have had no means of introducing any expert reports contradicting the opening expert report. But in this case, where the Court has established procedures (including procedures for “reply” reports), Rule 26 does not apply. Int’l Bus. Machines Corp. v. Fasco Indus., Inc., C-93-20326 RPA, 1995 WL 115421 at *2 (N.D. Cal. Mar. 15, 1995) (“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).)

The only case Oracle cites that involves a “rebuttal report” as it is used by Dr. Serwin and includes any analysis1 is distinguishable for at least two reasons. In Knapp v. State Farm Fire & Cas. Co., plaintiffs sued their insurer to recover benefits from a fire in their house. Civ. A. No. 94-2420-EEO, 1995 WL 340991 at *1 (D. Kan. May 31, 1995). The insurance company claimed plaintiffs had committed arson. Id. Defendant’s expert disclosed that he would testify that the fire resulted from someone pouring flammable liquid on the floor and lighting it on fire. Id. Plaintiffs’ expert then disclosed that he would testify that the fire resulted from an electrical problem with the attic fan. Id. In response, the defendant moved to add a “rebuttal” witness to refute the electrical causation theory, arguing that “it had no reason to anticipate that plaintiffs

_________________________

1 The court in Mayou v. Ferguson, 544 F. Supp. 2d 899, 900-01 (D.S.D. 2008), did not explain its ruling. Unlike here, the Mayou scheduling order did not provide for “reply” reports. See id.

4

would identify from the debris one particular item, an attic fan, as the cause of the fire.” Id. The court granted the motion. Id. at *2.

First, Knapp holds only that Rule 26 does not prevent a court from granting a motion to permit rebuttal reports. Google has never argued otherwise. Parties may always ask for relief from court orders in litigation, and courts have ample discretion to modify their prior orders. The Federal Rules set forth procedures for bringing and standards for resolving such motions. Oracle could have moved to modify the Court’s scheduling orders to permit rebuttal reports. But Oracle never filed such a motion. It ignored the Court’s orders and served Dr. Serwin’s reports.

Second, in Knapp, unlike here, there were good reasons why the court granted defendants leave to serve a rebuttal report. The Knapp plaintiffs had added a new defense theory in expert discovery, and defendant’s original expert on flammable liquids likely was unqualified to opine about purported electrical issues. Here, Oracle has never offered any reason why it needs a second expert economist (Dr. Serwin) to rebut Google’s experts, when it already designated and submitted multiple reports from its first expert economist (Dr. Cockburn).

C. Google was prejudiced by Oracle’s submission of “rebuttal” reports.

Finally, Oracle asks the Court to excuse its non-compliance with the scheduling orders on the ground that Google has not been prejudiced. But of course Google has been prejudiced. Google has been operating under one understanding of the scheduling orders and has proceeded accordingly, never offering new “rebuttal” experts to respond to Oracle’s experts’ opposition reports. Google will be further prejudiced if Dr. Serwin is allowed to testify; it will have to prepare for and take his deposition, then prepare for his trial testimony and cross-examine him. This will cost Google time and money that it otherwise would spend preparing for witnesses that Oracle properly disclosed in accordance with the Court’s orders.

For all the foregoing reasons, the Court should strike both Serwin “rebuttal” reports.

Dated: November 1, 2011

KEKER & VAN NEST LLP

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

5


590

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

REPLY IN SUPPORT OF DEFENDANT
GOOGLE INC.’S MOTION TO RETAIN
CONFIDENTIALITY DESIGNATIONS

Hearing Date: November 17, 2011
Time: 8:00 a.m.
Judge: Hon. William Alsup

Google respectfully disagrees with the Court’s October 20, 2011 Order (Dkt. 546) holding that the Lindholm email is not protected by attorney-client privilege or work-product immunity. Google intends to seek appellate review of that decision. In order to preserve its ability to seek that relief, Google must take all “reasonable steps” available to prevent disclosure of the information Google contends is privileged and confidential. See Fed. R. Evid. 502(b). As a result, Google cannot withdraw this motion, as Oracle has invited it to do.

Moreover, the only reason that the contents of the Lindholm email featured in news coverage before October 20, 2011 was because of Oracle’s violation of the terms of the Stipulated Protective Order. Had Oracle complied with the prior notice requirement of Section 5.2(b) of the Stipulated Protective Order (Dkt. 66), Google would have had the opportunity to assert its privilege claims before Oracle published the contents of a draft version of the email in open court, and the contents of the document would not have reached the public until the merits of the privilege dispute were adjudicated. The unfortunate fact that the contents of the contested documents were partially published before the Court even ruled upon Google’s privilege claim is therefore solely the result of Oracle’s violation of the agreed-upon process, and should not be considered as a reason for denying Google relief under the protective order.

For the foregoing reasons, and those expressed in Google’s opening memorandum, Google’s motion should be granted, and the challenged documents should retain their AEO designations.

Dated: November 1, 2011

KEKER & VAN NEST LLP

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

1


591

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

REPLY IN SUPPORT OF MOTION FOR
PARTIAL SUMMARY JUDGMENT
THAT GOOGLE IS NOT LIABLE FOR
DAMAGES FOR ALLEGED PATENT
INFRINGEMENT THAT OCCURRED
BEFORE JULY 20, 2010

Judge: Hon. William Alsup

“Too soon!” cries Oracle, in response to Google’s motion for partial summary judgment that Google is not liable for alleged patent infringement that occurred before July 20, 2010. But there is no reason to forestall summary judgment now that Oracle, by its silence, has conceded all four of the undisputed facts on which Google’s motion turns. Those facts are:

1. Oracle claims that Google infringed apparatus, system, and/or computer-readablemedium claims contained in the patents-at-issue.1

2. Oracle has identified many “markable” products that, it contends, practice the asserted claims of the patents-at-issue. Among those products are multiple releases of its Java desktop, enterprise, mobile, and embedded-software platforms.2

3. Yet Oracle has admitted that it “is not aware of any device, system, or product expressly marked with the patent number of any of the Patents-in-Suit or Related Patents.”3

4. Oracle first put Google on actual notice of its specific patent-infringement claims during a meeting at Google headquarters in Mountain View, California on July 20, 2010.4

Not once does Oracle contest any of these undisputed facts. The first two facts are Oracle’s own contentions, which Google assumes to be true only for the limited purposes of this motion. Oracle, not Google, is the party that is trying to “have its cake and eat it, too” by making assertions about things that it intends, and has the burden, to prove at trial, and then trying to wriggle out of those contentions to avoid partial summary judgment on damages.

Oracle’s main response to Google’s motion is that Google cannot obtain summary judgment based on Oracle’s contentions but must first admit those contentions for all purposes, and that, until Google does so, its motion “remains premature.”

Oracle has conjured this illogical requirement out of thin air. A movant may indeed seek

________________________________

1 See accompanying Declaration of Robert A. Van Nest (“Van Nest Decl.”), Ex. A (Oracle America, Inc.’s Case Management Statement Selecting Claims for Trial (Doc. 471)).

“Patents-at-issue” refers to patents RE 38,104; 5,966,702; 6,061,520; 7,426,720; and 6,192,476.

2 See Van Nest Decl., Ex. B (Oracle’s Second Supplemental Patent Local Rule 3-1 Disclosure at pp. 9-11).

3 See Van Nest Decl., Ex. C (Oracle’s Response to Google’s Request for Production No. 4).

4 See Van Nest Decl., Ex. D (Declaration of Benjamin Lee Concerning the August 6, 2010 Email and Drafts Thereof, Doc. 315, filed Aug. 17, 2011), ¶ 5; Van Nest Decl., Ex. E (Oracle’s Trial Brief (Doc. 536), pp. 18-19).

1

partial summary judgment by assuming the adversary’s contentions to be true for purposes of the motion only. “[A] party may argue that no [fact] issue exists in the hope that his legal theory will be accepted, but at the same time, the movant may maintain that there is a genuine factual dispute in the event his theory his rejected or the opponent’s theory is adopted. It should be remembered that a party moving for summary judgment concedes the absence of a factual issue and the truth of the nonmoving party’s allegations only for purposes of his own motion.” 10A Wright & Miller, Federal Practice and Procedure § 2718 (3d ed. 2011) (emphases added).

This procedure is as ordinary as it could be. Motions for partial summary judgment on a damages issue routinely concede liability “only for purposes of [the] motion,” id., while reserving the movant’s ability to contest liability if the motion is denied. There is no rule that a movant must concede liability for all purposes before seeking summary judgment on a damages issue. And courts grant such motions all the time. See, e.g., Barron v. Martin-Marrietta Corp., 868 F. Supp. 1203, 1208 (N.D. Cal. 1994) (granting partial summary judgment for defendant on damages based upon plaintiff’s “fear of cancer”); Letson v. Dean Witter Reynolds, Inc., 532 F. Supp. 500, 510 (N.D. Cal. 1982) (assuming liability and granting summary judgment for defendant on the method of calculating damages); Varela v. San Francisco City & County, C06-01841 WHA, 2007 WL 205069 (N.D. Cal. Jan. 25, 2007) (granting summary judgment as to punitive-damages claims).

Oracle also renews its argument that the motion is premature because the jury might find, as to one or more patents-at-issue, that only method claims were infringed, in which case there would be no marking obligation. This argument fails for at least three reasons.

First, as to patents containing both non-method and method claims, Federal Circuit precedents hold that the marking requirement does not depend on what sort of claims are found infringed, but on what sort of claims are asserted. The Federal Circuit has long held that where “both apparatus and method claims . . . were asserted and there was a physical device produced by the claimed method that was capable of being marked,” the patentee must mark that physical device in order “to recover damages” prior to the date of notice, even “under its method claims.”

2

American Med. Sys., Inc. v. Medical Eng’g Corp., 6 F.3d 1523, 1539 (Fed. Cir. 1993) (emphasis added). The Federal Circuit reaffirmed this rule just two years ago in Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., 559 F.3d 1308, 1316-17 (Fed. Cir. 2009). Here, as to all of the patents-at-issue, Oracle is asserting non-method claims. Oracle therefore had to satisfy the notice requirement as to every patent-at-issue.

This rule makes sense. “The marking statute serves three related purposes: 1) helping to avoid innocent infringement, . . . 2) encouraging patentees to give notice to the public that the article is patented, . . . and 3) aiding the public to identify whether an article is patented.” Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1443 (Fed. Cir. 1998). Those purposes are best served by a rule that failure to mark products embodying a patent results in loss of damages even if infringement ultimately only is found as to the patent’s method claims. Marking a product that practices one or more patent claims helps to give the world constructive notice of both the patent’s method and non-method claims. It thereby helps avoid “innocent infringement” of both types of claims. Failing to mark therefore makes innocent infringement of the method claims more likely; and the marking obligation therefore doesn’t and shouldn’t turn on whether, in a particular case, a defendant’s product is found to have infringed only the method claims.

Without ever mentioning American Medical or Crown Packaging, Oracle implies that both decisions are wrong because they supposedly conflict with an earlier precedent, Hanson Alpine Valley Ski Area, Inc., 718 F.2d 1075 (Fed. Cir. 1983). Oracle erroneously cites Hanson for the proposition that the marking obligation depends on whether an apparatus claim ultimately is found to have been infringed, not on whether an apparatus claim was asserted at the outset of the case.

But Hanson lends no support to Oracle’s “infringed/asserted” distinction, because the plaintiff in Hanson asserted infringement only of the patent’s method claims.5 Thus, the Hanson

_______________________________

5 See Hanson v. Alpine Valley Ski Area, Inc., 204 U.S.P.Q. 794, 796, 1977 WL 22812 (E.D. Mich. May 17, 1977) (“Plaintiff brought this suit claiming that the use of the Hedco H-2d, Mark II and Mark III snowmaking machines by Alpine Valley Ski Area, Inc., infringed his patented “airless” method of making snow. . . . This cause was tried by the Court without a jury to determine . . . whether defendant . . . had infringed Claims No. 1, 2, or 6 of said patent) (emphases added), aff’d, 611 F.2d 156, 204 U.S.P.Q. 803 (6th Cir. 1979); see also id., 204 U.S.P.Q. at 796 (“Claim No. 1 . . . recites a method of forming, distributing and depositing snow”; “Claim No. 2 is identical to Claim No. 1 except that it recites that the movement of air is ‘directable’”; “Claim No. 6 is identical to Claim No. 1 except [1] it omits the recitation that the movement of air is created ‘mechanically’ and [2] ‘a mixture of crushed ice and water’ is substituted for water”) (emphases added).

See also Hanson v. Alpine Valley Ski Area, Inc., 611 F.2d 156, 157, 204 U.S.P.Q. 803 (6th Cir. 1979) (“This is an action alleging patent infringement, and the patent alleged to be infringed is a process for making snow for winter sports.”) (emphasis added); Hanson, 718 F.2d at 1083 (“In affirming the district court’s finding of infringement in this case, the [Sixth Circuit] court of appeals stated in the first sentence of its opinion that ‘the patent alleged to be infringed is [for] a process for making snow for winter sports.’”) (emphasis added).

3

court had no opportunity or need to explore what happens to damages when a plaintiff that failed to mark asserts infringement of method and non-method claims, but proves only the latter. Hanson didn’t present those facts. Accordingly, American Medical and Crown Packaging do not conflict with Hanson, and they control here.

Second, even if Oracle’s “infringed/asserted distinction” had legal support, it wouldn’t matter in this case because Oracle itself contends 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.6 If that’s true, the jury cannot logically return a verdict of infringement only on method claims. As discussed above, Google is entitled to rely on Oracle’s own contentions for purposes of summary judgment while reserving the right to dispute those contentions at trial if this motion is denied.

Oracle responds that Google is improperly drawing inferences in its own favor by accepting Oracle’s hostile contention about its “mirrored” claim limitations for purposes of this motion. That reasoning is circular. Oracle’s mirrored-claim contention is substantively adverse to Google’s interests—not favorable—because it would parlay infringement of one type of claim into infringement of other types of claims in the same patent. Google’s acceptance of that hostile contention for purposes of summary judgment “favors” Google only by supplying the motion’s logical predicate.

Consider, for example, a motion that argues: “[Assuming for summary-judgment purposes that] I am liable for breaching the contract, then plaintiff still is not entitled to punitive

___________________________

6 Van Nest Decl., Ex. A, p. 1.

4

damages.” Oracle seems to be arguing that adopting the obviously hostile contention “I am liable for breaching the contract” for the limited purpose of seeking summary judgment somehow “favors” the movant because it facilitates making the motion. The Court should reject Oracle’s pretzel logic.

Oracle’s objection that this motion is “premature” also overlooks the fact that granting the motion now would streamline the issues to be tried in the damages phase of the trial. At present, both of Oracle’s damages experts have calculated alternative estimates of Oracle’s damages depending on whether or not marking occurred. This added layer of complexity can be dispensed with if this motion is granted now.

For all the reasons stated above and in Google’s opening brief, the Court should grant partial summary judgment that, with respect to patents RE 38,104; 5,966,702; 6,061,520; 7,426,720; and 6,192,476, Google is not liable to Oracle for damages for any alleged infringement that occurred before July 20, 2010.

Dated: November 1, 2011

Respectfully submitted,

KEKER & VAN NEST LLP

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

5


593

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 AMERICA, INC.’S REPLY TO
GOOGLE INC.’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: The Honorable William H. Alsup

Google defends Drs. Leonard and Cox largely by relying on two false premises: first, that it is an acceptable expert practice to adopt, without qualification or analysis, the post-discovery statements of Google employees (Opp. at 3, 4, 5, 7); and second, that the ends-based advocacy by Google’s experts is justified because Oracle’s experts supposedly offer “made-for-litigation” or “results-oriented” opinions. (Opp. at 1, 5–6, 12–13, 14–15.) Both arguments are wrong. Unlike Oracle’s experts, Drs. Leonard and Cox rely on interview statements that are contradicted by the record evidence, which they justify ignoring because contemporaneous documents must yield to what they now know, based on other witnesses for whom they vouch, law they misapply, and expertise beyond any they might legitimately claim. This approach is fundamentally subjective and scientifically unsound.

I. Drs. Leonard And Cox Rely On Spoon-Fed Facts From Google Employees In Ways That
Further Discovery Cannot Cure

The extraordinary extent of Drs. Leonard’s and Cox’s reliance on interviews is even clearer now that they have been deposed. [REDACTED]

This abdication of the role of the expert cannot be cured by cross-examination. “[W]hile Rule 703 was intended to liberalize the rules relating to expert testimony, it was not intended to abolish the hearsay rule and to allow a witness, under the guise of giving expert testimony, to in effect become the mouthpiece of the witnesses on whose statements or opinions the expert purports to base his opinion.”

__________________________

[FOOTNOTE REDACTED]

1

Loeffel Steel Prods., Inc. v. Delta Brands, Inc., 387 F. Supp. 2d 794, 808 (N.D. Ill. 2005).

Drs. Leonard’s and Cox’s interview-based opinions repeatedly contradict documents written by the interviewees. [REDACTED] Reliance on interviews inconsistent with the evidence warrants exclusion of the testimony. See IP Innovation L.L.C. v. Red Hat, Inc., 705 F. Supp. 2d 687, 690 (E.D. Tex. 2010) (excluding opinion founded on “blatant oversight” and assumptions contrary to record evidence).

Google defends its experts’ cherry-picking by claiming 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” (Opp. at 3); that “the interviews constitute facts and data ‘of a type reasonably relied by experts in the particular field,’” (id. at 4 (citing only Rule 703)); and that this Court has not held that “party employee interviews are an inherently unreliable basis for an expert opinion.” (Id.) None of these arguments justifies what Drs. Cox and Leonard did.

Google has not eliminated the hearsay problem. Its experts will offer opinions at trial based on information they were given during post-discovery interviews. When an expert ignores extensive record evidence to rely uncritically on interviews with “highly partisan” employees of the client, the opinion fails the standards for admissibility. Therasense Inc. v. Becton, Dickinson & Co., 2008 WL 2323856, at *2 (N.D. Cal. May 22, 2008) (“any opinion based on such untested and partisan foundation is not based on sufficient facts and data within the meaning of Rule 702”).2 Even if further additional

______________________________

2 The other two cases cited by Google for its reliance on interviews (Opp. at 4) do not rescue its experts either. Both cases involved accounting experts, and AICPA standards specifically allow accountants to base their opinions on interviews with their clients. See, e.g., Inline Connection Corp. v. AOL Time Warner, Inc., 470 F. Supp. 2d 435, 443 (D. Del. 2007) (quoting AICPA standards). Neither case holds that an economist may sit back and claim that party employees told them alternatives would be costless, as Google’s experts have done here. Additionally, Inline specifically noted that the experts’ opinion in that case (unlike the situation here) did not clearly contradict other factual evidence. Id.

2

discovery could fully cure this defect, Google refuses any new depositions for five of the seven interviewees. (See Opp. at 6–7; Norton Decl. Ex. D.) Google’s references to the depositions that have been taken (Opp. at 6–7) do not help, as they could not have addressed the accuracy of the experts’ paraphrases, their omission of bad facts disclosed by employees, or other aspects of the interviews.

II. Drs. Leonard And Cox Offer No Competent Economic Opinions On Alternatives

Drs. Leonard and Cox devote lengthy portions of their reports to technical opinions on noninfringing alternatives,3 despite their lack of expertise on that subject. (Oracle Br. at 4–5.) Google contends that Drs. Leonard and Cox actually provide only economic opinions based on those “foundational” facts. (Opp. at 1, 2.) Google is wrong.

Drs. Cox and Dr. Leonard provide no economic analysis of Google’s purported alternatives. [REDACTED]

[REDACTED]

_______________________________

[FOOTNOTE REDACTED]

3

[REDACTED]

Drs. Leonard and Cox do not merely “rely for technical background on the opinions of Google’s technical experts” (Opp. at 1); they try to bolster Google’s technical experts by citing interviews that they claim—but cannot competently testify—support those experts’ opinions and vouch for the technical witnesses that must be believed for their “economic opinions” to have a basis. That is impermissible. See, e.g., Dkt. No. 56 ¶ 12 (“experts lacking percipient knowledge should avoid vouching for the credibility of witnesses, i.e., whose version of the facts in dispute is correct.”); Loeffel, 387 F. Supp. 2d at 808 (“[a] scientist, however well credentialed he may be, is not permitted to be the mouthpiece of a scientist in a different specialty. That would not be responsible science.”).

III. Drs. Leonard and Cox Offer No Competent Economic Opinions As To “Fragmentation”

Drs. Leonard and Cox opine that Sun had little to lose by abandoning Java to Google, [REDACTED] Drs. Cox and Leonard have no expertise in assessing the vitality of a complex software platform, and they have applied no economic analysis to assess the effects of any stagnation or fragmentation of Java. Google admits as much. It defends Drs. Leonard and Cox by arguing that they rely on witnesses, documents, and testimony that supposedly say the same thing. (Opp. at 10–11.) But an expert “may not simply parrot or recite the opinions and knowledge of other expert and fact witnesses.” Ash Grove Cement Co. v. Emp’rs Ins. Co., 246 F.R.D. 656 at 661 (D. Kan. 2007); see also Stein v. Pacific Bell, 2007 WL 831750, at *11 (N.D. Cal. Mar. 19, 2007).

IV. Drs. Leonard And Cox Offer Opinions That Are Contrary To Law

Dr. Cox improperly reduces wrongful profits damages by arguing that Google could have

____________________________

4 The experts also improperly apply ex post facts to ex ante hypothetical negotiations. For example, Google claims that Dr. Cox can claim that using a non-Java language was a viable alternative because of “massive success of Apple’s iPhone,” (Opp. at 10), but it is legally improper to use the ultimate success of the iPhone—which contains its own hardware and was launched in 2007—to ratify alternatives the parties might have considered in the hypothetical negotiation for a software platform in 2006. See, e.g., Lucent Techs., Inc. v. Gateway, Inc., 580 F. 3d 1301, 1333–34 (Fed. Cir. 2009) (describing proper use of later-dated evidence). Similarly, Dr. Leonard’s entire basis for concluding that Sun’s business model projections in 2006 are unreliable is hearsay within hearsay—a newspaper article reporting analyst report statements—from late 2008. (Leonard Dep. at 191:6-193:22).

4

earned those profits without infringing. Google defends that error by citing the copyright statute’s causation requirement. (Opp. at 13–14.) But Google cites no case holding that profits actually caused by the infringement may be ignored because the infringer could have chosen to sell a non-infringing product—but didn’t. The Copyright Act awards the profits that are “attributable to the infringement.” See Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 707–08 (9th Cir. 2004) (causal-link standard; quoting 17 U.S.C. § 504(b)). “If the infringer has earned a profit, this award makes him disgorge the profit to insure that he not benefit from his wrongdoing.” On Davis v. The Gap, Inc., 246 F.3d 152, 159 (2d Cir. 2001). The causation test for this disgorgement remedy is not, as Dr. Cox assumes, whether the infringer had alternatives; such a requirement would gut the purpose of wrongful profits. (Oracle Br. at 13.) The Court should strike Dr. Cox’s wrongful-profits analysis.

Google’s mitigation argument is also wrong. [REDACTED] Google concedes it has no mitigation defense, but says Dr. Leonard is really testifying about causation. (Opp. at 13.) Dr. Leonard has no expertise that would allow him to conclude it was feasible to monetize the infringing Android. In any event, Oracle’s decision not to pursue a business with a Java-incompatible Android is irrelevant to its ability to monetize a Java-compatible Android. This testimony could only confuse the jury.

V. Dr. Leonard Lacks Expertise Necessary To Testify On Conjoint Analysis

Dr. Leonard purports to critique Dr. Shugan’s conjoint survey and analysis of consumer preferences for the attributes provided by the copyrights and patents in suit. As explained in Dr. Shugan’s declaration, submitted with Oracle’s opening brief, Dr. Leonard lacks the expertise necessary to critique Dr. Shugan’s work and fundamentally misunderstands the marketing literature on conjoint analysis. Dr. Leonard’s response is to file a declaration that simply misreads a larger number of articles, compounding his errors and confirming his lack of expertise. (Shugan Response Decl. ¶¶ 4– 22.) Dr. Leonard’s testimony on conjoint analysis should be excluded.

Dated: November 1, 2011

BOIES, SCHILLER & FLEXNER LLP

By: /s/ Steven C. Holtzman
Steven C. Holtzman
Attorneys for Plaintiff
ORACLE AMERICA, INC.

5


595

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

DECLARATION OF STEVEN M.
SHUGAN IN SUPPORT OF ORACLE
AMERICA, INC.’S REPLY TO GOOGLE
INC.’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: Honorable William H. Alsup

I, STEVEN M. SHUGAN, declare as follows:

1. I have been retained as an expert in this matter and conducted a study using conjoint analysis to evaluate the enhancements enabled by the use of the copyrights and patents that Google is alleged to have infringed. In this declaration, I address certain aspects of the Declaration of Dr. Gregory K. Leonard as it related to my conjoint analysis.

2. My background and qualifications are set forth in my Declaration in Support of Oracle’s Motion to Exclude Portions of the Expert Reports of Gregory K. Leonard and Alan J. Cox (Dkt. No. 560 at 2–4), and I incorporate them here by reference.

3. In addition to the qualifications described in my initial declaration, I have graduate training in economics (a doctorate in Managerial Economics), and I taught econometrics at the University of Chicago, where I was listed on the econometrics faculty at the time. In any event, the most relevant expertise to my analysis is marketing, not economics.

4. As in his original Expert Report, Dr. Leonard’s declaration attempts to dismiss a widely used field of research because of the potential for measurement inaccuracies or bias. He has not demonstrated that such biases are present in my study, he has not considered that my results are entirely consistent with actual market shares for the devices being considered – which shows a high degree of external validity, and he relies on obscure and misquoted literature to support his positions.

5. Having reviewed Dr. Leonard’s declaration, I remain of the opinion that he lacks familiarity with the accepted principles, methodologies, and literature that are relevant to conjoint analysis. Dr. Leonard’s declaration suggests that he has surveyed a largely irrelevant body of literature, in search of sound bites that would seem, when presented out of context to jury who are likely unfamiliar with survey methodology, to support some of the opinions he expresses. The declaration suffers from the same principal defect as Dr. Leonard’s report: he is reading the wrong articles about the wrong survey techniques and then citing them for propositions that are wrong, or at best, irrelevant. Dr. Leonard’s declaration does not demonstrate the expertise necessary to critique the 2011 Smartphone Survey in particular or conjoint analysis in general.

Dr. Leonard does not have relevant experience in marketing.

6. Given the application that I and ultimately Professor Cockburn used, the relevant literature

1

for evaluating my time-tested market research methodology is the marketing literature. Dr. Leonard has not indicated that he has expertise in marketing. Based on the literature mentioned in his declaration, Dr. Leonard’s experience appears to be in surveys in which people are asked what they have done or bought in the past; therefore, it appears that he does not have a background in the type of surveys done in market research.

7. Dr. Leonard suggests he has experience with choice-based methods by noting that he coauthored a paper with Daniel McFadden. Although Professor McFadden uses choice-based methods, the paper he co-authored with Dr. Leonard does not employ such methods. Also of note, one of McFadden’s best known papers is “The Choice Theory Approach to Market Research” in which he examines conjoint analysis and makes no mention of hypothetical bias.1

Dr. Leonard’s fight over terminology is irrelevant and misplaced.

8. Dr. Leonard engages in a discussion of terminology over multiple pages, starting at ¶17. His remarks regarding the definition of revealed and stated preferences could have been avoided had Dr. Leonard refrained from quoting me out of context in his rebuttal report. Dr. Leonard wrote: “First, Professor Shugan claims that “Dr. Leonard describes my study as a ‘stated preference’ study and criticizes it on that basis. That characterization is misleading . . .” (Leonard Decl. at 5.) But my discussion of “stated preference” is based on an “understanding of that term in the marketing literature,” as I clearly stated in ¶20, in the very same sentence of my Declaration that Dr. Leonard quoted above. (Shugan Decl. at 7.) I have noted in my Reply Report and my first Declaration that Dr. Leonard’s critiques relied on a variety of articles on simple stated preference methods that do not rely on choice-making exercises, such as the one in the 2011 Smartphone Survey, which formed the basis for my opinions here.

9. Consequently, a large fraction of the literature authored and cited by Dr. Leonard (in both his report and much of his declaration) is irrelevant because it does not address how I used a conjoint analysis to form my expert opinion. For example, the paper by Dr. Leonard and Professor McFadden

______________________________

1 McFadden, Daniel, “The Choice Theory Approach to Market Research,” Marketing Science, Vol 5. No. 4, Special Issue on Consumer Choice Models, Autumn 1986, pp. 275-297.

2

focuses on contingent valuation and Willingness to Pay (“WTP”).2 The only mention of conjoint analysis in that paper is a reference to an early version of conjoint: the authors state that “a constellation of techniques called conjoint analysis elicits consumer rankings or ratings of hypothetical products.”3 This particular methodology is not what was used in my choice-based conjoint method, and thus it offers no relevant insight on choice-based conjoint analysis. In the same vein, Dr. Leonard’s coauthorship with Professor Diamond does not contribute to the methodology that I used in my Expert Report as it again refers to contingent valuation techniques and not to choice-making exercises.4

10. Notably, these two chapters that Dr. Leonard co-authored and quoted from are chosen without regard to a chapter by Kemp and Maxwell in the same book, who state: “The most significant advance in survey research methods over the last 25 years has been the development of trade-off analysis techniques, the best-known form of which is called conjoint measurement.”5

Dr. Leonard continues to misread the literature to conjure up a problem with “hypothetical bias.”

11. Dr. Leonard quotes in part from articles in obscure journals and articles from outside the marketing literature to make the case that my survey is “susceptible to hypothetical bias.”6 He presents numerous articles that either (1) do not apply to conjoint analysis or (2) focus on the economic construct of WTP, which is not a relevant measure in my Expert Report. Dr. Leonard himself acknowledges that WTP and pricing decisions are not relevant to my survey: “Moreover, Dr. Shugan fails to note that he and Dr. Cockburn are using his conjoint survey results for a purpose much different than the making of ‘pricing decisions,’ which is what Miller, et al. (2011) discuss. Dr. Shugan and Dr.

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2 McFadden, Daniel, and Gregory Leonard, “Issues In The Contingent Valuation Of Environmental Goods: Methodologies For Data Collection And Analysis,” in Hausman, Jerry A., Ed., Contingent Valuation: A Critical Assessment, North Holland Press, Amsterdam, 1993, pp. 165-215.

3 McFadden, Daniel, and Gregory Leonard, “Issues In The Contingent Valuation Of Environmental Goods: Methodologies For Data Collection And Analysis,” in Hausman, Jerry A., Ed., Contingent Valuation: A Critical Assessment, North Holland Press, Amsterdam, 1993, p. 165-215.

4 Diamond, Peter A., Jerry A. Hausman, Gregory K. Leonard, and Mike A. Denning, “Does Contingent Valuation Measure Preferences? Experimental Evidence,” in Hausman, Jerry A., Ed., Contingent Valuation: A Critical Assessment, North Holland Press, Amsterdam, 1993, p. 41-89.

5 Kemp, Michael A., and Christopher Maxwell, “Exploring a Budget Context for Contingent Valuation Estimates,” in Hausman, Jerry A., Ed., Contingent Valuation: A Critical Assessment, North Holland Press, Amsterdam, 1993, p. 224.

6 Leonard Decl. at 7.

3

Cockburn are attempting to predict changes in market share resulting from a change in a product attribute.” (Leonard Decl. at 19.) If Dr. Leonard acknowledges this application, then it is unclear why he relies so heavily on this and other papers which primarily discuss WTP. Furthermore, many of these articles discuss WTP as it applies to situations completely unrelated to the case in this matter, my use of conjoint analysis, or the proper application of conjoint analysis as more widely applied in market research.

12. Below I present examples of how Dr. Leonard continues to misread the literature to conjure up a problem with “hypothetical bias.” These examples demonstrate how Dr. Leonard cites literature to make allegations that are not applicable to my Expert Report and conjoint analyses.

  • Ladenburg, J., S. B. Olsen, R. C. F. Nielsen, “Reducing hypothetical bias in Choice Experiments - Testing an Opt-Out reminder,” European Association of Environmental and Resource Economists 15th Annual Conference, Thessaloniki, Greece, 2007. This citation is irrelevant to my analyses. The authors use a survey employing simple (not conjoint) “choice experiments on preferences for re-establishing a stream in a park in Copenhagen.” Dr. Leonard also quotes a slide titled “No hypothetical bias panacea,” on which the authors note that “…the challenge remains of finding a hypothetical valuation design that demonstrably provides unbiased value estimates for public goods.” As I previously emphasized, valuation methods for public goods such as a park cannot be applied to those evaluating consumer goods such as cell phones. Hence, this article does not support Dr. Leonard’s assertions.
  • Silva, Andres, Rodolfo M. Nayga, Jr., Ben L. Campbell, and John Park, “On the Use of Valuation Mechanisms to Measure Consumers’ Willingness to Pay for Novel Products: A Comparison of Hypothetical and Non-Hypothetical Values,” International Food and Agribusiness Management Review, Vol. 10, No. 2, 2007, pp. 165–180. This source (which is not even included in the Institute for Scientific Information (“ISI”) journal citation reports of accepted journals) suggests that hypothetical bias may affect estimated WTP, but makes no reference to an effect on preference shares, and is therefore not relevant to Dr. Leonard’s critiques. Meanwhile, Silva does acknowledge the wide application of conjoint analysis and acknowledges that the approach that I took in this case is more practical than alternative approaches.
  • Volckner, Franziska, “An empirical comparison of methods for measuring consumers’ willingness to pay,” Marketing Letters, Vol. 17, 2006, pp. 137–149. As the title of this article indicates, it is irrelevant to the analyses I conduct or the conclusions that I or Professor Cockburn draw from my 2011 Smartphone Survey. Again, while this source provides support that hypothetical bias may affect estimated WTP it does not address the effect of particular features on preference shares. The authors conclude: “Our research contributes to the body of academic literature that investigates techniques for measuring reservation prices by empirically analyzing two potential sources of differences among WTP estimates that emerge from value elicitation studies.”
  • Harrison, Glenn P. and E. Elisabet Rutström, Experimental Evidence on the Existence of Hypothetical Bias in Value Elicitation Methods, Handbook of Experimental Economic

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    Results, Volume 1, Elsevier, 2008. The cited chapter in this book does not discuss conjoint analysis and the final conclusions of the paper are unrelated to the conjoint analysis employed in this case. This source examines hypothetical bias as it relates to WTP in contingent valuation studies, which is a different methodology than the one in my 2011 Smartphone Survey.

  • Bettman, James R., Mary Frances Luce, and John W. Payne, “Constructive Consumer Choice Processes,” Journal of Consumer Research, Vol. 25, No. 3, 1998, pp. 187–217. This source does not refer to conjoint analysis or choice-based methods and is irrelevant to the statistical modeling approach that I have employed in my Expert Report. This article states the consumers in the real world also exhibit biases and, in fact, the biases found in market research studies can reflect the actual biases consumers have in the real market. The authors of this well known behavioral theory publication explain how consumers construct preference under certain circumstances.
  • Miller, Klaus M., Reto Hofstetter, Harley Krohmer, and Z. John Zhang, “How Should Consumers’ Willingness to Pay Be Measured? An Empirical Comparison of State-of-the-Art Approaches,” Journal of Marketing Research, 2011, pp. 172–184. As I state in my Reply Report, Miller et al. indicates that opposite of Dr. Leonard’s claims and finds that hypothetical bias cannot necessarily be assumed: “Our mean bias analysis uses the criterion of overlapping confidence intervals and cannot confirm the existence of a hypothetical bias. This result suggests that in our data set, all methods have a high convergent validity in measuring consumers’ mean WTP [willingness to pay].” The authors also conducted t-tests that indicate the existence of hypothetical bias for a cleaning product. However, even if such hypothetical bias had occurred in my study, its only influence would have been on willingness to pay.
  • Murphy, James J., P. Geoffrey Allen, Thomas H. Stevens, and Darryl Weatherhead, “A Meta-Analysis of Hypothetical Bias in Stated Preference Valuation,” Environmental and Resource Economics, Vol. 30, No. 3, 2005, pp. 313–325. Dr. Leonard quotes selections from the Murphy et al. article (which again is evaluating environmental/public goods) and ignores this article’s support for choice-based conjoint. He ignores that the authors “… find that a choice-based elicitation mechanism is important in reducing bias.” Hence this article does not support Dr. Leonard’s assertions.
13. Dr. Leonard also includes two Sawtooth Conference papers to demonstrate in ¶27 and ¶28 of his Declaration that hypothetical bias is not a new phenomenon, but a widely discussed issue that needs to be accounted for in validity measures. However, both of these papers simply discuss limitations for direct measures of external validity of conjoint studies; they do not refer to hypothetical bias at all. It is obvious that Dr. Leonard again misstates the literature. Dr. Leonard quotes “use of CBC [Choice-Based-Conjoint] share-of preference estimates should in general not be taken as forecasts of the market shares without adjustment of the external effects.” (Leonard Decl. at 12.) However, my preference share calculation correspond almost perfectly to current market shares of the leading operating system brands and therefore do not need any calibration or adjustment. In fact, one of the

5

papers cited by Dr. Leonard confirms this approach: “CBC is often concerned with the prediction of market shares. In this context, the external validity of CBC can be defined as the accuracy with which a CBC market simulator predicts these real market shares.” Hence this paper does not support Dr. Leonard’s assertions, but instead merely emphasizes that it is important to do the types of conjoint validation that I did in this matter. My results confirm that the results of my 2011 Smartphone Study simulate the preferences observed in the real world.

14. Many real-life practitioners are not concerned about hypothetical bias. Notably, the Department of Justice (“DOJ”) advocates choice-based surveys without mentioning hypothetical bias. For example, see Case 1:11-cv-00948-BAH, Document 67-2, filed 08/24/11, GX 622, Designing and Using Surveys to Define Relevant Markets by Christine Meyer. In fact, Dr. Leonard discusses one application (with no mention of hypothetical bias) in his article “Application Of Empirical Methods In Merger Analysis.” Hence, Dr. Leonard seems to grudgingly admit that DOJ and some economists are turning to marketing research tools such as conjoint to solve problems that could not be solved by traditional economic tools.

15. Finally, Dr. Leonard claims that hypothetical biases will artificially elevate the WTP upwards. There is no support to suggest that the results of the 2011 Smartphone Survey are affected by hypothetical bias. Dr. Leonard’s critiques regarding hypothetical bias would appear to apply to all market research tools employing consumer surveys. Thus, although he acknowledges in his recent Declaration that hypothetical bias is not necessarily present (Leonard Decl. at 19), Dr. Leonard provides no evidence that the conjoint analysis that I employed has a specific flaw or defect. Further, one could confirm that hypothetical bias is not an issue with my study by simply increasing the prices in my simulation model and comparing the preference share shifts under this scenario with my original analyses.

Dr. Leonard ignores my results regarding price, and he miscasts my use of the 2011 Smartphone Study data

16. Dr. Leonard claims that the main consequence of hypothetical bias is for the price feature to be underestimated in its importance, but he ignores my results, where price was the second most important feature in my conjoint analysis. However, even if the results of my estimation model would

6

have understated the importance of price, the market simulation analysis that I conducted in my Expert Report only considers scenarios where the levels for patented features change, not levels of price. (See Exhibit 3A of my Expert Report). Hence, market share movements depend solely on the relative relationships between product features that have nothing to with WTP, price, or any monetary unit. Indeed, Miller et al., cited by Dr. Leonard, state that while choice-based-conjoint may lead to a higher stated willingness to pay, “hypothetical CBC can be appropriate if a manager is interested mostly in the relative partworths of product attributes and price.”7 In addition, any “missing attributes” in my conjoint analysis would be equivalent in the “but-for world” and “infringing world.” Hence, the missing attributes have no impact on consumer choices between the two worlds. Thus, any potential bias will not influence the market share measures that I presented or that Professor Cockburn relied on.

17. Dr. Leonard continues to rely heavily on an article by Professor Ding et al. (quoted in both his report and again in his Declaration) that discusses the type of features that might be affected by hypothetical bias. He mischaracterizes this article attacking conjoint. In fact, this article is supporting conjoint and only trying to propose an improvement to conjoint to make consumers more sensitive to product prices. However, completely contrary to Dr. Leonard’s claims, in this article, Professor Ding points out that features that are highly utilized are typically undervalued. Application launch time would be such a feature, as it is unlikely to be the focus of Smartphone users’ experiences, but it is used every time that any application is used. Dr. Leonard argues that I am using “conjecture” to predict how a hypothetical bias would affect the features being considered, but that is hypocritical because Dr. Leonard is relying on Ding’s research and of course Professor Ding is using exactly the same conjecture to draw his conclusions. Thus, Dr. Leonard is simultaneously dismissing Professor Ding’s analysis and conclusions by asserting that conjecture is inappropriate in such settings, yet citing Professor Ding to critique me. One must ask why Dr. Leonard is willing to cite Professor Ding at all if such conjecture – based on economic theory and market research – is irrelevant.

18. Finally, Dr. Leonard continues to cite selectively and omit context-changing information.

____________________________

7 Miller, Klaus M., Reto Hofstetter, Harley Krohmer, and Z. John Zhang, “How Should Consumers’ Willingness to Pay Be Measured? An Empirical Comparison of State-of-the-Art Approaches,” Journal of Marketing Research, Vol. 48, No. 1, 2011, pp. 172–184 at p. 178.

7

It is unacceptable in the academic world to take a quote out of context, which he did in the List and Gallet paper where he excludes a crucial phrase (exclusion in italics):

“Exceptions to this upward bias can be found in numerous studies (e.g., Sinden 1988; Johannesson et al. 1998), but the average person seems to exaggerate his or her actual WTP across a broad spectrum of goods with vastly different experimental protocol.”8
19. As I noted in my Reply Report and Declaration, Dr. Leonard seems to dismiss conjoint methodology broadly (which Dr. Leonard denies in his recent Declaration). He continually cites Train who generally recommends the use of market data (such as that also considered by Professor Cockburn). However, even Train acknowledges that market data are not always the ideal method to parse out valuations and that under some circumstances market data can lead to insufficient utility measurements from price: “Even for choice situations that currently exist, there may be insufficient variation in relevant factors to allow estimation with revealed-preference data.”9 Train explains that insufficient variation in price leads to the unrealistically small importance of price, such that the researcher could erroneously conclude from this insignificance that price is unimportant to consumers. This paradox is inherent in revealed-preference data (i.e., use of market data): factors that are the most important to consumers will often exhibit the least variation due to the natural forces of market equilibrium. Their importance might therefore be difficult to detect with revealed-preference data. Hence, my conjoint approach is the best approach for the assignment in this case.

Dr. Leonard dismisses the conjoint simply because it did not confirm his own assumptions.

20. As discussed in my Declaration and Reply Report, the price preferences respondents exhibited in the 2011 Smartphone Survey are not inconsistent with the real world behavior of some or many consumers, even if they do contradict classical normative axiomatic economic theory about how everyone should theoretically behave. As I previously noted, and is widely recognized in the literature, individuals often use price as more than merely a budget constraint. For example, a higher price for some individuals might provide prestige for a conspicuously consumed product like a smart phone or

___________________________

8 List, John A. and Craig A. Gallet, “What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?” Environmental and Resource Economics, 20, 2001, pp. 241–254 at p. 243.

9 Kenneth E. Train, Discrete Choice with Simulation, Cambridge University Press, 2009, p. 156 (emphasis added).

8

provide a signal of a non-observable durability. So, consumers may interpret price (and perhaps the brand name) more broadly or differently than Dr. Leonard wants them to.10 Hence, if so-called economic preferences as described by Dr. Leonard don’t hold in the survey results, then it is a reflection of real-world consumer behavior. In real markets, a few consumers can make decisions that might appear to contradict economic predictions just as they can in a survey.

21. Dr. Leonard claims that preferences should be monotonic, that is, a price of $200 is always preferred to a price of $300, a price of $100 is always preferred to a price of $300, and a price of $100 is always preferred to a price of $200. However, his monotonicity rules fail to account for phone buyers such as the ones I already described in my Reply Report. Again, as I discussed in my Reply Report, I could have imposed monotonicity constraints on the model; however, as pointed out in the paper cited by Dr. Leonard, market share predictions should refrain from such constraints: “On the other hand, if the primary purpose of the study is to predict aggregate measures such as market shares, monotonicity constraints appear less helpful, and may occasionally even be harmful.”11 Nevertheless, as I noted in my Reply Report, the application of such constraints would yield even higher damages.

22. Dr. Leonard places excessive emphasis on individual responses and claims that results are inconsistent with economic preferences. Furthermore, he ignores the underlying power and purpose of conjoint accuracy, which comes from predictions at the market level (e.g., market shares). Most economic models focus only on evaluating and predicting market level measures as there is an inherent randomness in predicting individual choices in both surveys and real world decisions. Similar to the “Law of Large Numbers,” the aggregate level provides precise estimates because individual errors tend to cancel out. This is why larger samples produce better estimators for population values even though larger samples often have outliers that may initially appear problematic (but they are not). For example, it is impossible to predict one coin toss (heads or tails have equal probability) but 100 coin tosses will be much close to 50 heads and 50 tails than 2 heads and 98 tails.

_____________________________

10 For example, see Kahneman, Daniel et al., “Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues,” Journal of Risk and Uncertainty, Vol. 19., No. 1-3, 1999, pp. 203-235.

11 Johnson, Richard M., “Monotonicity Constraints in Choice-Based Conjoint with Hierarchical Bayes,” Sawtooth Software Research Paper Series, 2000, p. 9.

9

I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed at Gainesville, Florida on November 1, 2011.

By: /s/Steven M. Shugan
STEVEN M. SHUGAN

10


596

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

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

No. C 10-03561 WHA

ORDER DENYING
MOTION TO RETAIN
CONFIDENTIALITY
DESIGNATIONS AND
VACATING HEARING

___________________________

INTRODUCTION

In this patent and copyright infringement action, defendant moves to retain its confidentiality designations as to certain produced documents. For the reasons stated below, the motion is DENIED.

STATEMENT

The facts of this action have been set forth in previous orders (see Dkt. Nos. 137, 230, 433). In August 2011, Magistrate Judge Ryu ordered defendant Google Inc. to produce the final version and all nine drafts of an email by Google engineer Tim Lindholm, based on a finding that “Google has not demonstrated that the Lindholm Email falls within the ambit of attorney-client privilege or the work product doctrine” (Dkt. No. 361 at 8–9). Google moved for relief from that order. The motion for relief was denied in an October 20 order by the undersigned judge, based on a finding that Google failed to identify any aspect of Magistrate Judge Ryu’s order that was clearly erroneous or contrary to law. The October 20 order quoted the full text of the final

Lindholm email and described the history and content of the drafts (Dkt. No. 546). Those details need not be repeated here.

The protective order governing discovery in this action defined two levels of confidentiality designations that the parties could invoke when producing documents or items other than computer source code, which had its own designation. First, the label “CONFIDENTIAL” could be applied to “information (regardless of how it is generated, stored or maintained) or tangible things that qualify for protection under Federal Rule of Civil Procedure 26(c)” (Dkt. No. 66 at 2). Rule 26(c), in turn, allows for protective orders to prevent “annoyance, embarrassment, oppression, or undue burden or expense.” Second, the label “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY” could be applied to a subset of “CONFIDENTIAL” information or items which were “extremely sensitive” and “disclosure of which to another Party or Non-Party would create a substantial risk of serious harm that could not be avoided by less restrictive means” (Dkt. No. 66 at 2–3).

When Google produced the Lindholm email and drafts to Oracle America, Inc., it designated each of them as “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY” and added a “Privileged & Confidential” footer to each page. Oracle challenged the confidentiality designation and requested that Google re-designate the documents as merely “CONFIDENTIAL,” which would have enabled Oracle’s retained counsel to discuss the documents with Oracle’s in-house counsel (Francis Exh. A). Google refused. The parties attempted to resolve this dispute informally, but they were unable to do so (Francis Decl. ¶ 3).

Pursuant to the dispute-resolution procedures set forth in the protective order, Google now moves to retain its attorneys’-eyes-only confidentiality designations (Dkt. No. 66 at 8–9). Despite the fact that the full text of the Lindholm email was made public in the October 20 order, Google refuses to withdraw its motion. Google explains that it “intends to seek appellate review of that decision” and in order to preserve its right to do so, it must take all reasonable steps available “to prevent disclosure of the information Google contends is privileged and confidential” (Reply Br. 1). Oracle opposes the motion and now argues that Google should not be permitted to maintain any confidentiality designation as to the documents in question. Oracle

2

requests production of a “clean” set of the documents without any “Privileged & Confidential” footer added. This order follows full briefing.

ANALYSIS

Pursuant to the protective order, the burden of persuasion in this “challenge proceeding” is on “the Designating Party” — i.e., Google in this instance (Dkt. No. 66 at 9). To prevail on its motion, Google must show that its challenged confidentiality designations are appropriate. Google has not done so.

The protections conferred by the protective order “do not cover . . . any information that is in the public domain at the time of disclosure to a Receiving Party or becomes part of the public domain after its disclosure to a Receiving Party as a result of publication not involving a violation of this Order, including becoming part of the public record through trial or otherwise” (Dkt. No. 66 at 4) (emphasis added). The content of the Lindholm email and drafts became part of the public record on October 20, when the final version of the email was quoted in its entirety and the drafts were described in a public order issued by the undersigned judge. The issuance of that order did not violate the protective order. Accordingly, the Lindholm email and drafts are not subject to the protections conferred by the protective order.

Google argues that Oracle’s references to the email in open court violated the protective order, and that but for this supposed violation the email would not have become public until October 20. Google, however, does not argue that the October 20 publication violated the protective order or was somehow tainted by Oracle’s earlier supposed violation. Google also does not argue that any of this procedural history removes the documents from the ambit of the exclusionary provision in the protective order quoted above. Indeed, Google does not address that provision at all despite the fact that Oracle cited it in its opposition brief (Opp. 1–2, Reply Br. 1).

This order finds that the Lindholm email and drafts are not subject to protection under the protective order because they became part of the public domain on October 20 via a publication that did not violate the protective order. The exclusionary provision quoted above controls. This order need not reach the parties’ arguments concerning whether the documents satisfied the

3

definitions of material that could be designated as “CONFIDENTIAL” or “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY” under the protective order. This order also need not reach the other exclusionary provision in the protective order cited by Oracle. Google’s argument that the documents should retain their confidentiality designation until the privilege dispute is resolved is moot, because that dispute has been resolved.

The Lindholm email and drafts shall be treated as neither privileged nor confidential in this action. Accordingly, Google must produce to Oracle new copies of those documents without the “Privileged & Confidential” footer that was added for production.

CONCLUSION

For the foregoing reasons, defendant’s motion to retain its “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY” designation as to the Lindholm email and drafts is DENIED. The Lindholm email and drafts shall be treated as neither privileged nor confidential in this action. Defendant must produce to plaintiff new copies of those documents without the “Privileged & Confidential” footer that was added for production. The motion hearing previously set for November 17, 2011, is VACATED.

IT IS SO ORDERED.

Dated: November 2, 2011.

/s/ William Alsup
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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