|
Oracle v. Google - Oracle Loses on Motion Regarding Leonard and Cox Reports |
|
Tuesday, November 29 2011 @ 09:15 AM EST
|
Judge Alsup has now ruled on Oracle's motion to exclude portions of the damages reports submitted by Google from Drs. Leonard and Cox, and Oracle is going home largely empty-handed. (632 [PDF; Text]) With one minor exception, Judge Alsup rejected all of Oracle's assertions.
Oracle's attempt to challenge the Leonard and Cox reports was truly pathetic, as evidenced by Judge Alsup's comments in the order and in contrast to the challenges Google has made against various Oracle experts which Google has largely won [Oracle Serwin Report Excluded (Google Wins One and Has a Second Deferred; Oracle Mitchell Report Limited (Google Gets Significant Win on Mitchell Report and Orders, Orders, Orders and Oracle ordered to have the Cockburn report redone (Damages Report - Try Again, Oracle)]. It is refreshing to see that name-calling, taking quotations out of context, and failing to consider the actual law doesn't work.
Consider these gems from Judge Alsup's order:
- Oracle’s supposed examples of inappropriate technical opinions are not persuasive
- If
Oracle is worried about bias, then it should make its arguments on cross-examination.
- This argument overstates the record
evidence favoring Oracle.
- Oracle argues that Drs. Leonard and Cox cite no evidence for some key propositions
(Br. 9–10). This argument is plainly wrong.
- This passage has been taken out of context
- Oracle has made no attempt to
debunk these citations.
- Contrary to Oracle’s assertion
that this was ipse dixit, this phrase actually had a citation to an interview with Andy Rubin,
- Notably, Oracle’s own damages expert, Professor Cockburn, has opined on this
same fragmentation issue without having a background in computer science (Dkt. No. 230 at 9).
- Oracle does not meet
its burden to support this argument because it makes no attempt to debunk the citations.
- Oracle has not meet its burden to show that these sources are unreliable.
- If Oracle has problems with Dr. Leonard’s interpretation of the
literature, then it should save its critiques for trial.
The one point on which Oracle won is Dr Cox's opinion that "non-infringing alternatives would provide a basis for calculating wrongful profit [with respect to copyright damages]. Judge Alsup, while conceding that "non-infringing alternatives" could be considered in determining actual copyright damages, found the "non-infringing alternatives" argument unsupported by the law with respect to wrongful profits copyright damages. A little clarification with respect to these two forms of damages. Actual damages represents the profits the plaintiff would have obtained had it licensed the copyright or provide its own product. Wrongful profits are profits the defendant obtained as a result of its wrongful actions. The plaintiff may choose the form of damages that provides the greater return; the plaintiff does not get both.
**************
Docket
632 – Filed and Effective: 11/28/2011
ORDER
Document Text: ORDER GRANTING IN PART AND DENYING IN PART MOTION TO EXCLUDE PORTIONS OF THE EXPERT REPORTS OF GREGORY K. LEONARD AND ALANA J. COXgranting in part and denying in part 585 Motion to Strike 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 (whalc1, COURT STAFF) (Filed on 11/28/2011) (Entered: 11/28/2011)
**************
Documents
632
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 GRANTING IN PART
AND DENYING IN PART
MOTION TO EXCLUDE
PORTIONS OF THE EXPERT
REPORTS OF GREGORY
K. LEONARD AND ALAN J. COX
________________________________
INTRODUCTION
In this patent and copyright infringement action involving Java and Android, plaintiff
moves to strike portions of the reports by defendant’s damages experts. For the following
reasons, with one exception explained below, the motion is DENIED.
STATEMENT
The factual background of this action has been set forth in previous orders (see Dkt.
Nos. 137, 230, 433). The damages aspect of this action has been controversial. The parties and
their retained damages experts have advanced extremely divergent outcomes. Oracle’s expert,
Professor Iain Cockburn, opined in his first report that a hypothetical license for the alleged
infringement would have been “at least $1.4 billion” and “could be as much as $6.1 billion” (Dkt.
No. 230 at 4). Responding, Google’s experts estimated much lower damages: $27.8 million
and $6.44 million for the alleged patent and copyright infringement, respectively (Dearborn Exh.
1 [Leonard Report] at 72; Dearborn Exh. 2 [Cox Report] at 64). The complexity of calculating
potential patent and copyright damages, and starkly conflicting expert testimony, led to the
appointment under Rule 706 of an independent expert to testify as to damages (Dkt. No. 374).
Plaintiff Oracle has now moved to strike portions of Google’s expert reports on
patent-infringement damages by Dr. Gregory K. Leonard and copyright-infringement damages by
Dr. Alan J. Cox. This order follows full briefing.
ANALYSIS
“A witness qualified as an expert by knowledge, skill, experience, training, or education”
may provide opinion testimony “if (1) the testimony is based upon sufficient facts or data, (2) the
testimony is the product of reliable principles and methods, and (3) the witness has applied the
principles and methods reliably to the facts of the case.” FRE 702. District courts thus “are
charged with a ‘gatekeeping role,’ the objective of which is to ensure that expert testimony
admitted into evidence is both reliable and relevant.” Sundance, Inc. v. DeMonte Fabricating
Ltd., 550 F.3d 1356, 1360 (Fed. Cir. 2008).
Here, Oracle seeks to strike significant portions of both of Google’s damages reports.
Oracle contends that the reports contained unqualified technical opinions, were based on
unreliable “spoon-fed” facts, and were inconsistent with established damages principles. Each of
Oracle’s arguments will be addressed in turn.
1. UNQUALIFIED TECHNICAL OPINIONS.
Oracle argues that Drs. Leonard and Cox, both economists with no technical expertise,
offered unqualified opinions regarding technical matters. Specifically, Oracle seeks to strike
sections of the reports that stated that Google had “good” and “multiple acceptable and effective
non-infringing alternatives” to the patents and copyrights in suit at the time of the hypothetical
negotiation (Br. 4). This objection is overruled. Both experts relied on Google’s noninfringement
experts, interviews with Google’s employees, and documentary evidence for the
technical points. Expert reliance on foundational facts supplied by Google’s engineers can be
proper so long as they testify to the foundational facts with firsthand knowledge. See Therasense,
Inc. v. Becton, Dickinson & Co., No. C 04-02123 WHA, 2008 WL 2323856 at *2 (N.D. Cal. May
22, 2008) (Alsup, J.) (“The traditional and correct way to proceed is for a foundational witness to
testify first-hand at trial to the foundational fact . . . 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.”).
2
Google acknowledged in its opposition brief that it will “offer the underlying factual testimony
from the percipient witnesses first, before its [damages] experts may testify based on those facts”
(Opp. 3).
Oracle’s supposed examples of inappropriate technical opinions are not persuasive
(Br. 4–5). For instance, Oracle objects to the statement, “Google could have used a programming
language other than Java” in Dr. Leonard’s report as an inappropriate technical opinion (Br. 4).
But Dr. Leonard cites interviews with three different Google engineers and non-infringement
expert reports for that proposition (Leonard Report 13 n. 25). This order will not address each of
Oracle’s examples individually. Having reviewed the record, this order finds that in each
example, the damages experts did rely on sources of information reasonably relied upon as long
as the foundational facts are properly laid at trial. Of course, the expert should make clear that he
assumes this point and is not himself qualified to make expert findings on the technical point.
2. RELIANCE ON INTERVIEWS WITH GOOGLE EMPLOYEES.
In a parallel way, Oracle argues that Drs. Leonard and Cox inappropriately based their
calculations on “spoon-fed” facts given by Google employees (Br. 6). As discussed above, expert
reliance on interviews with Google’s engineers can be proper so long as they can testify to the
foundational facts with firsthand knowledge. See Therasense, Inc., 2008 WL 2323856 at *2. If
Oracle is worried about bias, then it should make its arguments on cross-examination.
Oracle also argues that the timing of these interviews is unfair because most were
conducted the “week prior to service of the Reports and after the conclusion of fact depositions”
(Br. 6). A recent order, however, addressed this concern by allowing additional depositions of
three of the “spoon-feeders,” the three to be selected by Oracle (Dkt. No. 617). All but one of the
seven interviewees referenced in the damages reports had already been deposed or offered for
deposition (ibid.).
Oracle also argues that Drs. Leonard and Cox have inappropriately relied on interviews at
odds with documents produced in discovery (Br. 8–9). This argument overstates the record
evidence favoring Oracle. While Oracle can point to discovery documents that support its
contentions, Google can similarly rely on its own witnesses to rebut those contentions. Who is to
3
say at this stage which is more accurate? Documents produced in discovery are not judicial
admissions. They are only data points. Company witnesses can try to explain away and even
contradict those data points. Subject to the rules of evidence, Oracle will have its chance during
trial to make the contrary case with Google’s own documents. See Hangarter v. Provident Life &
Acc. Ins. Co., 373 F.3d 998, 1017 n.14 (9th Cir. 2004) (holding that the factual basis of an expert
opinion goes to the credibility of the testimony, not the admissibility, and that it is up to the
opposing party to examine the factual basis for the opinion in cross-examination).
3. OPINIONS NOT SUPPORTED BY ANY EVIDENCE.
Oracle argues that Drs. Leonard and Cox cite no evidence for some key propositions
(Br. 9–10). This argument is plainly wrong. The allegedly unsupported sentences in the expert
reports were actually part of broader discussions with citations. For example, Oracle objects to
the phrase, “demand for a smartphone is a complex function of all of its attributes, and a
smartphone with slower application speed can still be highly demanded by consumers” (Br. 10) as
being unsupported. This passage has been taken out of context; instead, the entire sentence
included the introductory phrase “As discussed above . . .” (Leonard Report 25). And above that
sentence, on the same page in the report, Dr. Leonard cited a record document, a market research
study, and a deposition of an Oracle engineer for the proposition that there are many different
attributes that drive consumer demand (Leonard Report 25). Oracle has made no attempt to
debunk these citations.
Oracle takes issue with another phrase, “[smartphone manufacturers] would have accepted
small reductions in performance or somewhat more demanding handset specification in order that
they could still be able to offer Android smartphones” (Br. 10). Contrary to Oracle’s assertion
that this was ipse dixit, this phrase actually had a citation to an interview with Andy Rubin,
founder of Android and the head of Google’s Android division (Leonard Report at 30). Likewise,
the other examples in Oracle’s brief either have supporting citations attached to it or are part of a
broader discussion where support can be inferred from surrounding text.
4
4. OPINIONS ON FRAGMENTATION AND STAGNATION.
Oracle argues that Google’s damages experts were unqualified to opine on stagnation and
fragmentation in the Java community and relied on unreliable sources in doing so (Br. 11). This
order disagrees. The term “stagnation” was used in a business sense to describe dissatisfaction
among carriers, device manufacturers, and developers for the Java platform (see Leonard
Report 31–33; Cox Report 44–45). Similarly, “fragmentation” was used in a business sense to
describe how Java’s “write once, run anywhere” marketing concept was being eroded by a
proliferation of incompatible devices and platforms (see Leonard Report 34–37; Cox
Report 45–48). Notably, Oracle’s own damages expert, Professor Cockburn, has opined on this
same fragmentation issue without having a background in computer science (Dkt. No. 230 at 9).
Oracle also argues that Google’s damages experts failed to rely on facts or data
customarily relied upon in their opinions on fragmentation and stagnation. Oracle does not meet
its burden to support this argument because it makes no attempt to debunk the citations. In their
reports, Google’s experts cited depositions with former and current Oracle employees, including
Hasan Rizvi (Senior Vice President of Java), Jeet Kaul (former Vice President of the Java Clients
Software Group at Sun Microsystems), and Vineet Gupta (Senior Director, Chief Technology
Strategy Officer at Sun Microsystems, and subsequently an employee of Oracle). Google’s
damages experts also relied on interviews with John Rizzo (a third-party witness who has
experience with Java licenses), postings on internet blogs by James Gosling (former Chief
Technology Officer at Sun), and other online sources. These are sources of information the
damage experts can reasonably rely upon as long as the foundational facts are properly laid at
trial. Oracle has not meet its burden to show that these sources are unreliable.
5. LITTLE OR NO UPWARD ADJUSTMENT FOR LOST BUSINESS OPPORTUNITY.
Oracle’s expert, Professor Cockburn, opined that the starting point for patent damages
should be upwardly adjusted because infringement would have prevented Sun from offering a
commercial version of the Java platform that would run within Android (Br. 12). That is, Sun
would not be able to develop a potential business opportunity to create an Android-compatible
Java platform. Oracle now seeks to exclude portions of Dr. Leonard’s report that criticized this
5
upward adjustment by arguing that Dr. Leonard’s opinion constitutes an inappropriate mitigation
defense (Br. 12–13). Google’s Dr. Leonard opined that there should be little or no upward
adjustment because this business opportunity was not lost and was not worth that much to begin
with (Leonard Report 82–83). Despite using the word “mitigate” in his report, Dr. Leonard’s
opinion was not based on the legal assumptions of a contract-style mitigation defense. Instead,
Dr. Leonard merely opined on the value of this allegedly lost business opportunity. This
objection is overruled.
6. MISUSE OF NON-INFRINGING ALTERNATIVES TO
REDUCE DISGORGEMENT DAMAGES.
Turning to the copyright side, Oracle argues that Google’s Dr. Cox inappropriately opined
that non-infringing alternatives would provide a basis for calculating wrongful profit (Br. 11–12).
Copyright law provides recovery for “any profits of the infringer that are attributable to the
infringement and are not taken into account in computing the actual damages.” 17 U.S.C. 504(b).
In his damages report, Dr. Cox opined: “The ready availability of obviously acceptable
non-infringing alternatives also provide [sic] basis that the ‘element of profit’ that is attributable
to the allegedly infringed API claim contained in the Android framework is very small or zero”
(Cox Report 38). Dr. Cox did not explain how the availability of non-infringing alternatives
supposedly decreased the wrongful profits attributable to infringement. In its opposition brief,
Google argues that the existence of non-infringing alternatives suggests that profits are
attributable to other, non-infringing features added by the alleged infringer (Opp. 14). This is not
convincing.
There is no controlling authority on the issue of whether the existence of non-infringing
alternatives should be considered when calculating disgorgement damages under Section 504(b).
But our court of appeals’ interpretation of the purpose behind Section 504(b) sheds light on this
issue. Our court of appeals has held that Section 504(b) was enacted to explicitly provide for two
distinct monetary remedies — actual damages and recovery of wrongful profits — to serve
different purposes. Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 708 (9th Cir. 2004).
Damages for lost license fees, derived from a hypothetical negotiation, fall under the rubric of
actual damages. Id. at 708–709. As Dr. Cox makes clear in his report, the existence of “multiple
6
acceptable and effective” non-infringing alternatives “at little or no additional cost” greatly
reduces the lost license fees (Cox Report 61). This order finds this aspect acceptable. Not
acceptable, however, is allowing the existence of non-infringing alternatives to reduce recovery
of wrongful profits. This is a distinct remedy for the purpose of disgorgement. Non-infringing
alternatives have nothing to do with this. The motion to strike portions of Dr. Cox’s report that
opined that non-infringing alternatives would provide a basis for calculating wrongful profit
is GRANTED.
7. CRITIQUE OF CONJOINT ANALYSIS.
Oracle argues that Dr. Leonard was unqualified to critique the conjoint analysis — a type
of consumer-preference marketing study — conducted by Dr. Shugan (Br. 13–14), and attacks
Dr. Leonard’s interpretation of the relevant academic literature in the field of survey-based
research. This order disagrees. Dr. Leonard’s opinions on conjoint analysis are proper expert
testimony. Dr. Leonard has published and conducted studies in the field of survey-based research
(Leonard Decl. ¶¶ 22–23). He extensively cited to academic literature in his criticisms of Dr.
Shugan’s conjoint study. If Oracle has problems with Dr. Leonard’s interpretation of the
literature, then it should save its critiques for trial.
CONCLUSION
For the foregoing reasons, plaintiff’s motion to exclude portions of Dr. Leonard’s and
Dr. Cox’s expert reports is GRANTED IN PART and DENIED IN PART. As to Dr. Cox’s opinions
that non-infringing alternatives were a basis for calculating wrongful profits, the motion is
GRANTED. Any opinion in the Expert Report of Dr. Alan M. Cox that stated, in substance, that
non-infringing alternatives should in any way affect the calculation of infringer’s profits under 17
U.S.C. 504(b) is STRICKEN. As to Oracle’s other contentions, the motion is DENIED.
IT IS SO ORDERED.
Dated: November 28, 2011.
/s/William Alsup
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE
7
|
|
Authored by: jesse on Tuesday, November 29 2011 @ 10:03 AM EST |
thank you. [ Reply to This | # ]
|
|
Authored by: jesse on Tuesday, November 29 2011 @ 10:03 AM EST |
Thank you [ Reply to This | # ]
|
- New search engine - Authored by: Anonymous on Tuesday, November 29 2011 @ 11:11 AM EST
- EU Court Adviser Says Software Ideas Can't Be Copyrighted - Authored by: IMANAL_TOO on Tuesday, November 29 2011 @ 12:28 PM EST
- This is huge - Authored by: argee on Wednesday, November 30 2011 @ 12:49 AM EST
- This is huge - Authored by: Anonymous on Wednesday, November 30 2011 @ 03:27 AM EST
- Interest waning on Windows 8 tablet, Forrester says - Authored by: SilverWave on Tuesday, November 29 2011 @ 02:30 PM EST
- Interest in tablets with Microsoft's Windows 8 is plummeting, Forrester Research said - Authored by: SilverWave on Tuesday, November 29 2011 @ 02:32 PM EST
- US judge orders hundreds of sites "de-indexed" from Google, Facebook - Authored by: s65_sean on Tuesday, November 29 2011 @ 05:40 PM EST
- Eat More Kale - Confusing? - Authored by: Anonymous on Tuesday, November 29 2011 @ 07:00 PM EST
- Samsung wins aussie apple injunction overturned.. but apple appeals immediately. - Authored by: Anonymous on Tuesday, November 29 2011 @ 09:23 PM EST
- link fixed. - Authored by: Anonymous on Tuesday, November 29 2011 @ 09:29 PM EST
- Apple Seeks to Block Sale of Modified Samsung Galaxy Tablet in Germany - Authored by: Anonymous on Wednesday, November 30 2011 @ 11:47 AM EST
- Dimmick sues couple he kidnapped - Authored by: Anonymous on Wednesday, November 30 2011 @ 03:19 PM EST
|
Authored by: jesse on Tuesday, November 29 2011 @ 10:04 AM EST |
Thank you. [ Reply to This | # ]
|
|
Authored by: jesse on Tuesday, November 29 2011 @ 10:05 AM EST |
Thank you. [ Reply to This | # ]
|
|
Authored by: SLi on Tuesday, November 29 2011 @ 10:33 AM EST |
Oracle argues that Drs. Leonard and [Alan J.] Cox,
both economists
with no technical expertise, offered unqualified
opinions regarding technical
matters.
Oh, so it's a different Alan Cox from the Alan
Cox. What
an interesting coincidence. I had long time ago started to wonder
when he had obtained a doctorate in economics :)[ Reply to This | # ]
|
|
Authored by: Anonymous on Tuesday, November 29 2011 @ 11:07 AM EST |
>
Contrary to Oracle’s assertion that this was ipse dixit, this phrase actually
had a citation to an interview with Andy Rubin,<
I think I can guess what the Plain English version of that one is ;)
Tufty
[ Reply to This | # ]
|
|
Authored by: mcinsand on Tuesday, November 29 2011 @ 11:16 AM EST |
>>..."non-infringing alternatives" could be considered in
>>determining actual copyright damages...
Does this mean that a free (FOSS), non-IP_encumbered application will, on
becoming market-established, affect potential damages? The way I read this, if
SCOX, Oracle, Apple, and MS fail to have established IP clouds over FOSS and
FOSS gains a significant foothold, then their ability to shakedown the industry
can effectively disappear.
[ Reply to This | # ]
|
|
Authored by: Anonymous on Tuesday, November 29 2011 @ 02:48 PM EST |
The one point where the judge ruled in favor of Oracle is actually a big one, in
terms of money!
The judge has effectively ruled, that the fact that the (almost admittedly!)
copied source files used "for testing" could be very cheaply replaced
by nothing at all (a very cheap alternative indeed) does not save Google from
paying damages for their semi-use under the "wrongful profits" rules,
if Oracle chooses to use those rules.
In other words, if Oracle looses on every other allegation than the copyright on
those few files, then Oracle can still win a lot of money from Google simply
because they used those few files without permission and made money from the
result.
The one defense Google has left for those files is that they were not, in any
shape nor form, directly nor indirectly, included on Android phones, only
(maybe) in some Android development kits, which "sold" (at $0) in far
less quantity than the phones.
At least that is how I read the transcript and the article above.
[ Reply to This | # ]
|
|
Authored by: SpaceLifeForm on Tuesday, November 29 2011 @ 04:39 PM EST |
The one point on which Oracle won is Dr Cox's opinion that
"non-infringing alternatives would provide a basis for calculating wrongful
profit [with respect to copyright damages].
Congratulations
Oracle!
Judge Alsup threw you a crumb.
Even an ant would not
touch.
So come on Oracle (Party A), see if you can find a non-infringing
alternative by a Party C. And then explain how that somehow relates to Google
(Party B) having wrongful profit.
---
You are being MICROattacked, from various angles, in a SOFT manner. [ Reply to This | # ]
|
|
Authored by: Anonymous on Tuesday, November 29 2011 @ 10:44 PM EST |
I couldn't help thinking of the Lindholm emails while I was
reading part of Section 2: "... Documents produced in
discovery are not judicial admissions." Clearly the judge
thinks the emails belong on the record; but he will assess
them for what they are. I guess Google is not so sure that a
jury will be thinking as clearly.[ Reply to This | # ]
|
|
Authored by: SilverWave on Wednesday, November 30 2011 @ 06:59 AM EST |
But
there is more at stake than just an injunction preventing the sale of the Galaxy
Tab 10.1. If The Register is reading today’s proceedings correctly, then the
Federal Court in full bench is somewhat skeptical regarding Apple’s patent
claims. --- RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions
[ Reply to This | # ]
|
|
Authored by: SilverWave on Wednesday, November 30 2011 @ 07:02 AM EST |
BUSTED!
Secret app on millions of phones logs key taps Researcher says seeing is
believing --- RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions
[ Reply to This | # ]
|
|
|
|
|