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    Public Version of Google Filing Re. Oracle Damages

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    Florian Mueller
    Oracle v. Google: Google motion (of June 6, 2011) for leave to file Daubert motion, public version (blackened sections but provides indication as to Oracle expert's position on damage calculation)

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    Public Version of Google Filing Re. Oracle Damages

    Uploaded by

    Florian Mueller
    66K views5 pages
    Oracle v. Google: Google motion (of June 6, 2011) for leave to file Daubert motion, public version (blackened sections but provides indication as to Oracle expert's position on damage calculation)

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    Oracle v. Google: Google motion (of June 6, 2011) for leave to file Daubert motion, public version (blackened sections but provides indication as to Oracle expert's position on damage calculation)

    Copyright:

    Public Domain
    Download as PDF or read online from Scribd
    Download as pdf
    66K views5 pages

    Public Version of Google Filing Re. Oracle Damages

    Uploaded by

    Florian Mueller
    Oracle v. Google: Google motion (of June 6, 2011) for leave to file Daubert motion, public version (blackened sections but provides indication as to Oracle expert's position on damage calculation)

    Copyright:

    Public Domain
    Download as PDF or read online from Scribd
    Download as pdf
    of 5

    Case3:10-cv-03561-WHA Document165 Filed06/06/11 Page1 of 5

    King & Spalding LLP


    1185 Avenue of the Americas
    New York, New York 10036-4003
    (212) 556-2100
    www kslaw.com

    June 6, 2011

    The Honorable William Alsup


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

    Re: Oracle America, Inc. v. Google Inc., No. C 10-3561 WHA

    Dear Judge Alsup:

    In accordance with Your Honor’s February 9 and June 2 Orders, Google requests leave to

    file a Daubert or other motion directed at the damages report of Oracle’s expert Iain Cockburn.

    The Court’s November 19, 2010 Case Management Order recognized that an early

    damages report and early Daubert motion at this stage would substantially advance the case.

    The order provides that, after receiving Oracle’s opening damages report, Google “must file any

    Daubert or other motion directed at the methodology, reliability or other defect” within fourteen

    days. (Dkt. No. 56 at ¶ 9 (emphasis added)). This is consistent with the recent trend, by the

    Federal Circuit and other courts, to exclude under Daubert speculative and arbitrary damages

    testimony. See, e.g., Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011);

    Cornell Univ. v. Hewlett-Packard Co., 2008 WL 2222189, *1 (N.D.N.Y. 2008) (Rader, J.).

    Cockburn opines that Google, if found to infringe, would owe Oracle

    Contains Confidential and Highly Confidential - Attorneys’ Eyes Only Information

    561618.01
    Case3:10-cv-03561-WHA Document165 Filed06/06/11 Page2 of 5
    The Honorable William Alsup
    June 6, 2011
    Page 2

    Cockburn’s legal errors are fundamental and disqualifying, and allowing him to testify

    about his conclusions to a jury would prejudice Google. Although he purports to be calculating a

    reasonable royalty, he fails to offer any meaningful analysis of the Georgia-Pacific factors that

    would require him to separate out and define the value of the patented technology to both Google

    and Oracle.

    This “methodology” bears no resemblance to anything

    authorized by the law or occurring in any real-world negotiations regarding any aspect of the

    Java technology.

    First, Cockburn has no basis for including all of Google’s revenue from Android phones

    into the base of his royalty calculation. The accused product here is the Android software

    platform, which Google does not sell (and Google does not receive any payment, fee, royalty, or

    other remuneration for its contributions to Android). Cockburn seems to be arguing that

    Google’s advertising revenue from, e.g., mobile searches on Android devices should be included

    in the royalty base as a convoyed sale, though he never articulates or supports this justification

    and ignores the applicable principles under Uniloc and other cases. In fact, the value of the

    Android software and of Google’s ads are entirely separate: the software allows for phones to

    function, whether or not the user is viewing ads; and Google’s ads are viewable on any software

    and are not uniquely enabled by Android. Cockburn’s analysis effectively seeks disgorgement of

    Google’s profits even though “[t]he determination of a reasonable royalty . . . is based not on the
    Contains Confidential and Highly Confidential - Attorneys’ Eyes Only Information

    561618.01
    Case3:10-cv-03561-WHA Document165 Filed06/06/11 Page3 of 5
    The Honorable William Alsup
    June 6, 2011
    Page 3

    infringer’s profit, but on the royalty to which a willing licensor and a willing licensee would

    have agreed at the time the infringement began.” Radio Steel & Mfg. Co. v. MTD Prods., Inc.,

    788 F.2d 1554, 1557 (Fed. Cir. 1986).

    Second, Cockburn includes Oracle’s “lost profits and opportunities” in his purported

    royalty base. This is an obvious ploy to avoid the more demanding test for recovery of lost

    profits that Oracle cannot meet. See, e.g., Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575

    F.2d 1152 (6th Cir. 1978). Most audaciously, Cockburn tries to import into his royalty base the

    alleged harm Sun and Oracle would have suffered from so-called “fragmentation” of Java into

    myriad competing standards, opining that Oracle’s damages from the Android software includes

    theoretical downstream harm to a wholly different Oracle product. This is not a cognizable

    patent damages theory, and is unsupported by any precedent or analytical reasoning.

    Third, after improperly inflating the base of his royalty calculation, Cockburn proceeds to

    apply an unprecedented fifty percent royalty rate to that base through use of improper short-cuts.

    In contravention of long-settled precedent, he fails to tie his royalty rate to the value of the

    patented technology actually at issue in this case. See, e.g., Lucent Techs., Inc. v. Gateway, Inc.,

    580 F.3d 1301, 1333 (Fed. Cir. 2009). He treats the patents and copyrights at issue as a single,

    indivisible unit, casually dismissing critical differences in the patents (such as the technologies

    they embody and expiration dates over a decade apart) by deeming them all “essential” to Java,

    without pointing to any facts that could justify that conclusion. Instead of satisfying the Lucent

    standard, he adopts a presumption that is contrary to Lucent, stating that there is “no clear

    economic basis” for apportioning the total value of Android into value attributable to the patents

    and copyrights in suit and any additional value added by Google. Under the case law, however,

    Contains Confidential and Highly Confidential - Attorneys’ Eyes Only Information

    561618.01
    Case3:10-cv-03561-WHA Document165 Filed06/06/11 Page4 of 5
    The Honorable William Alsup
    June 6, 2011
    Page 4

    damages must be tied to “the claimed invention’s footprint in the market place.” ResQNet.com,

    Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010) (per curiam) (emphasis added).

    Cockburn similarly inflates his royalty rate by calculating Oracle’s loss based on the

    alleged value of Java as a whole, even though the patented features are only a small part of Java.

    Indeed, Oracle has conceded that the claimed invention of the ‘720 patent—the only patent

    discussed in Cockburn’s report—

    Fourth, Cockburn cavalierly asserts that infringement of a single claim of a single patent

    would result in the same award as infringement of all of the asserted claims.

    The ‘720 patent, for example, , it

    expires nearly eight years after every other patent-in-suit. But according to Cockburn, even if

    Google does not infringe the ‘720 patent, the damages should still run throughout its life, which

    extends to 2025. Cockburn therefore tacks onto his calculation for the eight

    years during which the ‘720 patent would be the sole remaining patent.

    All these basic legal errors are essential to Cockburn’s bottom-line conclusion of

    royalty base and a fifty percent royalty rate. Even without considering these errors,

    however, Cockburn’s 50% rate is no less arbitrary than the 25% “rule of thumb” methodology

    the Federal Circuit recently held cannot satisfy Daubert. See Uniloc, 632 F.3d at 1315. The

    critical question is “whether [Cockburn] has justified the application of a general theory to the

    facts of the case.” Id. at 1316. He has not.

    Contains Confidential and Highly Confidential - Attorneys’ Eyes Only Information

    561618.01
    Case3:10-cv-03561-WHA Document165 Filed06/06/11 Page5 of 5

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