Oracle Corporation et al v. SAP AG et al

Filing 1056

Declaration of Tharan Gregory Lanier in Support of 1055 Opposition/Response to Motion, Defendants' Opposition to Oracle's Conditional Motion for New Trial filed bySAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F)(Related document(s) 1055 ) (McDonell, Jason) (Filed on 4/8/2011)

Oracle Corporation et al v. SAP AG et al

Doc. 1056 Att. 3

Exhibit C
Dockets.Justia.com

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA BEFORE THE HONORABLE PHYLLIS J. HAMILTON, JUDGE ) ) PLAINTIFFS, ) ) VS. ) ) SAP AG, ET AL., ) ) DEFENDANTS. ) ____________________________) ORACLE CORPORATION, ET AL. JURY TRIAL NO. C 07-01658 PJH VOLUME 11 PAGES 1880 - 2020 OAKLAND, CALIFORNIA FRIDAY, NOVEMBER 19, 2010

CERTIFIED COPY
TRANSCRIPT OF PROCEEDINGS APPEARANCES: FOR PLAINTIFFS: BY: BINGHAM MCCUTCHEN LLP THREE EMBARCADERO CENTER SAN FRANCISCO, CALIFORNIA 94111-4607 ZACHARY J. ALINDER, HOLLY A. HOUSE, GEOFFREY M. HOWARD, DONN P. PICKETT, ATTORNEYS AT LAW BOIES, SCHILLER & FLEXNER LLP 1999 HARRISON STREET, SUITE 900 OAKLAND, CALIFORNIA 94612 DAVID BOIES, STEVEN C. HOLTZMAN, ATTORNEYS AT LAW

BY:

(APPEARANCES CONTINUED NEXT PAGE)

REPORTED BY:

RAYNEE H. MERCADO, CSR NO. 8258 DIANE E. SKILLMAN, CSR NO. 4909

RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR, CCRR [phone]

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AND B WILL BE GIVEN.

AND THE DEFENDANTS' 5A IS WITHDRAWN. CORRECT, YOUR HONOR. OKAY. ALL RIGHT. THANK YOU.

MR. LANIER: THE COURT:

NOW TURNING TO NUMBER 6. WHY DON'T I JUST TELL YOU THE DIFFICULTY I AM HAVING JUST GENERALLY WITH THE OVERALL DAMAGES CONCEPT. IT'S UNCLEAR TO ME WHETHER PLAINTIFF IS TAKING THE POSITION THAT THE JURY DOES NOT -- IS NOT GOING TO BE REQUIRED TO ELECT BETWEEN LOST PROFITS AND THE HYPOTHETICAL LICENSE. THE DEFENSE INSTRUCTIONS ARE PRETTY CLEAR. THE

PROPOSED INSTRUCTIONS ARE PRETTY CLEAR THAT -- AND I THINK IT'S CONSISTENT WITH THE WITNESS' TESTIMONY FOR THE MOST PART, THAT THE JURY WILL BE ASKED TO MAKE A DECISION WITH RESPECT TO ACTUAL DAMAGES, AS TO WHETHER OR NOT ACTUAL DAMAGES SHOULD BE ESTABLISHED BY VIRTUE OF THE HYPOTHETICAL LICENSE OR BY ORACLE'S LOST PROFITS. ALL RIGHT?

IF THE JURY DETERMINES THAT LOST PROFITS IS A BETTER MEASURE OF DAMAGES, GIVEN THE FACTS OF THIS CASE, THEN THEY WILL HAVE TO DETERMINE WHICH MEASURE THAT PROFFERED BY ORACLE OR THAT PROFFERED BY THE DEFENDANT. AND THEN THE JURY WILL

HAVE TO TURN TO THE QUESTION OF THE INFRINGER'S PROFITS. IT'S NOT CLEAR TO ME FROM THE DEFENDANTS' INSTRUCTIONS WHETHER OR NOT YOU'RE TAKING THE POSITION THAT -FROM THE VERDICT FORM IT'S NOT CLEAR. ARE YOU TAKING THE POSITION THAT INFRINGER'S PROFITS

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]

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ARE ONLY ADDED IF THERE'S A LOST PROFIT ELECTION BY THE JURY AS OPPOSED TO A HYPOTHETICAL LICENSE? MR. LANIER: THAT'S CORRECT, YOUR HONOR. AND THAT'S

BECAUSE, UNDER THE LAW, YOU'RE ENTITLED TO AWARD BOTH ACTUAL DAMAGES AND INFRINGER'S PROFITS TO THE EXTENT THAT THE INFRINGER'S PROFITS AREN'T ALREADY INCLUDED IN THE ACTUAL DAMAGES. AND, MORE IMPORTANTLY ALSO, BECAUSE AS ARGUED BY

PLAINTIFFS AND DISCLOSED IN THE PRETRIAL STATEMENT, ET CETERA, WERE THEY TO BE AWARDED DAMAGES BASED ON THE HYPOTHETICAL LICENSE, THAT COVERS BOTH. SO THE CHOICE THE JURY IS BEING GIVEN IS TAKE THE LICENSE APPROACH, AWARD ONE NUMBER BASED ON THE LICENSE, AND YOU CAN ARGUE WHAT THE NUMBER SHOULD BE, BUT AWARD A NUMBER BASED ON THE LICENSE, OR AWARD TWO NUMBERS, LOST PROFITS PLUS INFRINGER'S PROFITS. THAT'S THE CHOICE.

SO THAT'S WHY OUR SPECIAL VERDICT FORM WAS SET UP TO SAY, DO THIS IF YOU DO THE LOST PROFITS NUMBER, THEN GET TO QUESTION TWO. IF YOU DO THE LICENSE NUMBER, SIGN AND RETURN. OKAY.

THE COURT:

WHAT'S THE PLAINTIFFS' POSITION? MR. BOIES: FIRST, I THINK THE LAW IS CLEAR THAT THE

PLAINTIFF IS ENTITLED TO BOTH ACTUAL DAMAGES PLUS INFRINGER'S PROFITS UNLESS THE ACTUAL DAMAGES HAS ALREADY SOMEHOW CAPTURED THE INFRINGER'S PROFITS. THE COURT: RIGHT.

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]

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MR. BOIES:

WE BELIEVE THAT THE PLAINTIFF ACTUALLY

HAS THE RIGHT TO ELECT THE HYPOTHETICAL LICENSE, AND THAT THE RIGHT WAY FOR IT TO GO TO THE JURY IS TO GO TO THE JURY BASED ON A QUESTION OF WHAT WAS THE ACTUAL DAMAGES BASED ON A HYPOTHETICAL LICENSE. BECAUSE WE BELIEVE THE PLAINTIFF HAS THE

RIGHT TO ELECT THAT FORM OF DAMAGES AS OPPOSED TO LOST PROFITS. SO, WHAT WE REALLY BELIEVE THE JURY SHOULD BE INSTRUCTED IS THAT ON THE ACTUAL DAMAGES ASPECT, THEY OUGHT TO VALUE THE HYPOTHETICAL LICENSE. AND THEY HAVE TWO ALTERNATIVE

VALUES FOR THE HYPOTHETICAL LICENSE. IF THE JURY WERE TO BE GIVEN A CHOICE BETWEEN A HYPOTHETICAL LICENSE AND LOST PROFITS, THEN IT'S CLEAR THAT THE LOST PROFITS ESTIMATE OF THE TWO EXPERTS DO NOT INCLUDE INFRINGER PROFITS. IT IS LESS CLEAR WHETHER THE HYPOTHETICAL LICENSE DOES OR DOES NOT INCLUDE INFRINGER PROFITS, AND I THINK IT DEPENDS, TO SOME EXTENT, ON HOW YOU INTERPRET WHAT THE TWO EXPERTS HAVE SAID -THE COURT: WHAT YOUR EXPERT HAS SAID. I MEAN,

YOU'RE ATTEMPTING TO ESTABLISH THE HYPOTHETICAL LICENSE. MR. BOIES: THE COURT: THEY HAVE A HYPOTHETICAL LICENSE -BUT I WOULD MAKE A DETERMINATION BASED

ON WHETHER OR NOT YOUR EXPERT HAS INCLUDED IT IN HIS CALCULATION. WHAT'S YOUR VIEW OF THE EVIDENCE?

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]

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MR. BOIES:

I THINK HE HAS NOT INCLUDED THE I

INFRINGING PROFITS AS PART OF THE HYPOTHETICAL LICENSE.

THINK THE WAY HE CONSTRUCTS THE HYPOTHETICAL LICENSE IS ON THE VALUE AT THE TIME OF THE INFRINGEMENT COMMENCEMENT, THAT IS, JANUARY 19TH, AND HE VALUES WHAT IT WAS THAT WAS TAKEN AWAY. AND THE WAY THE COURTS HAVE DESCRIBED THE HYPOTHETICAL LICENSE CALCULATIONS IS YOU -- THE HOLDER OF THE COPYRIGHT IS BEING DEPRIVED OF THE VALUE OF THE LICENSE THAT OTHERWISE WOULD HAVE BEEN SOLD. SO THAT IF THEY HAD DONE WHAT

THE PROCESS CONTEMPLATES, WHICH IS, THEY HAD PURCHASED THIS LICENSE, HOW MUCH WOULD THEY HAVE PAID FOR IT. THAT IS SEPARATE BECAUSE THAT'S AN ACTUAL DAMAGES CALCULATION. THAT IS SEPARATE FROM WHAT PROFITS THEY MAKE IN

TERMS OF INFRINGEMENT LATER. MR. LANIER: YOUR HONOR, SEVERAL RESPONSES BRIEFLY.

FIRST OF ALL, AS PRESENTED BY THE PLAINTIFFS' EXPERT, IT WAS THE ONE AND SOLE NUMBER FOR WHICH HE OFFERED ANY DAMAGE CALCULATION. SECOND, HE DID TESTIFY, AND I WILL HAVE TO LOOK AT THE RECORD, THAT THIS WAS INTENDED TO CAPTURE THE VALUE TO SAP. AND THAT'S REALLY THE KEY POINT HERE, THE FAME OF THE CROSS-EXAMINATION THAT JUST HAPPENED. THE CLEAR ARGUMENT AND

EVIDENCE THAT PLAINTIFFS ARE ATTEMPTING TO PRESENT IS THAT SAP WOULD HAVE AGREED TO THIS LICENSE BECAUSE OF ALL THE PROFITS SAP WOULD HAVE MADE -- THAT WAS THAT LAST DIALOGUE ON THE

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]

1957

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PROJECTIONS AND ASSUMPTION DOCUMENTS, FOR EXAMPLE. THERE IS NO QUESTION THAT NOT ONLY DID THEY DISCLOSE IN THE PRETRIAL STATEMENT THE FAIR MARKET LICENSE AS THE ONE REMEDY THEY WOULD GET ON COPYRIGHT IF THAT WAS AWARDED BY THE JURY, THAT'S HOW THE EVIDENCE HAS COME IN, BOTH FACTUALLY AND FROM THE OPINION TESTIMONY AS WELL. MR. BOIES: THERE IS ONE QUALIFICATION TO THAT THAT

I THINK IS IMPORTANT, YOUR HONOR. IF THE JURY WERE TO COME BACK AND AWARD THE $1.65 BILLION THAT MR. MEYER PROPOSED, I THINK I WOULD AGREE WITH COUNSEL THAT THE BETTER VIEW OF THE EVIDENCE WOULD BE THAT THAT INCLUDES INFRINGER PROFITS. HOWEVER, IF THEY CAME BACK WITH 897 MILLION OR SOME OTHER NUMBER LIKE THAT, THEN THAT IS NOT SOMETHING THAT INCLUDES INFRINGER PROFITS. SO, I THINK THERE ARE PROBABLY TWO STEPS IN THE JURY'S ANALYSIS. ONE STEP IS IF THEY COME BACK IN AWARDING THE

HYPOTHETICAL LICENSE BASED ON WHAT MR. MEYER HAS PROPOSED, WHICH IS THE $1.65 BILLION, I THINK I WOULD AGREE THAT THAT INCLUDES THE INFRINGER'S PROFITS. HOWEVER, THAT IS NOT A NECESSARY ELEMENT OF A HYPOTHETICAL LICENSE. AND IF THEY COME BACK WITH SOME OTHER

NUMBER, THE JURY IS GOING TO HAVE TO DETERMINE FOR ITSELF WHETHER THAT OTHER NUMBER, DEPENDING ON HOW THE JURY ARRIVES AT IT, DOES OR DOES NOT INCLUDE INFRINGER PROFITS. BECAUSE I

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]

1958

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THINK, I THINK THE LAW IS CLEAR THAT ACTUAL DAMAGES IS SEPARATE FROM INFRINGER PROFITS EXCEPT TO THE EXTENT THAT THE CALCULATION OF THE ACTUAL DAMAGES INCLUDES INFRINGER PROFITS. I WOULD AGREE THAT THE HYPOTHETICAL LICENSE, AS DEFINED PRECISELY BY OUR EXPERT, DOES INCLUDE THAT. BUT IF YOU

HAVE -- IF THE JURY CONCLUDES HYPOTHETICAL LICENSE BUT WE'RE NOT GOING TO GIVE THE $1.65 BILLION, WE ARE GOING TO COME TO A VALUATION BASED ON SOME OTHER VIEW OF THE EVIDENCE, THEN I THINK THE JURY HAS TO MAKE A SEPARATE DETERMINATION AS TO WHETHER INFRINGER'S PROFITS IS OR IS NOT INCLUDED. THE COURT: MR. LANIER: OKAY. JUST A COUPLE OF POINTS, YOUR HONOR,

AND THEN MR. MC DONNELL MAY HAVE MORE TO ADD. THREE THINGS. FIRST, THE PRACTICAL POINT IS, WHEN

ONE ROLLS THE DICE, ONE ENDS UP WITH WHERE THE DICE FALL. THEY'VE ELECTED TO PURSUE AND PRESENT JUST ONE OF THE TWO APPROACHES THAT THEIR OWN EXPERT HAD TAKEN. THERE IS EVIDENCE

ABOUT THE SECOND APPROACH THEIR EXPERT TOOK IN THE RECORD ELICITED ON CROSS-EXAMINATION, SO THOSE NUMBERS ARE THERE. THEY ARE AVAILABLE TO THE JURY. AND SO THE JURY COULD ACTUALLY

AWARD LOST PROFITS AND INFRINGER'S PROFITS BASED ON PLAINTIFFS' OWN ANALYSIS ON EVIDENCE IN THE RECORD. THE SECOND POINT IS THAT THE -- IN THEIR STATEMENT OF RELIEF SOUGHT IN THE PRETRIAL STATEMENT, ORACLE SAID ON THE COPYRIGHT CLAIMS, HERE'S WHAT WE ARE SEEKING. AND IT DID NOT

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]

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RESERVE RIGHTS OR SAY THAT'S ONLY IF IT'S THIS BIG A NUMBER, IT SAID, HERE'S WHAT WE ARE SEEKING. AND IT HAS CONSISTENTLY

DISCLOSED THE LICENSE THEORY AS THE ONE RECOVERY YOU WOULD GET ON THE COPYRIGHT CLAIM. THERE, OF COURSE, HAS BEEN OTHER

CLAIMS, BUT THEY ARE NOT NECESSARY TO ADDRESS AT THIS POINT. SO BOTTOM LINE, I CERTAINLY APPRECIATE THE PRACTICAL ANALYSIS MR. BOIES IS GIVING. OF COURSE, IF THE NUMBER ISN'T

BIG ENOUGH, THEY WON'T FEEL LIKE THEY GOT WHOLLY COMPENSATED, BUT THAT'S NOT THE ISSUE FOR THE COURT. THE ISSUE IS, DOES THE FAIR MARKET VALUE LICENSE, AS PRESENTED BY PLAINTIFFS', SUBSTITUTE FOR THE OTHER TWO MEASURES OF DAMAGES THAT ARE POSSIBLE, IT DOES AS PRESENTED BY THEM. THE JURY, WE THINK, SHOULD BE ALLOWED TO BE GIVEN THE CHOICE AND THERE IS EVIDENCE IN THE RECORD OF BOTH SIDE'S POSITIONS ON THAT ALTERNATIVE APPROACH. THE COURT: ONE? MR. BOIES: THE COURT: NO, YOUR HONOR. I AGREE WITH DEFENDANTS. I THINK THAT OKAY. ALL RIGHT. ANYTHING ELSE ON THAT

THE HYPOTHETICAL LICENSE DOES INCLUDE THE INFRINGER'S PROFITS REGARDLESS OF WHAT NUMBER THE JURY COMES BACK WITH. SETTLES THAT PART OF IT. BUT YOU RAISED ANOTHER SUB-ISSUE THAT I WOULD LIKE TO HEAR YOU ALL OPINE ON, AND THAT IS THE WHOLE QUESTION OF WHETHER OR NOT THE JURY GETS TO MAKE THE ELECTION. SO THAT

DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC [phone]

CERTIFICATE OF REPORTER WE, RAYNEE H. MERCADO AND DIANE E. SKILLMAN, OFFICIAL REPORTERS FOR THE UNITED STATES COURT, NORTHERN DISTRICT OF CALIFORNIA, HEREBY CERTIFY THAT THE FOREGOING PROCEEDINGS IN C07-01658PJH, ORACLE USA, INC., ET AL. V. SAP AG, ET AL., WERE REPORTED BY US ON, FRIDAY, NOVEMBER 19, 2010, CERTIFIED SHORTHAND REPORTERS, AND WERE THEREAFTER TRANSCRIBED UNDER OUR DIRECTION INTO TYPEWRITING; THAT THE FOREGOING IS A FULL, COMPLETE AND TRUE RECORD OF SAID PROCEEDINGS AS BOUND BY US AT THE TIME OF FILING. THE VALIDITY OF THE REPORTER'S CERTIFICATION OF SAID TRANSCRIPT MAY BE VOID UPON DISASSEMBLY AND/OR REMOVAL FROM THE COURT FILE.

___________________________________ RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR, CCRR

___________________________________ DIANE E. SKILLMAN, CSR, RPR, FCRR

/s/

SATURDAY, NOVEMBER 20, 2010