Oracle Corporation et al v. SAP AG et al

Filing 1089

MOTION for 1292(b) Certification for Interlocutory Review filed by Oracle International Corporation. Responses due by 10/7/2011. Replies due by 10/14/2011. (Attachments: # 1 Proposed Order)(Howard, Geoffrey) (Filed on 9/23/2011) Modified on 9/26/2011 (kc, COURT STAFF).

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BINGHAM MCCUTCHEN LLP
DONN P. PICKETT (SBN 72257)
GEOFFREY M. HOWARD (SBN 157468)
ZACHARY J. ALINDER (SBN 209009)
BREE HANN (SBN 215695)
Three Embarcadero Center
San Francisco, CA 94111-4067
Telephone: [phone]
Facsimile: 415.393.2286
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
BOIES, SCHILLER & FLEXNER LLP
DAVID BOIES (Admitted Pro Hac Vice)
333 Main Street
Armonk, NY 10504
Telephone:
[phone]
Facsimile:
[phone]
[e-mail]
STEVEN C. HOLTZMAN (SBN 144177)
FRED NORTON (SBN 224725)
1999 Harrison St., Suite 900
Oakland, CA 94612
Telephone:
[phone]
Facsimile:
[phone]
[e-mail]
[e-mail]
DORIAN DALEY (SBN 129049)
JENNIFER GLOSS (SBN 154227)
500 Oracle Parkway, M/S 5op7
Redwood City, CA 94070
Telephone: [phone]
Facsimile: 650.506.7144
[e-mail]
[e-mail]
Attorneys for Plaintiffs Oracle USA, Inc., et
al.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
OAKLAND DIVISION
ORACLE USA, INC., et al.,
No. 07-CV-01658 PJH (EDL)
ORACLE’S NOTICE OF MOTION AND
Plaintiffs,
MOTION FOR 1292(b) CERTIFICATION FOR
v.
INTERLOCUTORY REVIEW; MEMO OF
POINTS AND AUTHORITIES
SAP AG, et al.,
Date: N/A
Time: N/A
Defendants.
Place: 3rd Floor, Courtroom 3
Judge: Hon. Phyllis J. Hamilton

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TABLE OF CONTENTS

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Page

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I.
II.

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III.

INTRODUCTION ............................................................................................................. 2
ARGUMENT ..................................................................................................................... 2
1.
The Post-Trial Order Poses Controlling Questions Of Law ...................... 3
2.
There Are Substantial Grounds For Difference Of Opinion...................... 3
a.
Whether There Is Sufficient Objective Evidence As A
Matter Of Law To Establish The Amount A Willing Buyer
Would Have Paid A Willing Seller................................................ 4
b.
Whether The Jury’s Assessment Of The Fair Market Value
Of The Rights Infringed May Be Set Aside As Speculative........ 13
c.
Whether The Jury’s Verdict, Falling Within The
Reasonable Range Of Hypothetical-License Damages
Established By The Evidence, May Be Set Aside As
Excessive...................................................................................... 16
3.
Certification Would Materially Advance The Termination Of The
Litigation .................................................................................................. 18
CONCLUSION ................................................................................................................ 19

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TABLE OF AUTHORITIES

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Page

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CASES

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Alvarado v. Cajun Operating Co.,
588 F.3d 1261 (9th Cir. 2009)...................................................................................................3

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Coopers & Lybrand v. Livesay,
437 U.S. 463 (1978) ..................................................................................................................2
Finjan, Inc. v. Secure Computing Corp.,
626 F.3d 1197 (Fed. Cir. 2010).................................................................................................7
Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc.,
No. 9692008, 2008 WL 928539 (N.D. Cal. April 4, 2008) ....................................................17
Gardner v. Nike, Inc.,
279 F.3d 774 (9th Cir. 2002).....................................................................................................9
Georgia-Pacific Corp. v. United States Plywood Corp.,
318 F. Supp. 1116 (S.D.N.Y. 1970), modified and aff’d, 446 F.2d 295 (2d Cir. 1971) ...6, 8, 9
Hanson v. Alpine Valley Ski Area, Inc.,
718 F.2d 1075 (Fed. Cir. 1983).................................................................................................8
In re Cement Antitrust Litig.,
673 F.2d 1020 (9th Cir. 1982), aff’d sub nom. Arizona v. Ash Grove Cement Co.,
459 U.S. 1190 (1983) ..........................................................................................................3, 18
In re Dynamic Random Access Memory (DRAM) Antitrust Litig.,
No. M 02-1486 PJH, 2008 WL 863994 (N.D. Cal. Mar. 28, 2008) .......................................18

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20
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Interactive Pictures Corp. v. Infinite Pictures, Inc.,
274 F.3d 1371 (Fed. Cir. 2001).............................................................................................6, 7
Jarvis v. K2 Inc.,
486 F.3d 526 (9th Cir. 2007)............................................................................................passim
Jules Jordan Video, Inc. v. 144942 Canada Inc.,
617 F.3d 1146 (9th Cir. 2010).................................................................................................13

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Klinghoffer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro in
Amministrazione Straordinaria,
921 F.2d 21 (2d Cir. 1990)........................................................................................................4
Kuehner v. Dickinson & Co.,
84 F.3d 316 (9th Cir. 1996).................................................................................................3, 18

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TABLE OF AUTHORITIES
(continued)
Page

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Lakeland Village Homeowners Ass’n v. Great Am. Ins. Group,
727 F. Supp. 2d 887 (E.D. Cal. 2010).....................................................................................18
Lavender v. Kurn,
327 U.S. 645 (1946) ..........................................................................................................14, 16
Mackie v. Rieser,
296 F.3d 909 (9th Cir. 2002).................................................................................................5, 6
On Davis v. The Gap, Inc.,
246 F.3d 152 (2d Cir. 2001)..........................................................................................5, 14, 17
Polar Bear Products, Inc. v. Timex Corp.,
384 F.3d 700 (9th Cir. 2004)...............................................................................................5, 14
Reese v. BP Exploration (Alaska) Inc.,
643 F.3d 681 (9th Cir. 2011).....................................................................................................4
Rite-Hite Corp. v. Kelley Co.,
56 F.3d 1538 (Fed. Cir. 1995)...................................................................................................8

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Sid & Marty Krofft Television Prods., Inc. v. McDonald’s Corp.,
562 F.2d 1157 (9th Cir. 1977)...................................................................................................9
Silver Sage Partners, Ltd. v. City of Desert Hot Springs,
251 F.3d 814 (9th Cir. 2001).......................................................................................14, 16, 17
Snellman v. Ricoh Co.,
862 F.2d 283 (Fed. Cir. 1988)...................................................................................................7

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TWM Mfg. Co., Inc. v. Dura Corp.,
789 F.2d 895 (Fed. Cir. 1986)...................................................................................................7
United States Rubber Co. v. Wright,
359 F.2d 784 (9th Cir. 1966).....................................................................................................3
United States v. 4.0 Acres of Land,
175 F.3d 1133 (9th Cir. 1999)...........................................................................................16, 17

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United States v. Begay,
___ F.3d ____, 2011 WL 94566 (9th Cir. Jan. 12, 2011),
petition for cert. filed May 27, 2011 .................................................................................14, 16
Univ. Computing Co. v. Lykes-Youngstown Corp.,
504 F.2d 518 (5th Cir. 1974)...............................................................................................9, 14

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TABLE OF AUTHORITIES
(continued)

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Via Techs., Inc. v. Sonicblue Claims, LLC,
No. C 09–2109 PJH, 2011 WL 2437425 (N.D. Cal. June 17, 2011) ..............................2, 4, 18
Westlands Water Dist. v. Amoco Chem. Co.,
953 F.2d 1109 (9th Cir. 1991)...................................................................................................3

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Yoshimoto v. O’Reilly Auto., Inc.,
No. C 10–05438 LB, 2011 WL 2669604 (N.D. Cal. July 7, 2011) ........................................19

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STATUTES

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28 U.S.C. § 1292 .....................................................................................................................2, 3, 4

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OTHER AUTHORITIES

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4 NIMMER ON COPYRIGHT § 14.02[B][1] at 14-22 (Matthew Bender, Rev. Ed. 2009)...................9

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19 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 203.31[3] (3d ed. 1997) ...............3

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CHRISTOPHER A. GOELZ AND MEREDITH J. WATTS, THE RUTTER GROUP PRACTICE GUIDE:
FEDERAL NINTH CIRCUIT CIVIL APPELLATE PRACTICE § 2:160.14 (2011) .............................18

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NOTICE OF MOTION AND MOTION
PLEASE TAKE NOTICE THAT in the United States District Court, Northern

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District of California, Oakland Division, located at 1301 Clay Street, Oakland, California,

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Courtroom 3, 3rd Floor, before the Hon. Phyllis J. Hamilton, Plaintiff Oracle International Corp.

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(“Oracle”) will and does hereby bring a motion to request that the Court amend its Order

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Granting Defendants’ Motion for JMOL, and Motion for New Trial; Order Denying Plaintiffs’

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Motion for New Trial; Order Partially Vacating Judgment (the “Post-Trial Order”) to certify the

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Post-Trial Order, as clarified by the Order of September 16, 2011 (“Clarification Order”), and

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the Clarification Order, for interlocutory review, pursuant to 28 U.S.C. 1292(b) and Fed. R. App.

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Proc. 5(a)(3). This motion is based upon this Notice of Motion and Motion and Memorandum of

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Points and Authorities, the Post-Trial Order, the Order dated September 16, 2011, the evidence at

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trial, the jury instructions and verdict, and the related prior motions, briefing, and orders.

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Pursuant to the Order dated September 16, 2011, the Court will decide this motion on the papers.

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REQUESTED RELIEF

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In response to the Court’s Order clarifying the basis for post-trial relief and

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inviting Oracle to file a new motion for certification, Oracle respectfully requests that the Court

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certify for interlocutory appeal the Post-Trial Order, as clarified by the Clarification Order, and

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the Clarification Order itself, because they involve the following controlling questions of law as

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to which there is substantial ground for difference of opinion and an immediate appeal may

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materially advance the ultimate termination of the litigation:

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1. Whether copyright damages measured by the amount a willing buyer would

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have paid a willing seller for a hypothetical license to the rights infringed are sufficiently

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established by evidence of: (a) the infringer’s contemporaneous projections of the profits it

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would realize from use of the rights, (b) the copyright owner’s contemporaneous evidence

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valuing the business it would lose if it licensed those rights, and (c) reliable expert testimony as

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to the fair market value of a hypothetical license to the rights, based upon that evidence.

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2. Whether a jury’s assessment of the fair market value of the rights infringed
may be set aside as speculative when based upon such objective evidence.
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3. Whether a jury’s verdict falling within the reasonable range of hypotheticallicense damages established by such objective evidence, may be set aside as excessive.

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MEMORANDUM OF POINTS AND AUTHORITIES
I.

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INTRODUCTION
Oracle presented extensive evidence of the value that each party placed on the

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rights infringed. Based on that evidence, the jury concluded that Oracle was entitled to a

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hypothetical license award of $1.3 billion. The Court set that verdict aside as speculative, and

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explained in its Clarification Order that its decision was based on Oracle’s supposed failure to

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“provide objective evidence of what a willing buyer would have paid” or “evidence sufficient to

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allow the jury to assess fair market value without undue speculation.” (Clarification Order at

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2:20-22). Even as clarified, the Post-Trial Order should be certified for interlocutory review, for

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it conflicts with decisions of the Ninth Circuit and other court of appeals decisions that take a

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broader view of the evidence sufficient to establish hypothetical-license damages. Moreover,

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certification will serve the interests of judicial economy. Given the amount at stake and the

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unsettled legal questions, this case will inevitably reach the Ninth Circuit, either now or after the

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new trial that the Court has ordered. It is far better that appellate review occur now:

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interlocutory review may avoid the need for a new trial altogether and, if a new trial is held, such

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review will help ensure that the trial’s scope comports with definitive Ninth Circuit law.

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II.

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ARGUMENT
Interlocutory appeal is the exception, not the rule, but it is warranted here,

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because the Post-Trial Order involves a controlling question of law, as to which there is

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substantial ground for difference of opinion, and a resolution thereof will materially advance the

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termination of this litigation. 28 U.S.C. § 1292(b); see Via Techs., Inc. v. Sonicblue Claims,

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LLC, No. C 09–2109 PJH, 2011 WL 2437425, at *1 (N.D. Cal. June 17, 2011). The party

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seeking certification of an interlocutory appeal has the burden to show the presence of those

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exceptional circumstances. Coopers & Lybrand v. Livesay, 437 U.S. 463, 474 (1978).

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Each of these three 1292(b) requirements is clearly satisfied here.

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1.

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A question of law is “controlling” if its resolution on appeal could “materially

The Post-Trial Order Poses Controlling Questions Of Law

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affect the outcome of the litigation in the district court.” In re Cement Antitrust Litig., 673 F.2d

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1020, 1026 (9th Cir. 1982), aff’d sub nom. Arizona v. Ash Grove Cement Co., 459 U.S. 1190

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(1983); United States Rubber Co. v. Wright, 359 F.2d 784, 785 (9th Cir. 1966) (per curiam).

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Review of the order need not be outcome-determinative; reversal of the order need not terminate

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the litigation. Kuehner v. Dickinson & Co., 84 F.3d 316, 319 (9th Cir. 1996) (order denying

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arbitration involved controlling question because it “could cause the needless expense and delay

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of litigating an entire case”). Instead, “a court will require only that the appeal present a

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controlling question of law on an issue whose determination may materially advance the ultimate

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termination of the case.” 19 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE

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§ 203.31[3] (3d ed. 1997).

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The post-trial orders pose three controlling questions of law, set forth above.

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Pp. 1-2. These questions directly control the outcome of this case. They control whether the

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verdict stands, whether a new trial will be conducted, and if so whether Oracle can seek

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hypothetical-license damages. If Oracle’s evidence was sufficient and not unduly speculative,

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then granting JMOL was reversible error. If the jury’s verdict cannot be set aside, then granting

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a new trial was error. Together these questions control the outcome. If the JMOL and grant of

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new trial are both error, the original judgment for Oracle must be reinstated. If the JMOL is

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error but the grant of new trial affirmed, there will be no apparent basis for limiting the new trial

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to lost profits and infringer’s profits. (Post-Trial Order at 19:21-22). It is well established that

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interlocutory appeal is appropriate to resolve a controlling question on the availability of

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damages. See, e.g., Westlands Water Dist. v. Amoco Chem. Co., 953 F.2d 1109, 1110, 1113 (9th

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Cir. 1991) (on § 1292(b) appeal, reversing order that had precluded punitive damages); Alvarado

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v. Cajun Operating Co., 588 F.3d 1261, 1263-64 (9th Cir. 2009) (§ 1292(b) appeal reviewing

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pre-trial order precluding damages).

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2.

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As this Court has noted, “Substantial grounds for a difference of opinion required

There Are Substantial Grounds For Difference Of Opinion

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to certify an order for interlocutory review arise when an issue involves one or more difficult and

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pivotal questions of law not settled by controlling authority.” Via Techs., 2011 WL 2437425, at

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*1. In Via Technologies, the Court found “substantial grounds for difference of opinion” where

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the court was “unable to locate any definitive authority that answered the exact question raised

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by the” controlling legal issues. Id. at *2; accord, Reese v. BP Exploration (Alaska) Inc., 643

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F.3d 681, 687-88 (9th Cir. 2011) (“[W]hen novel legal issues are presented, on which fair-

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minded jurists might reach contradictory conclusions, a novel issue may be certified for

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interlocutory appeal without first awaiting development of contradictory precedent.”);

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Klinghoffer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro in

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Amministrazione Straordinaria, 921 F.2d 21, 25 (2d Cir. 1990) (district court properly found

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“substantial grounds for difference of opinion” under section 1292(b) because issues were

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“difficult and of first impression”).

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Here, too, there is substantial ground for difference of opinion, as to each of the
three questions laid out above.
a.

Whether There Is Sufficient Objective Evidence As A
Matter Of Law To Establish The Amount A Willing
Buyer Would Have Paid A Willing Seller.

First, there is substantial ground for difference of opinion as to whether there was

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sufficient objective evidence at trial to establish the amount a willing buyer would have paid a

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willing seller for a license. No one disputes that the market-value approach must be objective.

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The Court’s Post-Trial Order and Clarification Order, however, restrict the scope of that

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objective evidence in a manner that conflicts with precedent.

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The cases cited by the Court, Post-Trial Order at 6:4-6 and 11:4-7, stand merely

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for the uncontroversial proposition that the “market value approach is an objective, not

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subjective analysis.” E.g., Jarvis v. K2 Inc., 486 F.3d 526, 534 (9th Cir. 2007) (quoting Mackie

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v. Rieser, 296 F.3d 909, 917 (9th Cir. 2002)). By “objective,” they mean only that valuation

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refers to the market value of the license, not the copyright owner’s subjective valuation. Thus,

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Jarvis held that the lower court’s analysis in that case was sufficiently “objective” because it

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“avoid[ed] references to what Jarvis thought he should have earned or wished he had charged.”
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486 F.3d at 534. Mackie held that personal feelings unrelated to market value were

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impermissibly subjective: the infringement admittedly “did not in any way influence the market

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value” of the work, so “Mackie sought to introduce evidence of his personal objections to the

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manipulation of his artwork. . . . [T]he market value approach is an objective, not a subjective,

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analysis. Consequently, Mackie’s subjective view, which really boils down to ‘hurt feelings’

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over the nature of the infringement, has no place in this calculus.” 296 F.3d at 917. The cited

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portion of On Davis similarly distinguishes the owner’s personal belief as to value from the

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objective market value: “The question is not what the owner would have charged, but rather

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what is the fair market value.” On Davis v. The Gap, Inc., 246 F.3d 152, 166 (2d Cir. 2001).

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And apart from confirming the Ninth Circuit’s adoption of the hypothetical-license damages

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theory in copyright law, Polar Bear Products, Inc. v. Timex Corp., 384 F.3d 700, 709 (9th Cir.

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2004) does not require any particular method of proving those damages. The only damage award

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it rejected was a lost profit award based on the return plaintiff claimed it would have earned by

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investing the license fee defendant didn’t pay. It rejected that award based on causation. These

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cases merely specify the measure of damages – objective market value rather than personal

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belief.

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The Court’s Orders incorrectly interpreted this body of law by requiring that this

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objective value could be proved only by particular kinds of evidence. The only form of

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acceptable evidence identified by the Court in either Order is prior actual license transactions or

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“benchmark licenses” for the same or comparable works:

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[T]he evidence Oracle presented was insufficient to establish an
objective non-speculative license price. Determining a hypothetical
license price requires an “objective, not a subjective” analysis, and
“[e]xcessively speculative” claims must be rejected. [Citations]
An objective, non-speculative license price is established through
objective evidence of benchmark transactions, such as licenses
previously negotiated for comparable use of the infringed work,
and benchmark licenses for comparable uses of comparable works.
[Citations]

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(Post-Trial Order at 11:3-11 [italics added]; see Clarification Order at 2:23-26 [“one way to

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establish an objective, non-speculative license price is by providing evidence of licenses
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previously negotiated for comparable use of the infringed work, and benchmark licenses for

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comparable uses of comparable works”]).

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This overly narrow interpretation of what kind of evidence suffices to establish

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objective market value raises substantial ground for disagreement. As the Court correctly

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clarified, the Ninth Circuit’s precedents do not require evidence of actual benchmark licenses or

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prior transactions in order to prove hypothetical-license value as a matter of law. (See Oracle’s

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Certification Motion (Docket No. 1085, filed 9/12/2011) at 5:23-7:24; Clarification Order at 2:8-

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13 [“The court did not hold as a matter of law” that the copyright owner must prove “actual

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‘benchmark’ licenses.”]). Numerous decisions have affirmed hypothetical-license damages

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without evidence of prior transactions.
Even as clarified, however, the Post-Trial Order conflicts with Court of Appeals

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precedents in finding insufficient the particular kinds of objective evidence that Oracle

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submitted. In other cases, courts have found the parties’ contemporaneous projections of

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defendants’ anticipated profits or plaintiffs’ anticipated losses – what they would have brought

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with them to the negotiating table – the ideal evidence from which to value a hypothetical

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license. Here Oracle presented exactly that kind of objective evidence, wholly apart from

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Oracle’s “personal” beliefs or “wishe[s].” Mackie, 296 F.3d at 917; Jarvis, 486 F.3d at 534.

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The Georgia-Pacific court itself, in a case with no reliable benchmark transaction

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and involving competitors who would not actually license to each other, relied upon defendant’s

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“profit expectations” in finding that defendant “would have been willing to pay a substantial

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royalty to [plaintiff] in order to obtain reasonably anticipated large profits.” Georgia-Pacific

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Corp. v. United States Plywood Corp., 318 F. Supp. 1116, 1130-31 (S.D.N.Y. 1970), modified

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and aff’d, 446 F.2d 295 (2d Cir. 1971). Courts applying Georgia-Pacific have affirmed

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hypothetical-license damages based on similar projections.

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For example, in Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d

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1371 (Fed. Cir. 2001), plaintiff relied on defendant’s contemporaneous business plan to establish

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a range of anticipated sales for the infringing product. Id. at 1384. Plaintiff then calculated the

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corresponding range of hypothetical-license damages based on revenue from those anticipated
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sales. Id. The jury awarded damages according to the lower range of these projections. Id. On

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appeal, defendant challenged plaintiff’s reliance on its business plan as speculative, claiming the

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plan’s projections were based on “optimistic assumptions of future growth.” Id. The Federal

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Circuit soundly rejected this argument. As the court reasoned, plaintiff did not engage in

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“speculation [or] guesswork” by relying on defendant’s own projections. Id. at 1385. To the

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contrary, plaintiff analyzed the very information that “would have been available to [defendant]

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at the time of the hypothetical negotiation.” Id. Consequently, the court affirmed the award of

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hypothetical-license damages based on plaintiff’s evidence of the “infringer’s expected sales.”

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Id. at 1384; see also Snellman v. Ricoh Co., 862 F.2d 283, 289 (Fed. Cir. 1988) (affirming jury’s

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consideration of internal “document projecting [defendant’s] anticipated sale” of infringing

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products in support of hypothetical-license damages); TWM Mfg. Co., Inc. v. Dura Corp., 789

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F.2d 895, 900 (Fed. Cir. 1986) (affirming hypothetical-license damages based on “pre-

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infringement internal memorandum” on defendant’s anticipated profits).

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Similarly, in Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197 (Fed. Cir.

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2010), plaintiff presented evidence of competitor-defendants’ profit margins as a “reflection of

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the profits [defendants] might have anticipated” to gain from the sale of infringing products. Id.

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at 1210. In contrast, defendants presented evidence of plaintiff’s prior license to a non-

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competitor. Id. at 1211-12. The jury disregarded the prior license and awarded damages based

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on defendant’s anticipated profits. Id. On appeal, the Federal Circuit affirmed the jury’s award.

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Id. at 1212. Given the differences between the plaintiff’s prior licensing scenario and a

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“hypothetical negotiation with [d]efendants,” the jury was permitted to discount the prior license.

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Id. The jury had a “reasonable basis” to conclude that evidence of defendants’ anticipated profits

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was more probative of the value of a hypothetical license than evidence of plaintiff’s licensing

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history. Id. Finjan confirms that a verdict for hypothetical-license damages need not rest on past

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license transactions, and indeed the jury may ignore evidence of such transactions.

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As in Interactive Pictures and Finjan, Oracle presented objective evidence

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valuing SAP’s anticipated profits at the time of the infringement. Pp. 10-12 below. SAP’s

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expectation of gaining well over $1 billion in future profits establishes a reasonable basis for the
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jury’s award of hypothetical-license damages. Accord Hanson v. Alpine Valley Ski Area, Inc.,

2

718 F.2d 1075, 1080-81 (Fed. Cir. 1983) (affirming award of hypothetical-license damages

3

based on defendant’s estimated cost savings from use of the infringing product).

4

Likewise, Oracle’s contemporaneous expectation of maintenance revenues,

5

customer retention, and profits based on historical profit margin (see pp. 10-11 below) is

6

objective evidence supporting a hypothetical license value under Georgia-Pacific. As the

7

Georgia-Pacific court explained, the amount of profits that a plaintiff could “expect to continue

8

to make on its sales of [product] by licensing no one . . . is of major relevance to the

9

determination of the amount of royalty that [plaintiff ] would accept from [defendant] and that

10

[defendant] would offer.” 318 F. Supp. at 1127. Where, as here, plaintiff was enjoying profits

11

and was in a position to retain the entire market, “[in] the hypothetical negotiations, [plaintiff]

12

would have been reasonable in taking the position that it would not accept a royalty significantly

13

less than the profit it was making by its policy of licensing no one to sell [the intellectual

14

property].” Id.

15

The opinion in Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir. 1995)

16

provides a useful illustration of this principle. In Rite-Hite, plaintiff presented evidence of its

17

“estimated lost profits” due to infringement. Id. at 1554. The district court then determined that

18

plaintiff would have licensed the invention “only if it received a royalty of no less than one-half

19

of the per unit profits that it was foregoing.” Id. The district court’s determination was based on

20

evidence that the patent was a “pioneer” patent with manifest commercial success; that plaintiff

21

had consistently followed a policy of exploiting its own patents, rather than licensing to

22

competitors; and that plaintiff would have had to forego a large profit by granting a license to a

23

strong competitor. Id. On appeal, the Federal Circuit ruled it was reasonable for the district

24

court to find that “an unwilling patentee would only license for one-half its expected lost profits

25

and that such an amount was a reasonable royalty.” Id. at 1555.

26

Similar to Rite-Hite, Oracle was at least a reluctant licensor of intellectual

27

property with manifest commercial success. Oracle presented evidence of the profits it expected

28

– $1.82 billion or more – from the customers that (we now know) SAP expected to take away by
8

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using Oracle’s software. P. 11, below. Such evidence of Oracle’s contemporaneous profit

2

expectations, from the customers that Oracle would expect to lose by granting SAP a license,

3

establishes an independent reasonable basis for the jury’s award of hypothetical-license damages.

4

Further, while these cases were decided in the context of patent infringement,

5

there is no logical or legal reason why the definition of “objective” evidence would differ

6

between patent and copyright law. To the contrary, the same considerations apply equally to

7

copyright infringement – as SAP has conceded. Tr. 1982:1-241 (argument re jury instructions)

8

(SAP conceding that “[o]nce you get to the valuation, Georgia-Pacific is appropriate”). See Sid

9

& Marty Krofft Television Prods., Inc. v. McDonald’s Corp., 562 F.2d 1157, 1174 & n.20 (9th

10

Cir. 1977) (copyright distinction between “what a willing buyer would have been reasonably

11

required to pay to a willing seller for plaintiffs’ work” and infringer’s profits represents the

12

“same distinction [that] is recognized in patent cases”); Univ. Computing Co. v. Lykes-

13

Youngstown Corp., 504 F.2d 518, 535 (5th Cir. 1974) (noting patent infringement cases are used

14

by analogy to determine the damages for copyright infringement); see also 4 NIMMER ON

15

COPYRIGHT § 14.02[B][1] at 14-22 (Matthew Bender, Rev. Ed. 2009) (“[T]he similarities

16

between this [patent] reasonable royalty rule and . . . [the copyright] value of use theory are

17

apparent.”). See generally Gardner v. Nike, Inc., 279 F.3d 774, 778 (9th Cir. 2002) (“Where

18

precedent in copyright cases is lacking, it is appropriate to look for guidance to patent law

19

‘because of the historic kinship between patent law and copyright law.’”) (internal citation

20

omitted). Any doubt whether willing buyer/willing seller license fees are calculated similarly in

21

copyright and patent cases would itself pose a question as to which there is a substantial ground

22

for difference of opinion.

23

Here Oracle introduced objective, expert opinion directly supporting the jury’s

24
25
26
27

1

The trial transcript excerpts, exhibits and deposition testimony cited in this motion are attached
to the Declaration of Lisa Chin In Support of Oracle’s Opposition to SAP’s Motion for JMOL or
New Trial, Dkt. 1058. Trial testimony is Exhibit A to that declaration, and is cited as “[Witness]
Page:Line”; other trial proceedings as “Tr. Page:Line.” Trial exhibits are Exhibits I to UU to that
declaration and are cited as PTX. Deposition testimony played to the jury but not re-transcribed
is Exhibits B to H of that declaration and is cited as “[Witness] Depo Page:Line.”

28
9

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$1.3 billion verdict. Based on the parties’ contemporaneous documents, Oracle’s expert Meyer,

2

whose testimony was held qualified, reliable, and admissible, calculated the amounts that SAP

3

stood to gain and Oracle stood to forego if SAP were allowed to use Oracle’s software. Those

4

amounts included maintenance revenue for customers who switched to SAP for maintenance,

5

and license revenue for customers who converted to SAP software.

6

To determine the profit SAP would have expected to make, Meyer used SAP’s

7

average per-customer revenues obtained from SAP’s documents, SAP’s costs (30% of revenue),

8

and an expected attrition rate of 3.5% customers per year, and reduced the profits to present

9

value using SAP’s discount factor of 14%. Meyer 995:2-998:1; Chin Decl., Ex. P (PTX 12).

10

Using this methodology and these figures, Meyer calculated the profits that SAP stood to gain

11

from its use of Oracle software through October 2008, when it shut down TomorrowNow,

12

depending on the number of customers that switched to SAP for maintenance and converted to

13

SAP software. Meyer 993:9-1001:19. He opined that if 3,000 customers switched to SAP for

14

maintenance, 2,000 of whom converted to SAP software, SAP would gain $1.2 billion. Meyer

15

999:1-1001:4. Indeed, depending on revenue per year, SAP might gain far more. Meyer

16

1001:18-1002:8.2

17

Meyer’s methods were similar, and equally grounded in objective

18

contemporaneous evidence, for Oracle’s side of the equation. To determine the amount that

19

Oracle stood to lose, he determined the total revenue lost based on number of customers,

20

multiplied by the profit margin, and discounted to present value. Meyer 1011:13-1013:16. He

21

based his opinion on documents showing how Oracle actually valued its business when a license

22

would have been negotiated, i.e. when SAP’s infringement began. Meyer 1011:13-1013:16;

23

Chin Decl. Exs. Q (PTX 13), JJ (PTX 615). He used Oracle’s documented average revenue per

24

customer at the time, $130,000. Meyer 1012:17-22; Chin Decl. Ex. JJ (PTX 615). This figure

25
26
27

2

For simplicity, we focus here on the portion of the evidence relating to PeopleSoft, which was
the largest portion of Meyer’s analysis. Meyer opined that Oracle sustained still further damage
related to its Siebel and database software. Meyer 1036:22-1037:7, 1047:1-11, 1048:20-25.

28
10

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came from the very valuation model that Oracle relied on in deciding to buy PeopleSoft. Meyer

2

1011:13-21 (Meyer used information from the “model that Ms. Catz talked about yesterday” to

3

provide “financial information about average revenue and attrition rates and other information

4

that would be known about Oracle’s potential revenues and profits from the PeopleSoft

5

customers”), 1012:17-22 ($130,000 figure came “from Oracle’s valuation documents”); Catz

6

845:12-846:21 (this model was basis for deciding to buy PeopleSoft). He used Oracle’s

7

historical 80% profit margin taken from Oracle’s own financial records. Meyer 1012:17-18;

8

Chin Decl. Ex. Q (PTX 13). He used Oracle’s 3.5% attrition rate taken from its PeopleSoft

9

valuation model. Meyer 1011:16-21, 1012:13-16; Chin Decl Ex. Q (PTX 13). The calculation

10

covered ten years because customers typically use the same software for many years. Meyer

11

1013:5-8; Chin Decl. Exs. Q (PTX 13), JJ (PTX 615). He discounted to present value using the

12

same 10% discount rate Oracle used when purchasing PeopleSoft and J.D. Edwards in 2005.

13

Meyer 1012:23-1013:4; Chin Decl. Ex. Q (PTX 13).

14

Using these assumptions, Meyer calculated that, by allowing SAP to use the

15

software, if Oracle lost 3,000 maintenance customers to SAP, of whom 1,375 converted to SAP

16

software, Oracle would forego $1.36 billion in profits. Meyer 1013:20-1014:22. If Oracle lost

17

3,000 maintenance customers of whom 2,000 converted, Oracle would forego $1.82 billion in

18

profits. Meyer 1014:17-25. If even more converted, Oracle would forego nearly $2.5 billion in

19

profits. Meyer 1014:23-1015:1.

20

Meyer then put SAP’s anticipated gain and Oracle’s anticipated foregone profits

21

together to yield a reasonable range for a license. Using the middle-of-the-range assumption that

22

2,000 customers would have converted, he opined, the fair market value of the right to use

23

Oracle’s software was at least $1.5 billion. Meyer 1016:7-17.

24

This estimate was fully supported by contemporaneous SAP documents

25

projecting that 3,000 customers would switch to SAP maintenance, and 2,000 or more customers

26

would convert to SAP software, as well as related testimony of members of SAP’s own board of

27
28
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directors.3 Brandt and Agassi considered these numbers SAP’s internal business “projections,”

2

contrary to SAP’s position at trial that they were mere hopes and desires. Agassi admitted that

3

the revenue and customer numbers were “projections” from a “business proposal,” or “case,”

4

presented to SAP’s board. Chin Decl. Ex. B (Agassi Depo.) 310:25-311:5. Brandt, referring to

5

the board presentation projecting 3,000 customers switching, similarly admitted that “[i]t was

6

projected that you would get almost $900 million in revenues over the initial three years of the

7

program.” Brandt 684:15-19 (emphasis supplied). Not only did Agassi not think these

8

conversion numbers were pie-in-the-sky, he thought “we could do better.” Chin Decl. Ex. B

9

(Agassi Depo.) 311:15. The numbers were developed with “extensive guidance” from SAP’s

10

executive board members responsible for the business units affected: Henning Kagermann

11

(CEO), Leo Apotheker (head of sales), Gerd Oswald (head of service), and Shai Agassi (head of

12

products). Chin Decl. Ex. SS (PTX 4814). And still again, PTX 161, recording a January 2005

13

integration meeting between SAP and TomorrowNow, identifies two “scenarios” only: 2,000

14

customers switching or 4,000 customers switching. Chin Decl. Ex. AA. Far from marketing

15

hype, the projections were an internal projection to the Board.

16

Oracle is aware of no decision before this Court’s Post-Trial Order that has ever

17

rejected as insufficient such objective evidence of hypothetical-license damages based on the

18

infringer’s contemporaneous projections of gain, the copyright owner’s contemporaneous

19

projections of value, and expert testimony that itself was based on the infringer’s projections.

20

The Court’s decision to reject such evidence as insufficient gives rise to a difference of opinion

21

warranting certification for interlocutory review.

22
23
24
25
26
27

3

Under SAP’s contemporaneous projections, the assumption that 2,000 customers would convert
was conservative. E.g., Brandt 682:12-20 (SAP’s goal through the SafePassage program was “to
convert approximately 50 percent of the PeopleSoft and J.D. Edwards customer installations to
SAP.”); Chin Decl. Ex. B (Agassi Depo.) 310:17-311:23, 314:5-318:3 (convert 50% or better).
Brandt explicitly connected SAP’s 50% conversion goal to its position in any hypotheticallicense negotiation: one of the reasons that a license would be valuable to SAP was that it would
“enable SAP to try to convert the approximately 50 percent of the PeopleSoft and J.D. Edwards
installations that it was seeking to convert.” Brandt. 693:9-14. Oracle had roughly 10,000
PeopleSoft customers at the time. Phillips 518:1-11. Hence a 50% conversion figure meant
5,000 customers converted from Oracle to SAP.

28
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2
3

b.

Whether The Jury’s Assessment Of The Fair Market
Value Of The Rights Infringed May Be Set Aside As
Speculative.

There is also substantial ground for difference of opinion as to whether JMOL is

4

permissible based on the Court’s clarified holding that Oracle’s evidence was insufficient

5

“because it failed to provide evidence sufficient to allow the jury to assess fair market value

6

without undue speculation.” (Clarification Order at 2:21-22). “A district court can set aside a

7

jury verdict and grant JMOL only if, under governing law, there can be but one reasonable

8

conclusion as to the verdict and only if there is no legally sufficient basis for a reasonable jury to

9

find for that party on that issue.” Jules Jordan Video, Inc. v. 144942 Canada Inc., 617 F.3d

10
11

1146, 1155 (9th Cir. 2010) (internal quotation marks and citations omitted).
Here, the Post-Trial Order held that no reasonable juror could reach this verdict

12

because Oracle had not presented evidence of willingness to license or benchmark licenses.

13

(Post-Trial Order at 14:19-15:4 [“[G]iven the lack of history of past licensing of the copyrighted

14

material . . . and the lack of any evidence that Oracle would ever license the material to SAP or

15

to anyone in the future, coupled with the absence of any benchmark evidence upon which to

16

determine the value of a license, the court finds no support for awarding Oracle actual damages

17

in the form of lost license fees. . . . The court finds that there was insufficient evidence for a

18

reasonable jury to find that Oracle was entitled to a hypothetical license . . . .”]). But the

19

Clarification Order makes clear that no such evidence is required. The Clarification Order thus

20

eliminates the only expressed basis for holding that no reasonable juror could reach this verdict.

21

The question now is whether a reasonable juror could find that Oracle provided

22

sufficient evidence of what a willing buyer would have paid and whether a reasonable juror

23

could assess fair market value without undue speculation. As already discussed, there are

24

substantial grounds for difference of opinion as to whether Oracle provided sufficient evidence

25

on these points. Pp. 4-13 above. Certainly the evidence cited above provided grounds for the

26

jury to reach the $1.3 billion verdict, which falls squarely in the range of the profits SAP would

27

have expected and those Oracle would have expected to forego if they agreed on a license, and is

28

below the amount calculated by Oracle’s expert based on the approved willing buyer/willing
13

Case No. 07-CV-01658 PJH (EDL)

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1
2

seller methodology. P. 11 above.
The only apparent basis for the Court’s JMOL is an implicit determination that

3

Oracle’s hypothetical-license evidence required impermissible speculation by the jury. There are

4

substantial grounds for difference of opinion as to whether Oracle’s evidence required undue

5

speculation. That an inference is “‘supported by a chain of logic’ . . . . is all that is required to

6

distinguish reasonable inference from speculation.” United States v. Begay, ___ F.3d ____, 2011

7

WL 94566, at *5 (9th Cir. Jan. 12, 2011), petition for cert. filed May 27, 2011. “Only when

8

there is a complete absence of probative facts to support the conclusion reached” is a verdict

9

speculative. Lavender v. Kurn, 327 U.S. 645, 653 (1946) (reinstating jury verdict; appellate

10
11

court erred in overturning verdict based on speculativeness).
These principles apply with even more force to damage determinations. Although

12

“finding the fair market value of a reasonable license fee may involve some uncertainty,” that

13

uncertainty does not preclude such damages. On Davis, 246 F.3d at 166. “Many of the accepted

14

methods of calculating copyright damages require the court to make uncertain estimates in the

15

realm of contrary to fact.” Id. at 166-67; see also Polar Bear Prods., Inc., 384 F.3d at 709

16

(“Timex used Polar Bear’s copyrighted footage without authorization. Having taken the

17

copyrighted material, Timex is in no better position to haggle over the license fee than an

18

ordinary thief and must accept the jury’s valuation unless it exceeds the range of the reasonable

19

market value.”); Silver Sage Partners, Ltd. v. City of Desert Hot Springs, 251 F.3d 814, 820-21

20

& n.6 (9th Cir. 2001) (reversing grant of new trial based on speculativeness of damages: where

21

the defendant’s own wrong has made it difficult to determine the damages, “it will be enough if

22

the evidence show[s] the extent of the damages as a matter of just and reasonable inference,

23

although the result be only approximate.”) (quoting Story Parchment Co. v. Paterson Parchment

24

Paper Co., 282 U.S. 555, 563 (1931)); Univ. Computing Co., 504 F.2d at 544-45 (affirming jury

25

valuation of hypothetical license in trade secret case: “Courts should be reluctant to penalize an

26

aggrieved plaintiff by too unrealistic and sterile a requirement of proving that the defendant

27

would have agreed to the price the plaintiff thinks is fair. . . . The proper method of fleshing out

28

the dimensions of this hypothetical sale is by cross-examination and rebuttal testimony.”).
14

Case No. 07-CV-01658 PJH (EDL)

ORACLE’S MOTION FOR 1292(b) CERTIFICATION OF ORDER

1

Here, the $1.3 billion verdict is “supported by a chain of logic” and there is no

2

colorable argument that there is a “complete absence of probative facts” supporting the verdict.

3

First, actual damages include the license fee on which a willing buyer and willing seller would

4

have agreed at the start of the infringement. Jarvis, 486 F.3d at 533. Second, in December 2004

5

and January 2005 SAP’s internal business cases projected that SAP would induce 3,000 or more

6

customers to convert to SAP maintenance and 2,000 or more customers to convert to SAP

7

software. Pp. 11-12 above. The jury was not bound to accept SAP’s argument that these were

8

pie-in-the-sky hopes, and could find that they were SAP’s considered business projections. It

9

could base this finding on the following facts, among others: two SAP executive board members

10

(Agassi and Brandt) called them “projections;” they were produced after “extensive” guidance

11

from SAP’s CEO and the Executive Board members heading the very business units that would

12

be tasked with producing those results; they were repeated in numerous internal SAP business

13

presentations; SAP’s internal integration meeting with TomorrowNow considered just two

14

“scenarios” – 2,000 and 4,000 conversions; and Agassi admitted he thought SAP would do “even

15

better” than these projections. Pp. 11-12 above. That SAP itself expressed the contemporaneous

16

belief that it would obtain 2,000 conversions and 3,000 maintenance switches certainly gives rise

17

to a reasonable inference of hypothetical-license damages. Third, 2,000 conversions and 3,000

18

maintenance switches, combined with SAP’s historical revenue per customer, profit margin and

19

discount rate, led to a range of profits in which $1.3 billion fell in the middle. Pp. 10-12 above.

20

Fourth, the jury could reasonably infer that SAP would have been willing to pay $1.3 billion for

21

a license to obtain business worth considerably more than $1.3 billion to it, pp. 10-12 above,

22

especially where it received still further value from disrupting its major competitor. Brandt

23

693:3-694:10; Zepecki 610:12-611:2 ; Chin Decl. Exs. B (Agassi Depo 314:5-318:3), N (PTX

24

7), U (PTX 24), Y (PTX 141).

25

Particularly where the only expressed basis for holding that no reasonable juror

26

could reach this verdict has been eliminated by the Clarification Order, and in view of the

27

reasonable uncertainty allowed in damage calculations, there is at least a substantial ground for

28

difference of opinion as to whether Oracle’s hypothetical-license evidence is “supported by a
15

Case No. 07-CV-01658 PJH (EDL)

ORACLE’S MOTION FOR 1292(b) CERTIFICATION OF ORDER

1

chain of logic,” Begay, ___ F.3d ____, 2011 WL 94566, at *5, or there is a “complete absence of

2

probative facts to support the conclusion reached.” Lavender, 327 U.S. at 653.

3

c.

4
5

Whether The Jury’s Verdict, Falling Within The
Reasonable Range Of Hypothetical-License Damages
Established By The Evidence, May Be Set Aside As
Excessive.

6

There is also substantial ground for difference of opinion as to whether the Court

7

may set aside the verdict where the record contains such contemporaneous, concrete evidence as

8

described above and the jury’s damage award falls within the range set by competent expert

9

opinion.

10

First, when the jury’s damage award is within the fair range of the evidence, the

11

Ninth Circuit has held that a court abuses its discretion in granting a new trial based merely upon

12

the size of the verdict. For example, in Silver Sage Partners, Ltd. v. City of Desert Hot Springs,

13

251 F.3d 814, 818 (9th Cir. 2001), the district court found the jury’s verdict was “grossly

14

excessive” and granted new trial upon plaintiff’s rejection of remittitur. On appeal after the

15

second trial, the Ninth Circuit reversed the grant of new trial and reinstated the original verdict.

16

“[A] district court may not grant a new trial simply because it would have arrived at a different

17

verdict. Thus if the jury’s verdict is not against the clear weight of the evidence, we may find

18

that a district court abused its discretion in granting a new trial.” Id. at 819 (internal citations

19

omitted). “The jury award was not outside the range of evidence presented and a new trial

20

should not have been granted.” Id. at 825 (quoting United States v. 4.0 Acres of Land, 175 F.3d

21

1133, 1143 (9th Cir. 1999)).

22

Similarly, in 4.0 Acres of Land, 175 F.3d 1138, the district court found that the

23

jury’s verdict was “against the weight of the evidence” as “outside the range of the testimony in

24

evidence.” On appeal after the second trial, the Ninth Circuit reversed the grant of new trial and

25

reinstated the original verdict. The Ninth Circuit explained that “a district court may not grant or

26

deny a new trial merely because it would have arrived at a different verdict. Thus, we may find

27

that a district court abused its discretion in ordering a new trial if the jury’s verdict is not against

28

the clear weight of the evidence.” Id. at 1139 (internal citation omitted). As in Silver Sage
16

Case No. 07-CV-01658 PJH (EDL)

ORACLE’S MOTION FOR 1292(b) CERTIFICATION OF ORDER

1

Partners, the Circuit held that the “award was not outside the range of evidence presented and a

2

new trial should not have been granted.” Id. at 1143. Compare Jarvis, 486 F.3d at 535

3

(upholding damages figure adopted by the district court as “near the center of the range

4

supported by the evidence”); Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc., No.

5

9692008, 2008 WL 928539, at *3 (N.D. Cal. April 4, 2008) (denying motion for new trial; “a

6

jury’s choice simply must be within the range encompassed by the record as a whole” (internal

7

citation omitted)).

8
9

Here, unless Oracle’s evidence was insufficiently objective or overly speculative,
the jury’s verdict fell well within the range of the evidence. The jury instructions correctly

10

authorized the jury to award hypothetical-license damages. Court 2215:22-2217:19. Oracle’s

11

expert Meyer opined that a license would have been worth $880 million to $2.7 billion to SAP,

12

depending primarily on the number of customers that SAP expected to switch to SAP

13

maintenance and the number it expected to convert to SAP software. Meyer 938:17-939:3,

14

1015:7-1016:12; pp. 9-12 above. Since the verdict was at the lower end of that range, there is at

15

least substantial ground for difference of opinion whether the Court nevertheless had authority to

16

grant a new trial. Silver Sage, 251 F.3d at 825; 4.0 Acres of Land, 175 F.3d at 1143.

17

Second, there is reasonable ground for difference of opinion as to the validity of

18

the Court’s basis for concluding that the verdict was against the weight of the evidence. The

19

court found that the verdict was “grossly excessive” compared to Oracle’s actual loss of

20

customers as a result of SAP’s infringement. (Post-Trial Order at 17:8-18, 20:12). But Oracle

21

was not required to prove that it actually lost customers as a result of the infringement, nor was it

22

limited to damages measured by such a loss of customers. The market value of a hypothetical

23

license is a permissible measure of damages because the copyright owner was deprived of that

24

value when the defendant infringed. E.g., On Davis, 246 F.3d at 165-66; see also Jarvis, 486

25

F.3d at 533-35. This market value is based not on lost sales but rather on the parties’ reasonable

26

contemporaneous expectations about profits and loss from the infringement and

27

contemporaneous evidence of value – the very sort of evidence that Oracle introduced here. See

28

pp. 9-12 above. There is substantial ground for difference of opinion as to whether a new trial
17

Case No. 07-CV-01658 PJH (EDL)

ORACLE’S MOTION FOR 1292(b) CERTIFICATION OF ORDER

1

can be justified by ruling that the verdict exceeds the value of actual customers lost when that

2

verdict is well supported by ample objective evidence of the parties’ contemporaneous

3

expectations.

4
5

*****
Only the Ninth Circuit review can provide the “explicit[ ]” authority the Court

6

itself found lacking in its Post-Trial Order. (Id. at 12:1). As in other cases, the lack of clarity in

7

the law governing the Court’s ruling justifies certification here. See Via Techs., 2011 WL

8

2437425, at *2; see also Lakeland Village Homeowners Ass’n v. Great Am. Ins. Group, 727 F.

9

Supp. 2d 887, 896-97 (E.D. Cal. 2010) (“[C]ourts have held [a substantial ground for difference

10

of opinion] satisfied when there is a lack of binding authority on an issue.”); In re Dynamic

11

Random Access Memory (DRAM) Antitrust Litig., No. M 02-1486 PJH, 2008 WL 863994, at *1

12

(N.D. Cal. Mar. 28, 2008) (“The court finds that this case meets all three criteria stated above for

13

the reasons advanced by plaintiffs and those acknowledged by the court in the orders plaintiff

14

seeks to appeal.”); CHRISTOPHER A. GOELZ AND MEREDITH J. WATTS, THE RUTTER GROUP

15

PRACTICE GUIDE: FEDERAL NINTH CIRCUIT CIVIL APPELLATE PRACTICE § 2:160.14 (2011)

16

(“[A]lthough the Ninth Circuit does not necessarily limit review under § 1292(b) to matters of

17

first impression, presenting such an issue ensures serious consideration of your petition.”).

18
19
20

3.

Certification Would Materially Advance The Termination Of
The Litigation

“The third requirement – that the appeal be likely to materially speed the

21

termination of the litigation – is linked to the question whether an issue of law is ‘controlling,’ in

22

that the district court should consider the effect of a reversal on the management of the case. If,

23

on the other hand, an interlocutory appeal would delay resolution of the litigation, it should not

24

be certified.” Via Techs., 2011 WL 2437425, at *1 (internal citations omitted). Certification is

25

appropriate “only in exceptional situations in which allowing an interlocutory appeal would

26

avoid protracted and expensive litigation.” In re Cement Antitrust Litig., 673 F.2d at 1026.

27
28

This requirement is amply met here. First, reversal of the Court’s decision and
reinstatement of the verdict would avoid the “needless expense and delay” of re-trying the case.
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Case No. 07-CV-01658 PJH (EDL)

ORACLE’S MOTION FOR 1292(b) CERTIFICATION OF ORDER

1

Kuehner, 84 F.3d at 319. A retrial would be especially wasteful and inefficient if undertaken

2

only to result in an appeal of the controlling legal rulings contained in the Post-Trial Order (in

3

addition to any new appellate issues that arise during a second trial) and an ultimate reversal of

4

those rulings.

5

Second, even if the Ninth Circuit affirms this Court’s order of a new trial,

6

resolution of this litigation will be materially advanced if the Ninth Circuit clarifies now that the

7

Court took an overly restrictive view of what evidence is sufficient to establish the objective fair

8

market value of a hypothetical license. Absent certification, any appeal must wait until after the

9

new trial is held and a new judgment is entered. Only on that post-second-trial appeal would the

10

Ninth Circuit finally be able to review the sufficiency of Oracle’s hypothetical-license evidence

11

admitted in the first trial and the propriety of the JMOL and grant of a new trial. If the Ninth

12

Circuit holds that Oracle’s first-trial evidence was legally sufficient but affirms the discretionary

13

grant of a new trial, the parties and the Court will have to endure a third trial. (The first verdict

14

will remain vacated by the new-trial grant and the second verdict will be erroneously limited to

15

lost/infringer’s profits, necessitating the third trial.) A wasteful and unnecessary third trial is

16

avoidable by certification for interlocutory review now.

17

Thus, a certain second trial will be deferred, perhaps avoided and, if required,

18

conducted pursuant to clear appellate guidance. Certification thus will facilitate the efficient and

19

speedier resolution of this litigation. See Yoshimoto v. O’Reilly Auto., Inc., No. C 10–05438 LB,

20

2011 WL 2669604, at * 4 (N.D. Cal. July 7, 2011) (certification would materially advance

21

termination where reversal may make a trial unnecessary).

22

III.

23

CONCLUSION
The Court should certify its Post-Trial Order, even as clarified in the Clarification

24

Order, for interlocutory appeal.

25

DATED: September 23, 2011

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27

Bingham McCutchen LLP
By:

/s/ Geoffrey M. Howard
Geoffrey M. Howard
Attorneys for Plaintiffs Oracle USA, Inc., et al.

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Case No. 07-CV-01658 PJH (EDL)

ORACLE’S MOTION FOR 1292(b) CERTIFICATION OF ORDER