Oracle Corporation et al v. SAP AG et al

Filing 1092

RESPONSE (re 1089 MOTION for 1292(b) Certification for Interlocutory Review MOTION for 1292(b) Certification for Interlocutory Review ) Defendants' Opposition to Oracle's Motion for 1292(b) Certification for Interlocutory Review filed bySAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Proposed Order, # 2 Appendix Appendix of Unpublished Authorities)(Froyd, Jane) (Filed on 10/7/2011)

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Robert A. Mittelstaedt (SBN 060359)
Jason McDonell (SBN 115084)
Elaine Wallace (SBN 197882)
JONES DAY
555 California Street, 26th Floor
San Francisco, CA 94104
Telephone:
[phone]
Facsimile:
[phone]
[e-mail]
[e-mail]
[e-mail]
Tharan Gregory Lanier (SBN 138784)
Jane L. Froyd (SBN 220776)
JONES DAY
1755 Embarcadero Road
Palo Alto, CA 94303
Telephone:
[phone]
Facsimile:
[phone]
[e-mail]
[e-mail]
Scott W. Cowan (Admitted Pro Hac Vice)
Joshua L. Fuchs (Admitted Pro Hac Vice)
JONES DAY
717 Texas, Suite 3300
Houston, TX 77002
Telephone:
[phone]
Facsimile:
[phone]
[e-mail]
[e-mail]
Attorneys for Defendants
SAP AG, SAP AMERICA, INC., and
TOMORROWNOW, INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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OAKLAND DIVISION

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ORACLE USA, INC., et al.,

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Plaintiffs,

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v.

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Case No. 07-CV-1658 PJH (EDL)
[PROPOSED] ORDER DENYING
ORACLE’S MOTION FOR 1292(b)
CERTIFICATION FOR
INTERLOCUTORY REVIEW

SAP AG, et al.,
Defendants.

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SVI-98117v1

[PROPOSED] ORDER DENYING ORACLE’S MOT.
FOR 1292(b) CERT. FOR INTERLOCUTORY REVIEW
Case No. 07-CV-1658 PJH (EDL)

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Having considered the papers filed by the parties in connection with Oracle International
Corp.’s (“Oracle”) Motion for 1292(b) Certification for Interlocutory Review (“Motion”):

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IT IS HEREBY ORDERED THAT: Oracle’s Motion is DENIED.

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28 U.S.C. § 1292(b) provides a limited exception to the rule that an appellate court should

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not review a district court ruling until entry of final judgment. 28 U.S.C. §§ 1291 & 1292(b). A

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district court may exercise discretion to certify a non-final order for immediate appeal if there is:

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(1) a “controlling question of law,” (2) on which there are “substantial grounds for difference of

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opinion,” and (3) resolution of which would “materially advance the ultimate termination of the

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litigation.” In re Cement Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir. 1982). A district court

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must “strictly” construe the statute’s requirements and allow certification only “when exceptional

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circumstances warrant it.” Safeway Inc. v. Abbott Labs., No. C 07-05470 CW, 2010 U.S. Dist.

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LEXIS 61721, at *6 (N.D. Cal. June 1, 2010). No such exceptional circumstances exist here.

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Oracle’s proposed questions for certification are not “controlling questions of law.” A

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“question of law” is “controlling” only if resolving the question on interlocutory appeal “could

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materially affect the outcome of litigation in the district court.” In re Cement, 673 F.2d at 1026.

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The questions Oracle presents for certification are not “controlling,” for several reasons. First,

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resolving Oracle’s proposed questions would not affect the Court’s grant of judgment as a matter

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of law. As set forth in its September 1, 2011 and September 16, 2011 Orders, the Court granted

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judgment as a matter of law on two separate grounds—Oracle is not entitled to “hypothetical”

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license fees as actual damages because: (1) Oracle failed to prove that it actually lost any

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licensing opportunities, and (2) even if “hypothetical” license fees were recoverable absent proof

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of lost licensing opportunities, Oracle failed to offer any objective evidence upon which to

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calculate a non-speculative license price. Here, Oracle’s questions focus on whether certain

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categories of evidence suffice to support an award of actual damages in the form of a hypothetical

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license; they do not affect the Court’s ruling that Oracle may not recover hypothetical license fees

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because Oracle failed to prove that it actually lost any licensing opportunities.

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Second, Oracle’s questions are not controlling because they are not presented by this case.
See Hulmes v. Honda Motor Co., 936 F. Supp. 195, 209 (D.N.J. 1996) (denying certification
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[PROPOSED] ORDER DENYING ORACLE’S MOT.
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Case No. 07-CV-1658 PJH (EDL)

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where “Plaintiff has asked this court to certify for interlocutory appeal a question that it did not

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decide”); In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 212 F. Supp. 2d 903, 907

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(S.D. Ind. 2002) (denying certification where party “mischaracterize[d]” court’s ruling “[i]n an

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effort to make this issue a question of law”). The Court did not, as Oracle’s proposed questions

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suggest, rule that whole categories of evidence are per se insufficient to value license damages or

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that “objective value could be proved only by particular kinds of evidence.” Mot. at 1, 5. Nor did

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the Court rule that an award based on certain categories of evidence or falling “within the

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reasonable range of hypothetical-license damages established” by these categories of evidence

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must be set aside as speculative and/or excessive. Id. at 2. Rather, the Court held that the

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particular evidence that Oracle presented at trial failed to establish an objective, non-speculative

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license price and did not allow the jury to assess fair market value without undue speculation.

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Thus, a ruling by the Ninth Circuit that certain categories of evidence can suffice to price a

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hypothetical license would not alter the Court’s holding that the subjective evidence Oracle

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presented at trial failed to support a non-speculative license amount. Such an opinion also would

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not affect the Court’s discretionary new trial ruling that the award grossly exceeded actual harm

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to Oracle in the form of lost customers.

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Finally, to the extent that Oracle seeks appellate review of this Court’s determination that

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the trial evidence offered to value a hypothetical license was purely subjective, Oracle’s proposed

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questions fail to even qualify as “questions of law.” Under Section 1292(b), a “question of law”

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means a “pure question of law,” “not a mixed question of law and fact or an application of law to

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a particular set of facts.” Brizzee v. Fred Meyer Stores, Inc., CV-04-1566-ST, 2007 U.S. Dist.

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LEXIS 99155, at *10-11 (D. Or. Dec. 10, 2007); Keystone Tobacco Co. v. U.S. Tobacco Co., 217

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F.R.D. 235, 238-39 (D.D.C. 2003) (denying certification, as “crux of an issue decided by Court

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[was] fact-depend[e]nt” and appellate review “could only result in the court of appeals improperly

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wading into the factual pond of an ongoing matter”). Certification is appropriate only where a

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party seeks review of “an abstract legal issue,” Brizzee, 2007 U.S. Dist. LEXIS 99155, at *11, not

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simply a court’s “application of the governing law to the relevant facts of this case.” Hulmes, 936

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F. Supp. at 210; Ahrenholz v. Bd. of Trs. of Univ. of Ill., 219 F.3d 674, 676-77 (7th Cir. 2000).
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[PROPOSED] ORDER DENYING ORACLE’S MOT.
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Case No. 07-CV-1658 PJH (EDL)

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Although Oracle frames its questions in terms of abstract categories of evidence, Oracle devotes

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much of its brief to rearguing its specific trial evidence, including whether the evidence showed

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the parties’ “expectations” and whether Oracle’s damages expert, Paul Meyer, offered reliable

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trial testimony valuing a lost license fee. If Oracle intends that the Ninth Circuit undertake the

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same fact-intensive review that this Court carried out to determine whether Oracle’s specific trial

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evidence was objective or subjective, then Oracle’s proposed questions are not “questions of law”

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appropriate for interlocutory appeal. See Hulmes, 936 F. Supp. at 210 (“Section 1292(b) was not

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designed to secure appellate review of ‘factual matters’ or of the application of the acknowledged

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law to the facts of a particular case, matters which are within the sound discretion of the trial

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court.”); Ahrenholz, 219 F.3d at 676-77.
Oracle also fails to show that a substantial ground for difference of opinion exists as to

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the law governing its proposed questions. To determine if a “substantial ground for difference of

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opinion” exists under Section 1292(b), “courts must examine to what extent the controlling law

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is unclear.” Couch v. Telescope Inc., 611 F.3d 629, 633-34 (9th Cir. 2010). Such grounds

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typically exist only where “the circuits are in dispute on the question and the court of appeals of

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the circuit has not spoken on the point, if complicated questions arise under foreign law, or if

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novel and difficult questions of first impression are presented.” Id. “That settled law might be

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applied differently does not establish a substantial ground for difference of opinion.” Id.; see

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also N. Carolina ex. rel. Long v. Alexander & Alexander Servs., Inc., 685 F. Supp. 114, 116

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(E.D.N.C. 1988) (denying request where party raised only “dispute with the application of facts

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to existing and well-settled law”). “A party’s strong disagreement with the Court’s ruling is not

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sufficient for there to be a ‘substantial ground for difference.’” Couch, 611 F.3d at 633-34.

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Here, clear Ninth Circuit precedent establishes that recovering lost license fees requires

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offering objective evidence sufficient to calculate a non-speculative license price. See Jarvis v.

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K2 Inc., 486 F.3d 526, 534 (9th Cir. 2007); Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d

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700, 709 (9th Cir. 2004); Mackie v. Rieser, 296 F.3d 909, 917 (9th Cir. 2002). The Ninth Circuit

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rejects license awards based only on subjective evidence. See Mackie, 296 F.3d at 917; Frank

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Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 513-14 (9th Cir. 1985) (upholding
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refusal to award license damages where plaintiffs offered “no disinterested testimony” in support

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of alleged damages). The Court applied this controlling law and held that the subjective

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evidence Oracle offered at trial could not support an objective non-speculative license price.

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Having decided, on multiple grounds, that Oracle was not entitled to recover actual damages in

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the form of a lost license fee, the Court held that the award grossly exceeded the only evidence

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of actual harm, in the form of lost customers. Oracle’s claim that the Court should have come to

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a different conclusion in applying this “settled law . . . does not establish a substantial ground for

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difference of opinion.” Couch, 611 F.3d at 633. Oracle’s attempt to manufacture substantial

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grounds for difference of opinion by misconstruing this Court’s order as holding that objective

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value can be proved only by certain categories of evidence must fail. See Hulmes, 936 F. Supp.

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at 209 (denying certification where plaintiff mischaracterized order as not applying controlling

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law). And Oracle’s reliance on inapposite patent law does not create substantial grounds for

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difference of opinion as to the correct legal standard in this copyright case; as this Court has

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explained on previous occasions, a reasonable royalty under patent law and a “hypothetical

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license” under copyright law are different remedies, the calculation of which are governed by

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different standards. See Couch, 611 F.3d at 633-45 (noting that “just because counsel contends

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that one precedent rather than other is controlling does not mean there is such a substantial

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difference of opinion as will support an interlocutory appeal”).

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Lastly, Oracle fails to show that an immediate appeal will materially advance the ultimate

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termination of this litigation. Whether an appeal “materially advances” a litigation’s termination

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“is linked to whether an issue of law is ‘controlling’ in that the Court should consider the effect of

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a reversal by the Ninth Circuit on the management of the case.” Mateo v. M/S Kiso, 805 F. Supp.

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792, 800-01 (N.D. Cal. 1992), abrogated on other grounds by Brockmeyer v. May, 361 F.3d 1222

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(9th Cir. 2004). A court should certify interlocutory appeal only when doing so “would avoid

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protracted and expensive litigation.” In re Cement, 673 F.2d at 1026. By contrast, if that appeal

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“delay(s) resolution of the litigation, it should not be certified.” Matsunoki Group, Inc. v.

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Timberwork Or., Inc., No. C 08-04078 CW, 2011 U.S. Dist. LEXIS 33178, at *6 (N.D. Cal. Feb.

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18, 2011) (denying certification because trial would be concluded in approximately five months);
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[PROPOSED] ORDER DENYING ORACLE’S MOT.
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Case No. 07-CV-1658 PJH (EDL)

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Sonoda v. Amerisave Mortg. Corp., No. C-11-1803 EMC, 2011 U.S. Dist. LEXIS 100275, at *6

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(N.D. Cal. Sept. 7, 2011); FTC v. Swish Mktg., No. C 09-03814 RS, 2010 U.S. Dist. LEXIS

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47948, at *10 (N.D. Cal. Apr. 14, 2010) (holding that denying certification is appropriate if

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“interlocutory review would . . . carry with it a greater risk for delay than its promise for ultimate

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savings of both time and resources”). Here, since Oracle’s proposed questions are not

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“controlling” and thus would not avoid a new trial limited to lost profits/infringers’ profits, an

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appeal would result only in the unnecessary delay, rather than material advancement, of the

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district court proceedings.

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*

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*

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For the reasons set forth above, the Court DENIES Oracle’s Motion for 1292(b)

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Certification for Interlocutory Review of the Court’s September 1, 2011 Order (“9/1/11 Order”)

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(ECF No. 1081). Accordingly, Oracle shall submit a statement accepting or rejecting the

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remittitur set forth in the Court’s 9/1/11 Order no later than ______________________.

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IT IS SO ORDERED.

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DATED: ________________________

By:
Hon. Phyllis J. Hamilton

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[PROPOSED] ORDER DENYING ORACLE’S MOT.
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