Oracle Corporation et al v. SAP AG et al

Filing 790

Memorandum in Opposition re 728 MOTION in Limine Defendants' Motions in Limine filed byOracle EMEA Limited, Oracle International Corporation, Oracle USA Inc., Siebel Systems, Inc.. (Attachments: # 1 Proposed Order)(Howard, Geoffrey) (Filed on 8/19/2010)

Oracle Corporation et al v. SAP AG et al

Doc. 790

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

BINGHAM McCUTCHEN LLP DONN P. PICKETT (SBN 72257) GEOFFREY M. HOWARD (SBN 157468) HOLLY A. HOUSE (SBN 136045) ZACHARY J. ALINDER (SBN 209009) BREE HANN (SBN 215695) Three Embarcadero Center San Francisco, CA 94111-4067 Telephone: [phone] Facsimile: [phone] [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] [e-mail] STEVEN C. HOLTZMAN (SBN 144177) 1999 Harrison St., Suite 900 Oakland, CA 94612 Telephone: [phone] [e-mail] DORIAN DALEY (SBN 129049) JENNIFER GLOSS (SBN 154227) 500 Oracle Parkway, M/S 5op7 Redwood City, CA 94070 Telephone: [phone] Facsimile: 650.506.7114 [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) v. Plaintiffs, PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE Date: Time: Place: Judge: September 30, 2010 2:30 pm Courtroom 3, 3rd Floor Hon. Phyllis J. Hamilton

SAP AG, et al., Defendants.

PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)
Dockets.Justia.com

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VII. VIII. IX. X. XI. IV. V. VI. I. II. III.

TABLE OF CONTENTS Page INTRODUCTION RELEVANT TO DEFENDANTS' MIL NOS. 1 & 2 ........................ 1 DEFENDANTS' MOTION IN LIMINE NO. 1: GOODWILL ......................................... 2 DEFENDANTS' MOTION IN LIMINE NO. 2: PRECLUDED LOST PROFITS .......... 4 A. Defendants Mischaracterize The Orders On Their Rule 37 Motion ...................... 4 B. Preclusion of Long-Known Factors Relevant to a Hypothetical FMV License Negotiation is Unwarranted...................................................................... 5 DEFENDANTS' MOTION IN LIMINE NO. 3: NON-PARTY LOST PROFITS.......... 10 DEFENDANTS' MOTION IN LIMINE NO. 4: THE SOMMER REPORT................... 10 DEFENDANTS' MOTION IN LIMINE NO. 5: THREE BASELESS MOTIONS ........ 12 A. The Court Should Not Exclude Oracle's Employee Witnesses ........................... 12 1. Oracle's Employees Offer Fact Testimony.............................................. 13 2. If Not Outright Fact Testimony, The Oracle Employees Offer Admissible Lay Opinion Testimony ........................................................ 14 3. Alternatively, the Failure to Separately List These Witnesses as Experts Is Substantially Justified and Harmless ...................................... 15 B. The Court Should Allow John Ritchie's Testimony ............................................ 17 C. Pinto Properly Consulted Neuendorf to Assist in Responding to Garmus .......... 17 DEFENDANTS' MOTION IN LIMINE NO. 6: DEFENDANTS' USE OF THE ATTORNEY-CLIENT PRIVILEGE ............................................................................... 18 DEFENDANTS' MOTION IN LIMINE NO. 7: DOJ AND FBI INVESTIGATIONS......................................................................................................... 19 DEFENDANTS' MOTION IN LIMINE NO. 8: RIMINI STREET ................................ 21 DEFENDANTS' MOTION IN LIMINE NO. 9: HYPERION, RETEK AND EBUSINESS SUITE .......................................................................................................... 23 DEFENDANTS' MOTION IN LIMINE NO. 10: SAP/TN ............................................. 24

i
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CASES

TABLE OF AUTHORITIES Page

Abend v. MCA, Inc.., 863 F.2d 1465, 1479-80 (9th Cir. 1988) ................................................................................... 1 Hanger Prosthetics & Orthotics, Inc. v. Capstone Orthopedic, Inc., 2008 U.S. Dist. LEXIS 91373 (E.D. Cal. 2008) ..................................................................... 13 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), cert. denied, 404 U.S. 870 (1971) .............. 1 Hynix Semiconductor, Inc. v. Rambus, Inc., 2008 U.S. Dist. LEXIS 16716 (N.D. Cal. 2008)..................................................................... 14 In re: Perry H. Koplik & Sons, 382 B.R. 599 (S.D.N.Y. 2008).......................................................................................... 15, 17 Informatica Corp. v. Business Objects Data Integration, Inc., 2007 U.S. Dist. LEXIS 16247 (N.D. Cal. 2007)..................................................................... 13 Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371 (Fed. Cir. 2001)............................................................................................. 1, 6 Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F.3d 98 (2d Cir. 2002)................................................................................................ 13, 14 Micro Motion, Inc. v. v. Kane Steel Co., Inc., 894 F.2d 1318 (Fed. Cir. 1990)............................................................................................... 21 Minority TV Project Inc. v. FCC, 649 F. Supp. 2d 1025 (N.D. Cal. 2009) ............................................................................ 15, 16 Network Appliance, Inc. v. Bluearc Corp., 2005 U.S.Dist. LEXIS 16726 (N.D.Cal. 2005)......................................................................... 5 Polar Bear v. Prod., Inc. v. Timex Corp., 384 F.3d 700 (9th Cir. 2004)..................................................................................................... 1 Radio Steel & Mfg. Co. v. MTD Products, Inc., 788 F.2d 1554 (Fed. Cir. 1986)................................................................................................. 7 Snellman v. Ricoh Co., Ltd., 862 F.2d 283 (Fed. Cir. 1988)................................................................................................... 6

ii
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

TABLE OF AUTHORITIES (continued)

Page

THK America, Inc. v. NKS, Ltd., 917 F. Supp. 563 (N.D. Ill. 1996) ........................................................................................... 18 U.S. v. Rapanos, 376 F.3d 629 (6th Cir. 2004), vacated on other grounds, 547 U.S. 715 (2006) ....................................................................... 9 United States v. Bussell, 414 F.3d 1048 (9th Cir. 2005)................................................................................................. 22 Wendt v. Host Int'l , Inc., 125 F.3d 806 (9th Cir. 1997)..................................................................................................... 5 White v. Cinemark USA, Inc., 2005 WL 1865495 (E.D. Cal. 2005) ....................................................................................... 11 RULES Fed. R. Civ. P. 26 .................................................................................................................... 11, 16 Fed. R. Civ. P. 37 ................................................................................................................... passim Fed. R. Evid. 401 .......................................................................................................................... 20 Fed. R. Evid. 701 .............................................................................................................. 13, 14, 15 Fed. R. Evid. 702 .......................................................................................................................... 15 STATUTES 17 U.S.C. § 504 ............................................................................................................................... 1

iii
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

I.

INTRODUCTION RELEVANT TO DEFENDANTS' MIL NOS. 1 & 2 In their first two motions, Defendants contradict their prior statements to the Court and

distort the plain meaning of the Court's Rule 37 Orders related to Oracle's lost profits evidence. Oracle first provides background common to both motions, and then addresses each in turn. As the Court knows, there are two different measures of actual damages for copyright infringement under 17 U.S.C. § 504: "One method assesses the damage to the `fair market value' of the plaintiff's work caused by the defendant's infringement." Dkt. 762 (MSJ Order), at 20:1921 (quoting Abend v. MCA, Inc., 863 F.2d 1465, 1479-80 (9th Cir. 1988)). The other "attempts to prove actual damages by indirectly proving the plaintiff's lost profits" but "is often impractical because of the difficulty of proving such lost profits with specificity." Id. at 20:22-24; see also Dkt. 628 (Order Denying Defs' Mtn. for Partial SJ) at 3:6-9. The fair market value ("FMV") approach is sometimes called a "hypothetical license." Dkt. 628 at 3:24-27. The two measures relate to distinct time frames. Lost profits are "losses during the period of . . . infringement." Polar Bear v. Prod., Inc. v. Timex Corp., 384 F.3d 700, 709 (9th Cir. 2004). The FMV license "recognizes sales expectations at the time when infringement begins as a basis for a royalty base as opposed to after-the-fact counting of actual sales." Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F. 3d 1371, 1384-85 (Fed. Cir. 2001); see also Polar Bear, 384 F.3d at 709 (irrelevant that copyright holder never charged hypothetical rate, provided rate was objectively reasonable when infringement began). Thus, for FMV license damages, the trier of fact looks back to the parties' actual knowledge and expectations at the outset of the infringement ­ here, SAP's acquisition of SAP TN on January 19, 2005 ­ to determine the value the parties would reasonably have placed on a license authorizing the defendants' subsequent infringing conduct. That valuation is based on various factors (summarized in Georgia Pacific1), including the parties' expectations of future upsale and cross-sale opportunities. The jury does not look forward to determine value based on actual sales; the value is frozen as of the negotiation. Interactive Pictures, 274 F.3d at 1384-85. See Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970), modified and aff'd, 446 F.2d 295 (2d Cir. 1971), cert. denied, 404 U.S. 870 (1971). 1
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)
1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Defendants expressly limited their Rule 37 motion to lost profits. See Dkts. 342-45, 37476, 399-401 (Rule 37 Mtn. briefing). They moved to preclude Oracle "from presenting evidence ... in support of any claim that Oracle's lost profits damages include: (1) alleged lost profits relating to customers that were not customers of ... TomorrowNow...; (2) alleged lost profits relating to license revenues, as opposed to support revenues, and/or (3) alleged lost profits relating to products that were not supported by ... TomorrowNow...." Dkt. 342 (Defs' Rule 37 Mtn.) at 1:12-16. Defendants expressly disavowed any relief related to the FMV license: "The motion is limited to what Oracle characterizes as its lost profits claims, and does not extend to ... its hypothetical license theory.... Defendants ... will address those [other damages categories or theories] by separate motion if necessary. For example, Oracle's hypothetical license theory will be the subject of Defendants' Rule 56 motion ...." Id. at 13 n.9 (emphasis added). Defendants then filed that Rule 56 motion and lost. See Dkt. 628 (Order Denying Defs' Mtn. for Partial SJ). Judge Laporte's Order barred Oracle "from introducing evidence of damages due to lost profits from sources other than software support services provided to customers that switched from Plaintiffs to TomorrowNow." Dkt. 482 (Order Granting Defs' Rule 37 Mtn.) at 1:15-18; see also id. at 18:28-19:11, 26:16-22. She was clear that "the sanctions Defendants seek do not affect liability or preclude recovery of many millions of dollars of damages, but instead affect only a portion of potential damages, leaving Plaintiffs free to pursue their originally estimated `likely at least a billion dollars.'" Id. at 9:3-7 (quoting 6/24/2008 Jt. Disc. Conf. St. at 3). This Court has confirmed Oracle is "not precluded from seeking actual damages ... in the form of a `fair market value' or `hypothetical' license." Dkt. 762 (MSJ Order), at 22:7-9 (all emphases added). II. DEFENDANTS' MOTION IN LIMINE NO. 1: GOODWILL The Court should deny Defendants' first motion for two reasons. First, this Court already ruled, in the very motion on which Defendants rely, that evidence of harm to goodwill is admissible if "defendants take the position at trial that Oracle's damages are excessive." See Dkt. 532 (Order Overruling Oracle's Objs. to Rule 37 Order). Defendants do take that position. See Dkt. 727 (Defs' Trial Brief) at 1:18-20, 5:19-20; 7:12-14 (e.g., "Plaintiffs' damage claims are vastly exaggerated"); Declaration of Chad Russell in Support of Oracle's Opp. to Defs' Mot. in 2
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Limine ("Russell Decl."), ¶ 4 & Ex. A (8/5/2010 SAP Press Release) ("SAP said it will continue to present arguments and evidence demonstrating that Oracle's damages claims in this matter are vastly overstated."). Oracle should be allowed to refute it with evidence. Second, Oracle properly considers goodwill in its FMV license damages approach. To determine FMV, Oracle's damages expert Meyer considered (and made adjustments to) the goodwill attributed to Oracle's acquisitions of PeopleSoft and Siebel, along with many other inputs. Russell Decl., ¶ 5 & Ex. B (Meyer Report), ¶¶ 116 (Tbl. 6), 121-22, 153 (Tbl.8), 268-69 (Tbl 11), 272. Those contemporaneous goodwill valuations are directly relevant to the measure of FMV license damages, because, as Meyer testified, they reflect in part the value the negotiating parties would have attributed to the opportunity to cross-sell and up-sell software licenses. Id., ¶ 6 & Ex. C (Meyer Depo.) at 210:23-211:23; 238:5-18; 245:18-246:3; 247:2-7. However, goodwill is irrelevant to the Court's Rule 37 ruling on after-the-fact lost profits damages. Defendants seek to expand the Court's Rule 37 ruling to obtain a FMV preclusion order they expressly disclaimed, and the Court never made. Finally, Defendants have never made, much less won, a motion arguing Oracle has not produced what would be needed to try whether Defendants alleged actions impacted Oracle's goodwill. For example, Oracle's CEO, Larry Ellison, testified Defendants' activities caused "reputational damage" to Oracle "by saying Oracle wasn't the kind of company you want to do business with, because they overcharge for support, and we can do a better job for, you know, a fraction of that cost." Russell Decl., ¶¶ 7-8 & Ex. D (Ellison Depo.) at 10:2-12:1, Ex. E (Catz Depo.) at 16:2-17:7. Oracle's goodwill associated with the PeopleSoft and Siebel acquisitions was publicly reported in its financial statements. Id. ¶ 9 & Ex. F (Oracle 10-K). Defendants deposed the principal Oracle employee who assisted with the financial and valuation analyses for the PeopleSoft and Siebel acquisitions, and marked as exhibits Oracle accounting papers related to those acquisitions. Id., ¶ 10-11 & Ex. G (Kehring Depo.) at 188:3-191:3, Ex. H (Depo. Ex. 595).2
2

SAP's co-founder and Chairman of its Supervisory Board, Hasso Plattner, even testified that discussing the value of acquired intellectual property necessarily requires a discussion about goodwill. Russell Decl., ¶ 13 & Ex. I (Plattner Depo.) at 50:4-51:7. 3
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Defendants spent hours questioning Meyer on goodwill, id. at ¶ 12, and Defendants' own damages expert seeks to rebut those components of damage categorically, without the need for any additional evidence. Id., ¶ 14 & Ex. J (Clarke Report) at 43. III. DEFENDANTS' MOTION IN LIMINE NO. 2: PRECLUDED LOST PROFITS Defendants' second motion seeks to drastically limit Oracle's FMV license damages to a fraction of Defendants' actual infringement. The motion is baseless. Defendants did not move on, and Judge Laporte did not exclude, evidence of the parties' expectations in January 2005 about future up-sales, cross-sales or any other value they would have attributed to a hypothetical license. The parties produced that evidence long ago. Witnesses have testified about it at length. There is no basis to preclude Oracle from using it. The Court should deny the motion. A. Defendants Mischaracterize The Orders On Their Rule 37 Motion

Defendants do not claim Oracle seeks the lost profit damages that were the subject of their Rule 37 motion and the Court's Rule 37 Order. Instead, they invent an argument that Oracle never made ­ that Oracle sought permission from this Court "to offer the precluded evidence ... in support of [its] expert's hypothetical license." Dkt. 728 (Defs.' Motions in Limine ("MIL")) at 4:2-5. That is false. Defendants had already made clear that their motion was "limited to what Oracle characterizes as its lost profits claims, and does not extend to ... its hypothetical license theory." Dkt. 342 (Defs' Rule 37 Mtn.) at 13 n.9. Oracle had no reason to seek permission to offer evidence in connection with FMV damages which were expressly not in play in the motion. But Defendants continue with this alternate reality and pluck quotes from the Rule 37 Order that supposedly denied Oracle's non-existent request. The facts are these: Judge Laporte's Rule 37 Order provided for "the preclusion of Oracle's ability to seek lost profits `relating to licensing revenue, as opposed to support revenue' including for `products ... not supported by TomorrowNow' for the long-acknowledged list of TomorrowNow customers (also known as "cross-sell" and "up-sell" profits)." Dkt. 499 (Oracle's Objs. to Rule 37 Order) at 1:6-10 (emphasis added) (quoting Dkt. 482). Oracle anticipated that Defendants would attack the amount of its FMV license damages by pointing to the expected difference between that measure and lost profits. Accordingly, Oracle asked this Court to allow it 4
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

to reference the precluded lost profits evidence to explain the dollar difference between the two measures. Id. at 14:28-16:2. The Court ordered a compromise: "[T]he precluded evidence will NOT be admitted through the back door . . . Nevertheless, should defendants take the position at trial that Oracle's damages are excessive, Oracle will be permitted to advise the jury that it is not seeking all the damages to which it believes it is entitled...." Dkt. 532 at 1:25-2:3. Defendants' motion rests entirely on the fiction that this Court's statement that "the precluded evidence will NOT be admitted through the back door," id., granted the relief Defendants had expressly disclaimed in their motion. Nothing in the Court's Order expands the preclusion beyond Judge Laporte's ruling on lost profits damages, nor, respectfully, could it. The entire subject of Defendants' Rule 37 motion was evidence of profits actually lost in the years after SAP acquired SAP TN. The parties did not brief, and no one ruled on, evidence of the parties' expectations in January 2005 about the value of a FMV license. B. Preclusion of Long-Known Factors Relevant to a Hypothetical FMV License Negotiation is Unwarranted

Defendants' motion in limine is really the sanctions motion that Defendants expressly declined to bring long ago. Even if it had been properly noticed and brought (which it has not), it has no merit. There has been no failure to disclose that would trigger Rule 37. Defendants suffer no prejudice by Oracle's use of the long-known and highly relevant contemporaneous cross-sell and up-sell evidence Defendants now seek to preclude. Compare Network Appliance, Inc. v. Bluearc Corp., 2005 U.S. Dist. LEXIS 16726 (N.D. Cal.) at *9 ("`exclusion sanctions . . . are generally improper absent undue prejudice to the opposing side'") (citation omitted); Wendt v. Host Int'l , Inc., 125 F.3d 806, 814 (9th Cir. 1997) (providing five-factor test for preclusion, which Defendants cannot meet). Relevance of Evidence Defendants Seek to Preclude. The evidence that Defendants now seek to preclude is central to Oracle's FMV hypothetical license. As the parties have extensively briefed, this FMV license approach assesses the parties' expectations before the fact, at the time of the hypothetical negotiation, or as this Court has explained, "what a willing buyer would have been reasonably required to pay a willing seller for plaintiff's work." Dkt. 628 (Order Denying 5
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Defs' Mot. for Partial SJ) at 3:16-19 (quoting Jarvis v. K2, Inc., 486 F.3d 526, 533 (9th Cir. 2007)). "In considering the nature of this negotiation, the focus is on what the expectations of the patent holder and infringer would have been had they entered into an agreement at that time and acted reasonably in their negotiations." Model Patent Jury Instr. 5.7; see also Interactive Pictures, 274 F.3d at 1384-85 (hypothetical license "recognizes sales expectations at the time when infringement begins as a basis for a royalty base as opposed to after-the-fact counting of actual sales."); Snellman v. Ricoh Co., Ltd., 862 F.2d 283, 289-90 (Fed. Cir. 1988) (upholding damages based on infringer's expected sales that far surpassed actual sales). How Oracle Uses this Evidence Does Not Violate the Rule 37 Order. Meyer's use of anticipated up-sell and cross-sell opportunities is a strict application of these undisputed principles. Russell Decl., ¶ 5 & Ex. B (Meyer Report) at ¶¶ 129, 130, 132-33, 270, 279. Meyer estimated the value the parties would have assigned to the FMV license as of January 19, 2005 (or September 2006 for Siebel and Oracle database used to support Siebel),3 relying on contemporaneous evidence of their expectations. Id., ¶¶ 102, 117-120. One aspect of the license the parties would have valued at the time was the expected ability to cross-sell and up-sell additional software products to a larger customer base. Id., ¶ 121. In fact, both parties made these very projections at the time of the hypothetical negotiation: · In a December 23, 2004 presentation, SAP projected SAP TN would generate $897 million in revenue from 2005-2007, including $557 million explicitly related to "upswitch" (or "upsell" and "cross-sell." Russell Decl., ¶ 15 & Ex. K (Depo. Ex. 447) at SAP-OR00253288. The same document explains SAP's plan for "turning PeopleSoft customers into SAP customers" was "1. Commit (Up-Sell) 2. Switch (Replace) 3. Extend (Cross-Sell) 4. Reference." Id. at SAP-OR00253283, -290. · On January 5, 2005, an SAP executive explained SAP's plan: "Freezing a PeopleSoft customer `forever' is not an end goal for SAP. SAP ultimately wants to sell more software and upgrade a customer to mySAP. SAP will need to develop some type of tiered
3

Defendants' expert also used the January 2005 date. Id., ¶ 14 Ex. J (Clarke Report) at 31. 6
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 · ·

pricing/support model to help support both a disruption and upsell/migration strategy." Id., ¶ 16 & Ex. L (Depo. Ex. 225) at SAP-OR00004997. On January 19, 2005, Shai Agassi, President of SAP Products and Technology Group, called up-sales and cross-sales the TN acquisition's "rationale": "[T]he rationale is more around the value, if you want, that these customers represent as a potential future set of customers for SAP applications.... [T]he value was estimated by Oracle, rightfully or wrongly, as $10 billion. What we believe is that this customer base is not necessarily captive by Oracle. I think this customer base has to make a choice right now." Id., ¶ 17 & Ex. M (SAP AG Phone Press Conf.) at SAP-OR00329578. A December 2004 operating model outlined Oracle's expected up-sales and cross-sales after acquiring and integrating PeopleSoft the following month. Id., ¶ 18 & Ex. N (Project Spice, PeopleSoft Operating Model). Indeed, the testimony Defendants cite is related to the above December 2004 to January 2005 evidence, and describes the parties' expectations on or around January 19, 2005. MIL at 5:9-16. To be sure, evidence of what the value of those up-sale and cross-sale opportunities later turned out to be is precluded, but Meyer expressly does not attempt to quantify that value. Russell Decl., ¶ 5 & Ex. B (Meyer Report) at ¶ 351, n.656 ("I understand that Oracle is precluded from seeking ... lost profits on lost up-sell or cross-sell opportunities.... Accordingly, I have not quantified those damages in this report."). Rather, Meyer explained that he considered evidence of anticipated cross-sales and up-sales only for determining the parties' reasonable expectations on the hypothetical negotiation date. Id., ¶ 121 n.302. Meyer had good reason not to consider the precluded evidence in valuing the FMV license, even aside from the Court's order: What actually happened during the infringement period ­ i.e., what the precluded evidence relates to ­ is simply irrelevant to the value of a hypothetical license negotiated at the start of the infringement period. See, e.g., Radio Steel & Mfg. Co. v. MTD Products, Inc., 788 F.2d 1554, 1557 (Fed. Cir. 1986). Defendants' motion ignores this basic distinction. Defendants Have Long Known of and Defended Against Oracle's FMV License and Its Evidentiary Inputs. Defendant have long known that Oracle is seeking damages for Defendants' 7
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

copyright infringement in the form of a FMV hypothetical license. Oracle repeatedly disclosed this approach, starting with its Initial Disclosures. Russell Decl., ¶ 19 & Ex. O (Supp. Initial Disclosures) at 47. Defendants have also known exactly what evidence Oracle will use to support its FMV license damages. Meyer gave a laundry list of it in connection with the briefing on Defendants' summary judgment motion to preclude Oracle's ability to pursue the approach. Dkt. 487 (Meyer Decl.) at 22-23, ¶ 35.a-g. Most of the documents Meyer relies on to value the hypothetical FMV license, and in particular the parties' expectations concerning up-sale and cross-sale opportunities, were written by SAP itself, were produced by SAP, have been the subject of extensive deposition testimony by SAP's witnesses, and so obviously have been disclosed to SAP. These include: · SAP's December 23, 2004 projection of $557 million of up-sales and cross-sales, produced on September 5, 2008 and testified to on September 30, 2008, November 12, 2008, December 10, 2008, and January 5, 2009. Russell Decl., ¶ 20. · SAP's January 5, 2005 up-sell and cross-sell strategy, produced on April 15, 2008 and testified to on June 4 and December 11, 2008, and January 5, January 23, and September 9, 2009. Id., ¶ 21. · SAP's January 19, 2005 public description of its post-acquisition plan, produced on October 1, 2008. Id., ¶ 17 & Ex. M (SAP AG Phone Press Conf.). Likewise, Oracle long ago produced its own documents, and its witnesses have provided testimony in response to defense counsel's repeated questioning, demonstrating the reasonable expectations of cross-sales and up-sales that would have formed the basis for a hypothetical negotiation in January 2005. This evidence includes, among other documents and testimony: · A December 2004 operating model outlining Oracle's expected up-sales and cross-sales from the acquisition and integration of PeopleSoft, produced on February 6, 2009. Russell Decl., ¶ 18 & Ex. N (Project Spice, PeopleSoft Operating Model). · A valuation report allocating Oracle's January 18, 2005 $11.1 billion purchase price to PeopleSoft assets, including customer relationships, produced on February 6, 2009. Id., ¶ 22 & Ex. P (Depo. Ex. 403). 8
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

·

SAP deposed Oracle CEO Ellison about a 2004/2005 PeopleSoft planning model, discussing Oracle's expected up-sales and cross-sales related to the PeopleSoft acquisition. Id., ¶ 7, 23 & Ex. D (Ellison Depo.) at 105:15-106:3, Ex. Q (Depo. Ex. 401). Oracle's goal for the acquisition "was to expand [Oracle's] application business." Id., Ex. D at 58:6-10.

·

Oracle Co-President Safra Catz testified the "rationale" for that acquisition was the ability to up-sell new software licenses. Id., ¶ 8 & Ex. E (Catz Depo.) at 28:3-12.

·

Oracle Co-President Charles Phillips testified he would price a hypothetical license by modeling expected losses of license cross-sales and up-sales. Id., ¶ 25, Ex. S (Phillips Depo.) at 118:5-119:16.

·

SAP deposed the principal person who assisted in financial and valuation analyses for the PeopleSoft acquisition about Oracle's 2005 expected up-sales and cross-sales to that customer base. Id. ¶ 10 & Ex. G (Kehring Depo.) at 92:8-97:18, Ex. R (Depo. Ex. 591). These types of documents and testimony form the basis for Meyer's evaluation of the

parties' reasonable expectations for the hypothetical license value. Id., ¶ 26 & Ex. T (Meyer Report Schedule). Defendants do not and cannot argue they were unaware of the factors relevant to Oracle's hypothetical license damages model or the contemporaneous evidence that supports it. Preclusion would be inappropriate, even if properly requested. See Fed. R. Civ. Proc. 37(c)(1); U.S. v. Rapanos, 376 F.3d 629, 644-45 (6th Cir. 2004) (rejecting request to preclude damages calculations despite failure of disclosure because "Defendants were aware of the data used in the ... reports"), vacated on other grounds, 547 U.S. 715 (2006). Defendants Are Not Prejudiced. Defendants' claim they will be "deprived of a meaningful opportunity to rebut" the foregoing evidence, MIL at 6, has no basis in fact. To the contrary, their damages expert Clarke swore in support of their Rule 37 motion that he had been working to respond to Oracle's FMV license damages approach since his retention in December 2007. Dkt. 345 (Clarke Decl.) at ¶¶ 3-5, 8, 28. He did not then or ever claim a lack of necessary information. Id. Indeed, Clarke expressly considered the very evidence of the parties' January 2005 expectations, including expected up-sales and cross-sales, Defendants ask to exclude. He simply disagrees with Meyer about the evidence's relevance and (wrongly) ignores it: 9
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Mr. Meyer's use of SAP's "Expected Gains" as a basis for his Value of Use is an inappropriate measure of the actual use Defendants allegedly made of the Subject IP. *** SAP's unfulfilled and unrealized aspirations for the role of TomorrowNow driving sales of SAP application licenses do not constitute actual use and should play no role in assessing the Value of Use. Russell Decl., ¶ 14 & Ex. J (Clarke Report) at 33, 50 (emphasis added). Clarke, unlike Defendants, acknowledges the difference between evidence of the parties' expectations in January 2005 and evidence of actual lost profits in the years that followed. His disagreement with Meyer about the significance of the expectation evidence demonstrates that the evidence is in play and the subject of a live expert dispute. That is what the trial is for. There is no basis to exclude evidence of the parties' expectations in January 2005 concerning up-sale and cross-sale opportunities they would have expected from a hypothetical license, or any other metric of value the parties would have assigned to the license. Defendants never sought such a ruling, neither Judge Laporte nor this Court ever made one, and there has been no failure to disclose that would justify Defendants' back-door attempt to exclude it now. IV. DEFENDANTS' MOTION IN LIMINE NO. 3: NON-PARTY LOST PROFITS This motion is moot. The Court's August 17 Order confirms what Oracle has said all along: it does not seek "lost profits from non-parties," including "affiliated entities." See MIL at 7:7-8; Dkt. 762 (MSJ Order), at 22. V. DEFENDANTS' MOTION IN LIMINE NO. 4: THE SOMMER REPORT The Court should deny Defendants' motion to preclude Meyer from rebutting their expert Brian Sommer's report.4 Defendants claim Meyer, allegedly designated as a sur-rebuttal expert, was unprepared to discuss Sommer's report at deposition, contrary to a supposed agreement between the parties. Defendants are wrong: (1) there is no requirement to disclose "sur-rebuttal" Defendants actually ask the Court to preclude "any rebuttal of Sommer's opinion, whether offered by another expert or by an unidentified fact witness." MIL at 10:11-13. It is not surprising that Defendants want to shield Sommer from the facts. As shown in Plaintiffs' motion to exclude his testimony, filed today, Sommer's opinions have almost no factual basis, and he has no experience, much less expertise, in the matters on which he offers them. (If the Court grants that motion, this motion is moot.) In any event, Defendants cite no authority that would require Oracle to identify fact witnesses who will show that defense experts have the facts wrong, much less preclude Oracle from offering them. 10
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)
4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

testimony, under Rule 26 or the Case Management Order; (2) there was no agreement that Meyer would offer sur-rebuttal testimony in a further report or at deposition; (3) Meyer was not designated as a sur-rebuttal expert; and (4) Sommer's report was not rebuttal in the first place, but an untimely affirmative report that should itself be precluded ­ rendering this motion moot. First, neither the stipulated order setting the case schedule nor Rule 26 provides for surrebuttal reports or depositions. See Dkt. 325 (Revised CMC Order) at 1:10-2:255; Fed. R. Civ. P. 26(a)(2)(C); White v. Cinemark USA, Inc., 2005 WL 1865495, at *3 (E.D. Cal.). Thus, Meyer was not required to file a sur-rebuttal report or give sur-rebuttal testimony at deposition. Second, there was no agreement that Oracle's experts' depositions would "cover Plaintiff's experts' opinions in response to Defendants' expert reports," as Defendants assert. MIL at 9:1118 (citing Ex. G to McDonnell Decl.). Oracle's counsel actually stated: Given that Oracle's experts will be considering and likely responding at trial to Defendants' experts, depositions of them taken before they have had a chance to review Defendants' experts' reports will not preclude Oracle's experts from providing responsive opinions to Defendants' experts' opinions at trial. Dkt. 729-7 (Ex. G to McDonnell Decl.) (emphasis added). Defendants never sought to meet and confer on this issue or moved to compel further discovery from Meyer. Russell Decl., ¶ 30. Third, Oracle never designated Meyer (or anyone else) as a sur-rebuttal expert to any of Defendants' rebuttal experts, for the reasons stated above. Lacking any actual evidence, Defendants resort to mischaracterizing their own words as action by Oracle. MIL at 9:11-18 (citing Ex. G to McDonnell Decl.) (quoting defense counsel's own email as evidence that Oracle "designated Meyer as a sur-rebuttal expert regarding the Sommer Report"). That claim is especially nonsensical, as Oracle and Meyer would not even see the Sommer report until two months after counsel's January 25, 2010 email.6 Pursuant to the Court's May 5, 2008 Case Management Order, the provisions set by the Court could be changed only by written order, on the Court's own motion or the motion of a party. See Dkt. 84 (CMC Order) at 5:4-10. Although the parties have stipulated to certain modifications to that order and obtained Court approval, the parties sought no requirement of sur-rebuttal reports. 6 Oracle was wise to reject Defendants' effort to modify the Case Management Order, given that Defendants ultimately disclosed, on March 26, 2010, a 294-page single-spaced report from their damages expert, Clarke (with accompanying voluminous schedules and citations to analyses by other experts), along with the 61-page single-spaced Sommer report, as well as other expert 11
(Footnote Continued on Next Page.) PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)
5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Finally, Sommer's report is not true rebuttal. See Pls' Mot. to Exclude Testimony of Sommer (filed today). Sommer's general market overview disregarded the fact-based, casespecific causation analysis Meyer performed, and instead offered a generalized menu of thirdparty and self-support options supposedly available to enterprise software application users. At his deposition, Meyer made clear that, based on what he had seen, he did not view the Sommer report as a rebuttal to his own analyses, and that he had not yet had an opportunity to review and digest it. See Russell Decl., ¶ 6 & Ex. C (Meyer Depo.) at 37:19-41:1. As Oracle had already made explicitly clear, this fact did not "preclude Oracle's experts from providing responsive opinions to Defendants' experts' opinions at trial." Dkt. 729-7 (McDonnell Decl., Ex. G). VI. DEFENDANTS' MOTION IN LIMINE NO. 5: THREE BASELESS MOTIONS Defendants "fifth" MIL is really three motions: one aimed at Oracle employees Defendants belatedly deposed after taking no technical discovery for two years, one at testimony Defendants elicited from their own former employee, and one at a contractor who helped an Oracle expert analyze Defendants' rebuttal expert report. Each fails for similar reasons. A. The Court Should Not Exclude Oracle's Employee Witnesses

Defendants' motion regarding "undisclosed" Oracle employee "experts" fails because: (1) the witnesses offer fact testimony; (2) if not, they offer proper lay opinion testimony; and (3) even if they offered expert testimony, Oracle disclosed them and Defendants deposed each of the six they identify by name (pursuant to Judge Laporte's discovery order that Defendants' requests for more depositions was untimely), so any failure to disclose them as "experts" is harmless. Russell Decl., ¶¶ 34-38. Defendants did not object to most of the testimony from two of the six, Ackermann and Koehler, on Defendants' recent summary judgment motion, and the Court overruled the objections they made. Dkt. 762 (MSJ Order), at 25:13.
(Footnote Continued from Previous Page.)

reports relevant to damages. Russell Decl., ¶ 28. Meyer tried to determine which of these materials were relevant to his opinions, and to digest them, in the short time before the beginning of his three-day deposition starting on May 12, 2010. Id., ¶ 6 & Ex. C (Meyer Depo.) at 37:1941:1. He provided handwritten notes on the Clarke report, including pages where Clarke relied on Sommer. Id., ¶ 29 & Ex. U (Meyer's Notes). So even at Meyer's deposition, Defendants had some of the very Meyer reactions to Sommer they now propose be precluded. 12
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

1.

Oracle's Employees Offer Fact Testimony

Oracle's engineers testified about the process they follow to develop its software. This testimony is factual, so Rule 701 does not reach it. In fact, Defendants did not object to most of the Ackermann and Koehler declarations on summary judgment. For example, Ackermann's declaration describes the creative process he and others engage in to create the world's leading software, the code's characteristics, and the process of creating a next version of PeopleSoft's HRMS software, which involves starting with (and keeping) virtually all of the code from the prior release. Dkt. 650 (Ackermann Decl.) at ¶¶ 1-16.7 Those are factual matters, based on his familiarity and experience with the relevant products through his work as a programmer at Oracle. See id. at ¶ 2 (describing 14-year history with and involvement in HRMS development), ¶ 17 ( "I extracted three files with which I am personally familiar"), ¶ 26 ("based on my personal experience writing COBOL code in general and editing this file in particular, this exact same functionality could have been written by checking a different variable..."). Oracle witnesses Screven, Vardell and Fowler offered similar testimony in deposition for other products. The testimony Defendants did object to on summary judgment is also factual. Ackermann describes his comparison of three code objects, or COBOLs, to illustrate the same basic characteristics of the code that he describes in his unobjected-to testimony. Id. at ¶¶ 17-26 & Ex. B. The "comparison" Defendants object to is similar to running a "redline" between two Microsoft Word documents and produces a similar result. See Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F.3d 98, 111 (2d Cir. 2002) (allowing a computer programmer to use a comparison utility to explain the factual differences between source code files he had personally programmed).8 Oracle cites the Ackermann Declaration as originally filed because the attached exhibits were filed under seal. For reference, Defendants also attached the Ackermann Declaration without exhibits as Exhibit K to the Declaration of Jason McDonell. 8 Contrast Hanger Prosthetics & Orthotics, Inc. v. Capstone Orthopedic, Inc., 2008 U.S. Dist. LEXIS 91373 at *2, *7-8 (E.D. Cal.) (excluding testimony where witness did not testify based on his own business experience but was a "computer forensics investigator" who provided a detailed analysis using "forensic software."); Informatica Corp. v. Business Objects Data Integration, Inc., 2007 U.S. Dist. LEXIS 16247, at *10 (N.D. Cal.) (in patent infringement case, former employee not permitted to give expert testimony re undisclosed prior art in "this advanced technological field . . . without first making an offer of proof"). 13
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)
7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

The parties have consistently allowed similar employee testimony throughout the case. Defendants' witnesses have testified, without objection, to similar code characteristics and changes in code between different versions of Software and Support Materials. Russell Decl., ¶¶ 31-33 & Ex. V (Baugh Depo.) at 195:7-197:2, Ex. W (Hyde Depo.) at 58:24-60:12, Ex. X (Hyde Depo.) at 205:8-206:16; Dkt. 701-12 (Depo. Ex. 1300, filed under seal). Indeed, in a Rule 30(b)(6) deposition on the almost identical subject ­ the development of code objects within a PeopleSoft HRMS payroll tax update ­ SAP TN employee Hyde (among others) testified about a very similar code comparison analysis she did. See id., ¶¶ 32-33 & Exs. W, X (Hyde Depos.); Dkt. 701-12 (Depo. Ex. 1300, filed under seal). The same rules should apply to both parties. 2. If Not Outright Fact Testimony, The Oracle Employees Offer Admissible Lay Opinion Testimony

Rule 701 allows lay opinion testimony that is "(a) rationally based on the perception of the witness, (b) helpful to a clear understanding of the witness's testimony or the determination of a fact in issue, and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702." Fed. R. Evid. 701. Rule 701 also permits lay opinion testimony based on particularized knowledge of the witness' own job responsibilities. See generally Hynix Semiconductor, Inc. v. Rambus, Inc., 2008 U.S. Dist. LEXIS 16716, *32-36 (N.D. Cal.) (discussing the "particularized knowledge" carve-out to the Rule 701 limitation on lay opinion testimony requiring specialized or technical knowledge); Fed. R. Evid. 701 Advisory Committee's Notes (2000) (Lay opinion testimony is admissible "because of the particularized knowledge that the witness has by virtue of his or her position in the business."). The challenged testimony, if not considered factual, meets this standard. For example, Ackermann's particularized knowledge of the HRMS product through his work at Oracle is the basis for his description of the software and how he creates it, as well as his redline code comparison. See Medforms, 290 F.3d at 110-111 (affirming Rule 701 admission of lay opinion testimony regarding a computer programmer's work on the products at issue and his use of "a programming utility that highlights the similarities and differences between source code files"). Similarly, Dr. Koehler, Senior Director of Global Information Security, led Oracle's 14
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

technical investigation of SAP's illegal downloading. See Dkt. 652 (Koehler Decl.) at ¶ 2. He learned about the Oracle websites and the impact of SAP's actions on them in the scope of his duties investigating website intrusion and reviewing the resulting log files. See e.g., id. at ¶¶ 1, 4. He testified he "reviewed the reverse proxy log files ... and those log files reflect that on certain days between September 2006 and April 2007, TomorrowNow downloaded more bytes of data from Customer Connection and used more computer resources on those computer systems than all other users from the rest of the world combined." Id. at ¶ 4. He relies on his experience at Oracle for the conclusion that "it is very likely that customers using the Customer Connection systems during these periods of high downloads from TomorrowNow experienced slowness and latency issues." Id. If not factual testimony, this is permissible lay opinion testimony. See Minority TV Project Inc. v. FCC, 649 F. Supp. 2d 1025, 1032 (N.D. Cal. 2009) (Laporte, J.) (testimony based upon particularized knowledge through position in a business, as opposed to training or specialized knowledge within the realm of an expert, is lay opinion); In re: Perry H. Koplik & Sons, 382 B.R. 599, 602 (S.D.N.Y. 2008) (permitting "lay opinion testimony that reflects the perceptions of the witness" even if "aided in forming his perceptions by an ability, aided by his training and experience, to understand what he saw"). 3. Alternatively, the Failure to Separately List These Witnesses as Experts Is Substantially Justified and Harmless

Even if the challenged testimony of the employee witnesses should be considered expert testimony under Rule 702 (it should not), any failure to designate them as experts is substantially justified and harmless for four reasons. See Fed. R. Civ. P. 37(c)(1). First, in April 2007 and May 2009, Oracle identified several employee witnesses as knowledgeable about "technical analysis" and, on October 9, 2009, as part of preparing its expert reports, several more on "technical analysis" and/or "software development." See Russell Decl., ¶ 34 (explaining timing of witness disclosures). With only weeks left in discovery, Defendants noticed four, multi-topic Rule 30(b)(6) and 21 individual depositions (28-31 depositions total, having taken 39 in two years). Oracle objected to the timing and volume of the notices. Judge Laporte found that as to most of these, Defendants had simply waited too long; as to the remaining few, Oracle had "a valid reason 15
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

for the lateness" of the disclosures, and in general "[t]he number of depositions is burdensome given the limited time remaining for discovery." Id., ¶ 35-38 & Ex. Y (11/17/09 Disc. Conf. Tr.) at 6:20-21; Dkt. 553 (Order Following Disc. Conf.) at ¶ 2. She allocated 25 total hours for all remaining depositions. Pursuant to that Order, Oracle provided "more detailed information as to the relevant substance of the witnesses' knowledge (e.g., that Plaintiffs' experts are relying on)." Dkt. 553; Russell Decl., ¶ 38. Defendants then deposed the six witnesses they now ask the Court to exclude. Russell Decl., ¶ 38; MIL at 12:26-27; E.g., Dkt. 701-7 (Ackermann 12/4/09 depo testimony re code compare elicited without objection from Defendants). See Minority TV Project Inc., 649 F. Supp. 2d at 1032 (failure to disclose witness is harmless when witness is identified in Rule 26(a)(1) disclosures and made available for deposition). Second, Defendants did not object during deposition to, and affirmatively designated for trial, nearly identical testimony from their own Rule 30(b)(6) and individual witnesses. For example, they cite former SAP TN employee Keith Shankle's testimony that based on his "13 years of experience" with the J.D. Edwards software, by looking at a download sheet he can "know that all the system codes are involved." Russell Decl., ¶ 39-40 & Ex. Z (Shankle Depo.) at 10:5-10:9; 141:9-143:21, Ex. AA (Depo. Ex. 1446). Defendants also designated Matthew Bowden, a PeopleSoft developer and former SAP TN employee, who testified about modifications of COBOLs based on "my formed opinion" about the industry "common practice," including the "open source" nature of COBOL. Id., ¶ 41 & Ex. BB (Bowden Depo.) at 102:12-106:21. Third, even if disclosed as experts, as employees whose duties do not include regular testimony, these witnesses would not have been required to provide a report. See Fed. R. Civ. P. 26(a)(2)(B). Thus, Defendants would be in no different position. Fourth, again, Defendants made no objection at summary judgment to substantial portions of the testimony they now challenge. (E.g., Exhibits C-K to the Ackermann Declaration (Dkt. 650), which contain the actual results of the code comparison discussed in ¶¶ 17-26.) Their afterthought objections now are untimely and meritless. The objections that Defendants did make, the Court overruled. Dkt. 762 (MSJ Order), at 25:13. The same result should follow here. 16
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

B.

The Court Should Allow John Ritchie's Testimony

Oracle deposed SAP TN former employee Ritchie on December 2, 2009. Ritchie programmed Defendants' automated web-scraping program, Titan. He is the only witness to admit observing Titan crash Oracle's customer support websites. Defendants claim the testimony their own counsel elicited from their own former employee should be excluded because Oracle did not designate him as an expert. Ritchie also gave the disputed testimony three weeks after Oracle served its expert disclosures. Besides that, the motion fails for two more reasons. First, the challenged testimony is factual. E.g., Dkt. 657-27 (Ex. 27 to Alinder Decl. in Support of Oracle's Mtn. for Partial SJ) at 34:5-7 ("I could see how many times the servers would crash by how many times my program had to break the connection and then reestablish it"). Ritchie responded to SAP's query how he knew Oracle's website crashed (his factual observation) by referring to his 13 years of experience as web developer. Second, even if it is lay opinion, the testimony (which Defendants elicited) differs in no material respect from the Shankle, Bowden and other former employee testimony Defendants have designated. See, e.g., In re: Perry H. Koplik, 382 B.R. at 602. C. Pinto Properly Consulted Neuendorf to Assist in Responding to Garmus

Defendants also improperly seek to preclude Paul Pinto from working with a consultant to test "rebuttal" evidence by Defendants' expert David Garmus. Defendants' experts have similarly used assistants in their work. Russell Decl., ¶ 43. The Parties agreed to delay expert depositions to give Oracle's experts time to consider and respond to Defendants' rebuttal for just such a purpose. Now, Defendants seek to silence the response they received.9 In any event, Pinto can rely on Neuendorf's assistance ­ work that Pinto supervised and directed and then used to support his response to Garmus' new analysis. See id., ¶ 42 & Ex. CC (Pinto Depo.) at 53:11-57:13, 61:10-63:2, 67:6-69:24, 98:12-22, 100:4-102:20 & 103:22-104:23. Oracle produced all materials related to Neuendorf's work prior to Pinto's deposition. Defendants deposed Pinto on them. See id. Defendants complain Neuendorf did not provide a report or Oracle moved to exclude Garmus' analysis because he admits it is not rebuttal or relevant. See Oracle's Mtn. to Exclude Garmus Testimony at 19:15-20:22. That motion may moot this one. 17
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)
9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

deposition, but as a consultant to Pinto he was not required to. And, Defendants did not offer reports or depositions for individuals who assisted their own experts. See id., ¶ 43. Defendants can't have it both ways. VII. DEFENDANTS' MOTION IN LIMINE NO. 6: DEFENDANTS' USE OF THE ATTORNEY-CLIENT PRIVILEGE Defendants' motion in limine No. 6 seeks to "preclude Plaintiffs from offering any deposition testimony wherein Defendants' witnesses invoke the attorney-client privilege in response to a comment." MIL at 15. The Court should deny the motion for three reasons. First, it is too vague to grant. Defendants want to exclude "much of this testimony," MIL at 15, but give no example or citation. If it is more than the handful of situations where Defendants' attorneys instructed the witness not to answer and the witness completely refused (to which Oracle does not object), their motion gives no notice of what that may be. Second, both sides designated testimony where an attorney instructed the witness not to reveal privileged information and the witness gave a limited answer, presumably excluding such information. See, e.g., Russell Decl., ¶¶ 44-45 & Ex. DD (Faye Depo.) at 76:24-77:9, Ex. EE (A. Nelson Depo.) at 354:8-355:3. When a witness, instructed not to reveal privileged information in an answer, then answers, altering the record to remove the instruction is deceptive. It changes the witness's testimony by eliminating the express limitation. Besides, Defendants prefaced their own deposition designations by stating they had excluded privilege instructions only when the witness refused to answer at all. Dkt. 740 (Defs' Trial Depo. Designations) at 2:8-13. To the extent they take a contrary position in their motion in limine, the Court should deny it. Third, Defendants' cases hold it improper to draw an adverse opinion from a privilege assertion unless the alleged infringer relies on an advice of counsel defense. MIL at 16; THK America, Inc. v. NKS, Ltd., 917 F. Supp. 563, 567 (N.D. Ill. 1996) ("where a potential infringer charged with willful infringement defends against the charge by citing its reliance on the advice of counsel, it is clear that such advice should be produced or a negative inference concerning those opinions should be drawn"). Defendants' want to hide their privilege invocation from the jury while they simultaneously contend ­ and, just as harmfully, imply ­ they acted on advice of 18
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

counsel.10 This unfair and inconsistent position is further reason to grant Oracle's motion to exclude Defendants' advice of counsel evidence or, at a minimum, to deny this one. VIII. DEFENDANTS' MOTION IN LIMINE NO. 7: DOJ AND FBI INVESTIGATIONS The Court should grant in part and deny in part Defendants' motion to exclude evidence of DOJ and FBI investigations. The Court should grant the motion as to the recently publicized investigation of Oracle relating to pricing of government contracts, which is not even remotely related to the facts of this case and would "improperly influence" the jury. MIL at 18:1-5. Oracle does not oppose Defendants' motion, and does not intend to offer affirmative evidence, as to the DOJ's ongoing investigation of Defendants relating to the facts of this case. However, if SAP contends, through argument, questioning or evidence, that its post-litigation actions ­ including the alleged shut down of SAP TN ­ were motivated by responsible, good-faith or selfless intent, Oracle should be allowed to introduce evidence of the investigations as rebuttal. SAP's litigation strategy and likely trial evidence open the door. For more than three years, SAP has tried to shift liability in this case (much of which SAP has conceded) to SAP TN. See, e.g., Dkt. 36 (07/02/2007 Answer) at 2:16:24 ("Oracle's allegation that TN's downloading conduct ... involved SAP AG or SAP America is simply untrue."); Russell Decl., ¶ 4 & Ex. A (8/5/2010 SAP Press Release) ("SAP was not involved in TomorrowNow's service operations and did not engage in any of the copying or downloading alleged in Oracle's complaint."); Dkt. 727 (Defs' Trial Brief) at 2:15 ("This case is about TomorrowNow's conduct.") But Oracle alleges that SAP, not just SAP TN, intended to steal Oracle's software. Oracle alleges SAP approved and supervised a continuing course of post-litigation infringement in 2007 and 2008 after assigning an SAP executive to seize day-to-day control over SAP TN.11
10

Oracle has moved in limine to preclude Defendants from introducing express or implied advice of counsel evidence. Dkt. 737 (Oracle's MILs) at 3-9. 11 SAP pursued a three-year PR campaign touting its "responsible" actions. Russell Decl., ¶ 4, 46 & Ex. FF (7/3/2007 SAP Press Release) ("SAP ... has instituted changes in TomorrowNow's operational management," including appointing "SAP America [COO] and former [CFO] Mark White as TomorrowNow's Executive Chairman to manage TomorrowNow operations, including compliance programs."), Ex. A (8/5/2010 SAP Press Release) ("We acknowledged three years ago that TomorrowNow made mistakes, and we took direct action to address Oracle's concerns, including shutting down the company nearly two years ago."); Dkt. 727 (Defs' Trial Brief) at 1:13-17 (closed SAP TN "after it could assure that TomorrowNow's customers were protected"). 19
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

To try to deflect evidence of its wrongful intent and bad faith, SAP has designated evidence for trial alleging good conduct motivated by good intent. See e.g., Russell Decl., ¶ 47-48 & Ex. GG (White Depo.) at 6:15-9:16 (SAP appointed White to take "disciplinary actions" and to "implement the company's directive."), and Ex. HH (White Depo.) at 131:15-134:12 (SAP terminated SAP TN CEO Andrew Nelson for his "failure as a manager, as an executive for all the problems that happened on his watch."). SAP will argue (contrary to the evidence) that it was ignorant of SAP TN's intellectual property abuse until this lawsuit, then immediately took full responsibility, cleaned house, laid down the law, and kept violating Oracle's rights (well into 2008) only as necessary to "assure that customers were protected." Dkt. 437 (8/26/09 Answer) at ¶ 13; see also Dkt. 727 (Defs' Trial Brief) at 1:13-17. SAP thus asserts that its post-litigation state of mind is "of consequence to the determination of this case." MIL at 17:12-17; Fed. R. Evid. 401. The DOJ investigation rebuts SAP's evidence because, as SAP acknowledges, a DOJ investigation relates to determining a company's state of mind. Russell Decl., ¶ 48 & Ex. HH (White Depo.) at 220:9-221:4 (Customers left SAP TN "to get out from under a company that was the target of litigation and a Department of Justice investigation."). Thus, the investigation makes it "more probable ... than it would be without the evidence" that SAP finally started taking action when it did to appease the DOJ ­ as opposed to SAP's story that it simply did not know for more than two years that SAP TN used local copies of Oracle's software. Fed. R. Evid. 401. Evidence of the investigation also makes it more probable that SAP acted to "protect" itself, not customers. In sum, Defendants have opened the door to evidence of the DOJ investigation, which makes it more probable that SAP's postlitigation actions were motivated by fear of indictment, not an innocent desire to do the right thing. Compare Russell Decl., ¶ 48 & Ex. HH (White Depo.) at 187:7-188:5 (White met with the DOJ in "September or October of 2007.") with id. at 52:2-9 & 131:15-134:12 (SAP forced Andrew Nelson to resign in November 2007.). SAP wants to have the evidence both ways. Defendants allege in their Trial Brief and in the Joint Pretrial Statement that a prior DOJ action against Oracle, which they do not seek to exclude, gave customers "good reasons to consider alternatives" back in 2004. Dkt. 727 (Defs' 20
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Trial Brief) at 3:14-4:9; Dkt. 745 (Joint Pretrial Stmt.) at ¶ 381. If the investigation of Oracle explains customer behavior, then the investigation of SAP explains SAP's behavior. The Court should deny the motion as to the DOJ investigation against SAP. IX. DEFENDANTS' MOTION IN LIMINE NO. 8: RIMINI STREET The Court should either deny Defendants' motion to prevent Oracle from introducing evidence related to Rimini Street, or order that neither party be permitted to do so. Those are the only options fair to both sides. Oracle has no desire to present evidence related to Rimini Street's operations, or the "numerous alternatives" and "multiple other third party support providers" Defendants allude to. MIL at 20:1-2. Nor does Oracle prefer to introduce evidence of other litigation involving Rimini Street. See Dkt. 737 (Oracle's MILs) at 23-24. This case is about Defendants' theft of Oracle's intellectual property, not the services provided by alleged "numerous alternatives." Defendants disagree. They contend the availability of Rimini Street support services "is relevant to causation of damages, i.e. whether, but for TN, customers would not have cancelled their support agreements with Plaintiffs." MIL at 20:3-4. Defendants have asserted this position for more than two years. Russell Decl., ¶ 48, 14 & Ex. II (1/28/08 Defs' Mtn. to Compel) at 6 (Oracle's position re lost customers "puts into issue the extent to which Oracle lost business to other third-party service providers and derivatively how those companies were doing business.") (emphasis added), Ex. J (Clark Report) at 116 ("[W]hen viewed as a list and stripped down to the bare realities, it is clear that TomorrowNow's actions were not very different from the actions many third-party support vendors offer.") If the Court allows Defendants to introduce evidence of Rimini Street's services to defend on causation, Oracle should be allowed to respond. "There is precedent for finding causation despite an alternative source of supply if that source is an infringer." Micro Motion, Inc. v. v. Kane Steel Co., Inc., 894 F.2d 1318, 1322 (Fed. Cir. 1990) (emphasis added). It would be unfair to allow Defendants to introduce evidence that Rimini Street provided third party support but bar Oracle from introducing rebuttal evidence that Rimini Street was an infringer. That would distort the fact-finding process by giving the jury only one side of the story. 21
PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE, CASE NO. 07-CV-01658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Defendants' purported concern over a "trial within a trial" is unpersuasive for several reasons. First, Defendants offer no support for their contention that allowing Oracle to rebut their causation defense would "require a substantial amount of additional evidence, much of it highly technical, c