Oracle Corporation et al v. SAP AG et al

Filing 833

Memorandum in Opposition to 771 Plaintiffs' Motion No. 5 to Exclude Expert Testimony of Stephen Gray filed by SAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Proposed Order)(Froyd, Jane) (Filed on 9/9/2010) Modified on 9/10/2010 (vlk, COURT STAFF).

Oracle Corporation et al v. SAP AG et al

Doc. 833 Att. 1

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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. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION ORACLE USA, INC., et al., Plaintiffs, v. SAP AG, et al., Defendants. Case No. 07-CV-1658 PJH (EDL) [PROPOSED] ORDER DENYING PLAINTIFFS' MOTION NO. 5: TO EXCLUDE EXPERT TESTIMONY OF STEPHEN GRAY

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[PROPOSED] ORDER DENYING PLS.' MOT. NO. 5 TO EXCLUDE EXPERT TESTIMONY OF STEPHEN GRAY Case No. 07-CV-1658 PJH (EDL)

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Having considered Plaintiffs' Motion No. 5: To Exclude Testimony of Defendants' Expert Stephen Gray, the Defendants' Opposition to Plaintiffs' Motion No. 5: To Exclude Testimony of Defendants' Expert Stephen Gray, the memoranda and declarations in support, and exhibits attached thereto: IT IS HEREBY ORDERED THAT: Plaintiffs' motion is DENIED. DISCUSSION Plaintiffs seek to exclude the proffered expert opinion of Stephen Gray from trial. Rule 702 permits experts qualified by "knowledge, experience, skill, expertise, training, or education" to testify "in the form of an opinion or otherwise" based on "scientific, technical, or other specialized knowledge" if that knowledge will "assist the trier of fact to understand the evidence or to determine a fact in issue." See Fed. R. Evid. 702. The trial court acts as a "gatekeeper" to ensure that expert testimony is "reliable" and "relevant to the task at hand." Daubert v. Merrell Dow Pharms, Inc., 509 U.S. 579, 589-90, 597 (1993); see also Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147-48 (1999) (holding that the gate keeping function created by Daubert applies to evaluating technical experts). Rule 702 is applied consistent with "the `liberal thrust' of the Federal Rules and their `general approach of relaxing the traditional barriers to `opinion testimony.'" See Daubert, 509 U.S. at 588; see also Fed. R. Evid. 702 Advisory Committee's notes (confirming that "rejection of expert testimony is the exception rather than the rule"). To determine the admissibility of expert opinions, the Court must apply a three-part test: (1) Is the proffered expert qualified to testify in the area on which he is opining based on his knowledge, skill, experience, training, or education (qualification requirement)?; (2) Is the proffered expert testimony based on reliable scientific or specialized knowledge that is reliably applied to the facts of this case (reliability requirement)?; and (3) Will the proffered expert testimony assist the trier of fact in understanding the evidence or determining a fact in issue (relevancy requirement)? See Fed. R. Evid. 702; Daubert, 509 U.S. at 592-93. The scope of testimony for rebuttal experts is narrow compared to that of initial experts. See Fed. R. Civ. P. 26(a)(2)(C). Rebuttal experts are intended to provide context and insight into the opposing experts' opinions. See Scientific Components Corp. v. Sirenza Microdevices, Inc.,
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No. 03 CV 1851 (NGG) (RML), 2008 WL 4911440, at *2 (E.D.N.Y. Nov. 13, 2008) (noting that rebuttal experts should provide background information to illustrate their opinions related to the initial expert's analysis); Crowley v. Chait, 322 F. Supp. 2d 530, 551 (D.N.J. 2004) ("Rebuttal evidence is properly admissible when it will `explain, repel, counteract or disprove the evidence of the adverse party.'") (emphasis added). Rebuttal experts also respond to the conclusions drawn by the opposing party's expert. See, e.g., Long Term Capital Holdings v. U.S., No. 3:01 CV 1290 (JBA), 2003 WL 21518555, at *2 (D. Conn. May 15, 2003). Put another way, the purpose of the testimony of a rebuttal expert witness is to "poke holes" in the theories of the opposing party's expert. See, e.g., Minebea Co., Ltd. v. Papst, No. Civ. A. 97-0590 (PLF), 2005 WL 1459704, at *6 (D.D.C. June 21, 2004). Additionally, the Court must evaluate the proposed evidence under Rule 403, which requires that evidence be excluded where its probative value is substantially outweighed by the risk of unfair prejudice, confusion of the issues, and potential to mislead to the jury. See Fed. R. Evid. 403; Daubert, 409 U.S. at 595. Moreover, Rule 26(a)(2)(B) of the Federal Rules of Civil Procedure governs the disclosure of expert reports. Rule 26(a)(2)(B)(ii) requires an expert to disclose all of the sources the expert considered in performing his analysis, which refers to all documents provided to an expert for his review, not just those documents on which he relied to conduct his analysis. See, e.g., Fidelity Nat'l Title Ins. Co. of N.Y. v. Intercounty Nat'l Title Ins. Co., 412 F.3d 745, 751 (7th Cir. 2005) ("A testifying expert must disclose and therefore retain whatever materials are given him to review in preparing his testimony, even if in the end he does not rely on them in formulating his expert opinion, because such materials often contain effective ammunition for cross-examination."). Rule 702: Qualifications. Here, with regard to qualifications, Gray has over 35 years experience working in the computer software industry. This includes acting as Chief Technology Officer and holding senior management positions at several technology companies; background in systems and software architecture, design, and development; conducting source code comparisons to determine protected expression, including through use of the abstractionHUI-131153 [PROPOSED] ORDER DENYING PLS.' MOT. NO. 5 TO EXCLUDE EXPERT TESTIMONY OF STEPHEN GRAY Case No. 07-CV-1658 PJH (EDL)

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filtration-comparison method; and testifying in multiple copyright cases. Given this experience, the Court finds that Gray is qualified to provide testimony evaluating and rebutting the analysis performed by Plaintiff's technical expert, Kevin Mandia. Rule 702: Reliability and Relevancy. Moreover, with regard to reliability and relevancy, Gray is properly rebutting the testimony offered by Mandia by noting the gaps he perceives in Mandia's analysis and pointing out steps he thinks Mandia should have taken as part of his analysis of TomorrowNow's business model. This is a proper subject for rebuttal expert testimony. The Court specifically finds that Appendix 4 is a reliable and relevant form of rebuttal expert testimony. Appendix 4 is a spreadsheet Gray created to assist the jury in understanding which of TomorrowNow's 357 customers may or may not be implicated by the allegations contained in Mandia's report. Thus, Appendix 4 breaks down many of the conclusions Mandia drew in his initial report, gives context to those conclusions, notes the portions of Mandia's analysis where Gray has opined that the analysis is lacking, and specifically contradicts Section X of Mandia's report. The Court also finds that Plaintiffs' criticisms of Gray's opinions where he notes the steps Mandia did not take are without merit. It is typical for rebuttal expert testimony to note the flaws in the initial expert's analysis. Moreover, Gray's identification of the flaws he perceives in Mandia's analysis will assist the jury in evaluating the weight and reliability to be given to Mandia's opinions. Expertise is required for this purpose to understand the enormous quantity of technical evidence that will need to be considered in order to render a verdict in this lawsuit. This Court further finds no evidence that Gray offers his opinion on the parties' burden of proof. Finally, the Court finds that Gray did not offer his own legal opinions and conclusions regarding Plaintiffs' licenses and terms of use or on the propriety of TomorrowNow's business model. Any commentary and opinions by Gray regarding licensing, terms of use, and the propriety of TomorrowNow's business model were made in the context of his criticisms of Mandia's analysis and conclusions. This is proper rebuttal expert testimony.
[PROPOSED] ORDER DENYING PLS.' MOT. NO. 5 TO EXCLUDE EXPERT TESTIMONY OF STEPHEN GRAY Case No. 07-CV-1658 PJH (EDL)

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Rule 403: Probative Value Outweighs Potential for Unfair Prejudice, Jury Confusion, and Misleading. Gray's opinions are admissible under Rule 403. The Court finds that they do have probative value because they rebut many of the conclusions made by Mandia. Additionally, there is nothing unfairly prejudicial or misleading in allowing Gray to opine on Mandia's methodology. Rule 26(a)(2)(B): Proper Disclosure of Expert Reports. The Court finds Gray properly disclosed his rebuttal opinions in his expert report and exhibits. Based on the report and his deposition testimony, Gray provided Plaintiffs with a list of all the documents and sources he was provided by Defendants and that he generally considered for drafting his report and rendering his conclusions. CONCLUSION For the reasons stated above, pursuant to Rules 702 and 403 of the Federal Rules of Evidence and Rule 26 of the Federal Rules of Civil Procedure, Plaintiffs' Motion is denied and the Court will permit Gray to testify and offer opinions in rebuttal to Mandia, including but not limited to, the following topics: (1) rebutting Mandia's testimony regarding TomorrowNow's business model through use of Appendix 4; (2) testifying regarding the steps Mandia did not take with regard to his analysis of TomorrowNow's business model; and (3) criticizing Mandia's analysis and conclusions regarding the propriety of TomorrowNow's business model.

IT IS SO ORDERED.

DATED: ________________________

By: Hon. Phyllis J. Hamilton

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[PROPOSED] ORDER DENYING PLS.' MOT. NO. 5 TO EXCLUDE EXPERT TESTIMONY OF STEPHEN GRAY Case No. 07-CV-1658 PJH (EDL)