France Telecom S.A. v. Marvell Semiconductor, Inc.

Filing 206

TENTATIVE RULING ON PARTIES' MOTIONS IN LIMINE AND DEFENDANT'S DAUBERT MOTION re 190 MOTION in Limine, 184 MOTION in Limine, and 187 MOTION in Limine. Signed by Judge William H. Orrick on 08/26/2014. (jmdS, COURT STAFF) (Filed on 8/26/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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FRANCE TELECOM S.A.,

Case No. 12-cv-04967-WHO

Plaintiff,
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v.
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MARVELL SEMICONDUCTOR INC.,
Defendant.

TENTATIVE RULING ON PARTIES’
MOTIONS IN LIMINE AND
DEFENDANT’S DAUBERT MOTION
Re: Dkt. Nos. 184, 187, 190

United States District Court
Northern District of California

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The Court has the following tentative views concerning the motions in limine and Daubert

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motion that will be discussed at the Pretrial Conference this afternoon.

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I. PLAINTIFF FRANCE TELECOM’S MOTIONS IN LIMINE

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1. Preclude Marvell from referring to claim construction proceedings, order and any
other interlocutory orders
GRANTED IN PART. Claim construction is a question of law and exclusively within the

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province of the Court. Markman v. Westview Instruments, Inc., 517 U.S. 370, 372 (1996).
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Reference to the claim construction order, including the Court’s reasoning, is precluded, except for
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references to the actual constructions. To the extent that France Telecom now advances
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infringement contentions inconsistent with admissions made during the claim construction
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arguments, the admissions may be used by Marvell.
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Marvell argues that the Court’s reasoning informs the willfulness inquiry. Introduction of
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the Court’s reasoning to support the reasonableness of Marvell’s actions and its subjective belief
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that it did not infringe would be more prejudicial than probative and will be excluded.
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Marvell states that it does not intend to refer to the Court’s damages summary judgment
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order “unless France Telecom’s positions at trial contradict the terms of that order.”

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2. Preclude Marvell’s damages expert from arguing or offering evidence that
“running royalty” damages may be “capped” or that the lump sum royalty is

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€819,515
DENIED. Georgia-Pacific factor #11 is “[t]he extent to which the infringer used the
invention and any evidence probative of the value of that use.” Accordingly, Marvell is free to
argue, based on actual use of the patented method (i.e., the “book of wisdom”), that a running

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royalty would not exceed a certain amount. See, e.g., Lucent Technologies, Inc. v. Gateway, Inc.,
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580 F.3d 1301, 1333-34 (Fed. Cir. 2009) (“Consideration of evidence of usage after infringement

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started can, under appropriate circumstances, be helpful to the jury and the court in assessing
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whether a royalty is reasonable. . . . This quantitative information, assuming it meets admissibility
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requirements, ought to be given its proper weight, as determined by the circumstances of each
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case.”). But this is only one of several relevant factors in the reasonable royalty inquiry; France
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Telecom will have the opportunity to attack this opinion at trial and to emphasize other factors

United States District Court
Northern District of California

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3. Limit Marvell’s argument or evidence that the royalty amount is €63,111 or
€349,750

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DENIED. These “alternative” damages opinions consider only those Marvell sales

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realized after the filing of the Complaint in this case and are related to Marvell’s request that its

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laches defense be presented to the jury for a factual finding and an advisory verdict. Laches is a

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question for the Court, but I have discretion to present the issue to the jury for an advisory verdict.

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Fed. R. Civ. P. 39(c). In this case, there appear to be overlapping issues of Marvell’s willfulness

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and the laches defense, including when France Telecom first learned of Marvell’s alleged

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infringement and France Telecom’s alleged delay in filing suit. Presenting the issue to the jury for

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an advisory verdict, rather than conducting two separate trials, will conserve judicial resources.

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Accordingly, Marvell will be allowed to present evidence and argument regarding its laches

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defense to the jury. I do not believe presentation of Ms. Davis’s alternative “laches damages”

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theories will unduly prejudice the jury. I will consider an appropriate limiting instruction to

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address any possible prejudice resulting from evidence on this issue.

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4. Preclude Marvell from offering any argument or evidence regarding the impact of
purported non-infringing alternatives on the quantification of damages
DENIED. France Telecom contends that Marvell’s damages expert, Ms. Davis, did not

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adequately disclose her opinions or conclusions regarding the impact of purported non-infringing
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alternatives on the quantification of damages in her expert report. Ms. Davis did not disclose the

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specific monetary impact of purported non-infringing alternative on the damages quantification,

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but she opined that purported alternatives “could have been implemented at little cost and

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engineering time for MSI.” Dkt. No. 199-4 at 40. She cites a discussion with technical expert Dr.

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Min in support for this contention. She may offer testimony consistent with that opinion. France

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Telecom can cross-examine her regarding her basis for this opinion and her lack of specificity.

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The alleged deficiencies in Ms. Davis’s opinion are a matter of weight, not admissibility.

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France Telecom also contends that Marvell’s technical expert, Professor Min, is
unqualified to testify regarding the relative values of various purported alternatives to the patented

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technology. France Telecom contends that “Prof. Min has made no efforts to test and measure the

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United States District Court
Northern District of California

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relative values of these technologies; rather, his assertions of value appear to be based solely on

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unsubstantiated personal opinions.” France Telecom motions in limine at 14 (emphasis in

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original). But Federal Rule of Evidence does not require that Professor Min personally “test and

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measure” the value of the purported alternatives to the patented technology in order to offer his

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expert opinion. France Telecom will have the opportunity to question Professor Min regarding the

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bases for his opinions. As with Ms. Davis, the alleged deficiencies in Professor Min’s opinion are

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a matter of weight, not admissibility.

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5. Preclude Marvell from arguing or offering evidence that it did not ship accused
products to the United States
DENIED IN PART. France Telecom asserts that “Marvell appears to contend that none of

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the accused products sold by it were shipped to the United States because, according to Marvell,
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the accused products allegedly were stored in so-called “foreign trade zones” in Texas before
allegedly then being shipped to Monterrey, Mexico, for assembly into RIM handsets.” Dkt. No.

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184 at 15. Marvell states that it intends to present evidence that the accused products are imported
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into the foreign trade zones by Marvell’s customers, not Marvell itself. Marvell also intends to
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present evidence that its accused chips are imported into foreign trade zones for the express
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purpose of exporting them for assembly into finished devices, meaning that the accused chips
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cannot be used in the United States (or, presumably, the foreign trade zone) to perform the steps of
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the claimed method, and therefore do not infringe. Marvell is free to introduce such evidence and

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the motion in limine is denied to the extent it seeks to preclude that evidence.
However, if Marvell did in fact perform the steps of the claimed method in the foreign

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trade zones, determining whether the foreign trade zones are “within the United States” will be

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central to the infringement question. Whether the foreign trade zones are “within the United

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States” is a legal question for the Court. At the pretrial conference, the Court will discuss with the

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parties to what extent the Court needs to decide whether foreign trade zones are within the United

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States for purposes of patent infringement.

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6. Preclude Marvell from making any reference to purported co-inventors of the
‘747 patent

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DENIED. Marvell contends that it has admissible evidence bearing on the inventorship of the

United States District Court
Northern District of California

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‘747 patent. The evidence that Marvell references is sufficient to present to the jury. France

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Telecom will have the opportunity to attack this evidence at trial.
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II. DEFENDANT MARVELL’S MOTIONS IN LIMINE

1. Preclude France Telecom from presenting testimony, argument, or evidence on
certain subjects not contained in Dr. Mitzenmacher’s expert reports

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a. Doctrine of equivalents

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DENIED. France Telecom contends that “although Dr. Mitzenmacher did not purport to

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apply a legal standard of equivalents to the technical facts he observed, the facts and opinions he

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did express in his reports are more than sufficient to support a finding of infringement under the

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doctrine of equivalents.” France Telecom opposition at 2-3. France Telecom will have the chance

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to see whether the jury agrees, but Professor Mitzenmacher will be limited to presenting opinions

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disclosed in his report.1

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France Telecom points to opinions Dr. Mitzenmacher expressed in paragraphs 92 and 95 of his
expert report, where he compared the accused processors to the ’747 patent. Paragraphs 92 and 95
appear to relate only to the first limitation of Claim 1; they do not address the second limitation of
Claim 2. France Telecom also points to Dr. Mitzenmacher’s opinion that the 3GPP Standard
“includes a Turbo coding error correction scheme that is essentially the same” as that described in
the ’747 patent. It remains to be seen whether the opinions expressed in Dr. Mitzenmacher’s
report, along with any other evidence France Telecom presents, are enough to prove infringement
by the doctrine of equivalents.
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b. Indirect infringement
DENIED. Marvel argues that “Dr. Mitzenmacher put forth no opinion in his expert reports

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of any actions of Marvell that induced others to infringe (e.g., providing operating instructions,
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user manuals, product guides, or even advertising 3GPP data functionality).” France Telecom
counters that there is “adequate circumstantial and direct evidence exists to show that Marvell not

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only designed the accused products to practice the claimed invention, but also instructed its
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customers to use the accused products in an infringing way,” and has induced infringement.
Specifically, France Telecom refers to “product guides, advertising, source code, and test

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reports—as well as testimony by Marvell witnesses—showing that Marvell designed its 3GPP
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standards-compliant turbo encoder and decoder and aimed them for use with 3GPP-compliant
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networks in the United States.”

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United States District Court
Northern District of California

Marvell argues that France Telecom should be barred from offering evidence regarding
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contributory infringement because “Dr. Mitzenmacher has not advanced any evidence regarding
either substantial non-infringing uses or [Marvell’s] knowledge of the infringement.” France

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Telecom counters that Dr. Mitzenmacher stated that use of the accused products necessarily
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infringes, meaning that there are no non-infringing uses. France Telecom also states that
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Marvell’s knowledge will be evidence in “Marvell documents and testimony” and that “Dr.

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Mitzenmacher can also testify as to the tautology that the Marvell design documents and
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testimony he has reviewed were known to Marvell.”

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Indirect infringement can be proven by circumstantial evidence. See, e.g., nCube Corp. v.
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Seachange Int’l, Inc., 436 F.3d 1317, 1324-25 (Fed. Cir. 2006) (“The record contains sufficient

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circumstantial evidence to support the jury’s verdict of induced infringement. This evidence
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included SeaChange’s documents, as well as the testimony of SeaChange’s vice-president of
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engineering, which showed that the SeaChange system operated with a customer’s own DNCS
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component. The record shows that SeaChange sold ITV systems for use with Scientific–Atlanta
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equipment with the intent that customers would use them to perform the patented method, thus
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supporting the jury’s incorporation of these systems in its verdict of literal infringement.”).

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France Telecom will be afforded to opportunity to present Dr. Mitzenmacher’s testimony,
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consistent with his report, and any other admissible evidence regarding indirect infringement.
c. Third party use
DENIED. Dr. Mitzenmacher may offer his opinions, consistent with his report, regarding
third-party use. Marvell can cross-examine him on the bases for his opinions.
d. Coverage of 3GPP standard
DENIED. Dr. Mitzenmacher may offer his opinions, consistent with his report, that claim

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1 if the ‘747 patent covers claim the 3GPP standard. On cross-examination, Marvell can attack the

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purported lack of detail in Dr. Mitzenmacher’s report on this issue.

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2. Preclude France Telecom from presenting testimony and arguing that the mere
importation of Marvell 3G chips by Marvell into the United States can be an act
of direct infringement without showing that those chips were in fact used to
perform the claimed method steps

United States District Court
Northern District of California

GRANTED. France Telecom argues that Quanta Computer, Inc. v. LG Electronics, Inc.,
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553 U.S. 617 (2008) forecloses Marvell’s position that a method claim can only be infringed if
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each of the claimed steps is performed and that sales, offers to sell, or importation do not infringe
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method claims. But Quanta involved application of the patent exhaustion doctrine; it did not hold
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that method claims can be infringed by offering to sell, selling, or importing a product in which a
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claimed method is embodied. Indeed, following Quanta, the Federal Circuit and district courts
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have repeatedly held that a person must practice all steps of the claimed method to infringe a
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method claim. See, e.g., Meyer Intellectual Properties Ltd. v. Bodum, Inc., 690 F.3d 1354, 1366
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(Fed. Cir. 2012) (“Where, as here, the asserted patent claims are method claims, the sale of a

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product, without more, does not infringe the patent. Instead, direct infringement of a method claim
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requires a showing that every step of the claimed method has been practiced.”); Finjan, Inc. v.
Secure Computing Corp., 626 F.3d 1197, 1206 (Fed. Cir. 2010) (“To infringe a method claim, a
person must have practiced all steps of the claimed method.”); Lucent Technologies, Inc. v.

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Gateway, Inc., 580 F.3d 1301, 1317 (Fed. Cir. 2009) (same); Isis Pharmaceuticals, Inc. v. Santaris
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Pharma A/S Corp., 2014 WL 2531973, at *4 (S.D. Cal. 2014) (noting “clear precedent that a

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method patent may only be infringed when each of its steps are performed within the United
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States”); Mirror Worlds, LLC v. Apple, Inc., 784 F. Supp. 2d 703, 713 (E.D. Tex. 2011) (“the sale

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or offer for sale is insufficient to prove direct infringement of a method claim”) (“reliance on

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Apple’s sales of computers that contain the accused Mac OS X 10.4–6 software does not prove

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direct infringement”) aff’d, 692 F.3d 1351 (Fed. Cir. 2012).

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3. Preclude France Telecom from presenting testimony, argument, or evidence
concerning sales by nonparty Marvell Asia Pte. LTD. (“MAPL”)
GRANTED. I previously ruled that “Marvell is not liable for the actions of a third party,
nor is it liable for infringement that occurred abroad.” Id. at 23. France Telecom claims that it

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does not want to present testimony regarding Marvell Asia’s sales, but that it is not clear whether
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sales belong to Marvell or MAPL. Marvell produced a spreadsheet showing sales by itself and
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MAPL. France Telecom contends that the “spreadsheet purports to characterize sales transactions
and does so in a manner that is sharply disputed.” France Telecom opp. at 10. France Telecom

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United States District Court
Northern District of California

asked for the documents underlying the spreadsheet on August 1, 2014, per Fed. R. Evid. 1006,
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which provides that:
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The proponent may use a summary, chart, or calculation to prove the
content of voluminous writings, recordings, or photographs that
cannot be conveniently examined in court. The proponent must
make the originals or duplicates available for examination or
copying, or both, by other parties at a reasonable time and place.
And the court may order the proponent to produce them in court.

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Rule 1006 does not apply here because the spreadsheet was not prepared for trial; the spreadsheet

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is the underlying business record. See, e.g., U-Haul Intern., Inc. v. Lumbermens Mut. Cas. Co.,

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576 F.3d 1040, 1045-46 (9th Cir. 2009) (“the summaries themselves constituted the business

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records. They were the writings at issue, not summaries of other evidence. Thus, Rule 1006 does

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not apply.”) (emphasis in original); United States v. Draiman, 784 F.2d 248, 256 n.6 (7th Cir.

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1986) (“Rule 1006 contemplates the admission of a summary, prepared for trial, as secondary

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evidence of ‘voluminous writings, recordings or photographs’ that could not conveniently be

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introduced at trial. The entries on a business record, however, are considered the original entries,

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and therefore the business record is admissible without regard to the availability of the underlying

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documents.”) (citations omitted).

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Fact discovery and expert disclosures are closed. It is accordingly too late to introduce
new damage theories.
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4. Preclude France Telecom from presenting testimony, argument, and evidence of
conception, reduction to practice, and inventorship of the alleged inventions

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DENIED. France Telecom was arguably prohibited from requiring TDF to provide the

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requested documents to Marvell, and nothing prevented Marvell from started the Hague process

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sooner than it did. However, as noted above, Marvell will be allowed to present the evidence that

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it has regarding inventorship of the ‘747 patent.

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5. Preclude France Telecom from presenting testimony, argument, or evidence using
the term “turbo codes” as a proxy for the claimed invention
DENIED. At trial, Marvell will have the chance to present evidence that turbo codes are

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not covered by the ‘747 patent, but France Telecom should not be barred from presenting evidence
of the opposite or referring to the claimed invention as “turbo codes.”

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United States District Court
Northern District of California

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6. Preclude France Telecom from raising or referring to how Marvell manages its
tax burden

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GRANTED. Marvell’s treatment of its tax burden is irrelevant. However, should Marvell

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somehow make it relevant, France Telecom will be free to address the issue.

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III. MARVELL’S DAUBERT MOTION

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Marvell has filed a Daubert motion to preclude France Telecom’s damages expert,

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Professor Cornell, from testifying regarding (i) his opinions on alternative damages scenarios that

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are based on worldwide sales and sales of non-party MAPL, including his opinion on the lump

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sum royalty, and his opinions on the two alternative running royalties that use “Marvell 3G Chips”

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and “Marvell 3G Chips Sold to RIM” as the base; (ii) his opinions regarding the alleged level of

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importation, use, and roaming use in the United States; and (iii) his opinions of the use of sales

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data by BlackBerry as a proxy for alleged infringing use in the United States.

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1. Lump sum royalty opinion

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Professor Cornell opines that Marvell would have negotiated for a lump-sum royalty rather

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than a running royalty because, at that time, Marvell projected sales of such a volume that the

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lump sum would have been more economical than a running royalty. Marvell argues that

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Professor Cornwell’s opinion is “legally erroneous” because he did not distinguish between

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Marvell and non-parties Marvell Technology Group Ltd. (“MTGL”) and Marvell Asia Pte. Ltd

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(“MAPL”) in his hypothetical negotiation, i.e., his hypothetical negotiation was between France
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Telecom on one side and, on the other side, an “integrated entity” of Marvell, MTGL, and MAPL,

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even though MGTL and MAPL are not parties to this suit.2 I previously ruled that “Marvell is not

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liable for the actions of a third party, nor is it liable for infringement that occurred abroad.” Id. at

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Marvell’s motion to exclude Professor Cornell’s testimony regarding the lump-sum royalty

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is DENIED. While his opinion is based on forecasts which did not differentiate between the

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various Marvell entities, he explains why he believes that the portion of the forecasted sales which

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would have been sold in the United States—sales which he opines would have been recognized by

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defendant Marvell—exceed the number of sales which would make a lump-sum royalty more
economical than a running royalty, i.e., the “break-even” point. 3 Marvell can attack the

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United States District Court
Northern District of California

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reasonableness of those opinions at trial.
Professor Cornell’s opinion is based on forecasts which did not differentiate between the

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various Marvell entities. He states that “[n]o documents have been produced indicating Marvell’s

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forecasted sales to the United States.”4 Hansen Decl., Ex 1, Cornwell Rept. ¶ 192. But Professor

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Cornell explains how he extrapolated forecasts attributable to Marvell from the undifferentiated

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forecasts. According to Professor Cornell, the forecasted sales for the combined Marvell entities

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are more than double the “break-even” point. Professor Cornell opines that the portion of those

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forecasted sales attributable to sales in the United States, and recognized by Marvell, still exceeds

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the “break-even” point because the Marvell entities expected that more than three quarters of their

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sales would go to their largest customer, and a significant portion of that customer’s revenues

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(65% in 2006) was from the United States.

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Marvell contends that “Professor Cornell admitted that the only way to meet the . . .

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“break-even” point to justify his lump sum royalty . . . was to include both MSI and MAPL sales.”

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Mot. at 7 (emphasis in original). That is not accurate. With the benefit of hindsight, Professor

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Marvell and MAPL are both subsidiaries of MTGL. Dkt. No. 160 at 2.
The various figures at issue, e.g., the number of units needed to make the lump-sum royalty
preferable to the running royalty and the specific royalty figures identified by Professor Cornell,
are confidential and I therefore do not identify the specific figures.
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Marvell does not dispute that no forecasts specific to it were produced.
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Cornell testified that Marvell’s actual sales were not enough to meet the “break-even” point, but

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that has no bearing on Marvell’s forecasts at the time of the hypothetical negotiation.

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Professor Cornell lump sum opinion is sufficiently reliable to present to the jury. Any

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perceived deficiencies in the opinion go to its weight, not its admissibility. Marvell can draw out

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those purported deficiencies on cross-examination.

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2. Running royalty opinions

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Professor Cornell also provided four running royalty scenarios in the event that the jury

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finds that France Telecom and Marvell would have negotiated a running royalty rather than a lump

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sum royalty. The four alternative scenarios are based on (i) Marvell 3G chips; (ii) Marvell 3G
chips sold to RIM [Blackberry]; (iii) Marvell 3G chips shipped to the United States; and (iv)

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United States District Court
Northern District of California

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Marvell 3G chips sold to RIM, which RIM than sold into the United States as part of assembled

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handsets.

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Marvell contends that the scenarios based on “Marvell 3G chips” and “Marvell 3G chips

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sold to RIM” are unreliable and should be excluded because they include worldwide sales and

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sales of non-party MAPL and are barred by my summary judgment ruling. See Dkt. No. 160.

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France Telecom does not address the scenario based on Marvell 3G chips in its opposition brief,

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apparently conceding that that scenario is barred by my summary judgment ruling. It is, because it

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is based on alleged sales of the accused invention by non-parties. With respect to the scenario

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based on “Marvell 3G chips sold to RIM”, France Telecom responds that “[n]othing in the Court’s

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summary judgment decision precludes France Telecom from proving at trial that the sales in

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question were Marvell (as opposed to MAPL) United States sales.” Opp. at 21. There does not

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seem to be any basis for that contention, and I would exclude it as well.

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Marvell contends that the scenario based on “Marvell 3G chips sold to RIM, which RIM

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then sold into the United States as part of assembled handsets” should be precluded because it

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includes RIM handsets with chips supplied by non-party MAPL, rather than Marvell. I disagree.

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The document from RIM, upon which Professor Cornell based this scenario, does not differentiate

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between sales from Marvell and sales from MAPL. But given that the list is limited to handsets

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which RIM sold into the United States, it is a reasonable proxy for Marvell sales in the United
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States. Marvell can develop any deficiencies in this scenario at trial.
I also reject Marvell’s argument that Professor Cornell impermissibly used the document
from RIM, which lists sales to the United States, as a proxy for use in the United States. The

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parties agree that Marvell has no means of tracking where its chips are actually used. But France

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Telecom may rely on circumstantial evidence, including sales figures, to establish use of the

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patented methods. See, e.g., Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1318

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(Fed. Cir. 2009) (“the jury reviewed evidence relating to the extensive sales of Microsoft products

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and the dissemination of instruction manuals for the Microsoft products. The jury also heard

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corresponding testimony from Lucent’s infringement expert. The circumstantial documentary

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evidence, supplementing the experts’ testimony, was just barely sufficient to permit the jury to

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United States District Court
Northern District of California

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find direct infringement by a preponderance of the evidence.”); Moleculon Research Corp. v. CBS,

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Inc., 793 F.2d 1261, 1272 (Fed. Cir. 1986) (affirming finding of infringing use based on

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“circumstantial evidence of extensive puzzle sales, dissemination of an instruction sheet teaching

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the method of restoring the preselected pattern with each puzzle, and the availability of a solution

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booklet on how to solve the puzzle”). Whether France Telecom has enough circumstantial

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evidence of use to prove infringement remains to be seen, but Professor Cornell’s reliance on

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Blackberry’s sales figures are not so unreliable that his opinion cannot be presented to the jury.

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These are my tentative views, which I am providing to focus any desired argument this

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afternoon.

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Dated: August 26, 2014

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______________________________________
WILLIAM H. ORRICK
United States District Judge

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