Dolby Laboratories Licensing Corporation et al v. Adobe Systems Incorporated

Filing 372

PRETRIAL ORDER NO. 5 RE: SECOND PRETRIAL CONFERENCE. Signed by Judge Yvonne Gonzalez Rogers on 1/27/2020. (fs, COURT STAFF) (Filed on 1/27/2020)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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DOLBY LABORATORIES LICENSING
CORPORATION,
PLAINTIFF,

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Case No. 18-cv-1553 YGR
PRETRIAL ORDER NO. 5 RE: SECOND
PRETRIAL CONFERENCE

V.

ADOBE INC. F/K/A, ADOBE SYSTEMS
INCORPORATED

United States District Court
Northern District of California

DEFENDANT.
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____________________________________
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AND RELATED COUNTERCLAIM
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Having considered the filings to date and the arguments and other submissions at the
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Pretrial Conference, held on January 24, 2020, for good cause shown the Court memorializes and
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enters the following orders discussed at the pretrial conference:
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1. Admission of Documents: The parties appear to disagree about whether there must be a
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sponsoring witness with personal knowledge of the contents and meaning of a document in
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order to lay a foundation for its admission. Although the Court will make admissibility
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determinations based on the specific context of the testimony at issue, in general, the rules
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need to be considered collectively rather than in a vacuum. Federal Rule of Evidence (“FRE”)
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602, which imposes a personal knowledge requirement, is subject to exceptions. Fed. R. Evid.
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801(d)(2) advisory committee notes (opposing party statements enjoy “freedom . . . from . . .
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the rule requiring firsthand knowledge”); TEK Glob., S.R.L. v. Sealant Sys. Int’l, Inc., No. 1125
CV-00774-VC, 2017 WL 952955, at *1 (N.D. Cal. Mar. 12, 2017) (in ruling on the
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admissibility of a party admission, noting that “[t]here is no freestanding ‘sponsoring witness’
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requirement in the Federal Rules of Evidence”). Thus, while the Court concurs that a
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sponsoring witness is not required under FRE 801, a party must still comply with the

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requirements of admissibility including showing that the statement “(C) was made by a person

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whom the party authorized to make a statement on the subject; [or] (D) was made by the

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party’s agent or employee on a matter within the scope of that relationship and while it exists.”

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Fed. R. Evid. 801; see also United States v. STABL, Inc., 800 F.3d 476, 484 (8th Cir. 2015)

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(“[T]he only foundation required for 801(d)(2)(B) adoptive admissions is a showing that they

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were made or adopted by the opposing party or by its agent on a matter within the scope of

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that agency; there is no personal-knowledge requirement.”). Further, questioning a witness on

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such a document containing admissions is not without limitations. See Fed. R. Evid. 602
advisory committee’s note (“This rule does not govern the situation of a witness who testifies

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Northern District of California

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to a hearsay statement as such, if he has personal knowledge of the making of the

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statement. . . . This rule would, however, prevent him from testifying to the subject matter of

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the hearsay statement, as he has no personal knowledge of it.”); United States v. Pac. Gas &

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Elec. Co., No. 14-CR-00175-TEH, 2016 WL 3903384, at *6 (N.D. Cal. July 19, 2016)

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(testifying only to acronyms in the admitted document and other matters within the witness’s

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personal knowledge and not the content itself).

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2. The parties shall exchange documents that they intend to use in a direct examination no later

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than 24 hours before the witness testifies. The parties are not required to exchange documents

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that may be used in cross-examination. Relatedly, if a party seeks to use testimony from

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another court proceeding to impeach a witness, it is not required to give advance noticed to the

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opposing party. At the time the party seeks to use such a document, it must provide copies of

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the complete transcript to the Court, witness, and opposing counsel.

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3. Exclusion of Expert Witnesses: Under FRE 615, at the Court may order witnesses excluded

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so that they cannot hear other witnesses’ testimony, subject to certain exclusions, including for

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a person whose presence a party shows to be essential to presenting the party’s claim or

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defense. Here, Dolby’s request for its damages expert, Paul Meyer, to hear other witnesses’

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testimony is presently denied, as Dolby has not yet made a sufficient proffer that the

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exceptions to Rule 615 applies. However, rebuttal experts, including Adobe’s rebuttal
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damages expert Christian Tregillis, may be present for the witness testimony that they intend

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to rebut, so that they may prepare for rebuttal and assist counsel with cross-examination.

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4. Copyright Issues: The Court agrees that before instructing the jury, the Court must perform

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an analytic dissection to determine whether any elements of the Asserted Dolby Works are

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protected by copyright law. See Rentmeester v. Nike, Inc., 883 F.3d 1111, 1118 (9th Cir.

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2018). Analytic dissection generally requires (a) abstraction, in which the code is separated

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and examined, and (b) filtration, in which the court examines the structural components at each

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level of abstraction to separate protectable expression from non-protectable elements. See

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Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435, 1445 (9th Cir. 1994) (citing with
approval abstraction-filtration-comparison test set forth by Second Circuit in Computer

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United States District Court
Northern District of California

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Associates International, Inc. v. Altai, Inc., 982 F.2d 693 (2nd Cir. 1992)); see also Sega

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Enterprises, Ltd. v. Accolade, Inc., 977 F.2d 1510, 1524-25 (9th Cir. 1992) (affirming Second

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Circuit’s approach to analytic dissection).

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The parties appear to agree that this is the governing legal framework but disagree as to its

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application in this case. Adobe avers that although there are expressive elements in the source

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code at issue, it is Dolby’s burden to establish that the object code libraries provided to Adobe

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retained Dolby’s original expression. Dolby counters that the object code libraries are

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protected under the same copyright as its source code.

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Source code represents computer program code as a programmer would write it, using “a

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high level language that people can readily understand.” Syntek Semiconductor Co. v.

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Microchip Tech. Inc., 307 F.3d 775, 779 (9th Cir. 2002) (quoting Compendium of Copyright

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Office Practices (“CCOP”), § 321.01). Object code is “the representation of the program in

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machine language [binary] . . . which the computer executes.” Id. (quoting CCOP § 321.02)

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(alterations in original). Source code and object code are “two representations of the same

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computer program,” and for purposes of copyright registration, “the claim is in the computer

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program rather than in any particular representation of the program.” Id. (quoting CCOP

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§ 321.03). Source code, not object code, is comprised of human-readable text. As such, the

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Court must perform its analytic dissection at the source code level of abstraction. To the
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extent Dolby shows that the object code libraries provided to Adobe were a direct

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representation of Dolby’s copyrighted source code, the copyright extends to the object code as

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well. See Sega Enterprises, 977 F.2d at 1519 (object code is eligible for the full range of

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copyright protections). If, however, the object code libraries consist of compiled source code

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that does not contain protectable expression, no copyright protection exists.
Given that Dolby bring the copyright claims as an alternate form of relief, and additional

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trial management issues exist with respect to confidentiality with respect to those claims, the

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Court is inclined to bifurcate this portion of the trial. The Court will discuss the matter more

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fully with the parties at the next conference. Tentatively, the Court would be inclined to ask

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the jurors to decide whether the dispute at issue falls within the scope of one or more of the

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Northern District of California

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licensing agreements. If so, then the jury can decide the remaining issues regarding the breach

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of contract claims and no need would exist for the copyright phase. If not, then the parties

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would proceed to the copyright phase of the trial.

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5. Software Experts: As the Court previously explained, the parties’ software experts may not

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use conclusory terms, including “functional” or “expressive.” These experts may, however,

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use other non-conclusory language to describe such concepts to the jury.

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6. Confidential Source Code: The parties shall meet and confer to attempt to reach a written

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stipulation regarding their experts’ access to the source code at issue in this case. The parties

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shall admit into evidence only those portions of the source code that are essential to presenting

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the parties’ claims and defenses in this case.

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7. Pre-Judgment Interest and Attorneys’ Fees: Evidence related to pre-judgment interest must

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be presented as part of Dolby’s affirmative case. In addition, the parties shall submit

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additional briefing regarding whether evidence related to attorneys’ fees will be presented

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before or after a verdict is entered. No later than 5:00 p.m. on January 27, 2020, Dolby shall

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file a response to the arguments raised by Adobe at the pretrial conference. Adobe shall file

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any reply no later than 5:00 p.m. January 29, 2020.

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8. Deposition Designations: In order to rule upon the challenges to deposition designations, by
no later than January 29, 2020, each party shall file a chart listing the witnesses whose
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deposition testimony has been challenged and providing basic information about each,

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including (a) whether the individual is a Federal Rule of Civil Procedure 30(b)(6) witness and

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(b) what foundation, if any, the witness would have for the proffered testimony. The Court

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will not rule on any remaining objections to deposition designations without confirmation that

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the witness will not be testifying or satisfaction that the witness is a rule 30(b)(6) witness and

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thus the testimony would be admissible as an admission.1

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9. Video Deposition Testimony: No later January 29, 2020, the parties shall file a joint

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statement regarding the availability of the following witnesses to testify live and any requests

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to play their video deposition testimony due to unavailability: Bill Roberts, Delia Peterson,

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United States District Court
Northern District of California

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Hung Chang, Colin Stefani.
10. Dolby As Counterclaim-Defendant: The parties shall meet and confer regarding whether

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Dolby Laboratories, Inc. should be dismissed as a counterclaim-defendant. No later than

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January 29, 2020, the parties shall file either a stipulation of dismissal or a joint statement

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addressing any outstanding dispute on this topic.

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11. Key Terms: No later than January 29, 2020, the parties shall file a joint statement regarding

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(a) any remaining disputes over the terms that will be used to refer to the licensing amounts

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and licensing agreements at issue; (b) the inclusion of any key documents, such as the three

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agreements at issue in the case, in the juror binders; and (c) a proposed glossary for jurors.

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Unless otherwise agreed, the Court will order the use of the terms: “2012 Pricing Letter Rate,”

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“2013 Pricing Letter Rate,” and “Eligible Products/Creative Cloud Rate.”

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12. Motion for Relief from Non-Dispositive Pretrial Order: Adobe has filed a motion for relief

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from Magistrate Judge Ryu’s pretrial order regarding the special master’s order. (Dkt. No.

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363.) In its motion, Adobe challenges Magistrate Judge Ryu’s ruling that 27 documents which

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she found to constitute work product would be remanded to the special master for any

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“substantial need” determination. Adobe argues that in so ruling, Magistrate Judge Ryu

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exceeded the scope of review permitted under the appointment order. The Court disagrees.

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The objections to the deposition designations for Joe Perry are overruled.
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Over the course of this litigation, the parties have raised discovery disputes regarding

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thousands of documents. In order to manage the review of these documents, and given the

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short time to trial, Magistrate Judge Ryu has full authority to refer certain issues to the special

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master. This Court will consider any remaining disputes only after full review by magistrate

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judge and the special master, in accordance with the procedure set forth by Magistrate Judge

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Ryu. Any appeal of a ruling made by the magistrate judge or the special master must filed

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with the Court at least three business days before the party attempts to introduce the evidence

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at trial.

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13. Settlement: The parties are advised that even if they reach a settlement in principle, they shall
proceed to trial unless there is dismissal filed in the action. The Court is willing to retain

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Northern District of California

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continuing jurisdiction over any settlement. However, given the litigious nature of the parties,

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trial will proceed unless finality of a settlement is confirmed, either on the record (as binding)

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or in writing.

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14. Scheduling: The parties are advised that the Court will follow the following schedule:
a. Week of February 3: Trial days: Monday through Thursday. Friday will be used
to address any trial related matters; timing to be determined.
b. Week of February 10: Trial days: Monday through Thursday. The Court will be
dark on Friday; parties may plan accordingly.

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c. Week of February 18: Monday the Court is closed. Trial days: Tuesday through

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Friday. The parties should be prepared to discuss how much time they intend to

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reserve for purposes of Phase 2 of the trial.

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d. Week of February 24: Flexibility is required. The Court will advise later as to
timing.

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This Order terminates Docket No. 363.

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IT IS SO ORDERED.

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Dated: January 27, 2020
______________________________________
YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE
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