Emblaze Ltd. v. Apple Inc.

Filing 519

ORDER RE: PRE-TRIAL MOTIONS by Judge Paul S. Grewal granting-in-part 432 , 443 , 444 , 445 , 447 , 452 , 453 , 455 , 456 , 458 , 459 , 460 , 461 , 463 , 484 , 487 , 490 and 493 (psglc2, COURT STAFF) (Filed on 6/18/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
For the Northern District of California

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SAN JOSE DIVISION

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EMBLAZE LTD.,

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Plaintiff,
v.

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APPLE INC.,
Defendant.

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Case No. 5:11-cv-01079-PSG
ORDER RE: PRE-TRIAL MOTIONS
(Re: Docket Nos. 432, 443, 444, 445, 447,
452, 453, 455, 456, 458, 459, 460, 461,
463, 484, 487, 490 and 493)

Before the court are the parties’ Daubert and in limine motions. As previewed at
yesterday’s pre-trial conference, the court rules as follows 1:

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The court will issue separate orders addressing Apple’s Daubert and summary judgment motions.
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Case No. 5:11-cv-01079-PSG
ORDER RE: PRE-TRIAL MOTIONS

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DN

Motion

Order

432

Emblaze’s Daubert Motion
to Exclude Opinion and
Testimony of
James Malackowski

DENIED. Apple and Emblaze’s factual dispute over the
hypothetical negotiation date is a matter for
cross-examination—not grounds to exclude Apple’s damages
expert’s opinions in its entirety. See Micro Chem., Inc. v.
Lextron, Inc., 317 F.3d 1387, 1392 (Fed. Cir. 2003) (“When,
as here, the parties’ experts rely on conflicting sets of facts, it
is not the role of the trial court to evaluate the correctness of
facts underlying one expert’s testimony.”); Fed. R. Evid. 702,
Advisory Committee’s Note (“When facts are in dispute,
experts sometimes reach different conclusions based on
competing versions of the facts. The emphasis in the
amendment on ‘sufficient facts or data’ is not intended to
authorize a trial court to exclude an expert’s testimony on the
ground that the court believes one version of the facts and not
the other.”).
IT IS ORDERED that Emblaze shall be permitted to depose
Daniel Quinn, Rhonda Stratton and Roger Pantos for two
hours each. Any deposition shall take place at a location of
Emblaze’s choosing by Tuesday, June 24, 2014.

443

Emblaze’s MIL No. 1 – To
Exclude Alan Cohen From
Testifying at Trial

GRANTED. Mr. Cohen was not timely disclosed as a
percipient witness. He may not testify.

444

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Sealing Motion

Sealing of Ex. A is DENIED.
The fact that “Apple refers to their main line of business
products, Mac computers, iPads, iPhones and iPods as ‘hero
products’” internally is well known. It is not sealable. See,
e.g., http://www.theverge.com/2012/8/3/3217057/day-twotestimony-apple-samsung-trial (“10:02 AM Schiller sums up
Apple’s product-first advertising strategy nicely: ‘We call it
‘product as hero’.’”). Nor are “Apple’s Strategic Technology
Acquisitions” – including those from over a decade ago – a
secret. See, e.g. http://en.wikipedia.org/wiki/Pixo (“In 2001,
Pixo was hired by Apple to adapt their system software for
use in the iPod.”).
Sealing of Ex. B is GRANTED.

445

Apple’s MIL No. 1 – To
Exclude Reference to
Apple’s Total Revenues,
Profits, Cash, Earnings and
Similar Finances

GRANTED. Emblaze shall not introduce evidence or
argument on Apple’s U.S. and worldwide gross revenues,
gross margins, profits, earnings, cash, investments, income
and income projections, including total profits or revenues
from Apple products. See LaserDynamics, Inc. v. Quanta
Computer, Inc., 694 F.3d 51, 68 (Fed. Cir. 2012)
(“Admission of such overall revenues, which have no
demonstrated correlation to the value of the patented feature
alone, only serve to make a patentee’s proffered damages
amount appear modest by comparison, and to artificially
inflate the jury’s damages calculation beyond that which is
adequate to compensate for the infringement.”).

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United States District Court
For the Northern District of California

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Case No. 5:11-cv-01079-PSG
ORDER RE: PRE-TRIAL MOTIONS

Apple’s MIL No. 2 – To
Exclude Reference to
Unrelated Litigations,
Investigations, Accusations,
Settlements and/or Prior
Alleged Bad Acts Involving
Apple or Steve Jobs

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DENIED. The court will consider any appropriate objection
during trial, but a blanket prophylactic order is not warranted.
The court will not countenance speculation as to documents
impermissibly withheld.

Apple’s MIL No. 5 – To
Exclude Expert Testimony
Beyond the Scope of Expert
Reports, And Any Other
Evidence or Argument
Regarding Non-Infringing
Streams

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GRANTED. Emblaze shall not offer any evidence or
argument regarding Apple or Steve Jobs alleged copying of
third party products, ideas or inventions. See Fed. R. Evid.
401 and 403.

Apple’s MIL No. 4 – To
Exclude Reference to Any
Discovery Decisions or
Disputes, and Purported
Discovery Failures of Apple

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GRANTED-IN-PART. Emblaze shall not offer evidence or
argument regarding alleged past misconduct and the alleged
poor character of Apple or Steve Jobs, as well as any prior
unrelated litigations, investigations, accusations, or
settlements involving Apple or Mr. Jobs. See Fed. R. Evid.
401, 403 and 404(a)(1) (“Evidence of a person’s character or
character trait is not admissible to prove that on a particular
occasion the person acted in accordance with the character or
trait.”). To be clear, litigation settlements authorized
pursuant to ResQNet are not excluded by this order. 2
Apple similarly shall not introduce evidence or argument
related to poor character of Emblaze or its leadership.

Apple’s MIL No. 3 – To
Exclude Any Evidence or
Argument Regarding Apple
or Steve Jobs Copying of
Others

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GRANTED. With summary judgment of non-infringement
entered as to unanalyzed streams, Emblaze shall not
introduce evidence or argument at trial that these
non-infringing streams practice the asserted claims.
Dr. Madisetti will be held to those opinions disclosed in his
expert report in this case.

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United States District Court
For the Northern District of California

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See ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 872-73 (Fed. Cir. 2010).
This court observes as well that the most reliable license in this record arose out of
litigation. On other occasions, this court has acknowledged that the hypothetical reasonable
royalty calculation occurs before litigation and that litigation itself can skew the results of
the hypothetical negotiation. Similarly this court has long recognized that a reasonable
royalty can be different than a given royalty when, for example, widespread infringement
artificially depressed past licenses. And a reasonable royalty may permissibly reflect the
fact that an infringer had to be ordered by a court to pay damages, rather than agreeing to a
reasonable royalty.
On remand, the district court will have the opportunity to reconsider the reasonable
royalty calculation. At that time, the district court may also consider the panoply of events
and facts that occurred thereafter and that could not have been known to or predicted by the
hypothesized negotiators. During that remand, however, the trial court should not rely on
unrelated licenses to increase the reasonable royalty rate above rates more clearly linked to
the economic demand for the claimed technology.
In sum, the district court erred by considering ResQNet’s re-bundling licenses to
significantly adjust upward the reasonable royalty without any factual findings that
accounted for the technological and economic differences between those licenses and the
’075 patent. A reasonable royalty based on such speculative evidence violates the statutory
requirement that damages under § 284 be “adequate to compensate for the infringement.”
(internal quotations and citations omitted).
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Case No. 5:11-cv-01079-PSG
ORDER RE: PRE-TRIAL MOTIONS

Apple’s MIL No. 6 – To
Exclude Evidence or
Argument that Apple
Directly Infringes or that
Anyone Infringes Under the
Doctrine of Equivalents

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GRANTED. Although Malackowski’s prior experience as an
expert witness is relevant, the danger of unfair prejudice to
Apple substantially outweighs the probative value of the
evidence pursuant to Fed. R. Evid. 403. See
Fed. R. Evid. 403 (“The court may exclude relevant evidence
if its probative value is substantially outweighed by a danger
of one or more of the following: unfair prejudice, confusing
the issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence.”).
Apple, too, may not discredit any Emblaze expert’s prior
experience as an expert witness in independent litigation
absent a preliminary showing as to the probative nature of the
evidence.

Apple’s MIL No. 8 – To
Exclude Any Evidence or
Argument Regarding
Apple’s Alleged Copying of
Emblaze or Other
Secondary Considerations
of Non-Obviousness That
Emblaze Intentionally
Withdrew in this Case

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GRANTED-IN-PART. Emblaze may offer evidence that
Apple directly infringes Emblaze’s patent only to support its
35 U.S.C. § 271(b) inducement claims, not any 35 U.S.C. §
271(a) direct infringement claims – which are no longer in
the case. 3

Apple’s MIL No. 7 – To
Exclude Any Evidence or
Argument Regarding Expert
Testimony Previously
Excluded in Unrelated
Litigation

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GRANTED. Emblaze’s counsel represented Emblaze would
not rely on the commercial success of Emblaze’s products
and services and that it would not assert the failure of others
or copying when it declined to reply with a Rule 30(b)(6)
witness on topics propounded by Apple during discovery in
this case. Emblaze therefore shall not marshal evidence or
argument regarding Apple’s alleged copying of Emblaze or
other secondary considerations of non-obviousness that
Emblaze withdrew earlier in this case.

Sealing Motion

Sealing of the opposition is GRANTED. The request is
narrowly tailored.
Sealing of Ex. D is GRANTED. The material is sealable.
Sealing of Ex. E is GRANTED. The material is sealable.
Sealing of Ex. L is DENIED. The request is not narrowly
tailored.
Sealing of Ex. 1 is GRANTED. The material is sealable.
Sealing of Ex. 2 is DENIED. The material is not sealable.
Sealing of Ex. 3 is DENIED. The material is not sealable.
Sealing of Ex. 4 is DENIED. The material is not sealable.
Sealing of Ex. 5 is GRANTED. The material is sealable.
Sealing of Ex. 6 is GRANTED. The material is sealable.
Sealing of Ex. 7 is GRANTED. The material is sealable.
Sealing of Ex. 8 is GRANTED. The material is sealable.

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United States District Court
For the Northern District of California

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See Docket No. 424 at 18 (“Because Madisetti only opined that Apple induced but did not
directly infringe the ’473 patent – and in light of Emblaze’s concession to the same at the hearing –
summary judgment that Apple did not directly infringe the ’473 patent is warranted.”).
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Case No. 5:11-cv-01079-PSG
ORDER RE: PRE-TRIAL MOTIONS

452

Sealing Motion 4

GRANTED-IN-PART.
Apple represented that the opposition and Ex. B need not be
filed under seal. The opposition and Ex. B will not be sealed.
The more narrowly-tailored redactions to Ex. A may be filed
under seal.

453

Emblaze’s MIL No. 3 – To
Exclude Testimony
Concerning Vocaltec
Communications

DENIED. Emblaze’s challenge to the probative value of the
license and Malackowski’s reliance on the license can be
addressed through cross-examination.

455

Sealing Motion4

GRANTED-IN-PART.
Apple represented that Emblaze’s MIL No. 4 need not be
filed under seal. MIL No. 4 will not be sealed.
The more narrowly-tailored redactions to Ex. A may be filed
under seal.
Sealing of Ex. B is DENIED. The proposed sealing is not
narrowly tailored.

456

Emblaze’s MIL No. 4 – To
Exclude Testimony Relating
to the Burst.com and MultiFormat, Inc. Agreements

DENIED. Without evidence that certain licenses are
significantly more probative and targeted of the technology at
issue, Malackowski may rely on Dr. Polish’s representations
as to the relevance of the licenses to the ’473 patent. Any
perceived differences may be drawn out through
Malackowski’s cross-examination or direct examination of
Emblaze witnesses.

458

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Sealing Motion4

DENIED.
Apple represented that Emblaze’s MIL No. 5 need not be
filed under seal. MIL No. 5 will not be sealed.
Apple’s declaration does not point out with particularity why
sealing of Ex. A is warranted.

459

Emblaze’s MIL No. 5 – To
Exclude Testimony Beyond
the Scope of Mr.
Malackowski’s Expert
Report and Expertise

GRANTED. Malackowski’s testimony shall be limited to the
scope of his expert report and his expertise.

460

Sealing Motion

DENIED. No timely declaration was submitted pursuant to
Civil L.R. 79-5(e)(1). See Civil L.R. 79-5(e)(1) (“Within 4
days of the filing of the Administrative Motion to File Under
Seal, the Designating Party must file a declaration as required
by subsection 79-5(d)(1)(A) establishing that all of the
designated material is sealable.”).

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Although no timely declaration was submitted pursuant to Civil L.R. 79-5(e)(1), the court
nevertheless will consider Apple’s declaration because Apple’s company representative was
occupied by a separate Apple trial before the undersigned. See Civil L.R. 79-5(e)(1) (“Within 4
days of the filing of the Administrative Motion to File Under Seal, the Designating Party must file
a declaration as required by subsection 79-5(d)(1)(A) establishing that all of the designated
material is sealable.”).
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Case No. 5:11-cv-01079-PSG
ORDER RE: PRE-TRIAL MOTIONS

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461

Emblaze’s MIL No. 2 – To
Exclude All Testimony that
Does Not Comply with the
Court’s October 22, 2013,
Order

GRANTED. Apple shall not suggest that Emblaze had an
obligation to create data or information that otherwise does
not exist, nor shall Apple elicit any testimony in violation of
the court’s October 22, 2013, order. See Docket No. 294.

463

Sealing Motion4

GRANTED-IN-PART.
Sealing of the opposition is DENIED. It is not narrowly
tailored.
The redactions to Ex. A are not narrowly tailored, target
historical information and not well supported by a
particularized declaration. Only Table 15 and Schedules 17A
and 18A may be filed under seal.
Sealing of Ex. B is DENIED. The request is not narrowly
tailored.
Sealing of Ex. C is DENIED. The request is not narrowly
tailored.
Sealing of Ex. F is GRANTED. The material is sealable.
Sealing of Ex. I is GRANTED. The material is sealable.
Sealing of Ex. J is DENIED. The material is not sealable.
Sealing of Ex. K is DENIED. The material is not sealable.
Sealing of Ex. L is DENIED. The material is not sealable.
Sealing of Ex. M is GRANTED. The material is sealable.
Sealing of Ex. N is DENIED. The request is not narrowly
tailored.
Sealing of Ex. O is GRANTED. The material is sealable.
Apple represented that Exs. G, H, P and Q need not be filed
under seal. Exs. G, H, P and Q will not be sealed.

484

Sealing Motion

Sealing of Apple’s opposition is GRANTED.
Sealing of Ex. A is GRANTED.

487

Sealing Motion

Apple’s declaration does not point out with particularity why
sealing of Ex. A is warranted.

490

Sealing Motion

Sealing of the reply brief is GRANTED.
Sealing of Ex. 2 is DENIED. No supporting declaration has
been filed.
Sealing of Ex. 3 is GRANTED.
Sealing of Ex. 6 is GRANTED.

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Case No. 5:11-cv-01079-PSG
ORDER RE: PRE-TRIAL MOTIONS