Function Media, L.L.C. v. Google, Inc. et al

Filing 153

Second MOTION to Expedite Motion to Compel by Function Media, L.L.C.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Text of Proposed Order)(Nelson, Justin)

EXHIBIT

1

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION
FUNCTION MEDIA. L.L.C. Plaintiffs.
vs.
$ $ $ $ $ $

Civil Action No. 2007 -CV -279

GOOGLE, INC. AND YAHOO, INC.
Defendants.

$
$ $

JURY TRIAL DEMANDED

DECLARATION OF WALTER BRATIC
1.

My name is Walter Bratic. I am a Senior Consultant to CRA International,
Inc. ("CRA"), and a Certified Public Accountant licensed to practice in the
State

ofTexas. I have provided financial consulting services for over 30 years

and have consistently worked on a broad range of intellectual property subject

matter for over 30 years. I have testified in state and federal courts, and in

tribunals related to intellectual property issues, including economic, f,tnancial,
accounting, and business matters involving damages, technology trends, and

industry licensing practices. I have been hired in the above-captioned case to provide an expert opinion on damages.
2.

As part of my analysis, I intend to evaluate the reasonably royalty damages
due to the

plaintiff if the trier of fact determines that the remaining defendant,

Google, Inc., has infringed the patents-in-suit. In the well-recognized

Georgiø-Pacificr case,the court set forth cer[ain factors to be considered
when determining a reasonable royalty. These factors, commonly referred to

' Georgia-Pacific Corp. v. United States Plywood Corp.,3l8 F. Supp. 116 (S.D.N.Y . 1970), modified, 446 F.2d295 (2d Cir. 1970), cert. denied, 404 U.S. 870 (1971).

as the Georgia-Pacific factors, are not absolute determinants

of a reasonable

royalty rate, but rather are guidelines to evaluating the likely actions of the
parties in a hypothetical negotiation. Based on the facts and circumstances the case, the factors are not necessarily given equal weight nor do I believe that the factors are all inclusive. Rather, the Georgia-Pacific factors are part

of

of the overall analysis I shall perform.
a

Based on my examination of the record evidence to date, it appears that instead of taking a license from a company that offers a particular technology, Google often purchases the company and/or the rights to the technology. As

part of my analysis of reasonable royalty damages in this mattet, it is relevant to consider the value Google placed on various technologies it obtained through acquisitions.
4.

A complete set of the purchase price and valuation information from Google's
acquisitions is therefore of great relevance in attempting to ascertain the value
Google ascribes to various transactions.

5.

While information about ads-related transactions specifically is certainly
relevant, it also is important to see broader price and valuation information

from all Google acquisitions. Based on my review of the record, ads-related
revenue comprises the vast proportion of Google's revenue. Google's public

filings have previously stated that its ads-related revenue has been
99%o

as

high as

of its total revenue.' Girrett the synergies between Google's various

products, it is not accurate to characterize apafücular technology as being

purely "non-ads-related." Therefore, the amount of money that Google pays

'

See, for example, Google, Inc., SEC Form lO-K for the fiscal year ended December 31, 2008, pp. 19-20.

for non-ads related technology
revenue base

- which comprises

a small subset

of its current

-

is an important measure in determining the amount of money

Google would pay for ads-related technology such as that related to the patents-in-suit.

6.

I am still formulating my expert opinions in this

case and discovery is

ongoing. Therefore, I have not reached any conclusions yet about the amount
that Google would have paid in a hypothetical negotiation. However, the

information requested will help me formulate my expert opinions.

I declare under penalty of perjury that the foregoing is true
day of August, 2009, in Houston, Texas.

and correct. Signed this 19th

Walter Bratic