Software Rights Archive, LLC v. Google Inc. et al

Filing 284

MOTION to Compel Google to Disclose Function Media Discovery and Transcript by Software Rights Archive, LLC. (Attachments: # 1 Affidavit of Raj Duvvuri, # 2 Text of Proposed Order)(Kaplan, Lee)

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

SOFTWARE RIGHTS ARCHIVE, LLC
v.

GOOGLE INC., YAHOO! INC., lAC & MEDIA, INC., AOL LLC, SEARCH and LYCOS, INC.

§ § § § § § §

CIVIL NO. 2:07-CV -511 (CE)

PLAINTIFF'S MOTION TO COMPEL GOOGLE TO
DISCLOSE FUNCTION MEDIA DISCOVERY AND TRANSCRIPT

Plaintiff Software Rights Archive, LLC ("SRA") moves to compel Defendant Google
Inc. to disclose certain discovery and the trial transcript in Civil Docket No. 2:07-CV-279;

Function Media, LLC v. Google, Inc.; in the United States District Court for the Eastern District

of Texas, Marshall Division. These documents are relevant to this case in multiple respects, and

Google's purported objection-that they contain confidential information-is overcome by the
1 fact that this Court has entered a protective order in this case protecting just such information.

INTRODUCTION
In July 2007 Function Media, L.L.C. fied suit in this Cour alleging that Google
"infringed. . . (Function Media's) patent(s) by its manufacture, use, sale, importation, and/or

offer for sale of products and services utilzing Google's AdSense and AdWords technologies,. .
. :,2 Discovery proceeded for over two years and involved depositions and written discovery

from experts on both sides as well as depositions of present and former Google employees
including Sergey Brin (Google's "Co-Founder & President, Technology") and Susan Wojcicki

1 Function Media has confirmed that it does not object to the provision of

the requested materials

to SRA.

2 Function Media First Amended Complaint (Ex. 1) at 2.

(Google's "Vice President, Product Management,,).3 These witnesses disclosed information

regarding the operation of Google's AdWords and AdSense programs-both accused
instrumentalities in this case. Google's lay and expert witnesses also disclosed information

regarding Google's business model, revenues, licensing history, and other facts relevant to
damages in this case. Google's witnesses also testified to the company's history and the

development of its technology-facts relevant to wilful infringement, laches, and other issues
here. SRA expects that additional relevant evidence was disclosed, though SRA's insight into

Function Media has been significantly limited by the protective order in that case. The case
proceeded to trial in January 2010, and the paries are currently engaged in post-trial briefing.

Recognizing that Function Media involved much evidence relevant to this case, SRA
requested Google to produce three targeted categories thereof: (1) transcripts of depositions of

Google employees, past and present; (2) expert reports and depositions; and (3) the trial
transcript.

4 Google refused. Google asserted that, because Function Media's patents covered

different terrain than SRA's patents, all the discovery in that case was automatically irrelevant to
SRA's case:

The patents and technologies involved in the Function Media case relate to

user interfaces for formatting and managing advertisements. SRA has
previously characterized the patents in this case as relating to the 'analysis
of non-semantic hyperlink relationships.' . .. Because these materials

relate to different underlying technologies and patents, they are neither
relevant nor discoverable.5

3 See Order Granting Brin Depo. (Ex. 2) Google Mgmt. Page from website. (Ex. 3)

4 See 3/31/10 Kaplan-Walsh Letter. (Ex. 4) Because trials are typically conducted under time
limits, the depositions and expert reports are likely to cover issues that were not raised at trial but
would be important to this case. SRA canot make that determination without being allowed to

review the materials. Critically, Google has demonstrated no reason why SRA should not be
allowed to conduct such a review.
55/11/10 Walsh-Kaplan Letter. (Ex.

5)

2

The paries conducted a meet-and-confer session on May 18, 2010 with lead and local counsel

participating and failed to resolve the disagreement.6

ARGUMENT
This Court should compel Google to produce three specific categories of evidence from

the Function Media case: (1) transcripts of depositions of Google employees, past and present,

and any other witnesses called by Google to testify; (2) expert reports and depositions; and (3)
the trial transcript. All of these materials are relevant; piecemeal production wil not suffce.

This Court has held: "Rule 26(b)(1) governs the scope of discovery, providing that
'(p )arties may obtain discovery regarding any nonprivileged matter that is relevant to any pary's
claim or defense' or 'appears reasonably calculated to lead to the discovery of admissible

evidence.'" Tyco Healthcare Group LP v. E-Z-EM, Inc., 2010 WL 774878, at *1 (B.D. Tex.

Mar. 2,2010) (quoting FED. R. CIv. P. 26). This rule is "accorded a broad and liberal treatment

to effect (its) purose of adequately informing litigants in civil trials." Id Specifically, the
phrase '''relevant to the claim or defense of any party' . . . is defined expansively in Local Rule

CV-26(d)." Blackboard, Inc. v. Desire2Learn, Inc., 2007 WL 3389968, at *1 (E.D. Tex. Nov.
14,2007). Under that rule, "something is relevant if:
(1) It includes information that would not support the disclosing parties'

contentions;
(2) It includes those persons who, if their potential testimony were known,

might reasonably be expected to be deposed or called as a witness by any
of the paries;
(3) It is information that is likely to have an influence on or affect the

outcome of a claim or defense;

6 Several days after the meet-and-confer session, Google offered a "compromise" that would

involve Google's producing a very small subset of the requested Function Media materials, while withholding the rest. SRA declined Google's insuffcient offer.

3

(4) It is information that deserves to be considered II the preparation,

evaluation, or trial of a claim or defense; and
(5) It is information that reasonable and competent counsel would consider

reasonably necessary to prepare, evaluate, or try a claim or defense."
Id n.l (quoting L.R. CV-26(d)).7 The requested materials from the Function Media case are

discoverable in multiple respects.
I. The Requested Function Media Materials Are Relevant To Damages.

This Cour has held: "In an infringement case, the patent holder may recover damages in
the form of lost profits and/or a reasonable royalty. . . . A reasonable royalty may be based upon
an established royalty, if there is one, or if not, upon the supposed result of hypothetical

negotiations between the plaintiff and defendant. . . . Determining the royalty which would result

from a hypothetical negotiation is often made by assessing factors such as those set out in
Georgia-Pacifc Corp. . . .." Tyco Healthcare Group, LP v. Applied Med Res. Corp., 2009 WL

5842064, at *2 (Mar. 17,2009) (internal quotation marks omitted).8 But "(t)he Georgia Pacifc
7 In the context of a motion to compel, this Cour has held, "( t )he moving pary bears the burden

of showing that the materials and information sought are relevant to the action or wil lead to the

discovery of admissible. evidence. Once the moving pary establishes that the materials
requested are within the scope of permissible discovery, the burden shifts to the part resisting discovery to show why the discovery is irrelevant, overly broad, or unduly burdensome or
oppressive, and thus should not be permitted." SSL Servs., LLC v. Citrix Sys., Inc., 2010 WL 547478, at *2 (E.D. Tex. Feb. 10,2010) (internal citations omitted).

8 The Georgia-Pacifc factors are as follows:
1. The royalties received by the patentee for the licensing of the patent in suit, proving or tending to prove an established royalty.

2. The rates paid by the licensee for the use of other patents comparable to the patent in
suit.

3. The nature and scope of the license, as exclusive or non-exclusive; or as restricted or non-restricted in terms of territory or with respect to whom the manufactured product
may be sold.

4. The licensor's established policy and marketing program to maintain his patent monopoly by not licensing others to use the invention or by granting licenses under
special conditions designed to preserve that monopoly.
4

factors for determining a reasonable royalty are not exclusive." lEX Corp. v. Blue Pumpkin
Software, Inc., 2005 WL 6426934, at *5 (B.D. Tex. Dec. 14, 2005). Furher, "it is not strictly

correct under present case law to say that the jury determines past damages based solely on
information available at the time of the hypothetical negotiation." Ariba, Inc. v. Emptoris, Inc.,

567 F. Supp. 2d 914,917 (B.D. Tex. 2008). For example, "The jur may consider the infringer's
actual sales and revenue up to the date of trial as par of the 'book of

wisdom.'" Id

5. The commercial relationship between the licensor and licensee, such as, whether they are competitors in the same territory in the same line of business; or whether they are
inventor and promoter.

6. The effect of sellng the patented specialty in promoting sales of other products of the licensee;. that existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales.
7. The duration of the patent and the term of the license.

8. The established profitabilty of the product made under the patent; its commercial
success; and its curent popularity.
the patent property over the old modes or devices, if any, that had been used for working out similar results.
9. The utility and advantages of

10. The nature of the patented invention; the character of the commercial embodiment of it as owned and produced by the licensor; and the benefits to those who have used the
invention.

11. The extent to which the infringer has made use of the invention; and any evidence
probative of the value of that use.
12. The portion of the profit or of

the sellng price that may be customary in the particular

business or in comparable businesses to allow for the use of the invention or analogous inventions.

13. The portion of the realizable profit that should be credited to the invention as
distinguished from non-patented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer.
14. The opinion testimony of qualified experts.
would have agreed upon (at the time the infringement began) if

15. The amount that a licensor (such as the patentee) and a licensee (such as the infringer) both had been reasonably and voluntarily trying to reach an agreement

Georgia-Pacifc Corp. v. Us. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970).

5

The requested evidence pertains to these factors. For example, in Function Media both
parties retained experts who prepared reports and testified regarding damages. That evidence by

definition applied the factors that govern here to facts that, while perhaps not entirely
coextensive, nevertheless largely overlap with the facts relevant here. For instance, the experts'
reports and testimonies undoubtedly contain data and analyses regarding Google's business

models, past, present, and projected revenues, market share, and profitability. See, e.g., OPTi

Inc. v. Apple, Inc., 2009 WL 4727912, at *4 (B.D. Tex. Dec. 3, 2009) ("This total revenue
evidence is relevant to Georgia-Pacifc factor number 6-derivative sales."). Such data are highly
relevant to this case, notwithstanding differences among the patents, because they pertain to the

. very same search advertising business from which Google derives the vast majority of its
revenue. The experts' reports and testimonies also likely contain lists and valuations of licenses

in the web search industry. See Georgia-Pacifc, 318 F. Supp. at 1120 ("The rates paid by the

licensee for the use of other patents comparable to the patent in suit."). They also likely contain
information regarding Google's licensing practices, see id ('The rates paid by the licensee for

the use of other patents comparable to the patent in suit"), particularly in obtaining licenses from
patentees who are not "competitors in the same territory in the same line of

business." Id As a

final of many potential examples, they also likely contain data and analyses regarding Google's history and product development-facts directly relevant, among other factors, to "(t)he extent to
which the infringer has made use of the invention" and "(t)he portion of the realizable profit that
should be credited to the invention." Id That the asserted patents have differences is thus beside

the point. How Google makes its money is accused in both lawsuits-and that has not changed.

6

II. The Requested Function Media Materials Contain Evidence Relevant To

Infringement.
To establish infringement, "a plaintiff must establish by a preponderance of the evidence
that one or more claims of the patent read on the accused device literally or under the doctrine of

equivalents." TGIP, Inc. v. AT&T Corp., 527 F. Supp. 2d 561, 570 (B.D. Tex. 2007) (internal

quotation marks omitted). Here, SRA has accused AdWords and AdSense of infringing the
patents-in-suit. Those programs incorporate infringing link analyses into their pricing

algorithms. AdWords and AdSense were also the accused programs in Function Media.
Different features of those programs were accused. But the witnesses presented by Google in

Function Media likely testified broadly to the history, development, and fuctionality of
AdWords and AdSense-and of Google's technology generally~and the parties' experts likely
also discussed fuctionalities beyond those strictly accused in the case. Therefore, once again,

notwithstanding distinctions among the patents, overlaps among the accused instrumentalities
demonstrate the relevance of the requested information.
III. The Requested Function Media Materials Likely Contain Evidence Relevant To

Other Issues.
Under this Cour's rules, paries must produce "information that deserves to be

considered in the preparation, evaluation, or trial of a claim or defense." L.R. CV-26(d). SRA
has asserted claims, such as wilful infringement, and Google has asserted defenses, such as

laches and unclean hands, that may be affected by evidence raised in the Function Media case.
For example, wilful infringement depends in part on "whether the infringer deliberately copied

the ideas or design of another" and the "duration of the defendant's misconduct." i4i, 670 F.
Supp. 2d at 593. The Function Media case involved testimony from Sergey Brin and Susan

Wojcicki-high-Ievel executives involved with Google from its inception-that may have
concerned the development of the company, its adoption of various technologies over time, and
7

its exposure to different patents. Wilful infringement was expressly asserted in Function

Media.9 Likewise, laches involves proving that "the plaintiff delayed filing suit for an
uneasonable and inexcusable length of time from the time the plaintiff knew or reasonably
should have known of its claim against the defendant," that "the delay operated to the prejudice
or injur of the defendant," and that in light of all the circumstances, the equities warrant

application ofthe defense. A.c. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1032

(Fed. Cir. 1992). Though laches was not asserted in Function Media, Brin, Wojcicki, and other
witnesses may have fuished testimony relevant to laches in this case, such as the circumstances
surounding Google's creation and development, including Google's responses over time to

patent infringement demands and suits. As a third example, Google asserted an inequitable
conduct defense in Function Media. 10 In developing a defense to that argument, Function Media
may have elicited facts relating to Google's own conduct before the USPTO or otherwise~facts
relevant to SRA's defense of

Google's "unclean hands" defense here.

iv. The Requested Function Media Materials "Includel) Those Persons Who, If Their

Potential Testimony Were Known, Might Reasonably Be Expected To Be Deposed Or Called As A Witness" In This Case.
Under this Cour's rules, paries must produce information that "includes those persons

who, if their potential testimony were known, might reasonably be expected to be deposed or

called as a witness by any of the paries." L.R. CV-26(d). One of the witnesses deposed in
Function Media-Sergey Brin::has already been named a relevant fact witness in this case by

both Google and SRA.11 SRA also believes that another witness-Susan Wojcicki-is also a
9 Function Media First Amended Complaint at 3. (Ex. 1)
10 Google Answer at 7. (Ex.

6)

11 See SRA Initial DiscI. at 7. (Ex. 7) SRA does not attach Google's Initial Disclosures because
they were designated as confidentiaL.

8

relevant fact witness here. SRA intends to notice both these witnesses' depositions shortly. The

depositions of these witnesses in Function Media by definition "includes th(e)se persons." As
argued above, by likely testifying to the origin and development of Google, its technology, and
its business model, as well as Google's licensing history and other issues, these witnesses almost

certainly furnished evidence relevant to this case. Further, SRA is entitled to these witnesses'

deposition transcripts for impeachment puroses. More generally, given the overlaps between
the issues in this case and those in Function Media, SRA is entitled to the deposition transcripts
of all of Google's witnesses in that case. To paraphrase this Cour's rule, if SRA could know the

potential testimony of those persons, then SRA might reasonably depose or call them as
witnesses. Such a production could also shorten the depositions taken in this case. This Court
granted

a similar motion in Function Media: "The Court grants Plaintiff s Motion to Compel

Previously-Taken Deposition Testimony of Google Executives (Dkt. No. 275) and hereby orders

Google to produce: (1) the deposition transcript plus any accompanying deposition exhibits of
Eric Schmidt in the Viacom case; and (2) any other depositions in the Viacom case or otherwise
that relate to the reasons why Google acquired a company in the advertising space.,,12 This

Cour should grant the same relief here.
v. Google's Objections Regarding Confidentiality and Overbreadth Lack Merit.

In conferences between counsel, Google has objected to SRA's request based on
supposed confidentiality and overbreadth concerns. Those objections are il-taken. Google is

already protected from such concerns. After lengthy negotiations, the parties agreed to a
thorough protective order that this Court then signed.13 The protective order is designed

12 Order Granting Exhibits and Testimony in Viacom case. (Ex.

8)

13 The one issue on which the parties disagreed-access by in-house counsel-was resolved in
Defendants' favor.

9

precisely for this purose: "(t)o expedite the flow of discovery materials" and "to adequately

protect information the parties are entitled to keep confidential.,,14 It restrains SRA from

misusing Google's information: "All Protected Information shall be held in confidence by each
person to whom it is disclosed, shall be used only as allowed by the terms of this protective

order, shall not be used for any business purpose, and shall not be disclosed to any person who is

not entitled to receive such information as herein provided.,,15 Google's approach-withholding

relevant evidence in its entirety, or at best, redacting evidence so that the disclosures contain
mere hand-picked selections~ignores these protections and forfeits the advantages secured by

the protective order. It creates delay, raises costs, and ensures future disagreements regarding
the scope of the production. All three are already overabundant in this case.

Furher, any irrelevant evidence produced will not be allowed in evidence in this case.
Again, it would be far less expensive, and quicker, for Google simply to produce what SRA has

requested, rather than spending tens of thousands or dollars in attorney time to slowly pick and
choose what it deems suffciently relevant to produce. Such a selective production would cost

Google much more than would a broader production and would increase the risk of
disagreements and motion practice. Can there be any doubt why Google is advocating the more

expensive, burdensome~and restrictive-approach?
CONCLUSION
This Cour should order Google to produce from the Function Media case the following

documents in unredacted form: (1) transcripts of depositions of past and present Google

14 Protective Order at 1. (Dkt. No. 161)

15 Protective Order at 12. (Dkt. No. 161)

10

employees and all witnesses called by Google; (2) expert reports and depositions from both

sides; and (3) the trial transcript.

Respectfully submitted,

(żL \4144 (i, i~~
Lee L. Kaplan
LEAD ATTORNEY

State Bar No. 11094400
SMYSER KAPLAN & VESELKA, L.L.P.

700 Louisiana, Suite 2300 Houston, Texas 77002 [phone]
[phone] (fax)

lkaplanęskv.com
Victor G. Hardy State Bar No. 00790821
(Admitted Pro Hac Vice) Andrew G. DiNovo State Bar No. 00790594 Adam G. Price State Bar No. 24027750

Jay D. Ellwanger State Bar No. 24036522
DiNovo PRICE ELLWANGER HARDY LLP

7000 North MoPac Expressway Suite 350 Austin, Texas 78731 [phone]
[phone] (fax)

vhardyędpelaw.com
O/counsel:
S. Calvin Capshaw State Bar No. 03783900 Elizabeth L. DeRieux State Bar No. 05770585
CAPSHAW DERiEUX

1127 Judson Road, Suite 220 P.O. Box 3999 Longview, TX 75606-3999 [phone]
11

[phone] (fax)

ccapshawęcapshawlaw.com
Robert M. Parker State Bar No. 15498000 Robert C. Bunt State Bar No. 00787165 Charles Ainsworth State Bar No. 0078352
PARKER, BUNT & AINSWORTH, P.C. 100 East Ferguson, Suite 1114

Tyler, Texas 75702 [phone]
[phone] (fax)

12

CERTIFICATE OF CONFERENCE
I certify that SRA has complied with the meet and confer requirement in Local Rule CV-7(h). This motion is opposed. The personal conferences required by this rule have been
conducted. The date of the conference was March 18, 2010. The participants in the conference

were Lee Kaplan, Charley Ainsworth, and other counsel for SRA, and Ruffin Cordell, Melissa

Smith, and other counsel for Google. No agreement could be reached because the parties
disagree regarding the discoverability of the specific categories of information from the Function Media proceedings requested by SRA. The discussions have conclusively ended in an impasse leaving open issues for this Court to resolve.

Lu ~I_ (~k-ß)
Lee Kaplan, Lead nal Counsel for SRA

lsI Charley Ainsworth Charley Ainsworth, Local Counsel for SRA

CERTIFICATE OF SERVICE
I hereby certify that all counsel of record who are deemed to have consented to electronic this document via the Court's CMlECF system per Local service are being served with a copy of May, 2010. Rule CV-5(a)(3) on the 24th day of

Raj D vvun

tl,Q ,

13