Eolas Technologies Incorporated v. Adobe Systems Incorporated et al

Filing 1000

RESPONSE in Opposition re 906 MOTION to Strike Defendant's Daubert Motion to Preclude Expert Testimony of Jonathan H. Bari filed by Eolas Technologies Incorporated. (Attachments: # 1 Exhibit A, # 2 Text of Proposed Order)(McKool, Mike)

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

Eolas Technologies Incorporated,
Plaintiff,
vs.
Adobe Systems Inc., Amazon.com, Inc.,
Apple Inc., Argosy Publishing, Inc.,
Blockbuster Inc., CDW Corp.,
Citigroup Inc., eBay Inc., Frito-Lay, Inc.,
The Go Daddy Group, Inc., Google Inc.,
J.C. Penney Company, Inc., JPMorgan
Chase & Co., New Frontier Media, Inc.,
Office Depot, Inc., Perot Systems Corp.,
Playboy Enterprises International, Inc.,
Rent-A-Center, Inc., Staples, Inc., Sun
Microsystems Inc., Texas Instruments Inc.,
Yahoo! Inc., and YouTube, LLC
Defendants.

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Civil Action No. 6:09-CV-00446-LED

JURY TRIAL

PLAINTIFF EOLAS’ RESPONSE IN OPPOSITION TO
DEFENDANTS’ DAUBERT MOTION TO PRECLUDE EXPERT
TESTIMONY OF JONATHAN H. BARI (DKT. NO. 906)

TABLE OF CONTENTS
I.

INTRODUCTION ...............................................................................................................1

II.

LEGAL STANDARDS .......................................................................................................2

III.

ARGUMENT.......................................................................................................................3
A.

Mr. Bari’s Testimony Is Relevant and Will Assist the Trier of Fact
in Understanding the Evidence and Determining Facts in Issue. ............................3

B.

Mr. Bari’s Testimony Is Based on Sufficient and Reliable Facts
and Data. ..................................................................................................................4

C.

Mr. Bari’s Testimony Is the Product of a Reliable Methodology............................5

D.

Mr. Bari Reliably Applies His Methodology to the Facts of the
Case..........................................................................................................................5
1.
2.

IV.

Mr. Bari’s testimony does not offend Uniloc, ResQNet, and
Lucent...........................................................................................................6
Mr. Bari’s testimony addresses issues that are relevant to
the jury’s evaluation of damages in this case...............................................7

CONCLUSION....................................................................................................................8

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ii

TABLE OF AUTHORITIES
Page(s)
CASES
Bauman v. Centex Corp.,
611 F.2d 1115 (5th Cir. 1980) ...................................................................................................3
Burbach Aquatics, Inc. v. City of Elgin,
No. 08 CV 4061, 2011 U.S. Dist. LEXIS 4573 (N.D. Ill. Jan. 18, 2011)..................................7
CDX Liquidating Trust v. Venrock Assocs.,
411 B.R. 571 (N.D. Ill. 2009) ....................................................................................................7
Dartey v. Ford Motor Co.,
104 F. Supp. 2d 1017 (N.D. Ind. 2000) .....................................................................................7
Daubert v. Merrell Dow Pharms., Inc.,
509 U.S. 579 (1993)......................................................................................................... passim
Fractus, S.A. v. Samsung et al.,
No. 6:09-cv-203-LED-JDL (E.D. Tex. Apr. 29, 2011) .............................................................6
i4i Ltd. P’ship v. Microsoft Corp.,
598 F.3d 831 (Fed. Cir. 2010)................................................................................................2, 6
Loeffel Steel Prods. v. Delta Brands,
372 F. Supp. 2d 1104 (N.D. Ill. 2005) .......................................................................................5
Micro Chem., Inc. v. Lextron, Inc.,
317 F.3d 1387 (Fed. Cir. 2003)..................................................................................................4
Perez v. City of Austin
No A-07-CA-044, 2008 U.S. Dist. LEXIS 36776 (W.D. Tex. May 5, 2008) ...........................7
ResQNet.com, Inc. v. Lansa, Inc.,
594 F.3d 860, 869 (Fed. Cir. 2010)............................................................................................6
Smith v. BMW N. Am., Inc.,
308 F.3d 913 (8th Cir. 2002) .....................................................................................................7
Uniloc USA, Inc. v. Microsoft Corp.,
632 F.3d 1292, 1316 ..............................................................................................................5, 6
United States v. 14.38 Acres of Land,
80 F.3d 1074 (5th Cir. 1996) .....................................................................................................4
Westfield Ins. Co. v. J.C. Penney Corp.,
466 F. Supp. 2d 1086 (W.D. Wis. 2006) ...................................................................................7
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iii

OTHER AUTHORITIES
FED. R. EVID. 401.............................................................................................................................2
FED. R. EVID. 403.............................................................................................................................5
FED. R. EVID. 702................................................................................................................... passim
Wright & Gold, 29 FEDERAL PRACTICE AND PROCEDURE: EVIDENCE § 6264 (1997) .....................3

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iv

I.

INTRODUCTION
Defendants concede that the jury will ultimately be tasked with measuring the value of

interactive content on their websites. Dkt. 903 at 8. To accomplish this task, the jury will need to
understand in particular the role of interactive product images, interactive video, and searchsuggest functionality in the e-commerce environment in which Defendants operate. There is no
reason to believe, however, that the jury will have experience with the e-commerce industry, or
will arrive with an understanding of the role and significance of interactive content in the ecommerce environment. Eolas plans to offer the expert testimony of Mr. Jonathan Bari to
educate the jury on these background issues. In particular, Mr. Bari will educate the jury on the
historical context of the e-commerce industry; on the rise in the use of interactive product
images, interactive video, and search-suggest functionality in the e-commerce environment; on
the role such interactive content plays in the industry today; and on background e-commerce
marketing principles such as “conversion rate,” “bounce rate,” “stickiness,” and “friction.” Mr.
Bari bases this educational testimony on his comprehensive review of respected industry sources
viewed through the lens of his substantial experience in the e-commerce field. Ex. A at 1-73.
Defendants object to Mr. Bari’s testimony principally on the ground that he does not
offer an opinion going to an ultimate issue such as infringement, validity, or specific quantum of
damages. Dkt. 906 at 1. The law holds, however, that an expert need not offer an opinion going
to an ultimate issue in order for his testimony to be relevant and admissible. Mr. Bari’s testimony
is obviously relevant to the issues in this case; it will undoubtedly assist the jury in understanding
the damages evidence submitted by both parties; and it is based on comprehensive research
informed by Mr. Bari’s substantial experience in the e-commerce industry. Mr. Bari’s testimony
is thus admissible under Rule 702, and Defendants’ motion to preclude it should be denied.

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II.

LEGAL STANDARDS
Where “scientific, technical, or otherwise specialized knowledge will assist the trier of

fact to understand the evidence or to determine a fact in issue,” an expert witness may testify “if
(1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of
reliable principles and methods; and (3) the witness has applied the principles and methods
reliably to the facts of the case.” FED. R. EVID. 702. The fundamental requirement that expert
testimony “assist the trier of fact” goes “primarily to relevance.” Daubert v. Merrell Dow
Pharms., Inc., 509 U.S. 579, 591 (1993). “Relevant evidence” is defined in turn “as that which
has ‘any tendency to make the existence of any fact that is of consequence to the determination
of the action more probable or less probable than it would be without the evidence.’” Id. at 587
(quoting FED. R. EVID. 401). This “basic standard of relevance thus is a liberal one.” Id. And
when an expert’s “methodology is sound, and the evidence relied upon sufficiently related to the
case at hand, disputes about the degree of relevance or accuracy (above this minimum threshold)
may go to the testimony’s weight, but not its admissibility.” i4i Ltd. P’ship v. Microsoft Corp.,
598 F.3d 831, 852 (Fed. Cir. 2010).
Significantly, Rule 702 contemplates that “it might also be important in some cases for an
expert to educate the factfinder about general principles, without ever attempting to apply these
principles to the specific facts of the case. For example, experts might instruct the factfinder on
… how financial markets respond to corporate reports, without ever knowing about or trying to
tie their testimony into the facts of the case.” FED. R. EVID. 702, 2000 advisory committee note.
In short, nothing in Rule 702 alters “the venerable practice of using expert testimony to educate
the factfinder on general principles.” Id.

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III.

ARGUMENT
A.

Mr. Bari’s Testimony Is Relevant and Will Assist the Trier of Fact in
Understanding the Evidence and Determining Facts in Issue.

Defendants assert that Mr. Bari’s “testimony does not relate to any of the issues in this
case, and is thus ‘non-helpful’ and non-admissible.” Dkt. 906 at 4. Defendants are wrong.
Indeed, they concede that the jury will ultimately be tasked with measuring “the value of
interactive content on [their] websites.” Dkt. 903 at 8. And there is no dispute that this interactive
content includes in particular interactive product images, interactive video, and search-suggest
functionality—every Defendant is accused of infringement based on the provision of at least one
of these specific forms of interactive online content and functionality. Mr. Bari’s testimony is
directly relevant to these issues; it focuses in particular on the role played by interactive product
images, interactive video, and search-suggest functionality in the e-commerce environment in
which Defendants operate. And Mr. Bari will further educate the jury on the historical context of
the e-commerce industry; on the rise in the use of interactive product images, interactive video,
and search-suggest functionality in the e-commerce environment; on the role such interactive
content plays in the industry today; and on background e-commerce marketing principles such as
“conversion rate,” “bounce rate,” “stickiness,” and “friction.” Ex. A at 1-73. All of these issues
are directly relevant to the facts of this case, and will assist the jury in understanding and
evaluating the damages evidence submitted by both parties.
The Fifth Circuit recognizes that experts are needed where the testimony concerns
complex matters that challenge the comprehension of lay people. See Bauman v. Centex Corp.,
611 F.2d 1115, 1121 (5th Cir. 1980); see also Wright & Gold, 29 FEDERAL PRACTICE

AND

PROCEDURE: EVIDENCE § 6264 (1997). The specialized and technical nature of internet
marketing and the e-commerce industry warrant guidance by an expert here. There is no reason

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to believe that the jury will arrive with an understanding of background e-commerce marketing
principles, or of the role and significance of interactive content in the e-commerce environment.
Mr. Bari’s testimony will educate the jury on these technical issues. Ex. A, at 1-73. It is thus
relevant, and “will assist the trier of fact to understand the evidence.” FED. R. EVID. 702.
B.

Mr. Bari’s Testimony Is Based on Sufficient and Reliable Facts and Data.

As in Micro Chemical, Defendants “confuse the requirement for sufficient facts and data
with the necessity for a reliable foundation in principles and method, and end up complaining
that [Mr. Bari’s] testimony [is] not based on ‘reliable facts.’” Micro Chem., Inc. v. Lextron, Inc.,
317 F.3d 1387, 1392 (Fed. Cir. 2003). Contrary to Defendants’ apparent assumption, questions
relating to the bases and sources of an expert’s opinion affect only the weight to be assigned that
opinion rather than its admissibility. United States v. 14.38 Acres of Land, 80 F.3d 1074, 1077
(5th Cir. 1996). In any event, Mr. Bari’s opinions are based on sufficient and reliable facts and
data. In conducting his analysis, Mr. Bari reviewed far more than a “selective smattering” of
evidence, as reflected by his source citations. He extensively evaluated market research, case
studies, company profiles, industry metrics, and more.1 Ex. A at 4, 7-8. And contrary to
Defendants’ assertion that Mr. Bari fails to offer “indicia of reliability” for his evidence, he
relies—as he explains—on trade publications in the relevant industry, reputable news outlets,
market research, and his personal experience in the industry. These are just the types of sources
routinely utilized by experts that pass Daubert muster. Furthermore, Defendants do not

1

Defendants also criticize Mr. Bari’s use of certain “anecdotal evidence.” Dkt. 906 at 4. As
Defendants note, Mr. Bari has used “[c]ertain market research, case studies, companies and
metrics … for anecdotal purposes.” Ex. A at 51 n.177. Mr. Bari’s disclosure clearly reflects that
he has utilized certain case studies to illustrate the role and significance of the functionalities
enabled by embedded interactive content to web retailers. But Defendants misconstrue Mr.
Bari’s disclosure. These “anecdotal” case studies simply provide background information
relevant to understanding the general e-commerce principles at issue.
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specifically challenge any of Mr. Bari’s underlying sources or evidence as unreliable.2
C.

Mr. Bari’s Testimony Is the Product of a Reliable Methodology.

As noted, Mr. Bari has reviewed and analyzed numerous industry reports, the business
profiles of the leading web-based companies and internet retailers, government reports, articles
from well-respected news sources, and industry analyst services. Ex. A at 9-10. He then analyzed
and evaluated this substantial literature in light of his own extensive experience in the ecommerce industry. Id. at 9. This methodology—“employing experience to analyze data
assembled by others”—is “neither illicit nor unusual.” Loeffel Steel Prods. v. Delta Brands, 372
F. Supp. 2d 1104, 1119 (N.D. Ill. 2005); FED. R. EVID. 702, 2000 advisory committee note.
D.

Mr. Bari Reliably Applies His Methodology to the Facts of the Case.

Defendants point out that a “major determinant of whether an expert should be excluded
under Daubert is whether he has justified the application of a general theory to the facts of the
case.” Dkt. 906 at 1; Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1316 (Fed. Cir. 2011).
Defendants argue that Mr. Bari’s testimony fails to meet this requirement, Dkt. 906 at 5-7, but
Defendants are again wrong. Mr. Bari clearly applies his analysis of e-commerce marketing to
the facts of this case: his testimony addresses the development of the market demand for
interactive images, interactive videos, and search suggest, see Ex. A at 17; the growth of the
internet retail market in which the majority of Defendants compete, see id. at 18-19; the
importance of interactive images, interactive video, and search suggest to success in internet

2

Defendants also throw in a Rule 403 objection. For the reasons discussed in sections III.A and
III.D.3, evidence relating to the role played by interactive images, interactive video, and searchsuggest functionality in online retail marketing is both highly relevant to this case and tied to the
patents-in-suit. To the extent that Defendants believe that the general principles discussed by Mr.
Bari apply to their particular products in a particular way, they are free to explore those issues on
cross-examination, or to present their particular story through their own witnesses.
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retail market, see id. at 24-31; and the underlying reasons for consumer demand for those
interactive features, see id. at 46-50.
1.

Mr. Bari’s testimony does not offend Uniloc, ResQNet, and Lucent.

Defendants rely on isolated snippets from Uniloc, ResQNet, and Lucent to suggest that
Mr. Bari must evaluate the specific claims at issue, and that he cannot provide any testimony
touching on non-accused products. Dkt. 906 at 3, 6-7. Those cases, however, do not support
Defendants’ position. To the contrary, they endorse expert testimony of comparable licenses to
non-accused products as a potentially reliable means of ascertaining a reasonable royalty. See
Uniloc, 632 F.3d at 1317-18 (“looking at royalties paid … in comparable licenses … remain[s]
valid”).3 Here, Mr. Bari’s testimony relates to the internet retail market’s use of the same
functionalities that Defendants utilize—interactive images, interactive video, and search suggest.
There should be no doubt, therefore, that Mr. Bari’s testimony is sufficiently tied to the facts of
this case. See id. Defendants’ reliance on isolated snippets from Uniloc, ResQNet, and Lucent is
further misplaced because those cases specifically address expert testimony opining on a
reasonable royalty rate. See Uniloc, 632 F.3d at 1317. Here, Mr. Bari’s testimony does not
advance a reasonable royalty rate formulation—it simply educates the jury on the role and
significance of interactive images, interactive videos, and search-suggest features in the online
retail market. Thus, the concerns for precision in an expert’s reasonable-royalty formulation are
not relevant here.4 See ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010).

3

See also i4i, 598 F.3d at 856 (affirming a Daubert ruling that allowed a damages expert to rely
on a non-accused, third-party product as his benchmark for calculating a licensing fee).

4

The experts excluded in Fractus, S.A. v. Samsung et al., No. 6:09-cv-203-LED-JDL (E.D. Tex.
Apr. 29, 2011), cited by Defendants, Dkt. 906 at 7, also appear to have been testifying as to a
reasonable royalty rate.
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2.

Mr. Bari’s testimony addresses issues that are relevant to the jury’s
evaluation of damages in this case.

The admissibility of Mr. Bari’s testimony educating the jury on the role and significance
of interactive images, interactive videos, and search suggest is expressly contemplated by the
advisory committee notes to Rule 702:
it might also be important in some cases for an expert to educate the factfinder about
general principles, without ever attempting to apply these principles to the specific facts
of the case. For example, experts might instruct the factfinder on the principles of … how
financial markets respond to corporate reports, without ever knowing about or trying to
tie their testimony into the facts of the case. The amendment does not alter the venerable
practice of using expert testimony to educate the factfinder on general principles.
FED. R. EVID. 702, 2000 advisory committee note. Accordingly, an expert’s testimony “need not
relate directly to the ultimate issue in a particular case.” Perez v. City of Austin, No A-07-CA044, 2008 U.S. Dist. LEXIS 36776, at *12 (W.D. Tex. May 5, 2008).5 In line with these
authorities, Mr. Bari does not testify as to a specific quantum of damages—Eolas’ expert Mr.
Roy Weinstein does that. But Mr. Bari does educate the jury on background interactive-content
and e-commerce principles that will assist the jury in evaluating the damages evidence submitted
by both parties. In particular, Mr. Bari will educate the jury on the historical context of the ecommerce industry; on the rise in the use of interactive product images, interactive video, and

5

See also Smith v. BMW N. Am., Inc., 308 F.3d 913, 919 (8th Cir. 2002) (“An expert’s testimony
need not relate directly to the ultimate issue that is to be resolved by the trier of fact, it only need
be relevant to evaluating a factual matter.”); Burbach Aquatics, Inc. v. City of Elgin, No. 08 CV
4061, 2011 U.S. Dist. LEXIS 4573, at *14 (N.D. Ill. Jan. 18, 2011) (“expert testimony need not
concern the (or an) ultimate issue in the case in order to be reliable”); CDX Liquidating Trust v.
Venrock Assocs., 411 B.R. 571, 584 (N.D. Ill. 2009) (expert testimony “need not embrace the
ultimate issue; rather, it need only be relevant to evaluating a factual matter”); Westfield Ins. Co.
v. J.C. Penney Corp., 466 F. Supp. 2d 1086, 1093 (W.D. Wis. 2006) (an expert “need not have
an opinion on the ultimate question to be resolved by the trier of fact in order to satisfy the
relevance requirement”); Dartey v. Ford Motor Co., 104 F. Supp. 2d 1017, 1025 (N.D. Ind.
2000) (“To be relevant under Rule 702, the proffered testimony must only assist the jury in
determining any fact in issue in a case. Relevant testimony is not excluded simply because the
testimony does not relate to the ultimate issue in the case.”).
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search-suggest functionality in the e-commerce environment; on the role such interactive content
plays in the industry today; and on background e-commerce marketing principles such as
“conversion rate,” “bounce rate,” “stickiness,” and “friction.” Ex. A at 1-73. Defendants are
plainly wrong to assert that this testimony does not “concern [] any of the issues in the case.”
Dkt. 906 at 3.6 Mr. Bari’s testimony is relevant, and it is reliably applied to the interactivecontent features and the e-commerce context of this case.
IV.

CONCLUSION
For the reasons discussed above, Eolas respectfully asks that the Court deny Defendants’

Daubert Motion to Preclude the Expert Testimony of Jonathan H. Bari, Dkt. 906, in its entirety.

6

Defendants also fail to acknowledge that Mr. Bari specifically addresses some Defendants’
success in the internet retail market as driven by their use of infringing functionalities. See Ex. A
at 34 (Amazon’s use of video); 47-50 (Google’s use of search suggest). It should also be noted
that Eolas’ and Mr. Bari’s reliance on market-wide data regarding the significance of the
infringing features is in part necessitated by Defendants’ failure to produce adequate A/B testing
results, a method of marketing testing frequently used in the internet retail context to determine
the most effective way to impulse customers into making a purchase.
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Dated: October 5, 2011.

McKool 396731v7

MCKOOL SMITH, P.C.
/s/ Mike McKool
Mike McKool
Lead Attorney
Texas State Bar No. 13732100
[e-mail]
Douglas Cawley
Texas State Bar No. 04035500
[e-mail]
Holly Engelmann
Texas State Bar No. 24040865
[e-mail]
J.R. Johnson
Texas State Bar No. 24070000
[e-mail]
MCKOOL SMITH, P.C.
300 Crescent Court, Suite 1500
Dallas, Texas 75201
Telephone: [phone]
Telecopier: [phone]
Kevin L. Burgess
Texas State Bar No. 24006927
[e-mail]
Josh W. Budwin
Texas State Bar No. 24050347
[e-mail]
Gretchen K. Curran
Texas State Bar No. 24055979
[e-mail]
Matthew B. Rappaport
Texas State Bar No. 24070472
[e-mail]
MCKOOL SMITH, P.C.
300 West Sixth Street, Suite 1700
Austin, Texas 78701
Telephone: [phone]
Telecopier: [phone]

Robert M. Parker
Texas State Bar No. 15498000
[e-mail]
Robert Christopher Bunt
Texas Bar No. 00787165
[e-mail]
Andrew T. Gorham
Texas State Bar No. 24012715
[e-mail]
PARKER, BUNT & AINSWORTH, P.C.
100 E. Ferguson, Suite 1114
Tyler, Texas 75702
[phone]
[phone]- Facsimile
ATTORNEYS FOR PLAINTIFF
EOLAS TECHNOLOGIES INC.
AND THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA

McKool 396731v7

CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the above and foregoing document has
been served on all counsel of record via e-mail and the Court’s ECF system on October 5, 2011.
/s/ Josh Budwin
Josh Budwin

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