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Emblaze Ltd. v. Apple Inc.

United States District Court, Ninth Circuit, California, N.D. California, San Jose Division
Jun 18, 2014
5:11-cv-01079-PSG (N.D. Cal. Jun. 18, 2014)

Opinion


EMBLAZE LTD., Plaintiff, v. APPLE INC., Defendant. No. 5:11-cv-01079-PSG. United States District Court, N.D. California, San Jose Division. June 18, 2014.

          ORDER RE: PRE-TRIAL MOTIONS (RR: DKT NOS. 432, 443, 444, 445, 447, 452, 453, 455, 456, 458, 459, 460, 461, 463, 484, 487, 490 and 493)

          PAUL S. GREWAL, Magistrate Judge.

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

The court will issue separate orders addressing Apple's Daubert and summary judgment motions.

         DN Motion Order 432 Emblaze's Daubert Motion DENIED. Apple and Emblaze's factual dispute over the to Exclude Opinion and hypothetical negotiation date is a matter for Testimony of cross-examination-not grounds to exclude Apple's damages James Malackowski 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 GRANTED. Mr. Cohen was not timely disclosed as a Exclude Alan Cohen From percipient witness. He may not testify. Testifying at Trial 444 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-two-testimony-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 GRANTED. Emblaze shall not introduce evidence or Exclude Reference to argument on Apple's U.S. and worldwide gross revenues, Apple's Total Revenues, gross margins, profits, earnings, cash, investments, income Profits, Cash, Earnings and and income projections, including total profits or revenues Similar Finances 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.").

         Apple's MIL No. 2 - To GRANTED-IN-PART. Emblaze shall not offer evidence or Exclude Reference to argument regarding alleged past misconduct and the alleged Unrelated Litigations, poor character of Apple or Steve Jobs, as well as any prior Investigations, Accusations, unrelated litigations, investigations, accusations, or Settlements and/or Prior settlements involving Apple or Mr. Jobs. See Fed.R.Evid. Alleged Bad Acts Involving 401, 403 and 404(a)(1) ("Evidence of a person's character or Apple or Steve Jobs 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. Apple similarly shall not introduce evidence or argument related to poor character of Emblaze or its leadership. Apple's MIL No. 3 - To GRANTED. Emblaze shall not offer any evidence or Exclude Any Evidence or argument regarding Apple or Steve Jobs alleged copying of Argument Regarding Apple third party products, ideas or inventions. See Fed.R.Evid. or Steve Jobs Copying of 401 and 403. Others Apple's MIL No. 4 - To DENIED. The court will consider any appropriate objection Exclude Reference to Any during trial, but a blanket prophylactic order is not warranted. Discovery Decisions or The court will not countenance speculation as to documents Disputes, and Purported impermissibly withheld. Discovery Failures of Apple Apple's MIL No. 5 - To GRANTED. With summary judgment of non-infringement Exclude Expert Testimony entered as to unanalyzed streams, Emblaze shall not Beyond the Scope of Expert introduce evidence or argument at trial that these Reports, And Any Other non-infringing streams practice the asserted claims. Evidence or Argument Dr. Madisetti will be held to those opinions disclosed in his Regarding Non-Infringing expert report in this case. Streams

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.

         Apple's MIL No. 6 - To GRANTED-IN-PART. Emblaze may offer evidence that Exclude Evidence or Apple directly infringes Emblaze's patent only to support its Argument that Apple 35 U.S.C. § 271(b) inducement claims, not any 35 U.S.C. § Directly Infringes or that 271(a) direct infringement claims - which are no longer in Anyone Infringes Under the the case. Doctrine of Equivalents Apple's MIL No. 7 - To GRANTED. Although Malackowski's prior experience as an Exclude Any Evidence or expert witness is relevant, the danger of unfair prejudice to Argument Regarding Expert Apple substantially outweighs the probative value of the Testimony Previously evidence pursuant to Fed.R.Evid. 403. See Excluded in Unrelated Fed.R.Evid. 403 ("The court may exclude relevant evidence Litigation 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 GRANTED. Emblaze's counsel represented Emblaze would Exclude Any Evidence or not rely on the commercial success of Emblaze's products Argument Regarding and services and that it would not assert the failure of others Apple's Alleged Copying of or copying when it declined to reply with a Rule 30(b)(6) Emblaze or Other witness on topics propounded by Apple during discovery in Secondary Considerations this case. Emblaze therefore shall not marshal evidence or of Non-Obviousness That argument regarding Apple's alleged copying of Emblaze or Emblaze Intentionally other secondary considerations of non-obviousness that Withdrew in this Case Emblaze withdrew earlier in this case. 447 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.

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.").

         452 Sealing Motion 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 DENIED. Emblaze's challenge to the probative value of the Exclude Testimony license and Malackowski's reliance on the license can be Concerning Vocaltec addressed through cross-examination. Communications 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 DENIED. Without evidence that certain licenses are Exclude Testimony Relating significantly more probative and targeted of the technology at to the Burst.com and issue, Malackowski may rely on Dr. Polish's representations Multi-Format, Inc. Agreements 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 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 GRANTED. Malackowski's testimony shall be limited to the Exclude Testimony Beyond scope of his expert report and his expertise. the Scope of Mr. Malackowski's Expert Report and 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.").

         461 Emblaze's MIL No. 2 - To GRANTED. Apple shall not suggest that Emblaze had an Exclude All Testimony that obligation to create data or information that otherwise does Does Not Comply with the not exist, nor shall Apple elicit any testimony in violation of Court's October 22, 2013, the court's October 22, 2013, order. See Docket No. 294. Order 463 Sealing Motion 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.

         493 Sealing Motion Apple has agreed to publicly file Exs. F, G, H, K, O, X, and DD. Those documents shall not be filed under seal. Sealing of the reply brief is GRANTED. The request is narrowly tailored. Sealing of Ex. B is GRANTED. A significant portion of the deposition testimony constitutes sealable material and the exhibit contains only selected portions of the deposition transcript. Sealing of Ex. J is GRANTED. The material is sealable. Sealing of Ex. L is GRANTED. The material is sealable. Sealing of Ex. M is GRANTED. The material is sealable. Sealing of Ex. N is GRANTED. The material is sealable. Sealing of Ex. P is GRANTED. The material is sealable. Sealing of Ex. Q is GRANTED. The material is sealable. Sealing of Ex. R is GRANTED. The material is sealable. Sealing of Ex. S is GRANTED. The material is sealable. Sealing of Ex. T is GRANTED. The material is sealable. Sealing of Ex. U is GRANTED. The material is sealable. Sealing of Ex. V is DENIED. The material is not sealable. Sealing of Ex. W is DENIED. The material is not sealable. Sealing of Ex. Z is DENIED. The material is not sealable. Sealing of Ex. AA is GRANTED. The material is sealable. Sealing of Ex. BB is GRANTED. The material is sealable. Sealing of Ex. CC is GRANTED. The material is sealable.

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.").

         IT IS SO ORDERED.

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).


Summaries of

Emblaze Ltd. v. Apple Inc.

United States District Court, Ninth Circuit, California, N.D. California, San Jose Division
Jun 18, 2014
5:11-cv-01079-PSG (N.D. Cal. Jun. 18, 2014)
Case details for

Emblaze Ltd. v. Apple Inc.

Case Details

Full title:EMBLAZE LTD., Plaintiff, v. APPLE INC., Defendant.

Court:United States District Court, Ninth Circuit, California, N.D. California, San Jose Division

Date published: Jun 18, 2014

Citations

5:11-cv-01079-PSG (N.D. Cal. Jun. 18, 2014)