United States District Court, E.D. Texas, Marshall Division
UNILOC USA, INC., UNILOC LUXEMBOURG, S.A., UNILOC 2017 LLC, Plaintiffs,
SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG ELECTRONICS CO. LTD., Defendants.
MEMORANDUM OPINION AND ORDER
GILSTRAP UNITED STATES DISTRICT JUDGE
the Court is Defendants Samsung Electronics America, Inc. and
Samsung Electronics Co. Ltd.'s (collectively,
“Samsung”) Motion to Strike Certain Opinions in
the Amended Expert Report of R. Christopher Rosenthal
(“the Motion to Strike”) (Dkt. No. 175) and
Samsung's Second Daubert Motion to Exclude
Certain Opinions and Testimony of Uniloc's Damages Expert
R. Christopher Rosenthal (“the Daubert
Motion”) (Dkt. No. 184).
reasons described herein, the Court finds that the Motion to
Strike should be and hereby is GRANTED-IN-PART and
DENIED-IN-PART as follows:
The Court GRANTS the Motion to Strike with respect to
paragraphs 40, 91-97, 108(B), Exhibits 1 and 2, and certain
documents in Appendix D of Mr. Rosenthal's 3/12/19
Amended Report. The Court DENIES the Motion with respect to
paragraph 108(A) of Mr. Rosenthal's 3/12/19 Amended
the Court finds that the Daubert Motion should be
and hereby is GRANTED-IN-PART and DENIED-IN-PART as follows:
The Court GRANTS the Daubert Motion with respect to
the RoyaltySource Licenses, the issue of apportionment and
the Entire Market Value Rule, and the references to
Samsung's overall revenue projections and totals. The
Court DENIES the Daubert Motion with respect to the
Factual and Procedural History
Court held a pretrial hearing on March 4, 2019, in
preparation for a trial then set to begin on April 1, 2019,
to address a number of pending motions, including
Samsung's Motion for Summary Judgment of
Non-Infringement. (Dkt. No. 102). After considering the
parties' submissions, the Court granted Samsung's
motion for summary judgment of noninfringement with respect
to direct infringement by Samsung and denied the motion as to
indirect infringement. (See Dkt. No. 173).
Plaintiffs Uniloc USA, Inc., Uniloc Luxembourg, S.A., and
Uniloc 2017 LLC (collectively, “Uniloc”) sought
pre-suit damages only for direct infringement, the
Court's order eliminating direct infringement also had
the effect of eliminating the pre-suit damages period.
Uniloc's damages expert, R. Christopher Rosenthal, had
not then distinguished between pre-suit and post-suit damages
in his original damages report. Rather than striking Mr.
Rosenthal's entire report on the eve of trial, the Court
exercised its discretion to grant Uniloc limited leave to
submit an amended expert report that accounted for the
Court's ruling. Specifically, the Court instructed Uniloc
that any amendments should only effectuate the
Court's ruling by truncating the relevant damages period
to distinguish between pre-suit damages (direct infringement)
and post-suit damages (indirect infringement). The Court
instructed Uniloc that it was not permitted to otherwise
introduce new material, opinions, or analyses, and counsel
for Uniloc indicated that they understood the Court's
instructions and had no additional questions. The Court also
reset the trial to start on April 23, 2019. Further, and in
view of the limited scope of amendment, the Court set the
following expedited briefing schedule:
• Uniloc's amended report was due three days after
the hearing, on March 8, 2019.
• Samsung's responsive damages report was due on
March 11, 2019.
• Both parties could take relevant depositions no later
than March 14, 2019.
• Both parties could submit Daubert motions, if
any, no later than March 18, 2019.
• Both parties could submit responses to any
Daubert motions no later than March 21, 2019.
with the Court's order, Uniloc served Samsung with Mr.
Rosenthal's amended damages report on March 8, 2019
(“the 3/8/19 Amended Report”). Samsung
immediately lodged objections to such, saying that various
portions of the 3/8/19 Amended Report went beyond the scope
granted by this Court and were accordingly improper. (Dkt.
No. 175 at 5). The parties conferred between March 8 and
March 11, and partially resolved their disputes-Uniloc agreed
to withdraw a number of additions while Samsung agreed to
withdraw a number of objections. (Id.) Uniloc served
Samsung with Mr. Rosenthal's second amended damages
report on March 12, 2019 (“the 3/12/19 Amended
Report”), implementing the agreements that resulted
from their meet-and-confer process. The 3/12/19 Amended
Report is identical to the 3/8/19 Amended Report in all
respects relevant to this Order, except that it has different
paragraph numbering resulting from a number of the prior
paragraphs being altered.
March 12, 2019, Samsung filed the present Motion to Strike
portions of the 3/8/19 Amended Report as beyond the leave
granted by the Court and thus untimely pursuant to
Fed.R.Civ.P. 26. (Dkt. No. 175). Samsung specifically asked
the Court to strike paragraphs “40, 87-93, 104,
Exhibits 1 and 2, and certain documents in Appendix D (i.e.,
the 74 new documents, two new patent applications, and the
previously unconsidered deposition transcript and exhibits of
Arthur Kinsolving)”. (Id. at 5). Uniloc timely
responded to the Motion to Strike on March 15, 2019, in part
seeking additional leave to amend to the extent the Court
found Mr. Rosenthal's 3/12/19 Amended Report went beyond
the Court's order granting leave to amend. (Dkt. No.
181). While the Motion to Strike for untimeliness was
pending, Samsung also filed the present Daubert
Motion seeking to exclude various opinions contained in Mr.
Rosenthal's 3/12/19 Amended Report pursuant to
Daubert. (Dkt. No. 184). Uniloc untimely
responded to the Daubert Motion on March
22, 2019. (Dkt. No. 187).
detailed in Sections III.A(1)-(4) and III.C of this Order,
Uniloc's briefing in response to Samsung's
Daubert Motion relies heavily on the new material
added in Mr. Rosenthal's 3/12/19 Amended Report. In a
moment of admirable candor, Uniloc explicitly concedes in
the briefing that it made numerous changes to respond to
criticisms raised in Samsung's first Daubert
motion, rather than in response to the Court's order.
(See, e.g., Dkt. No. 181 at 6 (“Mr. Rosenthal
amended his Georgia-Pacific Factor 13 analysis to
answer Samsung's direct criticism that he did not begin
his analysis with the smallest-salable patent practice
[sic] unit. Samsung's suggestion that Mr.
Rosenthal's ultimate royalty opinion, which was based on
comparable license agreements, was improper. . . . Mr.
Rosenthal thus provided this analysis-starting his
Georgia-Pacific analysis with the technology most
closely related to the patent in suit that could be valued.
That was the fitness tracker.”); id. at 11
(“Finally, Mr. Rosenthal reviewed the deposition
transcript of Arthur Kingsolving [sic] at the
request of Samsung's own counsel and in response to
Samsung's Daubert motion against Mr.
resolution of Samsung's Motion to Strike affects the
Court's analysis of Samsung's Daubert
Motion, the Court first addresses the Motion to Strike and
will subsequently turn to the Daubert Motion.
Legal Standard for a Motion to Strike
must disclose the opinions of its experts “at the times
and in the sequence that the court orders.”
Fed.R.Civ.P. 26(a)(2)(D). When confronted with a violation of
Rule 26, Rule 37 grants district courts the authority to
exclude untimely information. Fed.R.Civ.P. 37(c)(1). Since a
district court has “broad discretion” in imposing
a sanction pursuant to Rule 37, a district court's
decision “will not be disturbed ordinarily unless there
are unusual circumstances showing a clear abuse.”
Moore v. CITGO Ref. & Chemicals Co., L.P., 735
F.3d 309, 315 (5th Cir. 2013); Passmore v. Baylor Health
Care Sys., 823 F.3d 292, 294-95, 296-97 (5th Cir. 2016)
(holding that Rules 26 and 37 operate jointly to create a
“federal discovery scheme” that assigns
“broad discretion” to district courts with
respect to “their control of timing and sanctions for
factors guide the Court's exercise of discretion in
evaluating whether to exclude evidence under Rule 37. CQ,
Inc. v. TXU Min. Co., L.P., 565 F.3d 268, 280 (5th Cir.
2009). Those factors are: “(1) [The untimely
party's] explanation for its failure to disclose the
evidence, (2) the importance of the evidence, (3) the
potential prejudice to [the objecting party] in allowing the
evidence, and (4) the availability of a continuance.”
Id. A party's failure to provide any
justification for its untimely disclosure weighs heavily in
favor of striking the disclosure, and may even be sufficient
standing alone to support exclusion. Sobrino-Barrera v.
Anderson Shipping Co., 495 Fed.Appx. 430, 433 (5th Cir.
2012) (affirming district court's exclusion of an
expert's new affidavit purporting to supplement the
original report with new methodology because the proffering
party gave no justification for untimeliness); Patterson
v. Houston Indep. Sch. Dist., 570 Fed.Appx. 367, 370
(5th Cir. 2014) (collecting cases affirming district court
exclusions where the party offered no justification for
Court addresses Samsung's Motion to Strike by considering
four categories of testimony contained in Mr. Rosenthal's
3/12/2019 Amended Report: (1) paragraph 40, (2) paragraphs
91- 97, (3) paragraph 108 and Exhibits 1-2, and (4) certain
new documents contained in Appendix D. The analysis for all
four categories of testimony overlaps in certain respects but
is distinct in others. Accordingly, the Court will
consolidate its analysis where practicable and will identify
distinct reasoning where otherwise appropriate.
Factor 1-Party's Explanation
40 of Mr. Rosenthal's 3/12/19 Amended Report contains Mr.
Rosenthal's comparison of the patent-in-suit, U.S. Patent
No. 7, 690, 556 (“the '556 Patent”) to the
various patents covered by the four licenses identified by
the RoyaltySource database (collectively, “the
RoyaltySource Licenses”). (Dkt. No. 175-6 at 12 ¶
40). In paragraph 40, Mr. Rosenthal offers a new
technological comparability analysis based on an
untranscribed, thirty-minute phone call he had with
Uniloc's technology expert, Dr. William Easttom II. (Dkt.
No. 184-3 at 117:1-118:1). Mr. Rosenthal represents that Dr.
Easttom ranked the comparability of the four RoyaltySource
License agreements on a scale from one to four, based on two
criteria: “the degree of improvement over existing
technology as well as a comparable level of skill and
innovation regarding the patents in the RoyaltySource
agreements.” (Dkt. No. 175-6 at 12 ¶ 40).
“According to Dr. Easttom, anything equal to or above a
2 on his scale is comparable from a technical
standpoint.” (Id.) Mr. Rosenthal acknowledged
that while Dr. Easttom provided him with numerical
conclusions about technological comparability, Dr.
Easttom did not explain the basis for the scale, the basis
for the cutoff thresholds used in the scale, the basis for
the criteria, the metrics for measuring the criteria, or any
other details that informed Dr. Easttom's conclusions
about comparability. (See Dkt. No. 184-3 at
120:11-124:11). Mr. Rosenthal confirmed at deposition that he
could not explain the basis for Dr. Easttom's conclusions
and suggested, “it's probably better for Mr.
Easttom to answer” the “lot of technical
questions” which Samsung raised. (Id. at
does not offer a justification for the new opinions contained
in paragraph 40. Uniloc does not claim, for example, that the
new analysis in paragraph 40 is necessary to implement the
Court's order or that it is otherwise reactive to the
Court's grant of summary judgment. Instead, Uniloc
attempts to argue that the technological comparability
analysis in paragraph 40 is not substantively “new,
” but instead reflects substantially the same analysis
as is present in Mr. Rosenthal's original report. (Dkt.
No. 181 at 5).
argument is untenable because paragraph 40 is new in every
sense of the term. It is literally new, in the sense that the
language in paragraph 40 is not contained anywhere in Mr.
Rosenthal's original report. It is also substantively
new, in the sense that none of the analysis
contained in the amended paragraph 40 is present in Mr.
Rosenthal's original report. Mr. Rosenthal's original
report does not include an analysis of technological
comparability for the RoyaltySource Licenses at all. That is
to say, it does not compare the claims of the '556 Patent
to the claims in any of the patents licensed under the four
RoyaltySource License agreements. (See Dkt. No.
175-3 at 10 ¶¶ 37(A)-(D) (listing the four
RoyaltySource Licenses without discussing the claims of the
'556 Patent or conducting any other analysis)). By
contrast, new paragraph 40 purports to introduce a new
quantitative scale based on new criteria which come to new
conclusions about the comparability of the RoyaltySource
Licenses. (See Dkt. No. 175-6 at 12 ¶ 40).
Specifically, the original report has no methodology for
comparison; the new report has a quantified scale.
(Compare Dkt. No. 175-3 at 10 ¶¶
37(A)-(D), with Dkt. No. 175-6 at 12 ¶ 40). The
original report has no criteria for comparing the
RoyaltySource patents and the '556 Patent; the new report
introduces two new criteria. (Compare Dkt. No. 175-3
at 10 ¶¶ 37(A)-(D), with Dkt. No. 175-6 at
12 ¶ 40). The original report concludes that all four
RoyaltySource patents are comparable; the new report rejects
that conclusion and opts for the view that only three are
comparable. (Compare Dkt. No. 175-3 at 10
¶¶ 37(A)-(D), with Dkt. No. 175-6 at 12
¶ 40). The use of a new methodology to reach a new
conclusion can only be fairly described as new, and well
beyond the scope allowed by the Court.
the newness of paragraph 40, in its Daubert briefing
on technological comparability, Uniloc does not identify
any material from Mr. Rosenthal's original
report in support of its comparability argument.
(See Dkt. No. 187 at 1-3, 7-8) (addressing
technological comparability without referencing the content
of Mr. Rosenthal's original report). Paragraph 40 is the
only portion of any of Mr. Rosenthal's reports
upon which Uniloc relies for technological comparability.
(See Id. at 7-8). Fundamentally, when pressed to
identify a basis in Mr. Rosenthal's report for
technological comparability, Uniloc only pointed to new
the Court finds that the material in paragraph 40 is new and
beyond the scope permitted by the Court. Further, Uniloc has
offered no justification for its untimeliness. The Court thus
finds that Factor 1 weighs in favor of striking paragraph 40.
91-97 of Mr. Rosenthal's 3/12/19 Amended Report describe
additional analysis of Georgia-Pacific Factor 9,
including quantification of the various measurement
efficiency gains purportedly created by the '556 Patent.
In Mr. Rosenthal's original report, the
Georgia-Pacific Factor 9 analysis consists of four
paragraphs. (Dkt. No. 175-3 at 25-26 ¶¶ 84- 87).
The first two paragraphs are quoted excerpts of the
specification of the '556 Patent. (Id. at 25- 26
¶¶ 84-85). The third paragraph summarizes the
excerpts, stating that the '556 Patent “is more
accurate than older modes.” (Id. ¶ 86).
The fourth paragraph concludes that since Samsung caters to
“fitness and health conscious consumers, ”
Samsung would consider the '556 Patent to be “an
important factor.” (Id. ¶ 87).
Rosenthal's 3/12/19 Amended Report adds seven new
paragraphs and a chart. (Dkt. No. 175-6 at 27-28 ¶¶
91-97). The first paragraph (id. ¶ 91) and the
chart attempt to quantify “the percentage improvement
in accuracy over previous modes of calculating calorie burn
information.” (Id.) This quantitative analysis
is completely new in Mr. Rosenthal's 3/12/19 Amended
Report. The subsequent six paragraphs introduce new arguments
about Samsung's prototypical “use case”
(id. ¶ 92), commentary on Samsung's damages
expert (id. ¶¶ 93-94), analysis of
Samsung's “S-Health” application
(id. ¶¶ 94-95), and reliance upon
Samsung's own internal reviews (id. ¶ 96).
argues that paragraphs 91-97 introduce information that is
unfairly advantageous to Uniloc, unrelated to the Court's
order granting leave to amend, and otherwise
“completely new.” (Dkt. No. 175 at 10). In its
response, Uniloc does not dispute that the information is
new. Uniloc also does not argue that the additional
information added in paragraphs 91-97 was introduced in order
to effectuate the Court's grant of leave to amend.
Instead, Uniloc claims that the Court should not strike
paragraphs because they are broadly “consistent with
[Mr. Rosenthal's] prior analysis.” (Dkt. No. 181 at
Court finds that Factor 1 favors striking paragraphs 91-97
and the chart. Both paragraph 91 and the chart introduce a
substantially new basis for Mr. Rosenthal's opinion: a
quantitative claim that the “accuracy of calorie burn
information would have improved between 23% to 118% depending
on the degree of incline” based on “the use of
'556 patent.” (Dkt. No. 175-6 at 27 ¶ 91).
This quantitative analysis is not fairly disclosed by the
original report for the simple reason that it is not
mentioned in the original report. The calculations contained
in paragraph 91 and the chart thus furnish additional,
originally undisclosed support for Mr. Rosenthal's
analysis of Georgia-Pacific Factor 9.
the Court finds that paragraphs 92-97 are also both literally
and substantively new. Paragraphs 92-97 are literally new in
the sense that the language contained in the paragraphs is
not present in Mr. Rosenthal's original report.
Paragraphs 92-97 are also substantively new because they
introduce additional and previously undisclosed
justifications for Uniloc's Georgia-Pacific
Factor 9 analysis.
true of paragraph 40, the newness of paragraphs 91-97 is
demonstrated by Uniloc's response to Samsung's
Daubert Motion. When pressed by Samsung's
Daubert Motion to demonstrate an apportionment
analysis, Uniloc did not cite a single paragraph that was
present in Mr. Rosenthal's original report. (See
Dkt. No. 187 at 11-15) (discussing Mr. Rosenthal's
apportionment analysis without reference to the original
report). Uniloc instead relied on the wholly new paragraphs
91-97. (Id. at 11 (citing ¶¶ 91- 97 &
¶¶ 91-92); id. at 12 (citing ¶¶
93- 94 & ¶¶ 94-95 & ¶¶ 95-96);
see also Id. at 11, 12 (citing ...