`Case 1:17-cv-00770-JDW Document 259-5 Filed 11/02/23 Page 1 of 13 PagelD #: 29236
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`EXHIBIT 31
`EXHIBIT 31
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`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`PACKET INTELLIGENCE LLC,
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`Plaintiff,
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`
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`
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`v.
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`NETSCOUT SYSTEMS, INC.,
`TEKTRONIX COMMUNICATIONS, and
`TEKTRONIX TEXAS, LLC
`
`Civil Action No. 2:16-CV-00230
`
`
`
`Defendants.
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`PACKET INTELLIGENCE’S OPPOSITION TO NETSCOUT’S RENEWED
`MOTION FOR JUDGMENT AS A MATTER OF LAW OF NO WILLFUL
`INFRINGEMENT PURSUANT TO FED. R. CIV. P. 50(b)
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`TABLE OF CONTENTS
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`I.
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`II.
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`INTRODUCTION ...............................................................................................................1
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`LEGAL STANDARDS ........................................................................................................1
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`III.
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`ARGUMENT .......................................................................................................................2
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`A.
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`B.
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`C.
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`Absence of Formal Pre-Suit Infringement Notice Does Not Foreclose
`Willfulness ...............................................................................................................2
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`The Trial Evidence More Than Sufficiently Supports the Verdict ...........................3
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`NetScout Continues to Market and Promote Sales of the Infringing
`Products....................................................................................................................5
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`D.
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`NetScout’s Defenses Do Not Foreclose Willfulness ................................................7
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`IV.
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`CONCLUSION ....................................................................................................................8
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`ii
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`CASES
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`TABLE OF AUTHORITIES
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`Baisden v. I’m Ready Prods., Inc.,
`693 F.3d 491 (5th Cir. 2012) ....................................................................................................... 2
`
`Barry v. Medtronic, Inc.,
`230 F. Supp. 3d 630 (E.D. Tex. 2017) ........................................................................................ 8
`
`Bianco v. Globus Med., Inc.,
`No. 2:12-CV-00147-WCB, 2014 U.S. Dist. LEXIS 151967 (E.D. Tex. Oct. 27, 2014) ............ 6
`
`Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co.,
` 276 F. Supp. 3d 629 (E.D. Tex. 2017) ....................................................................................... 1
`
`Ericsson Inc. v. TCL Commun. Tech. Holdings, Ltd.,
`No. 2:15-cv-00011-RSP, 2017 U.S. Dist. LEXIS 183216 (E.D. Tex. Nov. 4, 2017).................. 3
`
`Ericsson Inc. v. TCL Commun. Tech. Holdings, Ltd.,
`No. 2:15-cv-00011-RSP, 2018 U.S. Dist. LEXIS 78857 (E.D. Tex. May 10, 2018) .............. 4, 5
`
`Flowers v. S. Reg’l Physician Servs. Inc.,
`247 F.3d 229 (5th Cir. 2001) ....................................................................................................... 6
`
`Huawei Techs. Co. v. T-Mobile US, Inc.,
`No. 2:16-cv-52-JRG-RSP, 2017 WL 1129951 (E.D. Tex. Feb. 21, 2017) .................................. 3
`
`Metaswitch Networks Ltd. v. Genband US LLC,
`No. 2:14-CV-00744-JRG, U.S. Dist. LEXIS 137926 (E.D. Tex. Aug. 28, 2017) ...................... 2
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`Olibas v. Barclay,
`838 F.3d 442 (5th Cir. 2016) ....................................................................................................... 2
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`Radware, Ltd. v. F5 Networks, Inc.,
`2016 U.S. Dist. LEXIS 112504 (Aug. 22, 2016 N.D. Cal.) ........................................................ 2
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`Weeks v. Angelone,
`528 U.S. 225 (2000) .................................................................................................................... 5
`
`WesternGeco LLC v. ION GeoPhysical Corp.,
`837 F.3d 1358 (Fed. Cir. 2016) ............................................................................................... 7, 8
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`RULES
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`Fed. R. Civ. P. 50(a)(2) ................................................................................................................... 7
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`iii
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`I.
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`INTRODUCTION
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`After rendering credibility determinations on fourteen witnesses presented at trial,1 a jury
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`was properly instructed on the standard for willful infringement and found unanimously that
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`NetScout willfully infringed PI’s Asserted Patents. Dkt. 237 at 3. Following extensive post-trial
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`briefing for entry of judgment on willfulness and for enhanced damages, the Court held “that the
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`jury’s willfulness finding was more than adequately supported by the evidence adduced at
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`trial[.]” Dkt. 305 at 3. Further, after considering the Read factors the Court independently
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`determined that “egregious infringement behavior [by NetScout] was present and enhancement is
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`appropriate on that basis.” Id. at 15.
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`Despite the jury’s verdict of willfulness and the Court’s findings enhancing damages
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`upon finding the verdict “more than” adequately supported, NetScout asserts: “There is no
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`evidence in the record that shows infringement that was [willful].” Mot. at 4. But NetScout’s
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`reliance on certain Read factors the Court found in NetScout’s favor—while ignoring Read
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`findings and evidence adverse to NetScout—is nakedly self-serving. The result is a NetScout
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`Motion that ignores or mistates important facts supporting willfulness, directs the Court to non-
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`binding or irrelevant authority, and ignores the substantial trial testimony and credibility
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`determinations underlining the jury’s willfulness verdict. The Court should deny the Motion.
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`II.
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`LEGAL STANDARDS
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`“A motion for judgment as a matter of law [under Rule 50(b)] is a challenge to the legal
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`sufficiency of the evidence supporting the jury’s verdict.” Erfindergemeinschaft UroPep GbR v.
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`Eli Lilly & Co., 276 F. Supp. 3d 629, 643 (E.D. Tex. 2017) (“UroPep”) (Bryson, J., sitting by
`
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`1 According to the Court’s trial minutes, 14 witnesses testified in person or by deposition
`to the jury (Dkt. 239-241)—not including witnesses who testified during the bench trial on
`equitable matters.
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`1
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`designation). The Fifth Circuit is “especially deferential” to a jury verdict. Olibas v. Barclay,
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`838 F.3d 442, 448 (5th Cir. 2016). The Court must draw all reasonable inferences in the light
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`most favorable to the verdict. See, e.g. Metaswitch Networks Ltd. v. Genband US LLC, No. 2:14-
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`CV-00744-JRG, U.S. Dist. LEXIS 137926 at *7 (E.D. Tex. Aug. 28, 2017). “A district court must
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`deny a motion for judgment as a matter of law unless the facts and inferences point so strongly
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`and overwhelmingly in the movant’s favor that reasonable jurors could not reach a contrary
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`conclusion Baisden v. I’m Ready Prods., Inc., 693 F.3d 491, 498 (5th Cir. 2012) (emphasis
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`added) (internal quotation marks omitted).
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`III. ARGUMENT
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`A. Absence of Formal Pre-Suit Infringement Notice Does Not Foreclose Willfulness
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`NetScout does not deny that defendant Tektronix knew of at least the asserted ’725 patent
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`prior to the filing of this lawsuit. Mot. at 2. Indeed, NetScout emphasizes that the way it learned
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`of the ’725 patent is a U.S. patent examiner cited PI’s patent as pertinent prior art to a purported
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`invention Tektronix was seeking to patent—putting Tektronix on notice that an independent
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`government patent official considered a presumptively valid and unexpired patent to be pertinent
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`to the technology Tektronix was developing and seeking to patent. NetScout relies on Radware,
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`Ltd. v. F5 Networks, Inc., 2016 U.S. Dist. LEXIS 112504 at *12-13 (Aug. 22, 2016 N.D. Cal.),
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`which states “mere” citation to asserted patents during prosecution is not sufficient for
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`willfulness. Id. But this authority focused on pre-suit knowledge as the sole basis for willfulness,
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`which is not pertinent to the facts of this case. Here, upon receiving detailed notice of
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`infringement in March 2016, NetScout not only continued to sell the infringing products, it did
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`so while asserting that the inventors did not invent the claimed inventions—NetScout and/or the
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`RMON Working Group did—and the inventors stole the inventions and have been lying about it
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`for nearly 20 years.
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`2
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`NetScout cites to non-binding caselaw outside this district to assert it is an “open
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`question” whether willful infringement can be supported based solely on post-suit conduct. Mot.
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`at 3. But NetScout’s argument ignores an important fact: it is not an “open question” whether
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`post-suit conduct alone can support willfulness in this case. The agreed willfulness instruction
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`issued to the jury did not foreclose a willfulness finding based solely on post-suit conduct—to
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`the contrary, the instruction explicitly provided “[i]n determining whether the infringement by
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`NetScout was willful, you may consider all the relevant facts.” Dkt. 252, 32:4-14. NetScout did
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`not object to this instruction—it agreed to it. Dkt. 251, Charge Conf. Tr., 10/12/17 at 5:6-10:4.
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`Nor does NetScout’s present Rule 50(b) motion object to the jury instruction. Mot., passim. As a
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`result, NetScout has waived any argument that the jury was improperly instructed on
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`willfulness—and the agreed jury instruction closes any purported open question on this issue.
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`Further, it is not an “open question” in this District—as the Court has already held in this case.
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`See Dkt. 305 at 3 (“willfulness based on egregious conduct post-filing conduct is permitted”)
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`(citing Ericsson Inc. v. TCL Commun. Tech. Holdings, Ltd., No. 2:15-cv-00011-RSP, 2017 U.S.
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`Dist. LEXIS 183216, t *18-19 (E.D. Tex. Nov. 4, 2017); Huawei Techs. Co. v. T-Mobile US, Inc.,
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`No. 2:16-cv-52-JRG-RSP, 2017 WL 1129951, at *4 (E.D. Tex. Feb. 21, 2017)).
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`B. The Trial Evidence More Than Sufficiently Supports the Verdict
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`The evidence presented at trial was more than sufficient to support the willfulness
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`verdict. The trial evidence established that NetScout’s corporate representative, Mr. Kenedi, had
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`never read the patents but took the stand to sponsor NetScout’s theory that Mr. Dietz lied and
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`stole the claimed inventions, and that NetScout’s CEO, Mr. Singhal, could not recall ever
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`carefully reviewing the Asserted Patents, and is certain he did not read the entirety of even a
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`single Asserted Patent. See Dkt. No. 300, 10/11/17 AM Trial Tr. at 109:14-110:22; 116:18-19;
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`Dkt. 248, 10/11/17 PM Trial Tr. at 87-11-88:4. NetScout relies on the same trial cites (Mot. at
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`3
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`3)—but none of those citations mitigate the egregious nature of NetScout’s infringement and its
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`strategy to attack the inventors and accuse them of stealing the subject-matter of the Asserted
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`Patents without having read the Asserted Patents in any detail. More importantly, nothing in the
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`transcripts cited above supports NetScout’s assertion that it “promptly investigated and, relying
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`on technical experts and its counsel, formed noninfringement and invalidity defenses in good
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`faith.” Mot. at 3.
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`NetScout did not assert an advice of counsel defense to willfulness. Thus, neither
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`counsel’s advice nor the steps taken to provide it were disclosed or subject to cross-examination.
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`NetScout cannot simply hide behind its attorneys or experts to insulate itself from the jury’s
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`willfulness finding—particularly in the absence of trial testimony demonstrating any reasonable
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`good-faith reliance or what they were told by experts or lawyers when the evidence established
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`NetScout’s principal witnesses were not even interested or engaged enough to bother reviewing
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`the Asserted Patents. “The jury was under no obligation to credit [NetScout’s] defenses as
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`reasonable or infer that the defense was evidence of [NetScout’s] good-faith belief, particularly
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`where there was no evidence about that belief.” Ericsson Inc. v. TCL Commun. Tech. Holdings,
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`Ltd., No. 2:15-cv-00011-RSP, 2018 U.S. Dist. LEXIS 78857, at *30-33 (E.D. Tex. May 10,
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`2018) (finding substantial evidence supported willfulness verdict and rejected defendant’s
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`pleading of good faith where “[w]hat is missing, however, is any evidence from [defendant]
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`regarding its actual, subjective beliefs. The [defendant] employees called by deposition at trial
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`indicated only that they did not read the patent. It would be impossible to conclude that these
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`employees reasonably believed the patent was invalid when the employees admitted they had no
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`beliefs at all about the matter.”).
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`4
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`In any event, the jury was instructed that it “may not determine that the infringement
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`was willful just because NetScout knew of the asserted patent and infringed it. Willful
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`infringement, ladies and gentlemen, is reserved for only the most egregious behavior, such as
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`where the infringement was wanton, malicious, in bad faith, deliberate, consciously wrong, or
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`flagrant.” Dkt. 252, 32:4-14; emphasis added. “A jury is presumed to follow its instructions.”
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`Weeks v. Angelone, 528 U.S. 225, 234 (2000). And here the jury found the willfulness standard
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`satisfied even though it heard the NetScout witnesses’ vague and generic testimony about their
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`reliance on attorneys and experts—thus “[t]he jury must have concluded that the defense was not
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`reasonable enough to permit an inference that [NetScout] did not willfully infringe the patent.”
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`Ericsson, 2018 U.S. Dist. LEXIS at *33.
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`Moreover, nothing in Mr. Kenedi’s or Mr. Singhal’s testimony disclosed the timing of any
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`investigations or development of defenses, nor did they disclose that they made any specific
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`business decision after being put on detailed notice of infringement based on any specific
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`defense to the claim other than conclusory testimony about conversations with lawyers or
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`experts—the contents of which were not disclosed to the jury. “The jury’s finding that
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`[NetScout’s] infringement was both culpable and egregious necessarily means that the jury did
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`not credit [NetScout] with a good faith belief about the [Asserted Patents]. This was not a
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`surprising result given the lack of evidence about the subjective beliefs of [NetScout’s] decision
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`makers.” Ericsson, 2018 U.S. Dist. LEXIS at *34; see also id. at *32-33 (further holding that the
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`fact that the case was not close contributed to its holding that substantial evidence supported the
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`jury’s willfulness finding).
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`C. NetScout Continues to Market and Promote Sales of the Infringing Products
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`NetScout asserts that prior to trial the infringing products were being phased out in favor
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`of promoting next-generation products. Mot. at 4. Such facts do not even come close to showing
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`5
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`insufficient evidence for the willfulness verdict. First, NetScout did not identify or rely on the
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`purported “phase out” of the infringing products in its Rule 50(a) willfulness motion. See
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`10/12/2017 Day 3 PM Trial Tr. at 97:1-100:18. For this reason, NetScout cannot rely on this
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`argument and evidence in its present motion. See Fed. R. Civ. P. 50(a)(2) (a Rule 50(a) “motion
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`must specify the judgment sought and the law and facts that entitle a movant to the judgment.”);
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`Bianco v. Globus Med., Inc., No. 2:12-CV-00147-WCB, 2014 U.S. Dist. LEXIS 151967, at *19-
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`20 (E.D. Tex. Oct. 27, 2014) (“Globus did not raise that specific argument in its pre-verdict Rule
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`50(a) motion for judgment as a matter of law. Globus has therefore waived the right to make that
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`argument as part of its renewed motion for judgment as a matter of law under Rule 50(b).”)
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`(citing Flowers v. S. Reg’l Physician Servs. Inc., 247 F.3d 229, 238 (5th Cir. 2001) and Duro-
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`Last, Inc. v. Custom Seal, Inc., 321 F.3d 1098, 1107-08 (Fed. Cir. 2003)).
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`Second, NetScout admits that Mr. Singhal testified that NetScout continues to sell the
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`infringing products upon request from customers. Mot. at 4. And the jury could reasonably infer
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`that NetScout decided it was more important to sell infringing products to any customer that
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`requests them than it was to respect PI’s patent rights. The jury could have reasonably inferred
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`that choosing greed (infringing sales) over respect for patent rights enshrined in the Constitution
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`shows at least “deliberate” and/or “consciously wrong” and/or “flagrant” behavior.
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`Third, NetScout misrepresents that it “ceased promoting sales of the accused products,”
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`and “pulled the accused products from its marketing.” Mot. at 4. PI’s Motions for Enhanced
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`Damages and For a Running Royalty established with declarations and exhibits that NetScout
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`has not “pulled the accused products from marketing”—and in fact continued to promote the
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`infringing products after the verdict. Dkt. 267 at 3-4, and Exs. A & B thereto; Dkt. 269 at 12.
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`NetScout did not come forward with any contrary evidence. Moreover, NetScout continues to
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`6
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`this day to market and promote sales of the infringing products front and center directly from
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`NetScout’s homepage. See Gasser Decl. at ¶¶3-8; Exs. 1-4. Hovering over the “PRODUCT” link
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`on NetScout’s homepage generates a product pull-down menu that lists “Iris/GeoProbe” under
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`“Carrier Service Provider Products.” Clicking the “Iris/GeoProbe” link on the home page brings
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`a customer directly to promotional materials for the infringing GeoProbe G10 and GeoBlade
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`devices, as well as additional hyperlinks to their respective datasheets. Id. at ¶¶3-10; Exs. 1-6.
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`Alternatively, a customer can click on (rather than hover over) the “products” link on NetScout’s
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`homepage which takes a customer to “NetScout’s Products Overview Page,” which appears to
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`itemize NetScout’s main product families. Id. at ¶¶11-13; Exs. 7-8. The seventh product family
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`on the Products Overview page is “Iris/GeoProbe” that when clicked opens the main GeoProbe
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`webpage with promotional material and datasheets for the infringing G10 and GeoBlade
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`products. Id. at ¶¶11-13; Exs. 4, 7-8. NetScout’s decision to continue such open and blatant
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`marketing of the infringing products from its homepage—while representing to the Court that it
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`had “ceased” promotion and “pulled” the products from marketing—is troubling, and
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`underscores that NetScout continues to “double-down” on its deliberate, flagrant, and undeniably
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`willful infringement.
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`D. NetScout’s Defenses Do Not Foreclose Willfulness
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`NetScout cites WesternGeco LLC v. ION GeoPhysical Corp., 837 F.3d 1358, 1363 (Fed.
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`Cir. 2016) to argue for the ongoing relevance of the objective reasonableness of NetScout’s
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`defenses in the context of the willfulness verdict. Mot. at 5. But WesternGeco does not help
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`NetScout because it relates solely to a district court’s discretion to enhance damages upon
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`judgment of willfulness—it plainly does not hold, as NetScout contends, that objective
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`reasonableness can vacate a jury verdict of willfulness. See WesternGeco, 837 F.3d at 1363
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`(“After Halo, the objective reasonableness of the accused infringer's positions can still be
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`7
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`relevant for the district court to consider when exercising its discretion.”) (emphasis added);
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`See also Barry v. Medtronic, Inc., 230 F. Supp. 3d 630, 649-650 (“While it is true that objective
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`reasonableness can still be relevant to the inquiry of whether enhanced damages are appropriate
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`(see WesternGeco, 837 F.3d at 1363), an after-the-fact robust defense of invalidity cannot defeat
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`a willfulness finding by a jury.”).
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`As explained in PI’s concurrently filed oppositions to NetScout’s motions for JMOL of
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`Invalidity and Non-infringement, PI not only provided evidence at trial to support the jury’s
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`findings that the Asserted Patent Claims were infringed and not invalid, but PI’s testimony and
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`cross-examination allowed the jury to make credibility determinations to the benefit of PI’s
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`witnesses and arguments, and to the detriment of NetScout’s witnesses and arguments, entitling
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`the jury to decide this was not a close case, and that NetScout did not have good-faith non-
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`infringement or invalidity arguments—i.e., that NetScout’s infringement was wanton, malicious,
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`in bad-faith, deliberate, consciously wrongful or flagrant.
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`IV. CONCLUSION
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`For the reasons stated above and previously identified by this Court in its enhancement
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`opinion (Dkt. 305), this Court should deny NetScout’s Motion for JMOL on willful infringement.
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`8
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`Dated: October 26, 2018
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`Respectfully submitted,
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`/s/ Alexander E. Gasser
`Paul J. Skiermont (Bar No. 24033073)
`Sarah E. Spires (Bar No. 24083860)
`Sadaf R. Abdullah (Bar No. 24093500)
`Steven W. Hartsell (Bar No. 24040199)
`Alexander E. Gasser (Bar No. 1022659WI)
`Steve J. Udick (Bar No. 24079884)
`SKIERMONT DERBY LLP
`1601 Elm Street, Suite 4400
`Dallas, Texas 75201
`Tel. (214) 978-6600
`Fax (214) 978-6601
`pskiermont@skiermontderby.com
`sspires@skiermontderby.com
`sabdullah@skiermontderby.com
`shartsell@skiermontderby.com
`agasser@skiermontderby.com
`sudick@skiermontderby.com
`
`William E. Davis, III
`Texas State Bar No. 24047416
`THE DAVIS FIRM, PC
`213 N. Fredonia Street, Suite 230
`Longview, Texas 75601
`Telephone: (903) 230-9090
`Facsimile: (903) 230-9661
`Email : bdavis@bdavisfirm.com
`
`Counsel for Plaintiff
`Packet Intelligence LLC
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`
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`CERTIFICATE OF SERVICE
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`I hereby certify that counsel of record who are deemed to have consented to electronic
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`service are being served with a copy of this document via the Court’s CM/ECF system per Local
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`Rule CV-5(a)(3), on this the 26th day of October, 2018.
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`/s/ Alexander E. Gasser
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`9
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