Case 1:12-cv-01013-RGA Document 243 Filed 01/29/15 Page 1 of 6 PageID #: 12013
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`SPRINT COMMUNICATIONS COMPANY
`L.P.,
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`Plaintiff,
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`v.
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`COMCAST IP HOLDINGS, LLC, et al.,
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`Defendants.
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`Civil Action No. 12-1013-RGA
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`MEMORANDUM ORDER
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`Presently before the Court is Comcast' s Motion to Exclude the damages opinions of
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`Sprint's experts, Dr. Arthur Brody and Dr. Debra Aron. (D.I. 170). This Motion was included in
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`Comcast's Motion for Summary Judgment filed on October 6, 2014, but is addressed separately
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`here. (Id.). The matter has been fully briefed (D.I. 171, 196 & 220), and the parties appeared for
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`oral argument on January 8, 2015 (D.I. 239). The parties appeared for a Daubert hearing on this
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`specific issue on January 16, 2015. (D.I. 229). Dr. Brody testified at the hearing. IT IS
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`HEREBY ORDERED that Comcast's Motion to Exclude is GRANTED.
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`Federal Rule of Evidence 702 sets out the requirements for expert witness testimony,
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`stating that:
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`A witness who is qualified as an expert by knowledge, skill,
`experience, training, or education may testify in the form of an
`opinion or otherwise if: (a) the expert's scientific, technical, or other
`specialized knowledge will help the trier of fact to understand the
`evidence or to determine a fact in issue; (b) the testimony is based
`on sufficient facts or data; ( c) the testimony is the product of reliable
`principles and methods; and (d) the expert has reliably applied the
`principles and methods to the facts of the case.
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`Fed. R. Evid. 702. The Third Circuit has explained:
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`1
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`ZIPIT EX. 2003, pg. 1
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`Case 1:12-cv-01013-RGA Document 243 Filed 01/29/15 Page 2 of 6 PageID #: 12014
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`Rule 702 embodies a trilogy of restrictions on expert testimony:
`qualification, reliability and fit. Qualification refers to the
`requirement that the witness possess specialized expertise. We have
`interpreted this requirement liberally, holding that "a broad range of
`knowledge, skills, and training qualify an expert." Secondly, the
`testimony must be reliable; it "must be based on the 'methods and
`'subjective belief or
`procedures of science' rather than on
`unsupported speculation'; the expert must have 'good grounds' for
`his o[ r] her belief. In sum, Daubert holds that an inquiry into the
`reliability of scientific evidence under Rule 702 requires a
`determination as to its scientific validity." Finally, Rule 702
`requires that the expert testimony must fit the issues in the case. In
`other words, the expert's testimony must be relevant for the
`purposes of the case and must assist the trier of fact. The Supreme
`Court explained in Daubert that "Rule 702's 'helpfulness' standard
`requires a valid scientific connection to the pertinent inquiry as a
`precondition to admissibility."
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`By means of a so-called "Daubert hearing," the district court acts as
`a gatekeeper, preventing opinion testimony that does not meet the
`requirements of qualification, reliability and fit from reaching the
`jury. See Daubert ("Faced with a proffer of expert scientific
`testimony, then, the trial judge must determine at the outset,
`pursuant to Rule 104(a) [of the Federal Rules of Evidence] whether
`the expert is proposing to testify to (1) scientific knowledge that (2)
`will assist the trier of fact to understand or determine a fact in
`issue.").
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`Schneider ex rel. Estate of Schneider v. Fried, 320 F.3d 396, 404-05 (3d Cir. 2003) (footnote
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`and internal citations omitted). 1
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`Comcast argues that Dr. Brody's opinion should be excluded because it does not meet the
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`requirements of Federal Rule of Civil Procedure 26 and Federal Rule of Evidence 702, and that
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`Dr. Aron's opinion should be excluded because it is based on the erroneous conclusions made by
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`Dr. Brody in his report. (D.I. 171 at 21-24). During direct examination, Dr. Brody explained
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`that he analyzed Comcast's Technical Requirements Document (TRD) for the IP Multimedia
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`Subsystem (IMS), and provided two opinions: (1) a requirements opinion (if 228); and (2) a
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`1 The Court of Appeals wrote under an earlier version of Rule 702, but the recent amendments to the rule were not
`intended to make any substantive change.
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`2
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`ZIPIT EX. 2003, pg. 2
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`Case 1:12-cv-01013-RGA Document 243 Filed 01/29/15 Page 3 of 6 PageID #: 12015
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`components opinion (ii 229). (D.I. 229 at 10:7-11: 10). For his requirements opinion, Dr. Brody
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`found that 258 (7%) of the approximately 3,685 "MUST" requirements "relate to" the
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`functionality claimed by the '853 patent. (D.I. 172-15 at 6-7 ii 228). For his components
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`opinion, Dr. Brody found that 7 (38.8%) of the 18 functional components in Comcast's IMS
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`network were implicated by the '853 patent, and that 7 (16. 7%) of the 42 enumerated functions
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`of the implicated components were related to the '853 patent. (Id. at 8 ii 229). Thus, Dr. Brody
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`concluded that 16.7% of the functionality of the 38.8% of the IMS system-6.5% of the system
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`as a whole-"relate to" the '853 patent. (Id.). Based on these two data points, Dr. Brody
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`concluded that from 6.5 to 7% of Comcast's IMS network infringed the asserted claims of the
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`'853 patent. (D.I. 229 at 10:12-18 & 11:3-8).
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`Comcast argues that Dr. Brody's report does not meet the requirements of Federal Rule of
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`Civil Procedure 26(a)(2)(B)(i) because his report does not provide the "basis and reasons" for his
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`opinions. (D.I. 171 at 21). Rule 26(a)(2)(B)(i) requires an expert witness to provide a report
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`containing: "a complete statement of all opinions the witness will express and the basis and
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`reasons for them." Fed. R. Civ. P. 26. Comcast argues that Dr. Brody's report does not disclose
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`how he determined whether a requirement or component was "implicated by" the '853 patent.
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`(D.I. 171 at 21 & 24). Sprint, on the other hand, argues that Dr. Brody's report explains that he
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`analyzed Comcast's TRD, and based on his experience in the field, identified the functionalities
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`that he believed to be related to the '853 patent. (D.I. 196 at 22-23). Dr. Brody concluded that
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`6.5 to 7% of Comcast's IMS network related to the patented subject matter, but provided no basis
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`for how he determined which features "related to" the patent. This determination provides the
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`entire basis for Dr. Brody's opinion, and thus requires at least some explanation. Without such,
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`Dr. Brody's report does not meet the requirements set forth in Rule 26.
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`3
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`I
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`ZIPIT EX. 2003, pg. 3
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`Case 1:12-cv-01013-RGA Document 243 Filed 01/29/15 Page 4 of 6 PageID #: 12016
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`Additionally, Comcast argues that Dr. Brody's apportionment methodology was not
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`reliable because he did not measure the value attributable to the '853 patent. (D.I. 171 at 23).
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`The Federal Circuit has made clear that "a patentee must in every case give evidence tending to
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`separate or apportion the defendant's profits and the patentee's damages between the patented
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`feature and the unpatented features." VirnetX Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1326 (Fed.
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`Cir. 2014) (quoting Garretson, 111 U.S. at 120). Further, the "patentee must show in what
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`particulars his improvement has added to the usefulness of the machine or contrivance." Id.
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`(quoting Garretson, 111 U.S. at 121). Comcast contends that Dr. Brody's analysis measures the
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`portion of the IMS network that is made up by the entire billing functionality, rather than the
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`incremental improvement added by the '853 patent. (D.I. 171 at 23). The '853 patent does not
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`purport to cover billing functionality generally, but instead claims to increase "flexibility" in
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`billing by eliminating the "cumbersome arrangement" between the interexchange carrier (IXC)
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`and the vendor, and to create "substantial efficiencies" by eliminating the need to transmit billing
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`information back to the originating switch. (D.I. 47-1 at 5, 1 :53-2:61). Dr. Brody's report does
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`not mention the improvements added to Comcast's IMS network by the '853 patent, and
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`provides no explanation for how requirements and components were found to "relate to" the
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`claimed subject matter. Therefore, Dr. Brody's analysis is not tied to the improvements
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`attributable to the patented invention, and his opinion is unreliable for purposes of Rule 702.
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`Sprint attempts to salvage Dr. Aron's opinion by claiming that she "took additional steps"
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`to determine a reasonable royalty, "including applying the Georgia-Pacific factors." (D .I. 196 at
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`24). According to the Federal Circuit, "a reasonable royalty analysis requires a court to ...
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`carefully tie proof of damages to the claimed invention's footprint in the market place." VirnetX,
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`767 F.3d at 1327 (alterations in original). Dr. Aron begins her analysis with the projected
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`4
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`ZIPIT EX. 2003, pg. 4
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`Case 1:12-cv-01013-RGA Document 243 Filed 01/29/15 Page 5 of 6 PageID #: 12017
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`savings that Comcast would generate by implementing the IMS network. (D.I. 172-21 at 3 if
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`162). Dr. Aron, however, does not address what, if any, impact the '853 patent had on generating
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`these savings. Dr. Aron makes clear that her understanding of the '853 patent as it relates to the
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`IMS network is based solely on Dr. Brody's report (Id. if 161 nn.282-84), and her entire analysis
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`is based on the two data points provided by Dr. Brody. (Id. at 4-5 ifif 165-67). I have seen no
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`evidence that ties Comcast's savings to the claimed invention. 2
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`I think an analogy may be helpful. Let's assume there is a company that uses a local area
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`network computer system. It costs $1,000,000 per year to operate. The company decides to
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`upgrade. It gets a new local area network computer system. The new network system has
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`upgraded routers. The upgrades to the routers are protected by a patent. A technical expert
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`concludes that the new network system performs 5000 different functions. The technical expert
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`also concludes that the routers perform 250 different functions. (Or that the upgrades to the
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`routers perform 250 different functions. The point will be the same.). After the new system is in
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`use, the company calculates that it now only costs $800,000 per year to operate the local area
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`network system. What is the contribution of the routers (or the upgrades to the routers) to that
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`$200,000 per year that is being saved? There is insufficient information to make a reasonable
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`estimate. Saying that the new routers (or the upgrades to the routers) are responsible for
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`25015000 (or 5%) of the savings is not based on science. It is not a reasonable estimate. It is
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`simply a guess.
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`Dr. Aron relies almost exclusively on Dr. Brody's report, which fails to provide any
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`scientific methodology that can be relied upon for determining how the patented features add
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`value to the IMS network. Therefore, Dr. Aron's analysis, even with the Georgia-Pacific factors,
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`2 Dr. Aron stated in her report that she requested documents from Comcast providing "additional detail behind
`Comcast's incremental savings from its IMS-CDV implementation," but no such information has been provided.
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`5
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`ZIPIT EX. 2003, pg. 5
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`Case 1:12-cv-01013-RGA Document 243 Filed 01/29/15 Page 6 of 6 PageID #: 12018
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`does not tie proof of damages to the claimed invention's "footprint." It follows that Dr. Aron's
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`methodology for determining a reasonable royalty is unreliable, and her opinion based on such
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`methodology should be excluded.
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`For the reasons set forth above, IT IS HEREBY ORDERED that Comcast's Motion to
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`Exclude the damages opinions of Dr. Brody and Dr. Aron is GRANTED.
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`~
`Entered this cir day of January, 2015.
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`6
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`ZIPIT EX. 2003, pg. 6
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