U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`Under Armour Inc.,
`Petitioner
`
`v.
`
`adidas AG,
`Patent Owner
`
`
`
`
`Case No. IPR2015-000698
`
`Patent No. 8,092,345
`
`
`
`
`
`CORRECTED PATENT OWNER ADIDAS AG’S
`MOTION FOR OBSERVATION REGARDING CROSS-EXAMINATION
`OF REPLY WITNESS JULIE DAVIS
`
`
`
`
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`Under Armour Inc.,
`Petitioner
`
`v.
`
`adidas AG,
`Patent Owner
`
`
`
`
`Case No. IPR2015-000698
`
`Patent No. 8,092,345
`
`
`
`
`
`CORRECTED PATENT OWNER ADIDAS AG’S
`MOTION FOR OBSERVATION REGARDING CROSS-EXAMINATION
`OF REPLY WITNESS JULIE DAVIS
`
`
`
`
`
`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
`
`
`Table of Contents
`
`I.
`
`II.
`
`INTRODUCTION ........................................................................................... 1
`
`OBSERVATIONS ON CROSS-EXAMINATION OF JULIE
`DAVIS TESTIMONY ..................................................................................... 1
`
`A. Observations Relevant to Ms. Davis’s Prior Testimony
`Regarding Commercial Success of MMF ............................................. 1
`
`B.
`
`C.
`
`Observations Relevant to Ms. Davis’ Prior Testimony on
`Profitability of MMF. ............................................................................ 6
`
`Observations Relevant to Ms. Davis’ Prior Testimony
`Regarding MMF’s Revenues. ............................................................. 10
`
`D. Observations Relevant to Ms. Davis’ Testimony
`Regarding Expected Profitability of UA products. ............................. 11
`
`E.
`
`F.
`
`Observations Relevant to the value of Social Media to
`MMF. ................................................................................................... 13
`
`Observations Relevant to the Credentials and Credibility
`of Ms. Davis. ....................................................................................... 13
`
`
`
`
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
`
`
`Patent Owner’s Exhibit List
`
`Exhibit
`Number
`2001
`2002
`2003
`2004
`2005
`
`2006
`
`2007
`
`2008
`
`2009
`2010
`
`2011
`
`2012
`
`2013
`
`Description
`
`Biography of Jonathan D. Olinger
`Declaration of William R. Michalson, Ph.D.
`Declaration of Mark T. Jones, Ph.D.
`Deposition Transcript of Dr. Joseph Paradiso
`MapMyFitness, About Us (last visited November 15, 2015)
`http://about.mapmyfitness.com/about/company-history/
`Running USA, 2014 State of the Sport – Part II: Running Industry
`Report June 15, 2014
`http://www.runningusa.org/2014-running-industry-
`report?returnTo=annual-reports
`Bloomberg, Company Overview of MapMyFitness, Inc. (November
`15, 2015)
`http://www.bloomberg.com/research/stocks/private/snapshot.asp?priv
`capId=60835454
`Under Armour, Inc. SEC Form 10-K, for the fiscal year ended
`December 31, 2013
`Sterne Agee company Report, “Under Armour Inc.: 2Q15 Preview,”
`MapMyFitness Help and Support, Getting Started, (last visited
`November 19, 2015)
`https://support.mapmyfitness.com/hc/en-us/articles/200118014-
`Getting-started-with-the-app
`MapMyFitness Help and Support, Change Profile Photo, (last visited
`November 19, 2015)
`https://support.mapmyfitness.com/hc/en-us/articles/200117694-
`Change-Profile-Photo
`MapMyFitness Help and Support, How to Save and View Photos
`using the In-App Camera (last visited November 19, 2015)
`https://support.mapmyfitness.com/hc/en-us/articles/200118494-How-
`to-save-and-view-photos-using-the-in-app-camera
`MapMyFitness Help and Support, Where are my Workouts and
`Routes, (last visited November 19, 2015)
`https://support.mapmyfitness.com/hc/en-us/articles/200118224-
`Where-are-my-workouts-and-routes
`
`
`
`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`2014
`
`Under Armour Connected Fitness, DOCS, (last visited November 19,
`2015)
`https://developer.underarmour.com/docs
`Under Armour Connected Fitness, Activity Type, (last visited
`November 19, 2015)
`https://developer.underarmour.com/docs/read/v71_Activity_Type
`MapMyFitness, Incorrect Calorie Calculations (last visited November
`16, 2015)
` https://support.mapmyfitness.com/hc/en-us/articles/200118084-
`Incorrect-Calorie-Calculations
`MobiHealthNews, “MapMyFitness Activity Feed Enables Social
`Sharing Across Devices” (Jan. 20, 2014)
`Google, “Mobile App Marketing Insights: How Consumers Really
`Find and Use Your Apps” (May 2015)
`Adobe Digital Index, “Social Intelligence Report” (Q1 2014)
`Running Shoes Guru, The 10 Best Running Apps for Android for
`2015 (December 26, 2014)
`www.runningshoesguru.com/2014/12/the-10-best-running-apps-for-
`android-for-2015
`adidas AG v. Under Armour, Inc. and MapMyFitness, Inc., Case No.
`14-cv-130 (D. Del.) D.I. 170 ¶ 227
`MapMyFitness Help and Support, Mobile App Questions, (last visited
`November 19, 2015)
`https://support.mapmyfitness.com/hc/en-us/categories/200003344-
`Mobile-App-Questions
`Intentionally Left Blank
`Intentionally Left Blank
`Deposition Transcript of Julie Davis, dated March 21, 2016
`(Protective Order Material)
`Davis Deposition Exhibit 1 – Excerpts from the Deposition Transcript
`of Chris Glode, dated July 17, 2015 (Protective Order Material)
`Davis Deposition Exhibit 2 – Excerpts from the Deposition Transcript
`of Scott Laing, dated July 20, 2015 (Protective Order Material)
`Davis Deposition Exhibit 3 – Excerpts from the Deposition Transcript
`of Andrew Page, dated June 12, 2015 (Protective Order Material)
`Davis Deposition Exhibit 4 – Excerpts from the Deposition Transcript
`of Robin Thurston, June 30, 2015 (Protective Order Material)
`
`2015
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`2016
`
`2017
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`2018
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`2019
`2020
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`2021
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`2022
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`2023
`2024
`2025
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`2026
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`2027
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`2028
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`2029
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`
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`U.S. Pat. No. 8,092,345
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`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`2030
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`Davis Deposition Exhibit 5 – Under Armour, Inc. Q4 2013 Earnings
`Call, dated January 30, 2014
`Davis Deposition Exhibit 6 – Under Armour, Inc. Q1 2014 Earnings
`Call, dated April 24, 2014
`Davis Deposition Exhibit 7 – Under Armour’s (UA) CEO Kevin
`Plank on Q2 2014 Results Earnings Call Transcript
`Davis Deposition Exhibit 8 – Under Armour’s (UA) CEO Kevin
`Plank on Q3 2014 Results Earning Call Transcript
`Davis Deposition Exhibit 9 – Under Armour’s (UA) CEO Kevin
`Plank on Q4 2014 Results Earnings Call Transcript
`Davis Deposition Exhibit 10 – Under Armour’s (UA) CEO Kevin
`Plank on Q1 2015 Results Earnings Call Transcript
`Davis Deposition Exhibit 11 – Under Armour’s (UA) CEO Kevin
`Plank on Q2 2015 Results Earnings Call Transcript
`Davis Deposition Exhibit 12 – Under Armour, Inc. Q3 2015 Earnings
`Call dated October 22, 2015
`Intentionally Left Blank
`Deposition Transcript of Joseph Paradiso, dated April 1, 2016
`(Protective Order Material)
`Paradiso Deposition Exhibit 1 – Excerpts from the Deposition
`Transcript of William Quast, dated July 1, 2015 (Protective Order
`Material)
`September 25, 2015 Email from Maria Vignone to Mitch Stockwell
`April 6, 2016 Email from Brian Ferguson to Trials
`
`2031
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`2032
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`2033
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`2034
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`2035
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`2036
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`2037
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`2038
`2039
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`2040
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`2041
`2042
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
`
`I.
`
`INTRODUCTION
`
`Pursuant to the Scheduling Order (Paper 10) and the Notice of Stipulation to
`
`Different Dates for Due Dates 4 and 5 Pursuant to the Scheduling Order (Paper
`
`33), Patent Owner adidas AG (“adidas”) respectfully submits observations on the
`
`March 21, 2016 cross-examination of Petitioner Under Armour, Inc.’s (“UA”)
`
`reply witness Julie Davis
`
`II. OBSERVATIONS ON CROSS-EXAMINATION OF JULIE DAVIS
`TESTIMONY
`
`Exhibit 2025 is a copy of the cross-examination transcript of Ms. Davis.
`
`Exhibits 2026-20371 were referenced during the cross examination of Ms. Davis on
`
`her Declaration (Exhibit 1014) filed in support of Petitioner’s Reply. Exhibits
`
`2026-2037 are filed herewith. Exhibit 1016 in co-pending proceeding IPR2015-
`
`00700 was also referenced during the cross examination of Ms. Davis.
`
`A. Observations Relevant to Ms. Davis’s Prior Testimony Regarding
`Commercial Success of MMF
`Observation #A.1. In Exhibit 2025, on page 75 line 17 to page 76 lines 18,
`
`Ms. Davis testified that after MapMyFitness (“MMF”) talked to multiple other
`
`
`1 The parties have agreed to not to submit Exhibit 13 to Ms. Davis’ Deposition.
`
`Exhibit 2053 is intentionally left blank for this reason. Patent Owner has also
`
`redacted all discussion of that exhibit from Exhibit 2025.
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`1
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`U.S. Pat. No. 8,092,345
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`bidders, UA purchased MMF for $150 million after MMF offered itself for $165
`
`million. This testimony is relevant to Paper 27, section III.A, pages 20-22, and
`
`Exhibit 1014, ¶¶ 12-15. This testimony is relevant because it rebuts Ms. Davis’
`
`prior testimony that the MMF applications that form the basis of MMF’s business
`
`were not commercially successful.
`
`Observation #A.2. In Exhibit 2025, on page 72, line 20 to page 73 line 9,
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`Ms. Davis testified that before its acquisition, MMF sought to entice initial users to
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`join MMF’s network of app users instead of using other, competing apps. This
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`testimony is relevant to Exhibit 1014, ¶ 29 because it rebuts Ms. Davis’ prior
`
`testimony that the number of downloads only demonstrates popularity and not
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`commercial success.
`
`Observation #A.3. In Exhibit 2025, on page 78 line 16 to page 79 line 13,
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`Ms. Davis testified testimony from Mr. Thurston (Exhibit 2029) confirmed that as
`
`MMF approached the sale to UA, MMF was looking at its revenues and the size of
`
`MMF’s how many people had downloaded the MMF apps. This testimony is
`
`relevant to Exhibit 1014, ¶ 29 because it rebuts Ms. Davis’ prior testimony that the
`
`number of downloads does not demonstrate commercial success.
`
`Observation #A.4. In Exhibit 2025, on page 83 lines 4-23, Ms. Davis
`
`testified that part of MMF’s metric for making the business commercially success
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`“was to grow the user base to make it an attractive investment for somebody like
`
`Under Armour that would then be able to monetize those users.” This testimony is
`
`relevant to Exhibit 1014, ¶ 29 because it rebuts Ms. Davis’ prior testimony that the
`
`number of downloads does not demonstrate commercial success.
`
`Observation #A.5. In Exhibit 2025, on page 79 line 20 to page 80 line 1 and
`
`page 80 lines 7-12, Ms. Davis testified that (1) the size of the user base dictated to
`
`whom UA could advertise for direct eCommerce sales and marketing for brand
`
`equity purposes and (2) as part of its diligence process for acquisition, MMF was
`
`told UA that MMF had a large audience and focused on the kinds of advertising
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`campaigns it could run for that audience. This testimony is relevant to Exhibit
`
`1014, ¶ 29 because it rebuts Ms. Davis’ prior testimony that the number of
`
`downloads does not demonstrate commercial success.
`
`Observation #A.6. In Exhibit 2025, on page 82 lines 4-11, Ms. Davis
`
`testified that from MMF’s shareholders standpoint, “of course it was” a successful
`
`commercial venture given its sale to UA for $150 million. This testimony is
`
`relevant to Paper 27, section III.A, pages 20-22, and Exhibit 1014, ¶¶ 12-15. This
`
`testimony is relevant because it rebuts Ms. Davis’ prior testimony that the MMF
`
`applications were not commercially successful.
`
`Observation #A.7. In Exhibit 2025, on page 80 lines 19-24, Ms. Davis
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`testified that at the time UA purchased MMF in late 2013, it paid $150 million for
`
`approximately 20 million users. This testimony is relevant to Paper 27, section
`
`III.A, pages 20-22, and Exhibit 1014, ¶¶ 12-15. This testimony is relevant because
`
`it rebuts Ms. Davis’ prior testimony that the MMF applications were not
`
`commercially successful.
`
`Observation #A.8. In Exhibit 2025, on page 102 line 22 to page 103 line 12,
`
`Ms. Davis testified that in UA’s Q3, 2014 earnings call transcript (Exhibit 2033),
`
`UA’s CEO reported that the number of MMF users had grown to over 30 million
`
`users. This testimony is relevant to Paper 27, section III.A, pages 20-22, and
`
`Exhibit 1014, ¶¶ 12-15. This testimony is relevant because it rebuts Ms. Davis’
`
`prior testimony that the MMF applications were not commercially successful.
`
`
`
`Observation #A.9. In Exhibit 2025 on page 67 line 16 to page 68 line 1, Ms.
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`Davis testified that UA received two benefits from the acquisition of the MMF
`
`communities: 1) more direct e-Commerce revenue and 2) the brand equity and
`
`value UA receives from customers liking UA. This testimony is relevant to Paper
`
`27, section III.A, pages 20-22, and Exhibit 1014, ¶¶ 12-15. The testimony is
`
`relevant because it rebuts Ms. Davis’ prior testimony that the MMF applications
`
`were not commercially successful and that they have generated low revenue for
`
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`U.S. Pat. No. 8,092,345
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`UA.
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`Observation #A.10. In Exhibit 2025 at page 68 line 19 to page 69 line 10,
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`Ms. Davis testified that she neither calculated the value of the above two benefits
`
`nor asked UA for its valuation of those benefits and, similarly, on page 126 lines
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`17-22, Ms. Davis testified she did not value UA’s ability to advertise or market to
`
`MMF users. This testimony is relevant to Paper 27, section III.A, pages 20-22, and
`
`Exhibit 1014, ¶¶ 12-15. The testimony is relevant because it rebuts Ms. Davis’
`
`prior testimony that the MMF applications were not commercially successful and
`
`that they have generated low revenue for UA.
`
`Observation #A.11. In Exhibit 2025, on page 130 line 23 to page 131 line
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`22, Ms. Davis testified that UA was able to run marketing and branding campaigns
`
`toward the MMF community, that UA received value for such campaigns, but that
`
`she did nothing to assess the value to UA of being able to run such campaigns.
`
`This testimony is relevant to Paper 27, section III.A, pages 20-22, and Exhibit
`
`1014, ¶¶ 12-15, 21-22. The testimony is relevant because it rebuts Ms. Davis’
`
`prior testimony that the MMF applications were not commercially successful and
`
`that they have generated low revenue for UA.
`
`Observation #A.12. In Exhibit 2025, on page 132 line 6 to page 133 line 6,
`
`Ms. Davis testified that Mr. Glode testified in a deposition (Exhibit 2026), which
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`she reviewed, that MMF did not get paid by UA to run marketing and branding
`
`campaigns and Ms. Davis confirmed that she did not account for the fact that UA
`
`did not pay MMF to run such campaigns. This testimony is relevant to Paper 27,
`
`section III.A, pages 20-22, and Exhibit 1014, ¶¶ 12-15, 21-22. The testimony is
`
`relevant because it rebuts Ms. Davis’ prior testimony that the MMF applications
`
`were not commercially successful.
`
`Observation #A.13. In Exhibit 2025, on page 73 lines 10-15, Ms. Davis
`
`testified that she had never performed studies on network effects in the mobile app
`
`business and had no training in that area. This testimony is relevant to Exhibit
`
`1014, ¶¶ 9 and 29 because it undermines her statement that she is qualified to opine
`
`on commercial success and it rebuts Ms. Davis’ prior testimony that the number of
`
`downloads does not demonstrate commercial success.
`
`B. Observations Relevant to Ms. Davis’ Prior Testimony on
`Profitability of MMF.
`Observation #B.1. In Exhibit 2025, on page 45 lines 16-23 and page 48
`
`lines 3-7, Ms. Davis testified that the relative number of apps downloaded, in her
`
`view, had nothing to do with commercial success. This testimony is relevant to
`
`Exhibit 1014, ¶¶ 9 and 12, because it undermines her statement that she is qualified
`
`to opine on commercial success and that she applied a reliable method to evaluate
`
`commercial success.
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`U.S. Pat. No. 8,092,345
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`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`Observation #B.2. In Exhibit 2025, on page 87 line 10 to page 88 line 11,
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`Ms. Davis testified that UA’s CEO, Mr. Planck, in UA’s first earnings call after
`
`acquisition of MMF (Ex. 2030 at 5), did not focus on MMF’s revenue or profits,
`
`but instead looked at metrics on the size of the MMF community or number of
`
`registered users. This testimony is relevant to Paper 27, section III.A, pages 20-22,
`
`and Exhibit 1014, ¶¶ 12-15, 21-22. The testimony is relevant because it rebuts Ms.
`
`Davis’ prior testimony that the MMF applications were not commercially
`
`successful because it has not been profitable.
`
`Observation #B.3. In Exhibit 2025, on page 96 lines 8-13, Ms. Davis
`
`testified that, based on Mr. Planck’s public statements on the UA earnings call for
`
`the first quarter of 2014 (Ex. 2031), UA was still investing in and trying to build
`
`the size of the MMF community. This testimony is relevant to Paper 27, section
`
`III.A, pages 20-22, and Exhibit 1014, ¶¶ 12-15, 21-22. The testimony is relevant
`
`because it rebuts Ms. Davis’ prior testimony that the MMF applications that form
`
`the basis of MMF’s business were not commercially successful because it has not
`
`been profitable.
`
`Observation #B.4. In Exhibit 2025, on page 99 lines 3-10, Ms. Davis
`
`testified that, based on Mr. Planck’s public statements on the UA earnings call for
`
`the second quarter of 2014 (Ex. 2032 at 3), UA was still investing in continuing to
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`U.S. Pat. No. 8,092,345
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`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`grow the MMF platform so as to sell more products to users on that platform. This
`
`testimony is relevant to Paper 27, section III.A, pages 20-22, and Exhibit 1014, ¶¶
`
`12-15, 21-22. The testimony is relevant because it rebuts Ms. Davis’ prior
`
`testimony that the MMF applications that form the basis of MMF’s business were
`
`not commercially successful because it has not been profitable.
`
`Observation #B.5. In Exhibit 2025, on page 103 lines 13 page 104 line 24,
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`Ms. Davis testified based on UA’s earnings call statement for Q3 2014 (Ex. 2033)
`
`at least up through October, 2014, UA’s focus remained on building the size of the
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`MMF community and that there was no reference in UA’s October 23, 2014
`
`earnings call transcript for third quarter of 2014 to assessing MMF based on
`
`profitability or revenue. This testimony is relevant to Paper 27, section III.A,
`
`pages 20-22, and Exhibit 1014, ¶¶ 12-15, 21-22. The testimony is relevant because
`
`it rebuts Ms. Davis’ prior testimony that the MMF applications were not
`
`commercially successful because they have not been profitable.
`
`Observation #B.6. In Exhibit 2025, on page 148 lines 1-8, Ms. Davis
`
`testified that part of the value that UA’s CEO saw in the acquisition of MMF was
`
`to establish a long term relationship with customers and that this was “critical to
`
`[UA’s] ability to sell the shirts and shoes going forward.” This testimony is
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`relevant to Paper 27, section III.A, pages 20-22, and Exhibit 1014, ¶¶ 12-15, 21-22.
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`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`The testimony is relevant because it rebuts Ms. Davis’ prior testimony that the
`
`MMF applications were not commercially successful because they have not been
`
`profitable.
`
`Observation #B.7. In Exhibit 2025, on page 149 line 21 to page 151 line 2,
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`Ms. Davis testified that the second highest priority UA articulated for MMF in its
`
`first quarter 2015 Earnings Call (Ex. 2035 at 10) was to build the communities and
`
`grow the network. This testimony is relevant to Paper 27, section III.A, pages 20-
`
`22, and Exhibit 1014, ¶¶ 12-15, 21-22. The testimony is relevant because it rebuts
`
`Ms. Davis’ prior testimony that the MMF applications were not commercially
`
`successful because they have not been profitable.
`
`Observation #B.8. In Exhibit 2025, on page 154 lines 6-13, Ms. Davis
`
`testified that in every earnings call transcript reviewed during her deposition–
`
`exhibits 2030 - 2037 – the metrics that Mr. Plank as CEO of UA talked about were
`
`“the size of the community, the number of users, the number of new users they are
`
`attracting.” This testimony is relevant to Paper 27, section III.A, pages 20-22, and
`
`Exhibit 1014, ¶¶ 12-15, 21-22. The testimony is relevant because it rebuts Ms.
`
`Davis’ prior testimony that the MMF applications were not commercially
`
`successful because they have not been profitable.
`
`Observation #B.9. In Exhibit 2025, on page 154 line 21 to page 155 line 13,
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`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`Ms. Davis testified that Mr. Planck informed UA investors that the $150 million
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`for MMF was well spent because UA had a community that started at 18-20
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`million and UA was continuing to grow that community and having huge growth
`
`rates every quarter. This testimony is relevant to Paper 27, section III.A, pages 20-
`
`22, and Exhibit 1014, ¶¶ 9, 12-15, 21-22. The testimony is relevant because it
`
`rebuts Ms. Davis’ prior testimony that the MMF applications that form the basis of
`
`MMF’s business were not commercially successful because it has not been
`
`profitable and because it undermines her statement that she is qualified to opine on
`
`commercial success and that she applied a reliable method to evaluate commercial
`
`success.
`
`C. Observations Relevant to Ms. Davis’ Prior Testimony Regarding
`MMF’s Revenues.
`Observation #C.1. In Exhibit 2025, on page 110 line 14 to page 111 line 4,
`
`Ms. Davis testified that UA’s number one risk in acquiring MMF was that users
`
`might decide not to continue using the MMF apps, which risk resulted in UA
`
`“go[ing] slow so that they did not overwhelm MapMyFitness users with too many
`
`e-mails.” This testimony is relevant to Paper 27, section III.A, pages 20-22, and
`
`Exhibit 1014, ¶¶ 9, 12-15, 21-22. The testimony is relevant because it rebuts Ms.
`
`Davis’ prior testimony that the MMF applications were not commercially
`
`successful because they have not been profitable.
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`Observation #C.2. In exhibit 2025, on page 166 to line 167 line 2, Ms.
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`Davis testified that the annual growth rate between each year as calculated from
`
`Schedule I to her declaration (Ex. 2016) was 80% from 2009-2010, 100% from
`
`2010-2011, 87% from 2011-2012, 28 percent from 2012-2013, and 30 % from
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`2013-2014:30, and that “most business would look at a growth rate in revenue of
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`that amount to be commercially successful if that is all we are looking at.” This
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`testimony is relevant to Paper 27, section III.A, pages 20-22, and Exhibit 1014, ¶¶
`
`9, 12-15, 21-22. The testimony is relevant because it rebuts Ms. Davis’ prior
`
`testimony that the MMF applications were not commercially successful.
`
`D. Observations Relevant to Ms. Davis’ Testimony Regarding
`Expected Profitability of UA products.
`Observation #D.1. In Exhibit 2025, on page 105 lines 9-23, Ms. Davis
`
`testified that after purchasing MMF, UA had no expectations for the MMF
`
`business to become profitable until at least 2017. This testimony is relevant to
`
`Paper 27, section III.A, pages 20-22, and Exhibit 1014, ¶¶ 9, 12-15, 21-22. The
`
`testimony is relevant because it rebuts Ms. Davis’ prior testimony that the MMF
`
`applications were not commercially successful because it has not been profitable.
`
`Observation #D.2. In Exhibit 2025, on page 107 line 7 to page 108 line 11,
`
`Ms. Davis testified that UA after purchasing MMF had also purchased other
`
`products Endomondo and MyFitnessPal which were integrated with MMF into
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`11
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
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`UA’s Connected Fitness business and, as a result, UA was putting more money in
`
`and may further stretch out the time before the Connected Fitness business could
`
`become profitable. This testimony is relevant to Paper 27, section III.A, pages 20-
`
`22, and Exhibit 1014, ¶¶ 9, 12-15, 21-22. The testimony is relevant because it
`
`rebuts Ms. Davis’ prior testimony that the MMF applications were not
`
`commercially successful.
`
`Observation #D.3. In Exhibit 2025, on page 58 lines 4-7, Ms. Davis
`
`testified that when a product is in the investing stage, profitability is not expected.
`
`This testimony is relevant to Paper 27, section III.A, pages 20-22, and Exhibit
`
`1014, ¶¶ 9, 12-15, 21-22. The testimony is relevant because it rebuts Ms. Davis’
`
`prior testimony that the MMF applications were not commercially successful.
`
`Observation #D.4. In Exhibit 2025, at page 59 line 9 to page 60 lines 17,
`
`Ms. Davis testified that as of July 2015, UA evaluated success of UA Record based
`
`on user registrations and that she had seen no document or had no discussion that
`
`indicated UA had changed its metrics to focus on revenue generation. This
`
`testimony is relevant to Paper 27, section III.A, pages 20-22, and Exhibit 1014, ¶¶
`
`9, 12-15, 21-22. The testimony is relevant because it rebuts Ms. Davis’ prior
`
`testimony that the MMF applications were not commercially successful.
`
`12
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
`
`
`E. Observations Relevant to the value of Social Media to MMF.
`Observation #E.1. In Exhibit 2025, on page 156 line 11 to page 157 line 12,
`
`Ms. Davis testified that Mr. Laing testified in his deposition (Exhibit 2027) that a
`
`significant percentage of users, approximately 20%, finding out about MMF and
`
`downloading the apps was through current user social posts and that MMF was
`
`trying to attract users through social media. This testimony is relevant to Paper 27,
`
`Section III.A.2, page 24 and Exhibit 1014 at ¶ 30. This testimony is relevant
`
`because it rebuts Patent Owner’s argument that factors other than sharing workouts
`
`and pictures via social media drive the success of MMF.
`
`Observation #E.2. In Exhibit 2025, on page 158 line 3 to page 159 line 20,
`
`Ms. Davis testified that, upon reviewing testimony from Mr. Glode (Exhibit 2026)
`
`regarding a report on user engagement, an important mechanism for users
`
`discovering and trying out MMF applications is social media. This testimony is
`
`relevant to Paper 27, Section III.A.2, page 24 and Exhibit 1014 at ¶ 30. This
`
`testimony is relevant because it rebuts Patent Owner’s argument that factors other
`
`than sharing workouts and pictures via social media drive the success of MMF.
`
`F. Observations Relevant to the Credentials and Credibility of Ms.
`Davis.
`Observation #F.1. In Exhibit 2025, on page 14, lines 10-22, Ms. Davis
`
`testified that the only methodology she used to evaluate commercial success was
`
`13
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
`
`reviewing information “related to revenues and profits and other metrics associated
`
`with” the apps in light of her “own background and training.” This testimony is
`
`relevant to Exhibit 1014, ¶¶ 9 and 12, because it undermines her statement that she
`
`is qualified to opine on commercial success and that she applied a reliable method
`
`(her experience as a damages expert and an accountant) to evaluate commercial
`
`success.
`
`Observation #F.2. In Exhibit 2025, on page 115 lines 14-18, Ms. Davis
`
`testified she has no expertise with assessing brands or brand value. This testimony
`
`is relevant to Exhibit 1014, ¶¶ 9 and 12, because it undermines her statement that
`
`she is qualified to opine on commercial success.
`
`Observation #F.3. In Exhibit 2025, on page 34 line 12 to page 35 line 12,
`
`Ms. Davis testified that she offered no opinions on the success or popularity of
`
`features covered by the ‘767 patent, but instead addressed the commercial success
`
`of the MMF apps or UA Record apps as a whole. This testimony is relevant to
`
`Exhibit 1014, ¶¶ 9 and 12 because it undermines her statement that she is qualified
`
`to opine on commercial success.
`
`Observation #F.4. In Exhibit 2025, on page 161 lines 14-18, Ms. Davis
`
`testified that she is adding no expertise to her review of Dr. Winer’s surveys and is
`
`simply referencing his testimony. This testimony is relevant to Exhibit 1014, ¶¶ 9
`
`14
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
`
`and 29 because it undermines her statement that she is qualified to opine on
`
`commercial success and it demonstrates the unreliability of her prior testimony that
`
`Dr. Winer’s survey is strong evidence that the use of MMF does not drive sales of
`
`Under Armour’s products.
`
`Observation #F.5. In Exhibit 2025, on page 106 lines 2-14, Ms. Davis
`
`testified that even though her client, UA itself, was not focused on revenues and
`
`profitability of MMF until 2017, Ms. Davis nonetheless evaluated only revenues
`
`and profits in assessing commercial success of MMF. This testimony is relevant to
`
`Exhibit 1014, ¶¶ 9 and 12, because it undermines her statement that she is qualified
`
`to opine on commercial success and that she applied a reliable method to evaluate
`
`commercial success.
`
`Dated: April 21, 2016
`
`
`
`
`
`
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`
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`
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`Respectfully submitted,
`
`
`
`/s/ Mitchell G. Stockwell
`Mitchell G. Stockwell
`
`Reg. No. 39,389
`Lead Counsel for Patent Owner
`adidas AG
`
`
`
`15
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`U.S. Pat. No. 8,092,345
`IPR2015-00698
`Corrected Patent Owner’s Motion for Observation re Cross-Examination (Davis)
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that a copy of CORRECTED PATENT
`
`OWNER ADIDAS AG’S RESPONSE TO MOTION FOR OBSERVATION
`
`REGARDING CROSS-EXAMINATION OF REPLY WITNESS JULIE
`
`DAVIS was served via email on the date below, upon the following:
`
`Brian E. Ferguson
`Weil, Gotshal & Manges LLP
`1300 Eye Street NW, Suite 900
`Washington, DC 20005
`Phone: 202-682-7000
`brian.ferguson@weil.com
`
`
`Dated: April 21, 2016
`
`
`
`
`
`
`
`Anish R. Desai
`Christopher T. Marando
`W. Sutton Ansley
`Weil Gotshal & Manges LLP
`1300 Eye Street NW, Suite 900
`Washington, DC 20005
`Phone: 202-682-7103
`anish.desai@weil.com
`christopher.marando@weil.com
`sutton.ansley@weilc.om
`
`
`
`/s/ Mitchell G. Stockwell
`Mitchell G. Stockwell
`
`Reg. No. 39,389
`Lead Counsel for Patent Owner
`adidas AG
`
`
`
`16
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