Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 1 of 11
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` IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
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`DRONE TECHNOLOGIES, INC.,
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`Plaintiff
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`PARROT S.A. and PARROT, INC.
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`Defendants
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`Civil Action No. 2:14-cv-00111
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`Judge Arthur J. Schwab
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`FILED ELECTRONICALLY
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`PLAINTIFF’S PRETRIAL STATEMENT
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`Pursuant to Local Rule 16.1.C, and this Court’s Case Management Order Re: Damages
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`[Doc. No. 126], Plaintiff submits its Pretrial Statement.
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`I.
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`BRIEF NARRATIVE STATEMENT OF MATERIAL FACTS TO BE OFFERED
`AT TRIAL
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`In 2006, Yu-Tuan “Diane” Lee conceived of a new and improved remote control system
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`for controlling remote controlled airplanes, cars, and the like. Existing remote controllers
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`typically used joysticks or similar manual controls to pilot a remote control airplane, for
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`example. Ms. Lee’s concept was to make piloting more intuitive by allowing a user to move the
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`remote controller itself, that is, tilting the remote controller in the direction of desired movement
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`for the airplane.
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` Ms. Lee filed two U.S. patent applications on her inventions, and they issued as U.S.
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`Patent No. 7,584,071 (on September 1, 2009) and U.S. Patent No. 8,106,748 (on January 31,
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`2012).
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`In 2012, Ms. Lee discovered that Defendants were manufacturing and selling flying
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`drones (AR.Drone and AR.Drone 2.0) that were piloted using an app that could be obtained from
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`Apple’s App Store. Once downloaded, the FreeFlight app allowed a user to pilot Defendants’
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`drones by simply tilting an iPhone (or iPod Touch or iPad). Ms. Lee advised Apple that she
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` IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
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`DRONE TECHNOLOGIES, INC.,
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`Plaintiff
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`v.
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`PARROT S.A. and PARROT, INC.
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`Defendants
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`Civil Action No. 2:14-cv-00111
`
`Judge Arthur J. Schwab
`
`
`FILED ELECTRONICALLY
`
`
`PLAINTIFF’S PRETRIAL STATEMENT
`
`Pursuant to Local Rule 16.1.C, and this Court’s Case Management Order Re: Damages
`
`[Doc. No. 126], Plaintiff submits its Pretrial Statement.
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`I.
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`BRIEF NARRATIVE STATEMENT OF MATERIAL FACTS TO BE OFFERED
`AT TRIAL
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`In 2006, Yu-Tuan “Diane” Lee conceived of a new and improved remote control system
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`for controlling remote controlled airplanes, cars, and the like. Existing remote controllers
`
`typically used joysticks or similar manual controls to pilot a remote control airplane, for
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`example. Ms. Lee’s concept was to make piloting more intuitive by allowing a user to move the
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`remote controller itself, that is, tilting the remote controller in the direction of desired movement
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`for the airplane.
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` Ms. Lee filed two U.S. patent applications on her inventions, and they issued as U.S.
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`Patent No. 7,584,071 (on September 1, 2009) and U.S. Patent No. 8,106,748 (on January 31,
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`2012).
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`In 2012, Ms. Lee discovered that Defendants were manufacturing and selling flying
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`drones (AR.Drone and AR.Drone 2.0) that were piloted using an app that could be obtained from
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`Apple’s App Store. Once downloaded, the FreeFlight app allowed a user to pilot Defendants’
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`drones by simply tilting an iPhone (or iPod Touch or iPad). Ms. Lee advised Apple that she
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 2 of 11
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`believed that Defendants’ drone products were infringing her patents. In March 2013, Apple
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`removed Defendants’ software app (referred to as “FreeFlight” or “AR.FreeFlight 2”) from the
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`Apple App Store meaning that Defendants’ customers could no longer download the FreeFlight
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`app to their iPhone (or iPod or iPad) to pilot Defendants’ drones.
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`Defendants replaced the FreeFlight app with a new app called “AR.Drone app.” The new
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`AR.Drone app was specifically designed so that it would not conflict with Ms. Lee’s patents. As
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`a result, the new app lacked the two key functions available under the previous app. Defendants
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`refer to these two features as “absolute control mode” and “accelerometer mode.” In simple
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`terms, accelerometer mode allows the pilot to fly the drone by tilting the iPhone (or iPod or
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`iPad), and absolute control mode allows the pilot to fly the drone from his perspective (meaning
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`that tilting the iPhone to the left will cause the drone to fly to the pilot’s left, even if the drone is
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`facing a different direction).
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`Without the FreeFlight app, and its absolute control mode and accelerometer mode
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`features, customers were unhappy. For three-and-a-half months, Defendants scrambled to find a
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`solution to deal with what had proven to be a public relations nightmare.
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`Ultimately, Defendants persuaded Apple to make the FreeFlight app available again for
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`download from Apple’s App Store by promising Apple that Defendants would reimburse Apple
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`if it had to pay any damages or attorney’s fees for infringing Diane Lee’s patents. Defendants
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`“absolute control mode” and “accelerometer mode” were again available to control their drones.
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`In December 2013, Diane Lee assigned her patents to Drone Technologies, Inc., a
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`company started by her husband to gain value (through licensing and otherwise) from the
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`patented technology. On January 24, 2014, Drone Technologies sued Defendants for patent
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`infringement.
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 3 of 11
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`On November 3, 2014, this Court held Defendants liable for infringing the two patents.
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`A reasonable royalty will be determined at trial based, inter alia, on the Georgia-Pacific
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`factors as fully set forth by Mr. Ned Barnes, Plaintiff’s damages expert, in his Rule 26(a)(2)
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`report. Doc. No. 186. Because Mr. Barnes relied heavily on information designated by
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`Defendants as CONFIDENTIAL or CONFIDENTIAL – ATTORNEYS EYES ONLY under the
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`Protective Order, Plaintiff incorporates Mr. Barnes’ report, of record at Doc. No. 186, in full by
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`this reference.
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`II.
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`STATEMENT OF ALL DAMAGES CLAIMED
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`As indicated, a reasonable royalty will be determined at trial based, inter alia, on the
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`Georgia-Pacific factors as outlined by Mr. Ned Barnes in his Rule 26(a)(2) report. Doc. No. 186.
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`In order to avoid having to file this Pretrial Statement under seal, Plaintiff incorporates
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`Mr. Barnes’ report, of record at Doc. No. 186, in full by this reference.
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`In addition, Plaintiff will also seek a finding that the case is exceptional, providing for
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`enhanced damages and attorney’s fees under 35 U.S.C. §§ 284 and 285. Plaintiff will also seek
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`its costs and prejudgment interest.
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`III. WITNESSES
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`Pursuant to Local Rule 16.1.C, Plaintiff identifies the following witnesses (damages only)
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`it expects to call at trial, with offers of proof for each included at the end of this Pretrial
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`Statement:
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`Ned S. Barnes, CPA
`Berkeley Research Group, LLC
`1800 M Street NW, Second floor
`Washington, DC 20036
`Phone: (202) 480-2682
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 4 of 11
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`Bruce Ding
`Drone Technologies, Inc.
`No. 14, Ln. 50, Sec. 3, Nangang Rd.
`Nangang Dist.
`Taipei City 11510
`Taiwan, R.O.C.
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`James Foley
`CLARK HILL
`150 N. Michigan Ave
`Suite 2700
`Chicago, IL 60601
`Phone: (312) 985-5557
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`Plaintiff identifies the following trial witnesses who it may call at trial, either live or by
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`deposition:
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`François Callou
`PARROT S.A.
`174, quai de Jemmapes
`75010 Paris
`Phone: +33 (0)1 48 03 60 60
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`Henri Seydoux
`PARROT S.A.
`174, quai de Jemmapes
`75010 Paris
`Phone: +33 (0)1 48 03 60 60
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`Plaintiff reserves the right to call at trial any witness identified in Defendants’ Pretrial
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`Statement.
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`IV. DEPOSITION DESIGNATIONS
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`In accordance with the Court’s Pretrial Order Re: Damages [Doc. No. 127], Plaintiff will
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`submit designations of deposition excerpts by April 1, 2015.
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`V.
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`EXHIBITS
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`Pursuant to Local Rule 16.1.C and this Court’s Pretrial Order Re: Damages [Doc. No.
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`127], Plaintiff’s exhibit list is attached hereto. See Attachment 1.
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 5 of 11
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`VI.
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`LEGAL ISSUES TO BE ADDRESSED
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`At this time, Plaintiff believes that the following legal issues should be addressed at the
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`pretrial conference:1
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`1.
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`2.
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`3.
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`4.
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`5.
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`6.
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`Whether Defendants may be permitted to argue (or present evidence) that Diane
`Lee is the not the true/sole inventor and/or that the patents are therefore invalid
`(as in Doc. No. 174);
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`Whether Defendants may be permitted to argue (or present evidence) that Bruce
`Ding is the true inventor and/or that his former employer owns rights to the
`patents (as in Doc. No. 174);
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`Whether Defendants may be permitted to argue (or present evidence regarding)
`Bruce Ding’s previous employment at Freescale (as in Doc. No. 225);
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`Whether Defendants may be permitted to argue (or present evidence regarding)
`the extent to which Defendants’ drone products infringe, e.g., whether
`Defendants’ use of the invention “is non-existent and insignificant at the most”
`(as in Doc. No. 196, ¶ 7);
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`Whether Defendants may be permitted to argue (or present evidence) that the
`patented inventions did not make a sufficiently valuable contribution to the art (as
`in Doc. No. 196, ¶¶ 20-25); and
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`Whether Defendants may be permitted to argue (or present evidence) regarding
`the concurrent inter partes review proceedings IPR2014-00730 or IPR2014-
`00732 in the Patent Office, including the existence thereof.
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`Plaintiff reserves the right to seek leave to supplement or add to the above list as issues arise
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`after the filing of this Pretrial Statement or are raised by the Defendants’ Pretrial Statement.
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`1
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`Some of these legal issues will be the subject of Plaintiff’s motions in limine (if the
`parties cannot reach agreement) to be filed by April 2, 2015. Doc. No. 127, ¶ 5.
`Additional issues, however, may need to be addressed as well.
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 6 of 11
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`VII. EXPERT REPORTS
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`Plaintiff’s damages expert, Ned Barnes, filed his Rule 26(a)(2) report with the Court,
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`pursuant to this Court’s Case Management Order Re: Damages [Doc. No. 126], on February 13,
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`Respectfully submitted,
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`s/ Gene Tabachnick
`Richard T. Ting
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`PA I.D. No. 200438
`rting@beckthomas.com
`Gene A. Tabachnick
`PA I.D. No. 73032
`gtabachnick@beckthomas.com
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`Clay P. Hughes
`PA I.D. No. 200033
`chughes@beckthomas.com
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`Charles H. Dougherty, Jr.
`PA I.D. No. 83795
`cdougherty@beckthomas.com
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`John C. Thomas III
`PA I.D. No. 85532
`jthomas@beckthomas.com
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`Beck & Thomas, P.C.
`1575 McFarland Road
`Pittsburgh, PA 15216
`Phone: (412) 343-9700
`Fax: (412) 343-5787
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`Attorneys for Plaintiff Drone Technologies, Inc.
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`2015 [Doc. No. 186].
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`Dated: March 23, 2015
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 7 of 11
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`Ned Barnes – Offer of Proof
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`Ned Barnes is Plaintiff’s damages expert and will testify regarding his analysis of, and
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`support for, the proper measure of damages. The bases for his testimony are fully set forth in his
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`previously filed (under seal) expert report, Doc. 186 (incorporated herein by this reference).
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 8 of 11
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`Bruce Ding is the president of Plaintiff Drone Technologies, Inc. He is also the husband of
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`Bruce Ding – Offer of Proof
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`the inventor, Yu-Tuan “Diane” Lee.
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`Mr. Ding was present when his wife conceived of the inventions claimed in the ‘071 and
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`‘748 Patents. He will describe her conception, her inventions, and the steps she took to obtain
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`patents on them.
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`Mr. Ding will be able to explain the inventions and their use within the remote-controlled toy
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`industry. He will describe when he and Ms. Lee became aware of Defendants’ infringing drone
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`products, and their unsuccessful efforts to have Defendants obtain a license to use the patents.
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`Mr. Ding also participated in notifying Apple about the conflict between Ms. Lee’s patents
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`and Apple selling Defendants’ drone products in its Apple Store. Mr. Ding communicated with
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`Apple and then Defendants (and their representatives) on Ms. Lee’s behalf. Those exchanges, over
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`the course of 15 months, highlight the importance (and therefore the value) of the patented features.
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 9 of 11
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`James Foley – Offer of Proof
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`James Foley is one of Defendants’ outside patent counsel. Mr. Foley was tapped by
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`Defendants to advise them and serve as their representative when corresponding with Apple and
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`then with Ms. Lee.
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`Mr. Foley made certain representations and admissions to Apple on Defendants’ behalf
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`that reinforce the importance and value of Ms. Lee’s inventions, which cover “absolute control
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`mode” and “accelerometer mode,” to the viability of Defendants’ drones in the marketplace.
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 10 of 11
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`François Callou – Offer of Proof
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`Francois Callou is the Drone Project Leader at Defendant Parrot S.A. in France.
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`Mr. Callou designed and developed the AR.Drone control system. If called, Mr. Callou will
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`testify as to how the “absolute control mode” and “accelerometer mode” functionalities benefit
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`the infringing drone products, as well as how these technologies differentiate the infringing
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`drone products from competitor products and enable new users to more easily pilot the infringing
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`drone products. Mr. Callou will also testify as to relevant marketing, sales, and licensing aspects
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`related to the infringing drone products.
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`Case 2:14-cv-00111-AJS Document 227 Filed 03/23/15 Page 11 of 11
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`Henri Seydoux – Offer of Proof
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`Henri Seydoux is Defendants’ founder and CEO. Mr. Seydoux was instrumental in
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`defining the development goals and specifications for the infringing products. Mr. Seydoux was
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`also involved in Defendants’ negotiations with Ms. Lee and Apple concerning the removal of the
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`“absolute control” and “accelerometer” functionalities and is familiar with the impact and value
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`of these technologies as they relate to the viability of Defendants’ drones in the marketplace.
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