Case 2:23-cv-00059-JRG-RSP Document 361-7 Filed 02/28/25 Page 1 of 6 PageID
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`EXHIBIT F
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`Case 2:23-cv-00059-JRG-RSP Document 361-7 Filed 02/28/25 Page 2 of 6 PageID
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`RESTRICTED CONFIDENTIAL – ATTORNEYS’ EYES ONLY
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`TOUCHSTREAM TECHNOLOGIES,
`INC.,
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` Plaintiff,
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`v.
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`CHARTER COMMUNICATIONS, INC.
`et al.,
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` Defendants.
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`Case No. 2:23-cv-00059-JRG
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`REBUTTAL EXPERT REPORT
`REGARDING DAMAGES
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`July 15, 2024
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`Respectfully Submitted,
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`____________________
`W. Christopher Bakewell
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`Case 2:23-cv-00059-JRG-RSP Document 361-7 Filed 02/28/25 Page 3 of 6 PageID
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`RESTRICTED CONFIDENTIAL – ATTORNEYS’ EYES ONLY
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`5.8
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`Established Profitability of the Patented Product, its Commercial Success, and
`its Current Popularity492
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`266. I understand that certain principles must be followed when assessing a reasonable royalty
`in matters involving complex devices with interrelated technologies.493 The overall goal
`is that a reasonable royalty analysis should consider the profitability that is specifically
`attributable to the footprint of the invention in the marketplace, or in other words the
`incremental value contributed by the patents-in-suit. From a financial/economic
`perspective, the idea is to get close to the financial footprint of the patent right, which
`reduces the possibility for error.494
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`267. G-P Factor 8 involves evaluating the economic benefits that can be specifically attributed
`to the patents-in-suit, and specifically to the extent that any such benefits can be
`distinguished from the products themselves. This was addressed in the cost and income
`approaches; G-P Factor 8 involves similar considerations (see Section 4.4). This G-P
`Factor is neutral relative to the baseline(s).
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`5.9
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`Utility and Advantages of the Patented Product Over Old Modes or Devices;495
`and
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`5.10 Nature of the Intellectual Property, Character of the Commercial Embodiment
`and the Benefits to Those Who Have Used the Invention496
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`268. G-P Factor 9 relates to the advantages of the patent property over any old modes or devices.
`G-P Factor 10 relates to the nature of the patented invention and its associated benefits.
`These two G-P Factors are often considered together due to their similar natures. I
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`492 In its entirety, G-P Factor 8 reads: “The established profitability of the product made under the patent;
`its commercial success; and its current popularity.”
`493 See, for example, ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010); Uniloc USA,
`Inc. v. Microsoft Corp., 632 F.3d 1292, 1320 (Fed. Cir. 2011); VirnetX, Inc. and Science Applications
`International Corporation v. Cisco Systems, Inc. and Apple Inc., 2014 WL 4548722, *14 (Fed. Cir. 2014).
`494 Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 894 F.3d 1258 (Fed. Cir. 2018), citing
`VirnetX, 737 F.3d at 1327.
`495 In its entirety, G-P Factor 9 reads: “The utility and advantages of the patent property over the old modes
`or devices, if any, that had been used for working out similar results.”
`496 In its entirety, G-P Factor 10 reads: “The nature of the patented invention; the character of the
`commercial embodiment of it as owned and produced by the licensor; and the benefits to those who have
`used the invention.”
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`Case 2:23-cv-00059-JRG-RSP Document 361-7 Filed 02/28/25 Page 5 of 6 PageID
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`RESTRICTED CONFIDENTIAL – ATTORNEYS’ EYES ONLY
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`Quadriga software agreement).500 Dr. Mangum performs no such analysis.
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`273. According to Dr. Mangum, “is the advantage of the Touchstream technology more or less
`advantageous over older products in the hospitality space or the cable industry.”501 Dr.
`Mangum provides no basis for this claim.
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`274. According to Dr. Mangum, as he is “unaware of any studies or evidence comparing the
`two industries with respect to the Touchstream technology…it is clear that the parties to
`the hypothetical negotiation would understand the economic value of the patents-in-suit
`and how US consumers, and in turn the cable companies value that technology relative to
`the hospitality space.”502 It is unclear why Dr. Mangum believes a lack of documents
`comparing two industries is indicative that the parties would understand the relative value
`of the technology in the two industries. If anything, this is another reason that the Quadriga
`software agreement is not comparable to the hypothetical license(s). These industries are
`different, and the use cases are different, as I discussed above. It is only Dr. Mangum,
`apparently, who believes that the hospitality industry is like consumer cable TV.
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`275. Dr. Mangum says that “[w]hile on the one hand, in the hospitality space, the technology
`enables consumers to view additional media in the room (e.g., BYOC), in the cable industry
`space, when a subscriber loses a remote, there is an immediate comprehensive
`replacement.”503 This comparison appears to be a mistake by Dr. Mangum, as it does not
`make sense. Dr. Mangum also states that the cable industry provides services to residential
`customers, but also to hotels.”504 Dr. Mangum does not consider that these are businesses
`that are different and separate, with different technologies and economics, treated as such
`by Charter.505
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`500 Mangum Report, p. 57.
`501 Mangum Report, p. 57.
`502 Mangum Report, p. 57.
`503 Mangum Report, p. 57.
`504 Mangum Report, p. 57.
`505 Interview of Mr. Hardin.
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`RESTRICTED CONFIDENTIAL – ATTORNEYS’ EYES ONLY
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`276. Dr. Mangum believes that the foregoing considerations “suggest the appropriate royalty
`rate would be at least, if not higher than, the rate from the market measure.”506 There is no
`reasonable basis for such a claim, and the basis for such a comparison is lacking to begin
`with.
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`5.11 Extent to Which the Infringer Has Made Use of the Invention and Any Evidence
`Probative of the Value of the Use 507
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`277. The extent of use of a patented invention is an important consideration that can bear on the
`form of a royalty.508 In my experience, royalties in real-world licensing agreements factor
`in the economic value of usage. It is widely accepted that a feature merely being present
`in an infringing device does not mean that it creates value. Rather, generally speaking, it
`is when a feature is used (or expected to be used) that value is created.509 In this regard,
`accounting for the “use made of the invention” is not the same thing as simple tallying or
`counting. The asserted claims of the patents-in-suit can be avoided by NIAs with no
`ongoing impact to the customer experience or economic costs.
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`278. As I have explained, and will discuss further in Section 6, Dr. Mangum does not evaluate
`usage of the patents-in-suit. Dr. Mangum claims that to “the extent [Charter] has included
`the accused product in the subscriptions provided to customers, the use is already
`accounted for in the royalty base, so no adjustment is necessary.”510 But Dr. Mangum did
`not consider usage in his royalty base, as I have now explained at great length.
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`279. According to Dr. Mangum, between Charter’s “ongoing advertising of the app and its
`inclusion in all subscriber months, the extent of use covers a material portion of its video
`operations.” 511 Dr. Mangum continues that “this extent of use by [Charter] has persisted
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`506 Mangum Report, p. 57.
`507 In its entirety, G-P Factor 11 reads: “The extent to which the infringer has made use of the invention;
`and any evidence probative of the value of that use.”
`508 This was emphasized in Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1333 (Fed. Cir.
`2009).
`509 Order Granting In Part and Denying In Part Motions to Exclude Expert Testimony, Denying Motion to
`Bifurcate Trial, Denying Motion For Preclusive Sanctions in the matter of Mformation Techs., Inc. v.
`Research in Motion, et al., 5:08-cv-04990-JW (N.D. Cal. 2012).
`510 Mangum Report, p. 59.
`511 Mangum Report, p. 58.
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