Unwired Planet, LLC v. Apple Inc.

Unwired Planet, LLC v. Apple Inc.

Opinion

ORDER GRANTING IN PART AND DENYING IN PART APPLE'S MOTION TO EXCLUDE

Re: Dkt. Nos. 319, 355-14

Apple's motion is granted with respect to the survey data for the '260 patent and all damages estimates dependent on that data. Given the limited explanation Unwired has offered for the assumptions underpinning Dr. Allenby's "equilibrium price premium" model, that data must also be excluded based on the current record. If Unwired believes it can properly [*3]  explain how the EPP model fits the facts of this case, the Court will reconsider its conclusion after a formal Daubert hearing. Apple's motion is otherwise denied.

I. Dr. Allenby's report

Dr. Allenby's survey for the '260 patent measured the value attributed to manual or automatic "content sharing," which Dr. Allenby described as a "[m]ethod of transferring songs, movies, and applications across devices . . . owned by the user." Dkt. 318-6 at 26.¹ This is not consistent with any user-facing benefits conferred by the claims asserted on the '260 patent. Rather, it appears that Dr. Allenby's questions for the '260 patent reflect the claim construction Unwired initially proposed for "provisioning," which would have made the term essentially synonymous with "providing." Dkt. No. 269 at 4; see also 357-4 at 10. Unwired's proposed claim construction was rejected in favor of the narrower "enabling or modifying communications capabilities." Dkt. No. 269 at 7. In light of that construction, "provisioning" features on a user's device bears no reasonable connection to sharing content across devices. Unwired suggests that Dr. Allenby's survey was intended to measure the value attributed to automatically provisioning all of one's devices [*4]  after manually provisioning a single device. But this would still make the survey inaccurate, as the benefit of the invention was tied to remote provisioning, not automatic provisioning. See id. at 3-4. And this would still leave the survey misleadingly ill-defined, as songs and movies have no effect on communications capabilities and are therefore not "provisioning" content. The combined result is a survey question — and survey responses — targeted at an invention other than the one at issue in this litigation. This is a problem of admissibility rather than weight. See, e.g., Fractus, S.A. v. Samsung, No. 6:09-CV-203-LED-JDL, 2011 U.S. Dist. LEXIS 154697, 2011 WL 7563820, at *1 (E.D. Tex. Apr. 29, 2011). The '260 patent survey results must therefore be excluded, along with all damages estimates hinging on those survey results. Unwired has requested an opportunity to correct its questions and redo its conjoint survey. But where the initial effort misses the mark so badly, it would be inappropriate to incentivize overreaching by allowing a second attempt. Cf. Network Prot. Scis., LLC v. Fortinet, Inc., No. C 12-01106 WHA, 2013 U.S. Dist. LEXIS 138890, 2013 WL 5402089, at *8 (N.D. Cal. Sept. 26, 2013).

The survey language on the '446 and '092 patents is a closer question. In both cases Dr. Allenby described the consumer-facing benefit of the invention in terms that clearly exceeded its incremental [*5]  improvement over the prior art. The '446 patent doesn't represent the invention of voice transcription. Dkt. No. 318-6 at 27. The '092 patent doesn't represent the invention of automatic location detection. Id. at 26. The patents represent modest improvements in these areas, based on the kinds of minor technical modifications most ordinary consumers likely wouldn't appreciate. But at this stage, the Court's concern is with limiting evidence that is irrelevant or unfairly prejudicial, that lacks an adequate technical or scientific ground for Daubert purposes, and that jurors may find confusing, misleading, or unhelpful. Although these survey questions perhaps skirt the line, the fundamental problem — their high level of abstraction — doesn't render the survey results entirely unhelpful in assigning value to the improvements in the surveyed areas, particularly as Unwired may argue that its improvements over the prior art were instrumental in making previously existing functionalities effective on the accused devices. See Sentius Int'l, LLC v. Microsoft Corp., 78 F. Supp. 3d 967, 2015 WL 331939, at *3 (N.D. Cal. 2015). Any flaws in the survey can be adequately drawn out at cross and mitigated with proper instructions. Nor is this case analogous to VirnetX [*6] , where the damages expert "relied on the entire market value of Apple's products" and "did not even attempt to subtract any . . . unpatented features from the [royalty] base" if those features weren't separately sold. VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1328 (Fed. Cir. 2014). The damages estimate in that case failed to comply with "settled principles of apportionment" because it adopted the entire market value rule without demonstrating that "the patented features [drove] the demand for [the] entire multi-component product." See LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 67 (Fed. Cir. 2012). A survey that approximates damages for a patented feature at a high level of abstraction is committing "error" of a different order, and doesn't give rise to a per se admissibility problem. See VirnetX, 767 F.3d at 1330 ("[W]e have long acknowledged that any reasonable royalty analysis necessarily involves an element of approximation and uncertainty." (citations and internal quotation marks omitted)). Apple's motion is therefore denied with respect to the survey data for the '446 and '092 patents.

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