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Case 3:14-cv-02235-DMS-BLM Document 431 Filed 07/16/18 PageID.

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1 Allison H. Goddard (211098)


ali@pattersonlawgroup.com
2 PATTERSON LAW GROUP
402 West Broadway, 29th Floor
3 San Diego, CA 92101
(619) 398-4760
4 (619) 756-6991 (facsimile)
5 Attorneys for Plaintiff,
Wi-LAN Inc.
6

8 UNITED STATES DISTRICT COURT


9 SOUTHERN DISTRICT OF CALIFORNIA
10 SAN DIEGO
11 )
WI-LAN INC., ) No. 3:14-cv-1507-DMS-BLM;
12 Plaintiff, )
v. ) (Lead Case No. 3:14-cv-2235-
13 ) DMS-BLM)
APPLE INC., ) DEMAND FOR JURY TRIAL
14 Defendant )
15 ) WI-LAN INC.’S TRIAL
)
16 ) BRIEF
)
17 ) Hon. Dana M. Sabraw
) Trial Date: July 23, 2018
18 )
) Time: 9:00 A.M.
19 )
20
)
)
21 )
)
22 )
)
23

24

25 REDACTED VERSION FOR PUBLIC FILING


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28 WI-LAN’S TRIAL BRIEF Case No. 3:14-cv-01507-DMS-BLM
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1 TABLE OF CONTENTS
2 PAGE
3 I. INTRODUCTION ...............................................................................................................1
4 II. DISPUTED ISSUES ............................................................................................................2
5 A. Apple Has Willfully Infringed the Patents-in-Suit ..................................................2

6 1. Apple Directly Infringes the Asserted Claims of the ’145 Patent ...............2

7 2. Apple Directly Infringes the Asserted Claim of the ’757 Patent .................4

8 3. Apple Actively Induces Direct Infringement of the Asserted

9 Claims by Apple’s Customers .....................................................................4

10 4. Apple’s Infringement is Willful ...................................................................5

11 B. Wi-LAN Is Entitled to Damages Including a Reasonable Royalty for

12 Apple’s Infringement of the Asserted Patents .....................................................................6

13 III. PROCEDURAL ISSUES ....................................................................................................7


14 IV. EVIDENTIARY ISSUES ....................................................................................................7
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1 TABLE OF AUTHORITIES
2
Page(s)
3 CASES

4 Arctic Cat Inc. v. Bombardier Rec. Prods.,


876 F.3d 1350 (Fed. Cir. 2017)..................................................................................................5
5
Commil USA, LLC v. Cisco Sys.,
6 135 S. Ct. 1920 (2015) ...............................................................................................................4
7
DSU Med. Corp. v. JMS Co., Ltd.,
8 471 F.3d 1293 (Fed. Cir. 2006) (en banc)..................................................................................4

9 Georgia-Pacific Corp. v. U.S. Plywood Corp.,


318 F. Supp. 1116 (S.D.N.Y. 1970)...........................................................................................6
10
Halo Elecs., Inc. v. Pulse Elecs., Inc.,
11 136 S. Ct. 1923 (2016) ...............................................................................................................5
12 Lucent Techs., Inc. v. Gateway, Inc.,
13 580 F.3d 1301 (Fed. Cir. 2009)..................................................................................................4

14 Uniloc USA, Inc. v. Microsoft Corp.,


632 F.3d 1292 (Fed. Cir. 2011)..................................................................................................6
15
Wenger Mfg., Inc. v. Coating Mach. Sys., Inc.,
16 239 F.3d 1225 (Fed. Cir. 2001)..................................................................................................2
17 STATUTES
18 35 U.S.C. § 271(b) ...........................................................................................................................4
19
35 U.S.C. § 284 ................................................................................................................................5
20
OTHER AUTHORITIES
21
Local Rule 16.1(f)(9)(a) ..................................................................................................................1
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1 Pursuant to Local Rule 16.1(f)(9)(a) and paragraph 7 of the Court’s June 22,
2 2018 Order Regarding Trial [ECF No. 398], Plaintiff Wi-LAN Inc. (“Wi-LAN”)
3 respectfully submits this trial brief.
4 I. INTRODUCTION
5 Wi-LAN is the sole owner of U.S. Patent Nos. 8,457,145 (“’145 Patent”)
6 and 8,537,757 (“’757 Patent”) (collectively, the “patents-in-suit”). The patents-in-
7 suit relate to wireless technologies that originated in work by Ken Stanwood, Wi-
8 LAN’s Chief Technology Officer (CTO) and inventor on all patents-in-suit. He
9 developed these technologies with a team at Ensemble Communications, where he
10 served as CTO prior to joining Wi-LAN. Ensemble was a San Diego product
11 company founded in the late 1990s as a start-up that Mr. Stanwood helped grow to
12 over 200 engineers, scientists, and support personnel. Wi-LAN and Ensemble
13 worked together to extend the capabilities of Wi-LAN’s pioneering Wideband
14 OFDM technology. In 2004, Wi-LAN began acquiring Ensemble’s assets and
15 engineers.
16 In this trial, Wi-LAN will demonstrate that Defendant Apple, Inc. (“Apple”)
17 has willfully infringed the asserted claims 1 of the patents-in-suit by making, using,
18 selling, offering for sale, and importing into the United States the accused voice-
19 over-LTE (“VoLTE”) iPhones. Wi-LAN will also establish that it is entitled to a
20 reasonable royalty on Apple’s sales of the accused iPhones (iPhone 6, iPhone 6
21 Plus, iPhone SE, iPhone 6s, iPhone 6s Plus iPhone 7, iPhone 7 Plus). Finally, Wi-
22 LAN will establish that Apple’s infringement was and continues to be willful.
23

24

25

26

27
1
The asserted claims are claims 9, 26 and 27 of the ’145 patent and claim 1 of the
’757 patent.
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1 II. DISPUTED ISSUES


2 A. Apple Has Willfully Infringed the Patents-in-Suit
3 Apple makes, uses, sells, offers for sale and imports into the United States
4 the accused iPhones. Apple thereby directly infringes the asserted claims of the
5 patents-in-suit. Apple further indirectly infringes the asserted claims of the
6 patents-in-suit by actively inducing infringement.
7 To prove infringement, a patentee must establish by a preponderance of the
8 evidence that every limitation of the patent claim be found in the accused product.
9 See Wenger Mfg., Inc. v. Coating Mach. Sys., Inc., 239 F.3d 1225 (Fed. Cir. 2001).
10 At trial, Wi-LAN will demonstrate by a preponderance of the evidence that the
11 accused iPhones directly infringe the asserted claims of the patents-in-suit. The
12 accused iPhones meet every limitation of the asserted claims of the patents-in-suit.
13 1. Apple Directly Infringes the Asserted Claims of the ’145
14 Patent
15 The accused iPhones directly infringe claims 9 and 26 of the ’145 patent.
16 Wi-LAN will establish that each limitation of claim 9 is met by Apple’s iPhone
17 products. This evidence will include the testimony of Prof. Vijay Madisetti, Wi-
18 LAN’s infringement expert. Wi-LAN will compare the elements of Claims 9 and
19 26 with the features of the iPhone and show that the accused iPhone products are
20 reasonably capable of satisfying every element in the claims.
21 Dependent claim 27 incorporates the apparatus of claim 26, but further
22 comprises a first timer for determining the transmission time for an aggregate
23 bandwidth request. Wi-LAN will present evidence to show that the accused
24 iPhones include such a timer.
25 Apple’s primary non-infringement arguments for the ’145 Patent are that (1)
26 the baseband processor in Apple’s iPhones (i.e., the claimed subscriber unit) does
27
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2 and (2) Apple’s iPhones


3

4 Both of these arguments


5 fail.
6 First, Wi-LAN will show that the accused VoLTE iPhones allocate
7 bandwidth across user connections. The circuit board in the iPhone includes an
8 application processor and a baseband processor. Prof. Madisetti will testify that
9 the baseband processor meets the construction of the claimed “subscriber unit,”
10 which is a module that allocates bandwidth across its user connections.
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15 Apple’s second non-infringement argument is that Apple does not directly


16 infringe because
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1 2. Apple Directly Infringes the Asserted Claim of the ’757


2 Patent
3 The accused iPhones directly infringe claim 1 of the ’757 patent. Wi-LAN
4 will establish that each limitation of claim 1 is met by Apple’s iPhones. This
5 evidence will include the testimony of Dr. Vijay Madisetti, Wi-LAN’s
6 infringement expert. Wi-LAN will compare the elements of Claim 1 with the
7 features of the iPhone and show that the accused iPhone products are reasonably
8 capable of satisfying every element in the claim.
9 3. Apple Actively Induces Direct Infringement of the Asserted
10 Claims by Apple’s Customers
11 Under 35 U.S.C. § 271(b), “[w]hoever actively induces infringement of a
12 patent shall be liable as an infringer.” To establish induced infringement, the
13 patentee must show by a preponderance of the evidence that the defendant acted
14 with specific intent to induce infringement of the patent. See DSU Med. Corp. v.
15 JMS Co., Ltd., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc). This requires the
16 patentee to prove that the defendant knew of the patent or was willfully blind to its
17 existence, and knew or was willfully blind to the fact that the acts it induced, if
18 taken, would constitute infringement of the patent. See Commil USA, LLC v. Cisco
19 Sys., 135 S. Ct. 1920, 1922 (2015). The patentee must also demonstrate that
20 someone directly infringed at least one patent claim. See Lucent Techs., Inc. v.
21 Gateway, Inc., 580 F.3d 1301, 1322 (Fed. Cir. 2009).
22 Wi-LAN will demonstrate by a preponderance of the evidence that Apple
23 induces its customers to directly infringe the asserted claims of Wi-LAN’s patents.
24 Wi-LAN will also show that Apple knew of Wi-LAN’s patents and acted with
25 specific intent to induce infringement. For example, Apple instructed its customers
26 to connect its iPhones to cellular networks implementing VoLTE and to configure
27
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1 its iPhones to use those networks.


2

3 Through this
4 and other evidence, Wi-LAN will demonstrate that Apple knew or was willfully
5 blind to the knowledge that it induced its customers to infringe the ’145 and ’757
6 Patents.
7 4. Apple’s Infringement is Willful
8 To prove Apple has willfully infringed any of the asserted claims of the
9 patents-in-suit, Wi-LAN must demonstrate by a preponderance of the evidence that
10 (1) Apple had knowledge of each of the patents-in-suit and (2) Apple subjectively
11 intended to infringe the patents-in-suit because it knew or should have known that
12 its actions constituted an unjustifiably high risk of infringement. See Halo Elecs.,
13 Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1933-34 (2016); Arctic Cat Inc. v.
14 Bombardier Rec. Prods., 876 F.3d 1350, 1371 (Fed. Cir. 2017).
15 At trial, Wi-LAN will demonstrate by a preponderance of the evidence that
16 that Apple knew of Wi-LAN’s patents and intentionally infringed them. Although
17 Apple may argue that it obtained a judgment of noninfringement in a prior lawsuit
18 between Apple and Wi-LAN, that lawsuit involved a different set of patents from
19 the patents asserted here. That lawsuit also involved different products designed
20 without VoLTE functionality. That judgment could not have provided a
21 reasonable basis for Apple to conclude its new VoLTE iPhones did not infringe
22 these patents.
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1 B. Wi-LAN Is Entitled to Damages Including a Reasonable Royalty


2 for Apple’s Infringement of the Asserted Patents
3 Once liability for infringement has been established, a patentee is entitled to
4 damages adequate to compensate for the infringement, which shall be no less than
5 a reasonable royalty. 35 U.S.C. § 284. A reasonable royalty is determined based
6 upon a hypothetical negotiation between a willing licensor and a willing licensee
7 occurring just before infringement began. See Uniloc USA, Inc. v. Microsoft
8 Corp., 632 F.3d 1292, 1312 (Fed. Cir. 2011). An established method of evaluating
9 the likely outcome of this hypothetical negotiation is to consider the 15 factors set
10 forth in Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120
11 (S.D.N.Y. 1970).
12 Wi-LAN is entitled to a reasonable royalty on the revenue generated by
13 Apple’s sale and importation of the accused products occurring since the iPhone 6
14 was first introduced to the market in September 2014. Based on these sales, Mr.
15 David Kennedy, Wi-LAN’s damages expert, will testify that
16

17 . Wi-LAN
18 will also seek an accounting for damages due to any infringing sales from trial
19 forward, and will seek pre-judgment and post-judgment interest on any damages
20 award.
21 To determine the damages owed to Wi-LAN, Mr. Kennedy will testify that
22 he applied the factors from Georgia-Pacific and considered the outcome of a
23 hypothetical negotiation.
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1 . Kennedy will then explain how damages are


2 backed up by other sources. First, Mr. Kennedy will testify about how this number
3 is backed up by Wi-LAN’s survey expert witness, Prof. Jeffrey Prince, and the
4 survey data he collected. Professor Prince’s survey analysis shows
5

6 .
7 Second, Mr. Kennedy will show how his infrastructure analysis supports
8 this per-unit royalty rate. Mr. Kennedy’s infrastructure analysis measures the cost
9 of the additional network resources required to counter the decreased speed of
10 iPhones if Apple had to remove its infringing technology from its iPhones.
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15 III. PROCEDURAL ISSUES


16 Wi-LAN is not currently aware of any procedural issues that require
17 resolution by the Court. The Court has already agreed that the trial will be
18 bifurcated and that all equitable issues will be postponed until after a jury verdict
19 has been reached and tried to the Court at a later date if necessary. ECF No. 398,
20 Order Regarding Trial, ¶ 1.
21

22 IV. EVIDENTIARY ISSUES


23 The parties’ respective Motions in Limine and Motions to Strike have been
24 fully briefed and are set for hearing on July 20, 2018. In addition, the parties have
25 raised a number of objections to one another’s exhibits and deposition
26 designations.
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3 Dated: July 16, 2018 Respectfully submitted,


4
By: /s/ Allison Goddard
5
Allison H. Goddard (211098)
6 ali@pattersonlawgroup.com
PATTERSON LAW GROUP
7 402 West Broadway, 29th Floor
San Diego, CA 92101
8 (619) 398-4760
(619) 756-6991 (facsimile)
9
Robert Cote
10 rcote@mckoolsmith.com
Brett Cooper
11 bcooper@mckoolsmith.com
Kevin Schubert
12 kschubert@mckoolsmith.com
Christopher McNett (298893)
13 cmcnett@mckoolsmith.com
McKOOL SMITH, P.C.
14 One Bryant Park, 47th Floor
New York, NY 10036
15 (212) 402-9400
(212) 402-9444 (facsimile)
16
Seth Hasenour
17 shasenour@mckoolsmith.com
MCKOOL SMITH, P.C.
18 300 W. 6th Street, Suite 1700
Austin, TX 78701
19 (512) 692-8700
(512) 692-8744 (facsimile)
20
Attorneys for Plaintiff,
21 Wi-LAN Inc.
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1 PROOF OF SERVICE
2 I hereby certify that on July 16, 2018, I caused a copy of this pleading to be
3 delivered via CM/ECF on the counsel of record.
4

5 Dated: July 16, 2018


By: /s/ Allison Goddard
6
Allison H. Goddard (211098)
7 ali@pattersonlawgroup.com
PATTERSON LAW GROUP
8 402 West Broadway, 29th Floor
San Diego, CA 92101
9 (619) 398-4760
(619) 756-6991 (facsimile)
10
Attorneys for Defendant,
11 Wi-LAN Inc.
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