Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-04910/USCOURTS-cand-3_13-cv-04910-25/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OPEN TEXT S.A.,

Plaintiff,

v.

BOX, INC., et al.,

Defendants.

Case No. 13-cv-04910-JD 

ORDER RE MOTIONS TO EXCLUDE 

OPINIONS AND TESTIMONY OF 

GREG LEONARD, SRINIVASAN 

JAGANNATHAN, AND SAM GHODS

Re: Dkt. No. 428, 434, 299-3

This patent case involves four patent claims directed at bi-directional synchronization of a 

cache.1 The patents are together known as the “File Synchronization patents.” Open Text has 

moved to exclude the damages opinions of a number of experts offered by defendants Box and 

Carahsoft (both subsequently referred to as just “Box”), as well as some Box employees whom 

Defendants intend to offer as lay witnesses. In light of the Court’s prior rulings, the only experts 

whose opinions remain at issue are Box’s damages expert, Dr. Gregory Leonard, and its technical 

expert, Dr. Srinivasan Jagannathan; the only Box employee whose testimony remains at issue is 

Sam Ghods. The Court denies the motion with respect to Leonard, grants in part and denies in 

part the motion with respect to Jagannathan, and denies the motion with respect to Ghods.

LEGAL STANDARD

A. Admissibility of Expert Opinions

Federal Rule of Evidence 702 allows admission of “scientific, technical, or other 

specialized knowledge” by a qualified expert if it will “help the trier of fact to understand the 

 

1

Specifically, claims 10 and 27 of U.S. Patent No. 7,062,515; claim 4 of U.S. Patent No. 

7,590,665; and claim 11 of U.S. Patent No. 8,117,152.

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evidence or to determine a fact in issue.” Following the Supreme Court’s ruling in Daubert v. 

Merrell Dow Pharms., Inc. that expert testimony must be both relevant and reliable to reach the 

jury, see 509 U.S. 579, 589 (1993), Rule 702 was amended to provide that expert testimony is 

admissible only if “(b) the testimony is based on sufficient facts or data; (c) the testimony is the 

product of reliable principles and methods; and (d) the expert has reliably applied the principles 

and methods to the facts of the case.” Fed. R. Evid. 702.

“Under Daubert, the district judge is ‘a gatekeeper, not a fact finder.’” Primiano v. Cook, 

598 F.3d 558, 564-65 (9th Cir. 2010). “[T]he trial court must assure that the expert testimony 

‘both rests on a reliable foundation and is relevant to the task at hand.’” Id. at 564 (quoting 

Daubert, 509 U.S. at 597). “After an expert establishes admissibility to the judge’s satisfaction, 

challenges that go to the weight of the evidence are within the province of a fact finder, not a trial 

court judge.” Pyramid Techs., Inc. v. Hartford Cas. Ins. Co., 752 F.3d 807, 814 (9th Cir. 2014).

B. Reasonable Royalty

Upon a showing of infringement, a patentee is entitled to “damages adequate to 

compensate for the infringement, but in no event less than a reasonable royalty for the use made of 

the invention by the infringer.” 35 U.S.C. § 284. A “reasonable royalty” usually derives from a 

hypothetical negotiation between the patentee and the infringer when the infringement began. See 

ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 868 (Fed. Cir. 2010). The hypothetical 

negotiation is a construct that “attempts to ascertain the royalty upon which the parties would have 

agreed had they successfully negotiated an agreement just before infringement began.” Lucent 

Techs. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009). Often, in determining the 

reasonable royalty, experts consider one or more of a non-exhaustive list of fifteen factors set forth 

in Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970). But 

the Federal Circuit “do[es] not require that witnesses use any or all of the Georgia-Pacific factors 

when testifying about damages in patent cases.” WhitServe, LLC v. Computer Packages, Inc., 694 

F.3d 10, 31 (Fed. Cir. 2012). The reasonable royalty can take the form of a running royalty paid 

out over time, or a lump sum that discharges the accused infringer’s obligations at one go. 

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DISCUSSION

I. MOTION TO EXCLUDE OPINIONS OF DR. GREGORY LEONARD (DKT. NO. 434)

Open Text moves to exclude Dr. Leonard’s opinions on four grounds (excluding those 

disposed of by the Court’s previous orders): (1) the limitation of the damages period to April 30, 

2014, despite the fact that Box produced financials through July 31, 2015; (2) the use of the cost 

of implementing non-infringing alternatives to determine a royalty; (3) the lack of evidentiary 

basis for non-infringing alternatives to the File Synchronization patents; (4) and reliance on 

allegedly non-comparable licenses. The Court addresses each in turn.

A. Limitation of Damages Period

Open Text’s first argument is that Leonard undercounted Box’s potential damages by 

using a damages period that ended on April 30, 2014, despite the fact that Box produced financial 

data through July 31, 2014, and that (according to Open Text) he could have projected Box’s 

allegedly infringing revenues through October 2014. Open Text contends this decision 

“improperly reduce[d] Box’s potential damages.” Dkt. No. 434 at 1.

As an initial matter, the damages period discussed by Leonard does not appear to have 

limited his final damages number. His opinion is that if Box is found to infringe a valid patent, 

appropriate damages would not be more than a fully paid-up lump sum amount based on the cost 

of implementing a non-infringing alternative to the patents-in-suit. See Leonard Expert Report ¶¶ 

77, 225-31, 279, Dkt. No. 332-5. The discussion of Box’s accused revenues comes in play when 

Leonard, discussing the first Georgia-Pacific factor, criticizes Open Text’s damages expert, Krista 

Holt, for her analysis of a settlement agreement between Open Text and a company called 

Alfresco that involved a lump sum payment. See Leonard Expert Report ¶ 141, Dkt. No. 427-2. 

Leonard says that the Alfresco agreement extended through the expiration date of the licensed 

patents (November 11, 2018), despite the fact that Holt believes that damages in this case should 

be restricted to past sales. Id. He therefore attempted to estimate the portion of the settlement 

amount attributable to those past sales by determining the share of Box’s past and projected future 

revenues through November 11, 2018, that is comprised of allegedly infringing revenue for past 

sales through April 30, 2014. See id. If there are additional past revenues that Leonard did not 

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consider, as Open Text says, then the adjusted lump sum associated with the Alfresco settlement 

would be higher. But the transparency of Leonard’s methodology means that it would be 

straightforward to cross-examine him on the discrepancy, or even for Open Text to calculate what 

it believes would be the proper adjusted lump sum for the Alfresco license. See Daubert, 509 U.S. 

at 596 (“Vigorous cross-examination, presentation of contrary evidence, and careful instruction on 

the burden of proof are the traditional and appropriate means of attacking shaky but admissible 

evidence.”). There is no warrant for excluding Leonard’s entire opinion on this ground, 

particularly since his final damages figures are not based on the Alfresco settlement agreement.

Overall, Open Text’s challenge goes to the facts Leonard used or omitted rather than the 

validity or reliability of his methods. These “questions regarding which facts are most relevant for 

calculating a reasonable royalty are properly left to the jury.” VirnetX, Inc. v. Cisco Sys., Inc., 767 

F.3d 1308, 1328 (Fed. Cir. 2014). Open Text is free to cross Leonard on these issues but the 

Court will not bar his opinions from trial. 

B. Use of the Cost of Non-Infringing Alternatives

Open Text also attacks Leonard’s report for opining that Box would not be willing to pay 

more than the difference between the incremental profits associated with the patented technology 

and the incremental profits associated with the next-best non-infringing alternative. See Leonard 

Expert Report ¶¶ 77, Dkt. No. 332-5. 

Open Text relies on Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359, 1373 (Fed. Cir. 

2008). In that case, the district court held a bench trial on damages, and determined that a 

reasonable royalty for the two asserted patents would be 7%. Id. at 1364. The defendant 

appealed, arguing that the district court erred as a matter of law by awarding a reasonable royalty 

higher than the cost of implementing acceptable non-infringing alternatives. See id. at 1372-73. 

The Federal Circuit affirmed, holding that there was no legal prohibition on an award of damages 

higher than the cost of implementing an acceptable non-infringing alternative. Id. at 1373 

(“Coinco is wrong as a matter of law to claim that reasonable royalty damages are capped at the 

cost of implementing the cheapest available, acceptable, noninfringing alternative.”). 

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Mars stands for the proposition that damages cannot be capped as a matter of law at the 

cost of implementing the cheapest available non-infringing alternative. Box, whether through 

Leonard’s testimony or any other channel, is barred from taking that position before the jury. But 

Mars is not a blanket prohibition on expert testimony about non-infringing alternatives as a 

damages measure. As the Federal Circuit has held, and as made abundantly clear in a decision 

that Open Text itself extensively cites in its reply, basing a reasonable royalty estimate on the cost 

of implementing non-infringing alternatives is an allowable methodology. Apple Inc. v. Motorola, 

Inc., 757 F.3d 1286, 1315 (Fed. Cir. 2014) (“[T]here may be more than one reliable method for 

estimating a reasonable royalty. For example, a party may ... estimate the value of the benefit 

provided by the infringed features by a [sic] comparing the accused product to non-infringing 

alternatives ...”) (citations omitted); see also Brandeis Univ. v. Keebler Co., Nos. 1:12-cv-01508, 

1:12-cv-01509, 1:12-cv-01511, 1:12-cv-01513, 2013 WL 5911233, at *6 (N.D. Ill. Jan. 18, 2013) 

(“Keebler would not have paid a royalty higher than the cost to it of switching to a noninfringing 

substitute for the plaintiffs’ margarine in its cookies or otherwise reworking its manufacturing 

process to avoid making the infringing margarine.”). That Mars only forbids “courts, not experts, 

imposing caps based on expected profits as a matter of law” is a reading endorsed by other district 

courts. Ergotron, Inc. v. Rubbermaid Commercial Products, LLC, No. 10-2010 ADM/JJG, 2012 

WL 3733578, at *12 (D. Minn. Aug. 28, 2012) (declining to exclude expert who stated that 

design-around costs would be a “cap” on the royalty rate); see also Kimberly-Clark Worldwide, 

Inc. v. First Quality Baby Prods., LLC, No. 1:09-cv-1685, 2013 WL 6036029, at *2 (M.D. Penn. 

2013) (declining to exclude expert who stated that the defendant “would not pay a royalty rate 

higher than the cost associated with forgoing use of the infringing products and instead using 

available, noninfringing alternatives”).

Leonard’s opinion is that Box would not have been willing to pay more than the cost of 

implementing a non-infringing alternative. Leonard Expert Report ¶¶ 77, 84, 266. That is an 

acceptable opinion and method about damages at this Daubert stage, and not a legal claim. See 

Oracle Am., Inc. v. Google Inc., No. C 10-03561 WHA, 2012 WL 877125, at *4 (N.D. Cal. Mar. 

15, 2012) (permitting Leonard to testify about how much “Google would have decided ... it was 

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willing to pay”). Open Text again is free to cross Leonard on this point to show the jury that a 

different measure is a superior approach. 

C. Evidentiary Basis for Opinions on Acceptable Non-Infringing Alternatives

Open Text’s third concern about Leonard’s opinions overlaps with its objections to 

Jagannathan. Leonard relied on Jagannathan to identify non-infringing alternatives to the asserted 

patents that would result “in comparable performance to the current client implementations, and 

would have been imperceptible to Box’s end users.” Leonard Expert Report ¶ 225. Open Text 

argues that any alternatives must be “market acceptable,” citing Stryker Corp. v. Intermedics 

Orthopedics, Inc., 96 F.3d 1409, 1418 (Fed. Cir. 1996), a case that analyzed the requirement that a 

patentee show the “absence of acceptable non-infringing substitutes” in order to obtain lost profits 

instead of a reasonable royalty. According to Open Text, neither Leonard nor Jagannathan is 

qualified to assess whether the alternatives Jagannathan proposes would be acceptable to Box’s 

customers, as neither of them has any background in marketing and neither gathered information 

from Box’s customers regarding whether the proposed alternatives would be acceptable to them.

That objection might have legs if Jagannathan had opined that his proposed alternatives 

had certain disadvantages, like the alternatives at issue in Stryker, but nevertheless concluded that 

they would be acceptable to consumers. But here, his opinion was that the alternatives would 

result in performance that was imperceptible to Box’s end users. That is clearly a technical 

opinion within Jagannathan’s expertise, despite the fact that, if true, it also means that the 

substitutes would necessarily be acceptable to Box’s customers. The Keebler opinion that Open 

Text discusses at length is not at all to the contrary. That case permitted the defendant’s damages 

expert, Michael Keeley, to rely on non-infringing alternatives proposed by its technical expert, 

Eric Decker, despite the lack of any indication that Decker had a marketing background and the 

absence of testing to determine whether his alternatives would result in a “commercially viable 

cookie.” See Keebler, 2013 WL 5911233, at *8-9. Keebler is of a piece with other opinions 

allowing estimates of design-around costs based on talking to technical experts and engineers. See 

Apple, 757 F.3d at 1321 (“Overall, outside of litigation, it would be reasonable, and quite 

common, for Napper to rely on technical information provided by Apple or one of its experts in 

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order to value the cost to design around Apple’s technology.”); Oracle Am., Inc. v. Google, Inc., 

C 10-03561 WHA, 2011 WL 5914033, at *1-2 (N.D. Cal. Nov. 28, 2011); TQP Devel., LLC v. 

Merrill Lynch & Co., Inc., No. 2:08-CV-471-WCB, 2012 WL 3283354, at *3 (E.D. Tex. Aug. 10, 

2012) (allowing expert to estimate design-around costs using technical expert and a “senior 

manager of network engineering”).

Moreover, it is unclear whether the test for lost profits, which calls for a binary, yes-no 

determination as to whether an alternative is “acceptable” or not, applies in the context of a 

reasonable royalty. See Carnegie Mellon Univ. v. Marvell Tech. Grp., No. 09-290, 2012 WL 

3686736, at *4 (W.D. Penn. Aug. 24, 2012) (distinguishing case law on lost profits from 

reasonable royalty). If a plaintiff cannot show the absence of acceptable non-infringing 

alternatives, it may not be entitled to lost profits at all. But for a reasonable royalty, problems with 

a non-infringing alternative that limit its attractiveness to consumers would simply reduce the 

profits associated with the alternative relative to the profits associated with the patented 

technology, and would end up being accounted for in the reasonable royalty number itself. Cf. 

Mars, 527 F.3d at 1373 (holding that district court did not commit clear error in reducing royalty 

rate based on “potential availability” of non-infringing alternatives that were not actually 

available).

One of the Box employees from whom Leonard obtained estimates of the time needed to 

implement some of the non-infringing alternatives, Ryan Knotts, has already been excluded for 

being disclosed too late. See Jan. 14, 2015, Transcript of Proceedings at 42:17-48:5, Dkt. No. 451. 

But Leonard can rely on estimates of design-around costs that do not require Knotts’s testimony, 

like those that rely on the testimony of Sam Ghods (whose testimony the Court is allowing for 

reasons given in Section III below), or the fact that Box paid $250,000 to develop Box Edit. See 

Leonard Expert Report ¶ 229-31.

D. Use of Box License Agreements

Finally, Open Text objects to Leonard’s discussion of four license agreements entered into 

between Box and various third parties under the rubric of Georgia-Pacific factor 2, which looks to 

“[t]he rates paid by the licensee for the use of other patents comparable to the patent in suit.” See 

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Georgia-Pacific, 318 F. Supp. at 1120. Leonard relies on Jagannathan’s opinion that “the 

technology covered in all four Box patent licenses is technically comparable to the claimed 

technology of the File Synchronization patents-in-suit.” Leonard Expert Report ¶ 251; 

Jagannathan Expert Report ¶¶ 187-91, Dkt. No. 434-2.

Open Text first argues that Jagannathan did not opine on the “similarities and differences 

in scope between the claims of the patents at issue” in Box’s agreements and that “he admits that 

he did not study the claims of the patents in the Box settlement licenses.” See Open Text’s Reply

in Support of Motion to Exclude Leonard at 9, Dkt. No. 371. In fact, the cited deposition 

testimony indicates only that for one of the patents that were the subject of the Box license, 

Jagannathan believes that he “probably” reviewed the claims, but couldn’t “specifically recall 

going through every single claim.” Jagannathan Dep. Tr. 12:14-13:13, Dkt. No. 332-19. Open 

Text cites no law requiring a technical expert to discuss the similarities and differences in scope 

between the scope of the licensed claims and the patents-in-suit or to go through every claim of 

the licensed patent in order to reliably opine that the licensed patents are “comparable” to the 

patents-in-suit, as Georgia-Pacific factor 2 requires, and the Court sees no reason why that should 

be required to render an expert’s testimony on this issue admissible. The portions of the Federal 

Circuit’s opinions in ResQNet and LaserDynamics that Open Text refers to do not establish such a 

requirement; they have to do with Georgia-Pacific factor one and the admissibility of settlement 

agreements under Federal Rule of Evidence 403, respectively. See ResQNet.com, Inc. v. Lansa, 

Inc., 594 F.3d 860, 869-73 (Fed. Cir. 2010); LaserDynamics, Inc. v. Quanta Computer, Inc., 694 

F.3d 51, 77-78 (Fed. Cir. 2012). Any differences between the licensed patents and the patents-insuit can easily be pointed out to the jury, either through cross-examination of Jagannathan or 

through the direct testimony of Open Text’s own experts.

Open Text next argues that Leonard’s assessment of the comparability of Box’s license 

agreements is deficient. Perhaps the most serious charge is that, as Leonard acknowledges, three 

of the four agreements were settlement agreements, because the Federal Circuit has expressed 

“longstanding disapproval of relying on settlement agreements to establish reasonable royalty 

damages,” though without establishing a per se rule against the use of such settlements. See 

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LaserDynamics, 694 F.3d at 77; ResQNet, 594 F.3d at 870-72 (noting that “litigation itself can 

skew the results of the hypothetical negotiation” but permitting reliance on license that arose out 

of litigation). (Open Text argues that Leonard mischaracterizes the fourth license, between Box 

and IPMG/LodsysGroup, as a “non-litigation license” given the fact that Lodsys filed a number of 

lawsuits, see Dkt. No. 434 at 15, but in fact it is Open Text that is mistaken. Leonard never calls 

the license a “non-litigation license,” despite Open Text’s quotation marks; he simply says it is not 

a “settlement agreement,” which Open Text does not dispute, see Leonard Expert Report ¶ 254.) 

But the license agreement that the LaserDynamics court held should not be considered contained 

specific indicia that suggested it was inflated: it was “executed shortly before a trial” in which the 

party who entered into the license was sanctioned and it was “six times larger than the next highest 

amount paid for a license to the patent-in-suit.” LaserDynamics, 694 F.3d at 77-78. Open Text 

points to no evidence suggesting that the royalties associated with the settlement agreements were 

depressed because they were entered into in the context of litigation. And it points to no other 

licenses that it claims are more comparable, making this case like ResQNet, which admitted a 

settlement agreement when it was “the most reliable license in [the] record.” See 594 F.3d at 872; 

LaserDynamics, 694 F.3d at 77. Once again, Open Text is free to grill Leonard at trial about these 

issues, but has not established that Leonard should be barred from testifying about them under 

Daubert. 

While the Court will not bar this testimony, it will listen with particular closeness to 

Leonard’s opinions relating to it. The Court is mindful, and advises Box to be equally mindful, of 

the Federal Circuit’s teachings on misuse of settlement agreements for royalty determinations. 

The Court will be quick to shut off or strike testimony that crosses the line, and expects Box to 

ensure that that does not happen. 

The other points Open Text makes about the comparability of the Box license 

agreements -- such as his lack of data on the extent of Box’s infringement in those cases -- also go 

to weight, not admissibility, like most challenges to the comparability of license agreements. See 

VirnetX, 767 F.3d at 1330 (permitting reliance on licenses “drawn to related technology” despite 

differences in breadth and timing between licenses and hypothetical negotiation); Apple, 757 F.3d 

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at 1326 (“Here, whether these licenses are sufficiently comparable such that Motorola’s 

calculation is a reasonable royalty goes to the weight of the evidence, not its admissibility.”);

ActiveVideo Networks, Inc. v. Verizon Communications, Inc., 694 F.3d 1312, 1333 (Fed. Cir.

2012) (permitting reliance on licenses involving, among other things, patents other than the 

patents-in-suit); Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1211-12 (Fed. Cir. 2010) 

(permitting testimony about licenses despite differences such as the competitive position of the 

licensee compared to defendant). The differences between the Box licenses and the hypothetical 

negotiation that Open Text points to (like the timing of the licenses, or the fact that the patent 

office had issued a non-final rejection of the licensed claims in one of the licenses) would be 

easily understandable to a jury.

Consequently, subject to the bar on Box arguing that there is an alternatives cap as a matter 

of law, the Court denies Open Text’s motion to exclude the opinions and testimony of Leonard.

II. MOTION TO EXCLUDE OPINION OF DR. SRINIVASAN JAGANNATHAN (DKT. 

NO. 428)

Open Text moves to exclude Jagannathan’s opinions on two grounds, but one of them --

his opinions regarding the comparability of the technology claimed in Box’s licenses -- was dealt 

with in the Court’s discussion of Leonard’s opinions, above, and is denied for the reasons given 

there. The remaining ground is Jagannathan’s use of an allegedly incorrect claim construction of 

the term “directly” to render a non-infringement opinion.

Claim 1 of the ’515 patent (from which asserted claim 10 depends) and claim 27 of the 

’515 patent both require receiving a file or database asset “directly from a database” and saving a 

cached file “directly to the database.” ’515 patent, claims 1, 27. Jagannathan purports to apply 

the plain and ordinary meaning of “directly” to support his opinion that if a connection is mediated 

by an intermediary, such as a second software program, a proxy server, or another server, it is not 

“direct.” Jagannathan Dep. Tr. 205:8-206:25. Jagannathan argues that since Box’s client 

software’s communication with a MySQL database is mediated by a web server, such 

communications are not “direct.” Jagannathan Rebuttal Expert Report ¶¶ 98, 133, 155 Dkt. No. 

428-1.

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As Open Text points out, however, that definition of “directly” would be inconsistent with 

a preferred embodiment of the ’515 patent described in the specification. “[A] claim construction 

that excludes a preferred embodiment ... is rarely, if ever correct and would require highly 

persuasive evidentiary support.” See Anchor Wall Sys., Inc. v. Rockwood Retaining Walls, Inc., 

340 F.3d 1298, 1308 (Fed. Cir. 2003) (citations omitted). In the section entitled “Detailed 

Description of the Invention,” the File Synchronization patents say, “cache manager 38 can 

communicate a copy of cached file 42 directly (e.g., without the use of an intermediate 

synchronization program) to server 24.” ’515 patent, 7:48-51; see also id. 11:11-13. Box attempts 

to characterize this as specifying only an example of a way in which the connection can be 

indirect, i.e., the use of an intermediate synchronization program. But in fact, it specifies an 

example of a way that a connection can be direct. It says that one way to establish a direct 

connection is to omit an intermediate synchronization program, but there may be other ways as 

well.

Far from limiting the claims using the specification, as Box suggests, this construction 

gives the claim its full scope by making clear that receiving from and saving to the database can be 

“direct” in multiple ways, one of them being omitting any intermediate programs. It is Box that 

would improperly limit the claims by claiming that the very example of a direct connection given 

in the specification -- a connection without a mediating software program -- could potentially fall 

outside the scope of the claims, for example if a server intervenes. Whatever other ways there are 

to receive from or save to a database “directly,” receiving or saving without an intermediate 

synchronization program is direct.

Any non-infringement opinions by Jagannathan inconsistent with this construction will be 

excluded.

III.MOTION TO EXCLUDE TESTIMONY OF SAM GHODS (DKT. NO. 299-3)

Sam Ghods is an “Architect and Co-Owner” at Box whom Leonard relied on to confirm 

that a particular non-infringing alternative would be technically feasible and to estimate how long 

it would take Box to implement it. See Leonard Expert Report ¶¶ 87, 227, 229-30. According to 

Open Text, such testimony is not admissible “lay opinion,” which is permitted by Rule 701 of the 

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Federal Rules of Evidence only if it is “(a) rationally based on the witness’s perception; (b) helpful 

to clearly understanding the witness’s testimony or to determining a fact in issue; and (c) not 

based on scientific, technical, or other specialized knowledge within the scope of Rule 702.” And 

because Ghods was not disclosed as an expert, Open Text that he cannot offer his opinions as 

expert testimony pursuant to the provisions of Rule 702.

As noted above in Section I.C with respect to Leonard, however, courts regularly permit 

experts to rely on lay witnesses for estimates of design-around costs. And properly so. The 

advisory committee notes that accompanied the amendment that added Rule 701(c) made clear 

that “particularized knowledge that the witness has by virtue of his or her position in the business” 

is not “scientific, technical, or other specialized knowledge,” even if it involves knowledge that 

the average person would have to consult an expert about, like the “value or projected profits of a 

business” or that a substance “appeared to be a narcotic.” Fed. R. Evid. 701, advisory committee’s 

note to 2000 amendment. Thus, “just because the underlying facts and data are technical in nature 

does not transform the information into ‘expert testimony’ when those facts are within the 

personal knowledge and experience of the company’s employee.” See In re Google AdWords 

Litig., No. 5:08-CV-3369 EJD, 2012 WL 28068, at *5 (N.D. Cal. Jan. 5, 2012) (collecting cases 

and permitting lay witness to testify on what Google AdWords “does when certain variables are 

changed”). Ghods has both managed engineers at Box and worked on Box’s products himself; 

whether Box’s products could be modified to include a certain non-infringing alternative and how 

long it would take to do so thus fall within the “particularized knowledge” that he has “by virtue 

of his or her position in the business” and is admissible under Rule 701. See Ghods 30(b)(1) Dep. 

Tr. 5:7-6:13, Dkt. No. 347-5.

Ghods did not come up with the non-infringing alternatives himself; those came from 

Box’s technical experts. The Court understands that he is not being offered to testify that the 

design-arounds he was presented with are actually non-infringing, and he is not being offered to 

testify that Box is working on implementing design-arounds. Box will not be permitted to solicit 

such testimony from him. Ghods may testify that, based on his work on Box’s products, certain 

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technical changes could be made to them, and may also say how long making those changes

would take. 

IT IS SO ORDERED.

Dated: January 29, 2015

______________________________________

JAMES DONATO

United States District Judge

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