Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_18-cv-02352/USCOURTS-cand-5_18-cv-02352-6/pdf.json

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

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Case No.: 5:18-cv-02352-EJD

ORDER DENYING PLAINTIFF’S MOTION TO STRIKE; GRANTING DEFENDANT’S 

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

NETFUEL, INC., 

Plaintiff, 

v. 

CISCO SYSTEMS INC., 

Defendant. 

Case No. 5:18-cv-02352-EJD 

ORDER DENYING PLAINTIFF’S 

MOTION TO STRIKE; GRANTING 

DEFENDANT’S MOTION TO STRIKE 

Re: Dkt. Nos. 256, 258 

 The Parties have filed motions to exclude portions of the opposing sides’ expert testimony. 

The Court finds these motions suitable for consideration without oral argument. See N.D. Cal. 

Civ. L.R. 7-1(b). Having considered the Parties’ papers, the Court DENIES Plaintiff’s motion to 

strike portions of Dr. Almeroth’s expert reports and GRANTS Defendant’s motion to strike 

portions of Dr. Rubin and Mr. Bratic’s expert reports.1

I. BACKGROUND 

A. Factual Background 

 Plaintiff alleges that Defendant infringed two of its patents. The Patents-in-Suit—U.S. 

Patent Nos. 7,747,730 (the “’730 Patent”) and 9,663,659 (the “’659 Patent”)—disclose the use of 

software programs called “agents” to monitor and manage computer networks and the devices 

(such as routers and switches) that run those networks. Plaintiff accuses four features of 

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 The Court has filed this Order under seal because it contains material subject to sealing orders. 

Within seven days of the filing date of this Order, the Parties shall provide the Court a stipulated 

redacted version of this Order, redacting only those portions of the Order containing or referring to 

material for which the Court has granted a motion to seal and for which the Parties still request the 

material be sealed. The Court will then issue a redacted version of the Order. 

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Defendant’s operating systems—IOS, IOS XE, IOS XR, or NX-OS (“the Accused Operating 

Systems”)—of infringing the Patents-in-Suit. Those features (“the Accused Features”) are the 

Embedded Event Manager (“EEM”), Control Plane Policing (“CoPP”), Local Packet Transport 

Services (“LPTS”), and Excessive Punt Flow Trap (“EPFT”). EEM is included in all four Cisco 

network operating systems, CoPP is included in three (IOS, IOS XE, and NX-OS), and LPTS and 

EPFT are included in one (IOS XR). 

 Defendant hired Dr. Kevin Almeroth, a computer-networking expert, to serve as 

Defendant’s designated expert on invalidity. Plaintiff retained Dr. Aviel Rubin, a computer 

security expert, to opine about the importance of the technology in the asserted claims, how that 

technology contributed to the value of Plaintiff’s software, and how that technology currently 

contributes to the value of the Accused Features. Plaintiff also retained Walter Bratic to provide 

expert opinions on the damages owed to Plaintiff as a result of Defendant’s alleged infringement. 

Several steps of Mr. Bratic’s apportionment analysis rely on Dr. Rubin’s technical opinions 

concerning the Accused Feature and the Patents-in-Suit. 

 Each side has raised objections to part of the testimony of the others’ expert witnesses 

based on either a Federal Rule of Civil Procedure 26 or Federal Rule of Evidence 702, including 

the principles set out in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). The 

Court addresses these arguments below. 

B. Procedural History 

 On January 16, 2020, Plaintiff filed a motion to strike portions of Defendant’s expert 

report and exclude related testimony. Plaintiff NetFuel Inc.’s Notice of Motion and Motion to 

Strike (“P Mot.”), Dkt. 255-3. Defendant file an opposition on January 30, 2020. Defendant 

Cisco Systems, Inc.’s Opposition to NetFuel’s Motion to Strike (“D Opp.”), Dkt. 275-4. On 

February 6, 2020, Plaintiff filed a reply. NetFuel’s Reply in Support of its Motion to Strike (“P 

Reply”), Dkt. 284-4. 

 On January 16, 2020, Defendant filed a motion to strike portions of Plaintiff’s expert 

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report and exclude related testimony. Defendant Cisco Systems, Inc.’s Motion to Exclude (“D 

Mot.”), Dkt. 257-4. Plaintiff filed an opposition on January 30, 2020. NetFuel’s Opposition to 

Cisco’s Motion to Exclude (“P Opp.”), Dkt. 274-4. On February 6, 2020, Plaintiff filed a reply. 

Defendant Cisco Systems, Inc.’s Reply in Support of Cisco’s Motion to Exclude (“D Reply”), 

Dkt. 286. 

II. LEGAL STANDARDS 

A. Federal Rule of Civil Procedure 26 

 Federal Rule of Civil Procedure 26(a)(2)(B) requires that a party seeking to offer expert 

witness testimony at trial disclose a “written report—prepared and signed by the witness.” This 

rule, however, does not “preclude counsel from providing assistance to experts in preparing the 

reports.” Fed. R. Civ. P. 26(a)(2)(B) advisory committee’s note to 1993 amendment; but see 

Bekaert Corp. v. City of Dyersburg, 256 F.R.D. 573, 578 (W.D. Tenn. 2009) (“[T]he expert must 

substantially participate in the preparation of his report.”). “Determining whether counsel crosses 

the line separating permissible assistance from improper participation in the expert’s report writing 

calls for a ‘fact-specific inquiry.’” Optronic Techs., Inc. v. Ningbo Sunny Elec. Co., Ltd., 2019 

WL 4780183, at *2 (N.D. Cal. Sept. 30, 2019) (quoting Numatics, Inc. v. Balluff, Inc., 66 F. Supp. 

3d 934, 942 (E.D. Mich. 2014)). The key question is “whether counsel’s participation so exceeds 

the bounds of legitimate assistance as to negate the possibility that the expert actually prepared his 

own report.” Bekaert, 256 F.R.D. at 578. Additionally, if the “opinions expressed in an expert 

report are not the opinions of the expert, the expert will not be able to satisfy the requirements of 

[Rule 702] . . . that the report be based on the expert’s own valid reasoning and methodology.” 

Trigon Ins. Co. v. United States, 204 F.R.D. 277, 294 (E.D. Va. 2001) (citing Fed. R. Evid. 702). 

B. Federal Rule of Evidence 702 

 Federal Rule of Evidence 702 provides that once an expert has been qualified on their 

“knowledge, skill, experience, training, or education,” they may testify as to their opinions if: 

(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact 

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to understand the evidence or to determine a fact in issue; 

(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. 

 When considering motions to exclude expert testimony, the trial court “acts as a 

gatekeeper” by “making a preliminary determination that the expert’s testimony is reliable.” 

Optronic Techs., Inc., 2019 WL 4780183 at *1; see also Oxford Gene Tech. Ltd. v. Mergen Ltd., 

345 F. Supp. 2d 431, 433 (D. Del. 2004) (“Motions to exclude evidence are committed to the 

court’s discretion.”). Rule 702 and Daubert are not “guarantees of correctness;” rather, they are 

safeguards against unreliable or irrelevant expert opinions. i4i Ltd. P’ship v. Microsoft Corp., 598 

F.3d 831, 855 (Fed. Cir. 2010). Daubert thus tests “the soundness of [the expert’s] methodology.” 

Primiano v. Cook, 598 F.3d 558, 564–65 (9th Cir. 2010) (“Under Daubert, the district judge is ‘a 

gatekeeper, not a fact finder.’”). 

 The Federal Circuit2 has condemned the use of arbitrary, “plucked out of thin air” 

percentages in damages apportionment analyses. LaserDynamics, Inc. v. Quanta Comput., Inc., 

694 F.3d 51, 69 (Fed. Cir. 2012). “Experts must follow some discernable methodology, and may 

not be a black box into which data is fed at one end and from which an answer emerges at the 

other.” GPNE Corp. v. Apple, Inc., 2014 WL 1494247, at *4 (N.D. Cal. Apr. 16, 2014) (quotation 

marks and citation omitted). So long as an opinion is “premised on reliable scientific principles, it 

should not be excluded by the trial judge.” In re Roundup Prods. Liab. Litig., 390 F. Supp. 3d 

1102, 1109 (N.D. Cal. 2018). 

2

 Plaintiff contends that “Ninth Circuit law governs the admission of expert testimony.” P Opp. at 

5. While it is true that Ninth Circuit law governs the admissibility of expert testimony generally, 

when a Daubert motion raises patent-specific damages issues, district courts must use Federal 

Circuit precedent. See, e.g., Wordtech Sys., Inc. v. Integrated Networks Sols., Inc., 609 F.3d 1308, 

1318 (Fed. Cir. 2010) (“When reviewing damages in patent cases, we apply regional circuit law to 

procedural issues and Federal Circuit law to substantive and procedural issues ‘pertaining to patent 

law.’” (citation omitted)). This Court thus uses Federal Circuit, and not Ninth Circuit, precedent 

when reviewing Plaintiff’s experts’ damage calculations. Cf. P Opp. at 1 (arguing this Court must 

apply Ninth Circuit law). 

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III. DISCUSSION 

A. Plaintiff’s Motion to Exclude Portions of Dr. Almeroth’s Expert Report 

 As noted above, Defendant retained Dr. Almeroth to offer an opinion as to whether the 

Patents-in-Suit are invalid. See Opening Expert Report of Dr. Kevin C. Almeroth of Invalidity of 

U.S. Patent Nos. 7,747,730 and 9,663,659 (“Almeroth Report”), Dkt. 255-5. Plaintiff challenges 

portions of the report on the grounds that (1) Dr. Almeroth did not author his own opinions on 

anticipation and obviousness for 21 out of 25 primary prior-art references and (2) Dr, Almeroth’s 

opinions about anticipation and obviousness are so conclusory and lacking in analysis that they are 

unreliable and thus unhelpful to the jury. P Mot. at 4. The Court addresses each argument in turn. 

1. Ghost-Writing 

 Plaintiff first argues that Dr. Almeroth’s report must be excluded pursuant to Federal Rule 

of Civil Procedure 26(a)(2)(B) because the portions sought to be struck were “ghost-written.” Id.

at 5. There is no dispute that Dr. Almeroth’s report relies on, and at some points recites verbatim, 

Defendant’s initial invalidity contentions. See D Opp. at 7. Plaintiff contends that Dr. Almeroth 

did not write or assist in writing these invalidity contentions. P Mot. at 13. Thus, in Plaintiff’s 

view, because Dr. Almeroth did not write the initial invalidity contentions recited in his invalidity 

report, the Court must strike portions of the report that recite the initial invalidity contentions. Id.

at 12. 

 Plaintiff’s argument, however, is flawed. It ignores the reality that Federal Rule of Civil 

Procedure 26 does not require experts to unilaterally write their reports. Indeed, attorneys may be 

involved in the preparation of an expert report. Manning v. Crockett, 1999 WL 342715, at *3 

(N.D. Ill. May 18, 1999) (noting that an expert need only “substantially participate” in the 

preparation of a report). This involvement can include “counsel’s paraphrasing of the expert’s 

qualifications, counsel’s providing ‘teamwork,’ ‘collaboration,’ or editorial assistance on the 

report, counsel’s composing of initial drafts of reports based upon communications with the expert 

and allowing the expert to substantively revise the report to reflect the expert’s opinions, or 

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counsel’s drafting of the report with the expert’s substantive assistance.” Accentra Inc. v. Staples, 

Inc., 2010 WL 11459205, at *4 (C.D. Cal. Oct. 7, 2010) (collecting cases). For instance, in 

Numatics, the court excluded the expert’s report because counsel wrote the entire report and the 

expert only made “fairly minor” changes before signing it. 66 F. Supp. 3d at 944 (noting that the 

expert “conceded” at his deposition that he did not draft his report). Thus, there, the report did not 

represent the expert’s own commentary on the evidence and was, in fact, “several degrees 

removed from his own work.” Id.

 Unlike Numatics, counsel did not “ghost-write” Dr. Almeroth’s report. Dr. Almeroth not 

only wrote a significant portion of his report, but also provided the information, analyses, and 

opinions expressed in the report. First, during his deposition, Dr. Almeroth testified that he helped 

draft the report and that the opinions therein are his own. See D Opp. at 12 (citing deposition 

testimony); see also Icon-IP, 87 F. Supp. 3d at 950 (holding that even though counsel typed the 

report, the expert still wrote the report since he testified that the information in the report came 

from him); Accentra Inc., 2010 WL 11459205, at *5 (concluding that expert met Rule 26’s 

requirements because her “testimony does not indicate that she had no involvement in the final 

report); Optronics Techs., 2019 WL 4780183 at *2 (noting that expert testified that he reviewed 

and edited the report and that the report captured his opinions and analysis); cf. Numatics, 66 F. 

Supp. 3d at 944. Dr. Almeroth thus “substantially participated” in the preparation of the report. 

Bekaert Corp., 256 F.R.D. at 578. This is confirmed by the fact that Dr. Almeroth spent over 100 

hours between August 2019 and October 2019 working on his Opening Report and “provided 

feedback on multiple drafts of the report before applying his signature.” D Opp. at 10; see also 

Manning, 1999 WL 342715 at *3 (holding that an expert is not “substantially involved” in the 

drafting of a report if the attorney simply drafts the report, without prior substantive input from the 

expert, and then ask the expert to approve and sign the report). 

 Second, much like in Icon-IP, it is irrelevant that the “[claim] charts are similar to claim 

charts prepared by counsel earlier in the litigation” because the charts “necessarily address the 

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same claims and prior art references.” 87 F. Supp. 3d at 943 (emphasis added). Finally, Dr. 

Almeroth wrote a significant portion of his report. While Dr. Almeroth’s report recites 

Defendant’s initial invalidity contentions, he does add analysis to the invalidity contentions.3 See 

e.g., Dkt. 256-3. Accordingly, because Dr. Almeroth provided the information, analyses, and 

opinions expressed in his report, the Court will not exclude his report or testimony. See Icon-IP, 

87 F. Supp. 3d at 950; cf. Numatics, 66 F. Supp. 3d at 941 (excluding expert witness who served 

as “lawyer’s avatar”).4 

2. Reliability of Dr. Almeroth’s Opinions 

 Plaintiff next argues that Dr. Almeroth’s opinions on anticipation and obviousness are 

unreliable and unhelpful to the trier of fact because they are “conclusory and unsupported.” P 

Mot. at 16. Plaintiff contends that Dr. Almeroth never explains how the specific claim elements at 

issue are to be understood and, based on that interpretation, how the claim elements are disclosed 

or taught in the asserted prior art references. P Reply at 11. The Court disagrees. 

 Expert testimony is relevant if it assists the trier of fact in determining the case. Daubert v. 

Merrell Dow Pharm., Inc., 509 U.S. 579, 590–95 (1993). “It is well-established that the first step 

in any validity analysis is to construe the claims of the invention to determine the subject matter 

for which patent protection is sought.” Smiths Indus. Med. Sys., Inc. v. Vital Signs, Inc., 183 F.3d 

1347, 1353 (Fed. Cir. 1999) (citation omitted). Hence, in order for an expert’s report to be 

relevant, it must explain how the expert understands the specific claim elements at issue. Oxford 

Gene Technology is instructive. In Oxford Gene, the court excluded the invalidity expert’s report 

pursuant to Federal Rule of Evidence 702 because the expert “fail[ed] to disclose a clear 

3

 Notably, Dr. Almeroth did spend four hours assisting Defendant with these initial invalidity 

contentions. P Mot. at 10. 

4

 In the alternative to Federal Rule of Civil Procedure 26, Plaintiff argues Dr. Almeroth’s “ghostwritten” report should be excluded under Federal Rule of Evidence 703. This argument, however, 

depends on the Court concluding that Dr. Almeroth did not prepare his report. As established 

above, the Court has held to the contrary. See supra. Thus, because the “opinions expressed in 

[the] expert report are . . . the opinions of [Dr. Almonte],” the requirements of Rule 702 are 

satisfied since the “report [is] based on [Dr. Almonte’s] own valid reasoning and methodology.” 

Trigon Ins., 204 F.R.D. at 294. 

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construction of each disputed claim element,” which made his report “less than helpful to the trier 

of fact.” 345 F. Supp. 2d at 436. The expert only “appl[ied] a negative or alternative construction 

of the claims . . . and [made] blanket conclusions of invalidity based on ‘anticipation and/or 

obviousness,’ [after] assuming the court found that such construction did not apply.” Id. 

 Unlike the expert in Oxford Gene, Dr. Almeroth did not “ignore[] this fundamental first 

step.” Id. at 435. Dr. Almeroth’s report contains a detailed “Claim Construction” chart and 

language that indicates that Dr. Almeroth’s opinions are based on these constructions. See Dkt. 

255-5 at 17–19. He confirms this in his deposition testimony. See D Opp. at 23 (“[My report] 

talks about the different claim scopes based on plain and ordinary meaning and the court’s 

constructions. NetFuel’s infringement contentions. And then in the reply report, Dr. Rubin’s 

infringement report.”); cf. Oxford Gene, 345 F. Supp. 2d at 435 (noting that the expert did not set 

out his claim construction “in a separate section” of his report). 

 Plaintiff argues in response that even while this is true, the report is flawed because Dr. 

Almeroth never indicates whether he is relying on the Court’s construction, his own 

understanding, or his interpretation of how Plaintiff understands the terms. P Reply at 12. 

Instead, Plaintiff contends, the report simply states at the outset of each section that the reference 

“anticipates and renders obvious the claims . . . at least under the apparent application of the 

claims in NetFuel’s infringement contentions.” Id. at 12 (citing Dr. Almeroth report) (emphasis 

omitted). This, in Plaintiff’s view, is fatal because it shows that Dr. Almeroth failed to disclose 

what interpretation he is applying when analyzing the prior art. Id. at 13. 

 The Court, again, disagrees. First, the claim construction section of the report clearly 

identifies how Dr. Almeroth construes certain claim terms. See Dkt. 255-5 at 17–19. Second, for 

terms that this Court has not defined, Dr. Almeroth explains that his interpretation of claim terms 

and prior art is based “at least under the apparent application of the claims in NetFuel’s 

infringement contentions.” See, e.g., id. at 19. Dr. Almeroth thus uses the same claim elements as 

Plaintiff. And, despite Plaintiff’s statements to the contrary, Dr. Almeroth need not commit to one 

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interpretation. It is permissible for him to qualify claim terms with expressions like “at least.” 

Compare Stryker Corp. v. Zimmer, Inc., 837 F.3d 1268, 1276 n.4 (Fed. Cir. 2016) (“[N]othing 

precludes Zimmer from arguing for a narrower application of the limitation on the infringement 

context, while also arguing, in the alternative, that . . . the patent claim would be so broad as to be 

invalid.”), with P Reply at 12 (“Cisco cannot avoid the fact that not once in his entire report does 

Dr. Almeroth state which interpretation of a given claim term he is using, let alone indicate 

whether he is relying on the Court’s construction, his own . . . [or] how he believes NetFuel 

understands each term in light of NetFuel’s contentions.”). Thus, much like in Icon-IP, Dr. 

Almeroth’s expert report is permissible because “he assumes that [Plaintiff’s] understanding of the 

construed claims is correct, and then proceeds to demonstrate how, in his opinion, each element of 

the claim[] is found in the prior art.” 87 F. Supp. 3d at 943; cf. TruePosition, Inc. v. Andrew 

Corp., 2007 WL 2429415, at *1 (D. Del. Aug. 23, 2007) (holding expert could not rely on broad 

interpretation because he failed to include in his invalidity report how the defendant’s equipment 

compares to either the claim limitations or the prior art). 

 The Court also disagrees with Plaintiff’s position that Dr. Almeroth’s report is conclusory 

and lacking in analysis. P Mot. at 18. “The second step in evaluating the validity of a patent is to 

perform an element-by-element comparison of each claim to each prior reference.” Oxford Gene, 

345 F. Supp. 2d at 436. Dr. Almeroth performs such an element-by-element analysis. For 

instance, in his report, on page 25 of the report, Dr. Almeroth explains why the prior art discloses 

an element of claim 1. See Dkt. 255-5 at 25; compare id. at 370–71 (comparing claims of the ’659 

patent to prior art and then analyzing why a person of ordinary skill in the art would have been 

motivated to combine the prior art), with Elder v. Tanner, 205 F.R.D. 190, 194 (E.D. Tex. 2001) 

(holding expert’s opinions about infringement, anticipation, and obviousness were too conclusory 

because the report simply listed the resources used and then stated an ultimate opinion without 

discussing the expert’s thought process), and Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 

1373 (Fed. Cir. 2008) (same). Dr. Almeroth thus explains “in detail how each claim element is 

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disclosed in the prior art reference.” Finjan, Inc. v. Blue Coat Sys., LLC, 283 F. Supp. 3d 839, 855 

(N.D. Cal. 2017); see also In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006) (“[T]here must be some 

articulated reasoning with some rational underpinnings to support the legal conclusion of 

obviousness.”). 

 Moreover, courts have found that “claim charts appended to [expert] reports are 

sufficiently detailed . . . to establish that [the] opinions will be helpful to the jury.” Icon-IP Pty 

Ltd., 87 F. Supp. at 943. As Dr. Almeroth notes on page 34 of his report, Exhibit B-3 attached to 

the report contains such claim charts. Accordingly, Dr. Almeroth’s opinions are not conclusory 

and are permissible under Federal Rule of Evidence 703 and Federal Rule of Civil Procedure 

26(a). For the foregoing reasons, Plaintiff’s motion to strike portions of Dr. Almeroth’s testimony 

is DENIED.

B. Defendant’s Motion to Exclude Portions of Mr. Bratic’s and Dr. Rubin’s 

Expert Reports 

 Mr. Bratic used two methods to calculate damages—an apportioned profit theory and a 

per-unit royalty theory. Dkt. 274-5 (“Bratic Report”) ¶ 206. Defendant argues both theories must 

be excluded because each is “based on vague, qualitative notions that lack underlying support or 

methodology” in contravention of Daubert. D Mot. at 1–2. The Court addresses each damage 

theory in turn. 

1. Apportioned Profits 

 Mr. Bratic calculated a royalty based on a percentage of Defendant’s alleged gross 

revenues. Bratic Report ¶ 174. To calculate this percentage, Mr. Bratic took the gross revenues 

from the Accused Devices and then applied a series of apportionments to arrive at a 2.1% 

apportionment rate. See id. ¶ 212 (“[N]o less than approximately 2% of Cisco’s sales and profits 

of [the] Accused Devices are attributable to the Patents-in-Suit.”); see also P Opp. at 2 (“The 

Accused Devices are fifteen families of Cisco routers and switches that run one of [the Accused 

Operating Systems].”). Defendant takes issue with the following three apportionments: 

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 Apportionment of 33% for the profits allegedly representing the “contribution of security, 

reliability, and availability” to the Accused Operating Systems. 

 Apportionment of 33% and 50% for the alleged contributions of the Accused Features to 

the value of all security, reliability, and availability on the Accused Devices. 

 Apportionment of 70% and 40% for the portions of the Accused Features that are allegedly 

attributable to the Patents-in-Suit. 

Defendant argues that these adjustments are unsupported and thus must be excluded. D Mot. at 7–

8. The Court analyzes each apportionment below. 

a. Apportioning Security, Reliability, and Availability of Accused 

Operating Systems 

 Mr. Bratic estimated that “security, reliability, and availability” represented 33% of the 

value of the Accused Operating Systems. Bratic Report ¶ 198. Mr. Bratic relied on Dr. Rubin’s 

analysis for this apportionment step.5 Id. Plaintiff argues that this opinion is reliable because, in 

reaching this conclusion, Dr. Rubin considered: (1) industry research (including Defendant’s own 

statements concerning the security, reliability, and availability of the Accused Operating Systems); 

(2) his knowledge and understanding of the Accused Devices (gained by his review of Ciscoproduced technical documents and his testing of the Accused Devices); (3) his knowledge and 

understanding of Defendant’s networking operating systems (gained by his extensive review of 

Cisco-produced technical documents and by his review of Cisco operating system source code); 

(4) his experience and specialized expertise in computer networking and security; and (5) his 

expert knowledge of the nature and function of routers and switches. P Opp. at 19 (citing Dkt. 

274-10 [“Rubin Report”] ¶¶ 45–86, 230–72, 360–61, 384–386); see also Dkt. 274-11 (“Rubin 

Reply Report”) ¶ 133–36. 

5

 The Parties do not dispute that Mr. Bratic “relie[d] on a technical expert, Dr. Rubin, for this 

apportionment step.” P Opp. at 18; see also Dkt. 257-9 (“Rubin Depo.”) at 208 (“I don’t know the 

specifics of how [Dr. Rubin] arrived at 33% . . . .”). Thus, because Mr. Bratic’s analysis depends 

on the validity of Dr. Rubin’s analysis, in order for Mr. Bratic’s analysis to stand, Dr. Rubin’s 

figure must be “reliable.” 

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 As discussed above, an expert witness must follow some discernable methodology, and 

may not be a “a black box into which data is fed at one end and from which an answer emerges at 

the other.” GPNE Corp., 2014 WL 1494247 at *4. In order for this Court to determine whether 

Dr. Rubin’s conclusions are “reliable” and based on “sufficient facts or data,” the Court must be 

able to follow his methodology. See Fed. R. Evid. 702. Indeed, “nothing in either Daubert or the 

Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to 

existing data only by the ipse dixit of the expert. A court may conclude that there is simply too 

great an analytical gap between the data and the opinion proffered.” Gen. Elec. Co. v. Joiner, 522 

U.S. 136, 146 (1997). While the Federal Circuit allows for “some approximation” in the 

reasonable royalty context, this “does not negate the Federal Circuit's requirement of ‘sound 

economic and factual predicates’ for that analysis.” Cornell Univ. v. Hewlett-Packard Co., 2008 

WL 2222189, at *2 (N.D.N.Y. May 27, 2008) (quoting Riles v. Shell Expl. & Prod. Co., 298 F.3d 

1302, 1311 (Fed. Cir. 2202). 

 After reviewing Dr. Rubin’s reports, the Court agrees with Defendant—Dr. Rubin’s 

conclusion that “security, reliability, and availability” represented 33% of the value of the 

Accused Operating Systems is an impermissible black box without “sound economic and factual 

predicates.” Riles, 298 F.3d at 1311. In his opening report, Dr. Rubin cursorily determined that 

the security, reliability, and availability represent at least 33% of the Accused Operating System. 

See Rubin Report ¶ 386. This determination is made based on Dr. Rubin’s “experience in 

computer network and security,” “[his] knowledge of the nature and function of routers and 

switches,” and “[his] knowledge and understanding of the Accused Products and Cisco’s network 

operating systems.” Id.; but see GPNE Corp., 2014 WL 1494247 at *5 (noting that “experience” 

does not constitute “sufficient facts or data” or “reliable principles and methods”). Dr. Rubin 

further declares that “[s]ecurity, reliability, and availability are extremely important to the network 

operating systems that run on network routers and switches.” Id. ¶ 384; see also id. ¶ 385. But, 

using industry-wide data as a starting point is improper. See Open Text S.A. v. Box, Inc., 2015 WL 

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349197, at *6 (N.D. Cal. Jan. 23, 2015) (“[D]ecisions from the Federal Circuit and this district 

have rejected deriving a royalty rate by picking a starting point based on industry-wide data (rather 

than facts specific to the case at hand) and varying it upwards or downwards using the Georgia–

Pacific and other factors.”). 

 Moreover, to the extent Dr. Rubin bases his industry research on Cisco statements, he 

never explains how those statements weighed in his 33% evaluation. See, e.g., Rubin Report 

¶ 385 (stating that various technical documents published by Defendant confirm the importance of 

security, reliability, and availability); Rubin Reply Report ¶¶ 133–34 (same). This is fatal; without 

explaining how he arrived at “33%,” the figure appears to have been “plucked out of thin air based 

on vague qualitative notions of the relative importance of [security, reliability, and availability to 

Defendant].” LaserDynamics, 694 F.3d at 69. As Dr. Rubin confirmed in his deposition, neither 

his opening nor reply report explain the features that comprise the 67% of remaining value. Dkt. 

257-12 (“Rubin Depo.”), at 248. 

 The complete lack of economic analysis to support Dr. Rubin’s apportionment “echoes the 

kind of arbitrariness of the ‘25% Rule’ that [the Federal Circuit] recently and emphatically 

rejected from damages experts.” Id. In an attempt to evade LaserDynamics, Plaintiff argues that 

Defendant invents a new legal standard by seeking to impose a “quantitative analysis” requirement 

based “on a single word mentioned in dicta by a Federal Circuit opinion applying Fifth Circuit law 

concerning an entirely different concept.” P Opp. at 6. Not so. First, as established, Federal 

Circuit law applies to a Daubert motion with patent-specific damages issues. See, e.g., Wordtech 

Sys., 609 F.3d at 1318; see also supra n.2. Thus, LaserDynamics, which addressed a patentspecific damages issue, controls this Court’s analysis. Second, contrary to Plaintiff’s position, 

LaserDynamics’ requirement of quantitative support for apportionments is not limited to a specific 

theory of damages. See 694 F.3d at 69 (stating that the lack of quantitative support would “alone 

justify” excluding the expert’s opinions at trial). Third, the requirement of quantitative support 

follows the requirement that percentages not be “plucked out of thin air.” Fourth, contrary to 

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Plaintiff’s contention that cross-examination and presentation of contrary evidence is the proper 

means to attack Dr. Rubin’s opinion, cross-examination cannot cure the deficiencies in Dr. 

Rubin’s analysis. See GPNE Corp., 2014 WL 1494247 at *6 (“Without a methodology . . . crossexamination is futile.”); see also id. (holding that cross-examination was futile because it the 

expert’s opinion rested on his experience and his “numerous statements that 3G and 4G LTE 

technology is valuable”). Accordingly, because Dr. Rubin failed to provide the methodology 

underlying his apportionment amount or explain how he arrived at that figure based on the facts of 

this case, his apportionment opinion is not backed by “sufficient facts or data” or by “reliable 

principles and methods” and so his 33% apportionment, and all opinions relying on the figure, 

must be excluded. 

b. Apportioning Security, Reliability, and Availability of Accused 

Features 

 Mr. Bratic’s next revenue apportionment step relied on two opinions offered by Dr. Rubin: 

(1) that 33% of the value of “security, reliability, and availability” of Cisco’s IOS-XR operating 

system is allegedly attributable to the Accused EPFT Feature and (2) that 50% of the value of the 

“security, reliability, and availability” of Cisco’s IOS, IOS-XE, IOS-XR, and NX-OS operating 

systems is allegedly attributable to the Accused Combination of EEM and either CoPP or LPTS.6 

See P Opp. at 19–20 (citing Rubin Report ¶ 388). Plaintiff argues that these opinions are reliable 

because, in reaching this conclusion, Dr. Rubin considered: (1) his knowledge and understanding 

of the Accused Devices (gained by his review of Cisco-produced technical documents and his 

testing of the Accused Devices); (2) his knowledge and understanding of Defendant’s networking 

operating systems (gained by his extensive review of Cisco-produced technical documents and by 

his review of Cisco operating system source code); (3) the analysis and opinions described in his 

6

 Again, the Parties do not dispute that Mr. Bratic “relie[d] on Dr. Rubin’s expert opinion for this 

apportionment step.” P Opp. at 19; see also Rubin Depo. at 209–10, 214 (stating that Dr. Rubin 

did not provide any quantitative analysis to support his figures). Thus, because Mr. Bratic’s 

analysis depends on the validity of Dr. Rubin’s analysis, in order for Mr. Bratic’s analysis to 

stand, Dr. Rubin’s figure must be “reliable.” 

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report concerning the Accused Devices and the Accused Features (including his thorough analyses 

of the Accused Features’ functionality and implementation); and (4) his experience and 

specialized expertise in computer networking and security. Id. (citing Rubin Report ¶¶ 45–86, 

230–72, 360–61, 388; Rubin Reply ¶ 134). 

 Similar to the Court’s holding above, see supra III.B.1.a., Dr. Rubin’s “33%” and “50%” 

findings lack “sound economic and factual predicates.” Riles, 298 F.3d at 1311. In his opening 

report, Dr. Rubin again relies on his “experience” and vague notions about the Accused Features 

contribution to the “security, reliability, and availability of the Accused Devices.” See Rubin 

Report ¶¶ 387–88. For instance, he claims, without support, that EPFT “ensures availability and 

reliability of the device” and that the combinations of EEM and CoPP or LPTS provide a “higher 

contribution” to the security, reliability, and availability of the Accused Devices than EPFT. Id.

¶ 387. Yet, Dr. Rubin fails to explain how the combination of EEM and CoPP or LPTS provided 

such “higher contribution.” Such vague, qualitative descriptions, without some indication as to 

the weight or value attributed to each feature, are insufficient to support Dr. Rubin’s specific 

apportionment conclusions. Cf. LaserDynamics, 694 F.3d at 69 (requiring some economic 

analysis to support the apportionment). 

 Dr. Rubin’s Reply Report does not cure the deficiencies in his opening report. See Rubin 

Reply Report ¶ 135. There, Dr. Rubin analyzes the Accused Features’ importance individually 

and notes that: 

 Defendant’s employees have called CoPP “critical to network operation,” “essential in 

order to protect the CPU,” and stated that, without CoPP, Cisco “cannot protect the switch 

against DoS attacks.” 

 Defendant’s employees have described LPTS as “[e]quivalent to CoPP but MUCH better,” 

and said that “LPTS is not a feature! It has to be there otherwise the router would not work 

at all.” LPTS is “a basic functionality required in the box for it to function.” 

 EEM has been called a “big powerful tool to diagnose problems” and “has been a 

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differentiating feature that helped enable many sales opportunities in a competitive 

situation.” 

 EPFT is a necessary feature because it helps “maintain a ‘fair share’ of control packets sent 

by various devices and stop[s] bad actors from hogging the control packets sent to the 

LPTS/CPU of the router.” It is a “must have feature” in Defendant’s eyes and a 

“mandatory requirement.” 

 But, apart from EPFT, the Accused Features do not infringe based on their individual 

functionality—they must be used in a specific combination to infringe.7 See Order Denying 

Cisco’s Motion for Summary Judgment at 2, Dkt. 283. Dr. Rubin does not explain how this 

information, about individual features, supports his conclusion as to the apportionment of 50% for 

the Accused Combination of EEM and CoPP/LPTS. Moreover, Dr. Rubin does not explain how 

the above information about EPFT factors into his 33% evaluation See LaserDynamics, 694 F.3d 

at 69 (finding that the lack of quantitative economic analysis to support the expert’s 

apportionment echoes the type of arbitrariness that the Federal Circuit has rejected). 

 Plaintiff argues that Dr. Almeroth, Defendant’s damages expert, similarly “offers bare 

opinions” and thus that this is nothing more than “experts’ disagreement concerning the relative 

value of the Accused Features.” P Opp. at 21. The Court disagrees. As stated above, in order for 

an expert’s opinion to be admissible, there must be a proper factual basis for the opinion. See 

Finjan, 2015 WL 4272870, at *4. Hypothesized damages, not grounded in fact, are not 

admissible. Id.; see also LaserDynamics, 694 F.3d at 69. Moreover, Dr. Almeroth’s opinion and 

apportionment rates are not “pulled out of thin air.” To the contrary, Dr. Almeroth explains the 

facts underlying his apportionment percentages, how they connect to his apportionment 

percentages, and the methodology he used to arrive at his apportionment percentages. See Dkt. 

274-13 at ¶¶ 388–91 (explaining the number of possible combinations and how they are 

7

 Defendant argues Mr. Bratic’s analysis fails to account for the fact that customers rarely use the 

accused features in the specific combination needed to infringe. The Court does not reach this 

argument as it holds that the percentages lack support. 

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attributable to the accused functionality of the asserted patents). Accordingly, because Dr. Rubin 

failed to provide the “methodology” underlying his apportionment amount or explain how he 

arrived at that figure based on the facts of this case, his apportionment opinion is not backed by 

“sufficient facts or data” or by “reliable principles and methods” and so his 33% EPFT and 50% 

Accused Combination apportionments, and all opinions relying on the figures, must be excluded. 

c. Apportioning the Accused Features for the Patents-in-Suit 

 Mr. Bratic next determined the portion of the Accused Features’ functionality attributable 

to the asserted claims of the Patents-in-Suit. He relied on Dr. Rubin’s expert opinion to do this.8 

In his report, Dr. Rubin opined that “at least 70%” of EPFT’s functionality and “at least 40%” of 

the functionality provided by the combination of EEM + CoPP/LPTS is attributable to the asserted 

claims of the Patents-in-Suit. See P Opp. at 21 (citing Rubin Report ¶ 389–90). Plaintiff argues 

that these opinions are reliable. Dr. Rubin proceeds as follows: he first concludes that EPFT and 

the combination of EEM + CoPP/LPTS infringe the asserted claims and thus include 100% of the 

functionality recited in those claims. Rubin Report ¶ 389. Dr. Rubin next notes that both EPFT 

and the combination of EEM + CoPP/LPTS include non-infringing functionality. Id. ¶¶ 389–90. 

He then compares the relative value of the Accused Features’ infringing and non-infringing 

functionalities. Id.; see also Rubin Reply Report ¶¶ 139–44. 

 For EPFT, Dr. Rubin noted that the feature’s primary function closely maps the asserted 

patent claims, but that it can be configured to perform a non-infringing function. Specifically, 

EPFT’s “only” non-infringing functionality is that it can be used “where a customer wants to 

perform a dry run of EPFT before implementing it.” Rubin Report ¶ 389; Rubin Reply Report 

¶ 140. This, however, would “highly restrict[] the overall functionality of EPFT.” Rubin Reply 

Report ¶ 140. Additionally, Defendant “advertises using EPFT’s full functionality.” Id. In light 

8

 Again, the Parties do not dispute that Mr. Bratic “relie[d] on Dr. Rubin’s expert opinion.” P 

Opp. at 21; see also Rubin Depo. at 212 (stating that he simply adopted the numbers). Thus, 

because Mr. Bratic’s analysis depends on the validity of Dr. Rubin’s analysis, in order for Mr. 

Bratic’s analysis to stand, Dr. Rubin’s figure must be “reliable.” 

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of EPFT’s infringing and non-infringing functionality, Dr. Rubin attributed 70% of EPFT’s 

functionality to patented functionality. Id. ¶ 139. This “under-estimated” the non-infringing 

functionality to “err on the side of caution.” Id. ¶ 140. 

 For the combination of EEM + CoPP/LPTS, Dr. Rubin noted that the combination has 

more non-infringing functionality than EPFT. Rubin Report ¶ 390. He listed the non-infringing 

ways that EEM works with CoPP/LPTS. Id. Based on the non-infringing and infringing uses, Dr. 

Rubin “conservatively” attributed at least 40% of the functionality provided by the combination of 

EEM and CoPP or LPTS to the patented functionality. Id.; see also Rubin Reply Report ¶ 142. 

 These apportionment percentages suffer from the same problems analyzed above. Dr. 

Rubin again failed to explain the methodology underlying his percentage calculations and again 

relied on vague assertions about the Accused Feature’s value. See, e.g., Rubin Reply Report ¶ 139 

(determining EPFT’s infringing functionality is “somewhat more than twice as valuable” as its 

non-infringing functionality); Id. ¶ 144 (finding that EEM with CoPP or LPTS’s non-infringing 

functionality “slightly outweighs” its infringing functionality); see also Open Text, 2015 WL 

349197 at *5 (“[A] superficial recitation of the Georgia-Pacific factors, followed by conclusory 

remarks is not enough.” (quotation marks and citation omitted); Whitserve, LLC v. Comput. 

Packages, Inc., 694 F.3d 10, 31 (Fed. Cir. 2012) (“[W]hile mathematical precision is not required, 

some explanation of both why and generally to what extent the particular factor impacts the royalty 

calculation is needed.” (emphasis added)); TASER Int’l, Inc. v. Karbon Arms, LLC, 2013 WL 

6773663, at *1 (D. Del. Dec. 19, 2013) (“[The expert] offers almost no basis as to how he arrived 

at his royalty rate other than that he considered the above numbers and factors. This is the 

quintessential ipse dixit justification.”). 

 Plaintiff argues that Dr. Rubin properly apportioned the value of the accused features by 

“relative valuation.” P Opp. at 22. As support, Plaintiff cites to Mass Engineered Design, Inc. v. 

Planar Systems, Inc., 2018 WL 6059375, at *1 (D. Or. Nov. 19, 2018). This case, however, does 

not support Plaintiff’s position. While the Mass Engineered Design court denied the plaintiff’s 

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post-verdict motion to strike the expert declaration of Walter Bratic, the issues in Mass 

Engineered Design are different from the issues present in this case. 2018 WL 6059375, at *1. 

There, the defendant argued that Mr. Bratic failed to apportion damages to account for possible 

non-infringement. Id. at *2. In contrast, here, the issue is not that Mr. Bratic (or Dr. Rubin) failed 

to apportion non-infringing uses. Rather, the issue is whether the apportionment percentages are 

properly supported. Cf. id. at *3 (noting that Mr. Bratic supported his apportionment rate because 

he used technical weighing factors to apportion his royalty rate). Moreover, Mass Engineered 

Design discussed a post-verdict royalty calculation, and so there was no need to exclude unreliable 

expert testimony to protect the jury from being swayed by “dubious scientific testimony.” See id.

at *3 (“The challenged notions are not going to a jury.”). 

 Because Dr. Rubin failed to provide the “methodology” underlying his apportionment 

amount or explain how he arrived at that figure based on the facts of this case, his apportionment 

opinion is not backed by “sufficient facts or data” or by “reliable principles and methods” and so 

his 70% EPFT and 40% Accused Combination apportionments, and all opinions relying on the 

figures, must be excluded. 

2. Per-Unit Royalty 

 Mr. Bratic also calculated a royalty rate of $120-per-unit based on two earlier transactions 

where Plaintiff licensed PlexOS software to two banking institutions. Plaintiff alleges that PlexOS 

“embodied the Patents-in-Suit.” P Opp. at 9; see also Rubin Report ¶ 381 (“Although Mr. 

Harlow’s testimony and the documentary evidence I have reviewed are not sufficient for me to 

form an opinion on whether PlexOS as implemented by NetFuel fully practiced the patents-in-suit, 

the PlexOS technology is very closely related to the inventions disclosed in the patent.”). 

 Plaintiff licensed PlexOS twice. The first license was to Bank of America, which received 

an implied license to PlexOS through a 2003 investment agreement and used PlexOS from 2004 to 

2014. Dkt. 274-5 (“Bratic Report”) ¶¶ 135–36. Bank of America did not pay Plaintiff a cash 

royalty for the license. Id. ¶ 136. The Bank did, however, provide Plaintiff important benefits 

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through the investment agreement, including an investment in NetFuel that made Bank of America 

a minority owner in NetFuel. Id. The license also gave Plaintiff the chance to test and ruggedize 

PlexOS in a commercial bank environment which was a “priceless” opportunity. Id.; see also Dkt. 

276-8 (“Harlow Decl.”), at 106 (“[T]he value of having a large bank . . . providing us access to 

infrastructure to install PlexOS on and run and use and abuse, that was priceless. Very few small 

companies get a chance to do that.”). Ultimately, in 2014, Bank of America and Plaintiff reached 

an impasse concerning the terms for the Bank’s continued use of PlexOS. Bank of America 

wanted to use the service royalty-free, but Plaintiff insisted that the bank pay for a license. 

Harlow Decl. at 107–08. 

. See generally Dkt. 274-14 (“Settlement Agreement”). 

 The second PlexOS license was to BNP-Paribas. Bratic Report ¶ 137. In 2008, Bank of 

America sold its prime brokerage business unit to BNP-Paribas. Id. In connection with this sale, 

Bank of America purchased 244 PlexOS licenses that it then transferred to BNP-Paribas. Id. 

Bank of America paid $1,000 per PlexOS license. Id. Additionally, Bank of America paid an 

18% software maintenance fee. Thus, the sale resulted in total fees of $287,920 to Plaintiff. Id. 

 Based on these licenses (and other expert data), Mr. Bratic reached his offered rate of $120 

per processor. To reach this rate, he applied two apportionment multipliers. First, he multiplied 

the $1000-per-license fee that was paid in the BNP-Paribas Agreement by 20%. Id. ¶ 139 (basing 

20% apportionment rate on statements of inventor of the Patents-in-Suit). Second, he multiplied 

the $1000-per-license fee by 60%. Id. ¶ 144 (using 60% apportionment rate because of “Dr. 

Rubin’s analysis). Defendant argues that Mr. Bratic’s per-unit royalty opinions should be 

excluded because (1) his 20% reduction has no basis in fact, (2) his 60% reduction has no basis in 

fact, and (3) he did not account for the severe differences in economic circumstances. The Court 

addresses these arguments below. 

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a. 20% Reduction 

 In order to use the $1000 license fee as a basis for reasonable royalty damages, Mr. Bratic 

needed to determine what portion of the fee was attributable to Plaintiff’s intellectual property. 

See Bratic Report ¶ 139 (discussing Georgia-Pacific factor number 1). To answer this question, 

Mr. Bratic used NetFuel’s determination that 80% of the license fee, or royalty, represented the 

investment and time and effort to develop PlexOS and 20% represented the value of NetFuel’s 

intellectual property. Id. The 20% figure came from NetFuel founders’, Bjorn Ahlblad and James 

Harlow, determination “the 20% software maintenance fee initially agreed to by [Bank of 

America] represented the recurring maintenance of the intellectual property in the PlexOS 

software.” Id. Indeed, when asked how this 20% number was determined, Mr. Bratic testified: 

[Jim Harlow] and [Bjorn Ahlblad] sat down and discussed how much 

development effort went into developing the PlexOS product. And 

they determined of that, 20% of the output, the work product, 

associated with PlexOS was the intellectual property embodied in 

PlexOS and 80% related to development—software development 

efforts. And they decided that if they were going to charge a 

maintenance fee, the maintenance fee would reflect a 20% of the—

the 20% reflecting the intellectual property portion of the 

development efforts because the maintenance was to keep the 

intellectual property updated. 

Dkt. 257-9 (“Bratic Depo.”), at 128–29. 

 This analysis suffers from the same flaws discussed above—how did NetFuel’s founders 

arrive at 20%? Why does the maintenance fee amount to 20%? Neither Mr. Bratic nor NetFuel’s 

founders provide an explanation as to why the value of a “maintenance fee” is equivalent to the 

value of the “market contribution of NetFuel’s intellectual property.” See P Opp. at 11–12. 

Without any underlying “economic analysis to quantitatively support the [20%] apportionment,” 

the figure is as good as “plucked out of thin air.” See LaserDynamics, Inc., 694 F.3d at 69; GPNE 

Corp., 2014 WL 1494247 at *6. This case, much like GPNE Corp., involves an expert valuing a 

royalty-rate based on “vague qualitative notions of the relative [value of the intellectual 

property].” GPNE Corp., 2014 WL 1494247 at *6. Hence, contrary to Plaintiff’s argument, 

cross-examination does not salvage Mr. Bratic’s opinion because his opinion is based on 

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NetFuel’s Founders’ arbitrary determination that 20% of the fee was attributable to Plaintiff’s 

intellectual property. P Opp. at 12; cf. Fail-Safe, 744 F. Supp. 2d at 888 (“[T]he court cannot 

simply take an expert’s word for a specific proposition.”). Accordingly, the 20% figure is 

excluded. 

b. 60% Reduction 

 For his second apportionment step, Mr. Bratic applied a percentage of 60% to the $1000-

per-license fee detailed above. Bratic Report ¶ 144. To justify this number, Mr. Bratic relied on 

“Dr. Rubin’s analysis.” Id. Dr. Rubin told Mr. Bratic that “60% of the intellectual property in 

PlexOS was comparable to the Patents-in-Suit.” Bratic Depo. ¶ 158. In his report, Dr. Rubin 

stated: 

Unlike the technology of the [] patents-in-suit, however, PlexOS is 

highly extensible and is operable with functionality that extends 

beyond what is claimed in the patents-in-suit, such as business 

process automation and workflow management. NETFL00001805 p. 

9 (describing workflow management with the following example: 

“For example, . . . Tracy submits a paycheck request. Dave is then 

notified on his blackberry and can either approve or deny the request. 

Once approved, the request is queued in the payroll system.”). 

PlexOS also provides agents and policies that extend beyond network 

management and into the area of enterprise resource management. Id. 

(“Custom agents engineered in-house or through a services 

organization might embody custom business logic . . . .”). Based on 

my analysis, I conclude that the patented inventions represent 60% of 

the functionality or value of PlexOS. 

Rubin Report ¶ 382 (emphasis added). In his Reply Report, Dr. Rubin similarly stated: 

To reach my conclusion that the patented inventions represent 60% 

of the functionality or value of PlexOS, I first reviewed the patentsin-suit. Then I reviewed various documents and testimony describing 

PlexOS and its functionality I note above. In my review, I noted that 

PlexOS performed similar functions as the patented technology, but I 

also observed that PlexOS has the option to be extended beyond the 

limitations of the asserted patents to perform other tasks not related to 

monitoring a computer network. I understand that clients actually 

used PlexOS for these purposes. Based on all of my experience and 

analysis, and the sources of information I have identified, and 

because the main default use-case for PlexOS is captured by the 

patents, I made the conservative determination that 60% of PlexOS 

represents the patented technology. However, there are substantial 

uses—which I concluded constitute 40% of the value of PlexOS—

that are not captured by the patents-in-suit. 

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Rubin Reply Report ¶ 124 (emphasis added). 

 Dr. Rubin’s analysis amounts to nothing more than plucking 60% out of thin air. See 

LaserDynamics, 694 F.3d at 69; see also D Reply at 6 (noting that even while Mr. Bratic was 

unable to determine if PlexOS as implemented by Plaintiff fully practiced the patents-in-suit, he 

was able to determine that the patented inventions represented 60% of the value of PlexOS 

intellectual property). He ascribes a value of 60% without providing an analysis as to why he 

picked that percentage or the methodology behind the percentage. See GPNE Corp., 2014 WL 

1494247 at *4–6 (noting that the failure to “follow [any] discernable methodology” is “classic ipse 

dixit reasoning”). 

 Indeed, when pressed during his deposition, Dr. Rubin could not explain why he selected 

60%. Rubin Depo. at 205 (“Well, the features that I saw that were in PlexOS that were not 

covered by the patents-in-suit were a small number of features, and so 50 percent would not have 

made sense because there was more than 50 percent attributable to the patents-in-suit.”). His 

deposition answer, of course, begs the question, why not 59% or 62%? Notably, he “didn’t 

perform a further analysis to see if it [sh]ould be a different number.” Id. at 215; see also id. at 

205–06 (stating that he “didn’t provide a deep analysis” as to why the non-patented inventions 

amounted to 40%). And, when asked how much value or weight he attributed to specific PlexOS 

features, he admitted, “I didn’t specifically assign a weight or a value to any feature in—explicitly 

in my report, but I did weigh them in my consideration by applying my familiarity with the 

technology with the Patents-In-Suit and with PlexOS as part of my analysis.” Id. at 218. Mr. 

Bratic’s generic descriptions of PlexOS’s features do not tie his 60% figure to the facts of the case 

and, without appropriate support, the jury cannot weigh the value of his opinion. See GPNE 

Corp., 2014 WL 1494247 at *6. Accordingly, the 60% figure is excluded.9

9

 Plaintiff argues Defendant “invents” a new quantitative standard. P Opp. at 15–16; see also 

supra III.B.1.a. Plaintiff misunderstands Defendant’s argument. The Federal Circuit and courts in 

this district have made it clear that percentages may not be “plucked out of thin air.” The 

complete absence of what methodology underlies Mr. Bratic and Dr. Rubin’s selection of 

percentage values shows the figures are “arbitrary” and thus unreliable. Accordingly, it is 

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c. Accounting for Technological and Economic Differences 

 Defendant last argues that Mr. Bratic failed to account for the economic differences 

between the licenses. D Reply at 7. Mr. Bratic used the royalties received by Plaintiff from 

existing licenses as the basis for predicting the outcome of a hypothetical negotiation between the 

Parties. As noted above, the licenses that Mr. Bratic based his analysis on involved PlexOS 

software and not the Patents-in-Suit. See supra III.B.2. 

 Expert testimony based on license agreements “must provide a jury enough information to 

“evaluat[e] the probative value of those agreements,” lest the jury be given “little more than a 

recitation of royalty numbers” to determine the outcome of a particular hypothetical negotiation. 

Apple, Inc. v. Samsung Elecs. Co., Ltd., 2014 WL 794328, at *8 (N.D. Cal. Feb. 25, 2014) 

(quoting Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1328–29 (Fed. Cir. 2009)). Thus, 

under the first Georgia-Pacific factor, when relying on a transaction that involves “technologies 

other than the patent in suit,” the expert “must account for ‘the technological and economic 

differences’ between them.” ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 

2010); Wordtech Sys., Inc. v. Integrated Network Sols., Inc., 609 F.3d 1308, 1320 (Fed. Cir. 2010); 

see also DataQuill Ltd. v. High Tech Comput. Corp., 887 F. Supp. 2d 999, 1023 (S.D. Cal. 2011) 

(“[Plaintiff’s expert’s] report appears to have no analysis at all of the economic 

differences . . . . Therefore, [the expert] has failed to establish economic comparability and his 

testimony regarding the [prior] agreements should be excluded . . . .”). 

 Because the BNP transaction involves PlexOS, i.e. a technology that differs than the 

Patents-in-Suit, the Court must decide whether Mr. Bratic properly accounted for the technological 

and economic differences between the two licenses. Defendant argues that Mr. Bratic failed to 

address how the following fundamental economic differences affect the royalty rate: 

(1) The differences between the sale of a software license to use PlexOS and a non-exclusive 

irrelevant that it is clear how the percentages are applied because it is unclear how those same 

percentages were selected. See P Opp. at 16. 

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license to patents; 

(2) The differences between licensing to Bank of America or BNP rather than Defendant, who, 

in contrast to the banks, is a networking product company that licenses patents for the rights to 

make, use, offer for sale, or import what the patent covers; 

(3) The differences between licensing to companies who Plaintiff had pre-existing, ongoing 

relationships with, and Defendant, who Plaintiff had no relationship with; and 

(4) The differences between giving Bank of America an “implied license” to use PlexOS 

software at no cost. D Mot. at 21–22. 

 Plaintiff contends that Mr. Bratic properly noted the “multiple differences” between the 

PlexOS licensing scenario in his hypothetical negotiation and factored those differences into the 

royalty rate. P Opp. at 14. The Court disagrees. After reviewing Mr. Bratic’s report (specifically 

the paragraphs that Plaintiff directs the Court to), it is clear that even while Mr. Bratic notes the 

differing circumstances, he never explains how the differences are reflected in his royalty rate. 

See Bratic Report ¶¶ 135–45. Indeed, his only reductions are to account for the alleged value of 

Plaintiff’s “intellectual property” (20%) and the portion of it that is “comparable to the patents-insuit” (60%). See id. ¶¶ 139, 144; see also supra (discussing those apportionment percentages). 

This is confirmed by paragraph 145 of Mr. Bratic’s report, which states “Georgia-Pacific Factor 

No. 1 indicates that the royalty rate per unit for a license to the Patents-in-Suit is $120 per single 

processor.” Bratic Report ¶ 145. The $120 per processor figure was derived from multiplying the 

$1000-per-license fee by 20% and 60%. See id. at 47 n.284. Thus, only the percentages, and not 

the economic differences, were factored into the per-unit royalty calculation. 

 Accordingly, because Mr. Bratic failed to account for the “economic differences,” between 

the BNP Agreement and the hypothetical license negotiation, he has not shown that the BNP 

agreement is sufficiently comparable.10 ResQNet.com, Inc., 594 F.3d at 873. Without some 

10 Defendant also argues that Mr. Bratic failed to address the technological differences between 

PlexOS and the Patents-in-Suit. D Mot. at 22. The Court does not reach this argument as it finds 

that Mr. Bratic failed to address the economic differences. See ResQNet.com, Inc., 594 F.3d at 

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showing that the economic differences were accounted for, Mr. Bratic’s use of the BNP agreement 

to calculate his damages amount is “unreliable, irrelevant, and unhelpful to the jury’s task of 

evaluating the result of the hypothetical negotiation.” Apple, Inc., 2014 WL 794328 at *11. The 

Court thus excludes it. 

C. Leave to Serve a Supplemental Damages Report 

 Plaintiff requests leave to serve a supplemental damages report to correct the deficiencies 

identified in this Court’s order. The Court declines this request. Allowing a “second bite” can 

encourage “overreaching on the first bite.” Network Prot. Sciences, LLC v. Fortinet, Inc., 2013 

WL 5402089, at *8 (N.D. Cal. Sept. 26, 2013). A second bite is thus only appropriate where the 

expert report can be salvaged with “minimal disruption to an orderly trial.” Id. Where, however, 

the report is “not even close,” there is a need to deny a second bite so as to “encourage candor in 

the first place. Id.; see also Unwired Planet, LLC v. Apple Inc., 2017 WL 589195, at *1 (N.D. 

Cal. Feb. 14, 2017) (“But where the initial effort misses the mark so badly, it would be 

inappropriate to incentivize overreaching by allowing a second attempt.”). 

 The Parties already have a trial date, which the Court and the Parties have built their 

calendars around. Mr. Bratic and Dr. Rubin have had multiple opportunities to submit sufficient 

testimony. Yet, they have failed to cure their deficient testimony. See Unwired Planet, 2017 WL 

589195 at *1. Moreover, because of the sheer volume of deficiencies, Plaintiff would have to 

advance new theories and methodologies. Defendant, who has already invested substantial time, 

money, and effort into defending against Plaintiff’s experts, would be prejudiced by this. Not to 

mention, Defendant’s expert already highlighted the deficiencies for Plaintiff’s experts, which 

means Plaintiff’s experts submitted reply reports believing they cured any deficiencies. Plaintiff 

failed to cure its own overreaching and will not be allowed a second bite at the apple. Network 

Prot. Sciences, LLC, 2013 WL 5402089 at *9. Accordingly, the request for leave to serve a 

873 (requiring the expert account for the “technological and economic differences” between 

licenses) (emphasis added). 

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supplemental damages report is DENIED.

IV. CONCLUSION 

 For the foregoing reasons, the Court DENIES Plaintiff’s motion to exclude portions of 

Dr. Almeroth’s testimony and GRANTS Defendant’s motion to exclude portions of Mr. Bratic’s 

report. The following paragraphs shall be struck from Mr. Bratic’s report: 

 Mr. Bratic’s per-unit royalty calculations based on the BNP Agreement: Paragraphs 11, 

135–45, 207–11, 217 of Mr. Bratic’s Expert Report (Dkt. 257-8), Paragraphs 11–12, 15 of 

Mr. Bratic’s Supplement Report (Dkt. 257-6), and Paragraphs 70–76 of Mr. Bratic’s 

Corrected Reply Report (Dkt. 257-7). 

o Dr. Rubin’s opinion, which Mr. Bratic relies on, that the patented inventions 

represent 60% of the functionality or value of PlexOS: Paragraph 382 of Dr. Rubin 

Expert Report (Dkt. 257-10) and Paragraphs 121–24 of Dr. Rubin’s Reply Report 

(Dkt. 257-11). 

 Mr. Bratic’s profit apportionment analysis based on Dr. Rubin’s calculations: Paragraphs 

11, 297–203, 205–06, 212–17 of Mr. Bratic’s Expert Report (Dkt. 257-8), Paragraphs 9–

10, 13–15 of Mr. Bratic’s Supplement Report (Dkt. 257-6), and Paragraph 2 of Mr. 

Bratic’s Corrected Reply Report (Dkt. 257-7). 

o Dr. Rubin’s opinion, which Mr. Bratic relies on that 33% of the profits allegedly 

represent the “contribution of security, reliability, and availability to the Accused 

Operating Systems.” Paragraphs 383–86 of Dr. Rubin’s Expert Report (Dkt. 257-

10) and Paragraphs 133–34 of Dr. Rubin’s Reply Report (Dkt. 257-11). 

o Dr. Rubin’s opinion, which Mr. Bratic relies upon that 33% and 50% of the value 

of all security, reliability, and availability features on the Accused Devices are 

attributable to EPFT and the combination of EEM and CoPP/LPTS, respectively. 

Paragraphs 387–88 of Dr. Rubin’s Expert Report (Dkt. 257-10) and Paragraphs 

135–36 of Dr. Rubin’s Reply Report (Dkt. 257-11). 

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o Dr. Rubin’s opinion, which Mr. Bratic relies upon that 70% and 40% of EPFT and 

the combination of EEM and CoPP/LPTS, respectively, is allegedly attributable to 

the Patents-in-Suit. Paragraphs 389–90 of Dr. Rubin’s Expert Report (Dkt. 257-10) 

and Paragraphs 138–44 of Dr. Rubin’s Reply Report (Dkt. 257-11). 

IT IS SO ORDERED. 

Dated: March 10, 2020 

______________________________________ 

EDWARD J. DAVILA 

United States District Judge 

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