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UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

WACO DIVISION

ECOFACTOR, INC.,

Plaintiff, 

v. 

GOOGLE LLC, 

Defendant. 

Civil Action No. 6:20-cv-00075 (ADA)

GOOGLE LLC’S OPPOSED MOTION TO EXCLUDE EXPERT 

TESTIMONY OF DAVID KENNEDY 

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TABLE OF CONTENTS

Page 

I. INTRODUCTION ...............................................................................................................1

II. FACTUAL BACKGROUND..............................................................................................2

A. Mr. Kennedy bases his opinion on three litigation settlement licenses. ..................2

B. Mr. Kennedy took no steps to confirm that the lump-sum payments were

calculated using a per-unit royalty rate of .....................................................5

C. Negotiations between EcoFactor’s counsel and the licensees confirm that

the lump-sum payments were not based upon a per unit rate. .......................7

III. LEGAL STANDARD..........................................................................................................8

IV. ARGUMENT.......................................................................................................................9

A. The Court should exclude Mr. Kennedy’s opinion that is an

established royalty because it is unsupported by reliable methodology or

sufficient facts..........................................................................................................9

1. Mr. Kennedy’s failure to perform any calculation to show that

$ had been applied as a per-unit royalty renders his opinion

unreliable....................................................................................................10

2. Mr. Kennedy’s reliance on statements by Mr. Habib and

EcoFactor’s counsel without independent analysis renders his

opinion unreliable. .....................................................................................12

3. Mr. Kennedy’s opinion is also unreliable because he ignores

evidence explicitly contradicting as an established royalty

rate..............................................................................................................13

B. Kennedy’s opinion that is a per-unit reasonable royalty must also be

excluded because the licenses upon which he relied are not comparable. .............15

1. Mr. Kennedy fails to take into account that the “comparable”

licenses were negotiated to settle pending litigation. .................................16

2. Mr. Kennedy’s failure to account for EcoFactor’s entire portfolio

further undermines his opinion. .................................................................17

3. Mr. Kennedy’s opinion that applies no matter the number of

patents or claims allegedly infringed fails to satisfy Rule 702. .................19

V. CONCLUSION ..................................................................................................................20

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TABLE OF AUTHORITIES

Page(s)

Federal Cases

Apple Inc. v. Wi-LAN Inc.,

No. 14-cv-2235, ECF No. 548 (S.D. Cal. Jan. 3, 2019) ..........................................................13

AVM Techs., LLC v. Intel Corp.,

927 F. Supp. 2d 139 (D. Del. 2013).........................................................................................18

Baltimore Aircoil Co., Inc. v. SPX Cooling Techs. Inc.,

2016 WL 4426681 (D. Md. Aug. 22, 2016) ............................................................................12

Bank of N.Y. Mellon Tr. Co., Nat’l. Assoc. v. Solstice ABS CBO II, Ltd.,

910 F. Supp. 2d 629 (S.D.N.Y. 2012)......................................................................................15

In re Bextra and Celebrex Mktg. Sales Practices and Prod. Liab. Litig.,

524 F. Supp. 2d 1166 (N.D. Cal. 2007)...................................................................................15

DataQuill Ltd. v. High Tech Computer Corp.,

887 F. Supp. 2d 999 (S.D. Cal. 2011)......................................................................................15

Daubert v. Merrell Dow Pharms., Inc.,

509 U.S. 579 (1993)...............................................................................................................2, 9

Exmark Mfg. Co. v. Briggs & Stratton Power Products Group,

879 F.3d 1332 (Fed. Cir. 2018)................................................................................................14

General Electric Co. v. Joiner,

522 U.S. 136 (1997)...................................................................................................................9

Info-Hold v. Muzak,

2013 WL 4482442 (S.D. Ohio Aug. 20, 2013), rev’d in part on other grounds, 

783 F.3d 1365 (Fed. Cir. 2015)..........................................................................................12, 13

LaserDynamics Inc. v. Quanta Comput., Inc.,

2011 WL 7563818 (E.D. Tex. Jan. 7, 2011)................................................................16, 17, 18

Lucent Techs., Inc. v. Gateway Inc.,

580 F.3d 1301 (Fed. Cir. 2009)................................................................................................15

M2M Sols. LLC v. Enfora, Inc.,

167 F. Supp. 3d 665 (D. Del. 2016)...................................................................................16, 17

MLC Intellectual Prop., LLC v. Micron Tech., Inc.,

10 F.4th 1358 (Fed. Cir. 2021) ....................................................................................11, 14, 19

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MTX Commc’ns Corp. v. LDDS/WorldCom, Inc.,

132 F. Supp. 2d 289 (S.D.N.Y. 2001)......................................................................................12

Omega Patents., LLC v. CalAmp Corp.,

13 F.4th 1361 (Fed. Cir. 2021) ..........................................................................................19, 20

Pavo Solutions v. Kingston Technology,

2019 WL 8138163 (C.D. Cal. Nov. 20, 2019)...................................................................10, 11

PerdiemCo, LLC v. Industrack LLC,

2016 WL 6611488 (E.D. Tex. Nov. 9, 2016) ..........................................................................16

Prism Techs. LLC v. Sprint Spectrum L.P.,

849 F.3d 1360 (Fed. Cir. 2017)................................................................................................17

US Salt, Inc. v. Broken Arrow, Inc.,

563 F.3d 687 (8th Cir. 2009) ...................................................................................................13

Wordtech Sys., Inc v. Integrated Networks Sols., Inc.,

609 F.3d 1308 (Fed. Cir. 2010)......................................................................................1, 11, 15

Rules

Federal Rule of Evidence 702................................................................................................ passim

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I. INTRODUCTION

EcoFactor’s damages expert, David Kennedy, opined that represented an 

established per-unit royalty for a license to EcoFactor’s patents, entitling EcoFactor to damages 

of through trial, plus future royalties. But Mr. Kennedy’s opinion tha per 

unit is an established royalty rate is unsupported by either any reliable methodology or sufficient 

facts. Mr. Kennedy relied on three settlement agreements granting worldwide licenses to 

EcoFactor’s entire patent portfolio in return for lump-sum amounts, each of which was executed 

after the hypothetical negotiation date (and the filing of this case). 

EcoFactor has produced no information concerning any of these licensees’ past or 

projected sales, nothing to suggest that EcoFactor has ever had access to such information, and 

nothing to show how unit sales were purportedly used to calculate the licensees’ lump-sum 

payments of —far less than the Mr. 

Kennedy arrived at with respect to Google. Mr. Kennedy took no steps to confirm that the 

settlement amounts represented a royalty of per unit; nor could he, as he has never seen 

any licensees’ past or projected sales. Because the settlement agreements do not describe how 

the parties purportedly calculated each lump sum, and Mr. Kennedy has no “idea of the volume 

of sales or projected sales,” his opinion that the agreements establish a royalty rate is unreliable. 

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

What’s more, two of the agreements Mr. Kennedy relies on contradict his opinion: both 

state that the lump-sum payment 

 One of the agreements even makes clear that in the clause containing 

EcoFactor’s representation regarding a royalty rate 

 Mr. Kennedy also ignores EcoFactor’s 

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negotiations with the three licensees, which contradict his opinions. Emails exchanged between 

counsel for the licensees and EcoFactor’s litigation counsel in this case show that the lump sums 

were not derived based upon a calculation of per unit. Instead, these emails show that the 

licensees negotiated and agreed on lump-sum payments to settle litigation in each case. 

Mr. Kennedy admits not knowing how the per unit rate was arrived at or who 

determined it. Instead, because represents EcoFactor’s “belief” about a reasonable royalty, 

Mr. Kennedy saw no need to see the of how it was determined, 

it or otherwise verify it. Knowing nothing about how the rate was determined, Mr. Kennedy 

nonetheless opined that per unit would apply equally for a license to any or all of 

EcoFactor’s patents—whether one patent or EcoFactor’s entire portfolio. Because Mr. Kennedy 

takes no steps to confirm the central premise of his opinions that the settlement amounts were 

derived from ignores contradictory evidence, and defies basic principles of license 

comparability, his opinion must be excluded for failing the standards under Federal Rule of 

Evidence 702 and Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). 

II. FACTUAL BACKGROUND

A. Mr. Kennedy bases his opinion on three litigation settlement licenses. 

Mr. Kennedy opined that 

 Ex.1

 1 (“Kennedy Rept.”) 

¶ 268. To support this conclusion, Mr. Kennedy relies on litigation settlements between 

EcoFactor and three licensees: 

 All three agreements were executed after January 2020, the date 

1 All references to “Ex.” are to the Declaration of Anna Porto in support of Google’s Mot. to 

Exclude Expert Testimony (“Porto Decl.”). 

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EcoFactor filed this case and the date of the hypothetical negotiation proposed by Mr. Kennedy; 

included licenses to EcoFactor’s entire portfolio; and specified one-time, lump-sum 

payments to settle litigation. 

. 

First, Mr. Kennedy relied upon an April 2020 settlement between EcoFactor and 

Ex. 2. 

. See id. The parties further agreed to a 

 Id. at 3. Notwithstanding the 

lump-sum payment and agreed-upon language, in a clause, the agreement stated that 

 Id. at 

1.2

 

Second, Mr. Kennedy relied upon a June 2020 settlement between EcoFactor and 

. Ex. 3. In this agreement, EcoFactor granted 

 Id. The parties agreed that 

 would pay EcoFactor a . Id. at 3. In the 

same clause, the parties agreed that 

 Id. The agreement also included a clause again 

stating that 

2

 Unless otherwise noted, all internal quotation marks and citations have been omitted, and all 

emphases have been added.

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 Id. at 1. 

Third, Mr. Kennedy relied upon a July 2021 settlement with Ex. 4. EcoFactor 

granted 

 Id. The parties agreed that Johnson would pay a 

 Id. at 3. Again, in a clause, the agreement stated that 

 Id. at 1. 

Based upon these three litigation settlement licenses, Mr. Kennedy opined that 

represents 

 Kennedy Rept. ¶ 268. According to Mr. Kennedy, 

 

Id. ¶¶ 197, 202, 208, 344. Mr. Kennedy further opined that the three licenses were economically 

comparable to the hypothetical negotiation, noting that 

 Id. ¶ 267.3

 Mr. Kennedy used the 

3

 As explained infra, EcoFactor did not even assert the same patents against each of the licensees 

Case 6:20-cv-00075-ADA Document 119 Filed 11/24/21 Page 8 of 26
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rate to calculate damages against Google totaling from January 2020 through the 

projected trial date. Id., Exhibit 1. 

Mr. Kennedy based his royalty opinion solely on these three settlement agreements, 

concluding that 

 Id. ¶ 250. Mr. Kennedy also did not rely on any other 

EcoFactor licenses, including EcoFactor’s agreement with which pre-dated the 

hypothetical negotiation and included a license to EcoFactor’s patent portfolio. See id. pages 

119-128. Mr. Kennedy’s damages opinion thus relies entirely on a unilateral statement about 

what EcoFactor is a per-unit royalty, which appears in three settlement agreements 

negotiated by its litigation counsel after EcoFactor filed its complaint against Google here. 

B. Mr. Kennedy took no steps to confirm that the lump-sum payments were 

calculated using a per-unit royalty rate of 

Mr. Kennedy failed to perform any calculations to confirm that had been applied as 

a per-unit royalty to compute the various lump sums. Mr. Kennedy’s report does not include any 

information on the licensees’ sales. See Kennedy Rept. Mr. Kennedy admitted that he had never 

seen sales information for any licensee, nor did he know whether such information exists. Ex. 5 

(“Kennedy Depo.”) at 103:1-7 ; id. at 123:16-25 ; id. at 146:3-9 

id. at 129:23. Mr. Kennedy did not ask for for the licensees. Id. at 111:24-25, 

130:11-14. He also testified that he was unsure whether EcoFactor’s CEO, Shayan Habib (who 

executed the agreements on EcoFactor’s behalf), 

. Id. at 151:9-18. When confronted with Mr. Habib’s testimony, Mr. Kennedy 

acknowledged that Mr. Habib said that he Id. at

as it asserts against Google here. 

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111:6-16. Mr. Kennedy testified that he whether 

EcoFactor or its counsel ever had sales information, and he never asked counsel to provide it. Id.

at 111:14-17, 128:15. 

 Id. at 113:4-8; Ex. 6. 

 Mr. Kennedy also testified that 

 Kennedy Depo at 

104:8-11 id. at 123:10-25 id. at 151:21-152:9 Unsurprisingly, 

then, Mr. Kennedy was unaware of whether any of the lump sums to reflect 

net present value, or whether the parties had applied any other discount to arrive at the agreedupon lump sums. See id. at 138:13-15 

id. at 118:13-15 id. at 152:10-16 Mr. 

Kennedy further testified that he 

as a per-unit royalty. Id. at 156:20-157:1 

 Mr. Kennedy never asked 

EcoFactor’s counsel how the lump sums had been determined, other than 

 Id. at 151:1-4. 

Beyond the settlement agreements themselves, Mr. Kennedy’s report cites only to: (1) 

deposition testimony and conversations with Mr. Habib; and (2) an email from 

as support for his conclusion that each 

Kennedy Rept. 

¶¶ 197, 202, 208. Although Mr. Habib himself had no 

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Mr. Kennedy asserted that,

 

Id. ¶ 344. Mr. Kennedy admitted lacking documentation of the of how 

 Kennedy Depo at 94: 22-95:11. When pressed, Mr. Kennedy testified tha 

may have been proposed in collaboration with experts, but he did not know whom. Id. at 129:1-

10 id. at 157:8-20; Ex. 7 (“Habib Depo.”) at 439:3-15 

(EcoFactor’s belief as to 

Beyond his reliance on the whereas clauses as to EcoFactor’s belief, testimony from Mr. 

Habib, and statements from EcoFactor’s counsel, Mr. Kennedy failed to otherwise substantiate 

as a per-unit royalty rate. Mr. Kennedy’s report thus provides no explanation of how the 

settlement agreements with —who, like Google, are 

 can be reconciled with the in damages through January 

of 2022 alone that he calculated for Google. See id. ¶ 72; Exs. 2, 4. 

C. Negotiations between EcoFactor’s counsel and the licensees confirm that the 

lump-sum payments were not based upon a per unit rate. 

EcoFactor’s counsel produced emails relating to negotiations with 

 which Mr. Kennedy’s report ignores, and which demonstrate that the licensees did not 

agree to as a per-unit royalty and that the lump sums were not derived from a rate of 

 None of the correspondence that EcoFactor produced included any actual or estimated 

unit sales, or information related to any purported calculations of the lump-sum settlements with 

4

 EcoFactor’s litigation counsel is the custodian of the email correspondence with the licensees. 

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any of the licensees.5 Several emails also reflect that the licensees as a perunit royalty rate. In an email between counsel for EcoFactor and for example, 

EcoFactor’s litigation counsel proposed a per-unit royalty of per residential HVAC unit, 

and per commercial HVAC unit. Ex. 9. In response, attorney asked for 

 which 

 Id. at 2. In another email, proposed a lump-sum settlement without reference to a 

per-unit royalty rate of Ex. 10. EcoFactor countered with a

or evidencing 

EcoFactor’s view that an ongoing royalty is distinct from a . Id. 

In another email, counsel for recounted a back-and-forth with EcoFactor’s counsel 

over the amount of a lump-sum payment and proposed to which the parties ultimately 

agreed, without ever referencing a rate of per unit. Ex. 11. Finally, EcoFactor produced a 

redlined draft agreement reflecting Daikin that should be 

 Ex. 12.6

 

III. LEGAL STANDARD 

Federal Rule of Evidence 702 permits an expert to testify in the form of an opinion if the 

opinion is “based on sufficient facts or data” and “the testimony is the product of reliable 

principles and methods.” Fed. R. Evid. 702. The district court has a “gatekeeping” obligation to 

5 Some of the emails referred to EcoFactor’s EcoFactor represented that 

existed. Ex. 8. Furthermore, although some of the emails appeared to reference the 

licensees’ unit sales, the figures were redacted, and EcoFactor represented that it could not 

produce unredacted versions due to confidentiality issues in related ITC actions. See id.

6

 Google moved to compel EcoFactor to produce data and calculations underlying the lump 

sums. See Ex. 8. After the Court ordered EcoFactor to produce anything it planned to rely on at 

trial, ECF No. 95, EcoFactor produced no additional information, representing that had “already 

produced, and is not withholding, the non-privileged information supporting Mr. Kennedy’s 

proposed Ex. 6. 

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ensure that the proffering party has met its burden of satisfying Rule 702. Daubert, 509 U.S. at 

595, 600–601. Although the focus of the reliability inquiry is on the principles and methodology 

an expert uses in forming the opinions, in conducting the reliability analysis, the court must also 

consider whether “there is simply too great an analytical gap between the data and the opinion 

proffered.” General Electric Co. v. Joiner, 522 U.S. 136, 146 (1997). 

IV. ARGUMENT

Mr. Kennedy’s damages opinion fails to satisfy Rule 702 and Daubert and must be 

excluded in its entirety.

7 First, Mr. Kennedy’s opinion that per unit is an established or 

reasonable royalty is unsupported by any reliable methodology and is not based upon sufficient 

facts or data. Second, Mr. Kennedy’s opinion that per unit is a reasonable royalty is also 

unreliable because the three licenses he relies on in support of that position are not economically

comparable to the hypothetical negotiation. 

A. The Court should exclude Mr. Kennedy’s opinion that is an established

royalty because it is unsupported by reliable methodology or sufficient facts.

The Court should exclude Mr. Kennedy’s opinion that per unit is a reasonable 

royalty because his opinion is unsupported by any reliable methodology and unsupported by the 

evidence. Mr. Kennedy failed to (1) show that had ever been applied as a per-unit royalty 

rate, (2) confirm the opinions of EcoFactor’s CEO or litigation counsel as to the reasonable 

royalty rate, or (3) consider any evidence contradicting that the lump sums were derived from a 

 royalty rate. 

As an initial matter, Mr. Kennedy’s report repeatedly asserts that per unit 

represented an See Kennedy Rept. ¶¶ 268, 269, 313, 318. But in his 

7

 Counsel for Google and EcoFactor met and conferred about this Daubert motion on November 

11, 2021, and EcoFactor indicated that it would oppose Google’s motion. See Porto Decl. ¶ 17. 

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deposition, Mr. Kennedy backtracked, claiming that he was not opining that was 

 Kennedy Depo. at 91:12–17.8

 He nonetheless opined that the 

rate is 

and that Id. at 89:8-24. As 

explained herein, Mr. Kennedy cannot substantiate that is an per-unit royalty 

rate—in any sense. 

1. Mr. Kennedy’s failure to perform any calculation to show that had 

been applied as a per-unit royalty renders his opinion unreliable. 

Mr. Kennedy performed no calculation to confirm tha had been applied as a perunit royalty rate to calculate the lump sums agreed upon with 

Mr. Kennedy’s report makes no mention of the three licensees’ sales figures, nor do the licenses 

include any information related to past or projected sales. See generally Exs. 1-4. In fact, Mr. 

Kennedy testified that he had never seen that information, nor had he requested it. Kennedy 

Depo. at 111:24-25, 130:13-14. Instead, he based his opinion on the face of the licenses 

themselves, and in particular, the clause purporting to state EcoFactor’s belief as to a 

reasonable royalty. See id. at 131:10-12 

 

Mr. Kennedy’s failure to independently assess his proffered opinion renders it unreliable. 

In Pavo Solutions v. Kingston Technology, 2019 WL 8138163, at *5 (C.D. Cal. Nov. 20, 2019), 

for example, the court excluded an expert opinion on a per-unit royalty derived from a license 

agreement, because the expert admitted that she “ha[d] no knowledge or evidence of sales 

8

 There is thus no dispute that Mr. Kennedy has failed to show in his report that the factors 

necessary for satisfying an “established” royalty are met here. Counsel for EcoFactor confirmed 

during the parties’ meet-and-confer regarding this motion that Mr. Kennedy was not opining that 

 was “established” in the legal sense. Porto Decl. ¶ 17. 

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figures under [the] agreement.” Id. Because the expert had “not demonstrated how the lump 

sums extracted from those agreements could be accurately converted to a royalty rate,” her 

opinion was unreliable. Id. Similarly, in Wordtech Sys., Inc v. Integrated Networks Sols., Inc., 

609 F.3d 1308, 1320 (Fed. Cir. 2010), the Federal Circuit refused to uphold a damages award 

based in part on two lump-sum agreements, because “[n]either license describe[d] how the 

parties calculated each lump sum, the licensees’ intended products, or how many products each 

licensee expected to produce.” Id.; see also MLC Intellectual Prop., LLC v. Micron Tech., Inc., 

10 F.4th 1358, 1368 (Fed. Cir. 2021) (expert opinion unreliable where he had “offered no 

testimony as to how the $21 million lump-sum payment could be converted to any royalty rate”). 

Mr. Kennedy’s opinion must be rejected on the same basis as the expert’s opinion in 

Pavo Solutions and the jury’s damages verdict in Wordtech. As in Pavo, Mr. Kennedy conceded 

that he had no sales numbers with which to calculate the per-unit royalty rate. Here too, Mr. 

Kennedy was “incapable” of demonstrating how the lump sums had been calculated, because he 

lacked the “relevant sales numbers that are required to derive an accurate royalty rate.” Pavo 

Solutions, 2019 WL 8138163, at *5; see Kennedy Depo. at 129:23. Accordingly, Mr. Kennedy 

had no idea whether a discount had been applied to the lump sums, nor could he explain how the 

settlement agreement with for example, had resulted in a round sum of 

despite the fact that it was allegedly based on a per-unit royalty of See Kennedy Depo. at

153:6-9 And like the 

patentee in Wordtech, Mr. Kennedy had no “idea of the [licensees’] volume of sales or projected 

sales.” 609 F.3d at 1320. Because Mr. Kennedy’s opinion would leave the jury with “almost no 

testimony with which to recalculate in a meaningful way the value of any of the lump-sum 

agreements to arrive at the per-unit royalty damages award,” his opinion is unreliable. Pavo 

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Solutions, 2019 WL 8138163, at *5; Baltimore Aircoil Co., Inc. v. SPX Cooling Techs. Inc., 2016 

WL 4426681, at *25 (D. Md. Aug. 22, 2016) (excluding licenses where expert was “unaware of 

any information about the amount of sales . . . made under the license”). 

2. Mr. Kennedy’s reliance on statements by Mr. Habib and EcoFactor’s 

counsel without independent analysis renders his opinion unreliable.

 Mr. Kennedy’s reliance on testimony of and conversations with EcoFactor’s CEO and 

counsel supporting as a per-unit royalty rate without independent analysis is insufficient to 

satisfy Rule 702. See Kennedy Rept. ¶ 197 (citing, inter alia, Mr. Habib’s deposition testimony

and email from Mr. Kennedy acknowledged that 

he did not know whether Mr. Habib himself had seen sales numbers, and Mr. Habib’s own 

deposition testimony made clear that Mr. Habib had See Kennedy Depo. 

111:10-13. And EcoFactor’s counsel never provided Mr. Kennedy with data that would support 

his opinion of as a per-unit royalty, as confirmed by their failure to produce such 

information. Mr. Kennedy’s references to statements by EcoFactor’s CEO and counsel thus 

provide no basis for his opinion that is an established or reasonable per-unit royalty. See 

MTX Commc’ns Corp. v. LDDS/WorldCom, Inc., 132 F. Supp. 2d 289, 292–93 (S.D.N.Y. 2001) 

(rejecting expert testimony in reliance on third-party attorney where “[t]he information . . . was 

neither verified nor submitted in a way that permits meaningful review,” and “[t]here [was] no 

indication that [the attorney] was a source of accurate or reliable expert information”). 

Even if Mr. Habib or EcoFactor’s counsel were reliable sources of information (they are 

not, given their interest in the litigation outcome), an expert may not rely upon a party’s or 

attorney’s statements without independent analysis. In Info-Hold v. Muzak, 2013 WL 4482442, 

at *5 (S.D. Ohio Aug. 20, 2013), rev’d in part on other grounds, 783 F.3d 1365 (Fed. Cir. 2015), 

for example, the court excluded the testimony of an expert who had “relie[d], without 

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verification, on Plaintiff’s employees and Plaintiff’s counsel for information crucial to his 

opinions.” The expert had simply accepted, for example, that all of the “Defendant’s ... 

revenues were driven by demand for the [accused products,]” “because he [had been] told to 

make this assumption by [] Counsel.” Id., at *5. Because the expert “did not independently 

verify anything that Plaintiff’s CEO or Plaintiff’s counsel told him,” his opinion was unreliable. 

Id. So too here. As in Info-Hold, Mr. Kennedy’s testimony parroting unverified statements from 

EcoFactor’s CEO and its attorneys is “more advocacy for Plaintiff than expert testimony.” Id., at 

*5. Because Mr. Kennedy accepted EcoFactor’s statements “without conducting his own 

investigation or independent verification, his opinion is unreliable.” Id.; see also US Salt, Inc. v. 

Broken Arrow, Inc., 563 F.3d 687, 691 (8th Cir. 2009) (rejecting expert testimony that “relied 

almost exclusively on [the CEO’s] speculative estimates without any independent verification”).9

 

3. Mr. Kennedy’s opinion is also unreliable because he ignores evidence 

explicitly contradicting as an established royalty rate. 

Mr. Kennedy’s opinion is also unreliable because he failed to account for evidence 

contradicting his opinion that per unit was used to derive the lump-sum amounts. Mr. 

Kennedy disregarded explicit statements that disagreed that the lump sums 

they paid reflected a per-unit royalty rate. See Kennedy Rept. ¶¶ 197, 202; Ex. 2; Ex. 3. 

Furthermore, Mr. Kennedy failed to address (or even cite) the agreement’s statement 

that 

 See Kennedy Rept. ¶¶ 197, 202. Instead, Mr. Kennedy baldly concludes 

that 

9

 Mr. Kennedy’s opinion was previously excluded based on his adoption of the opinion of an 

unreliable expert. See Apple Inc. v. Wi-LAN Inc., No. 14-cv-2235, ECF No. 548 (S.D. Cal. Jan. 

3, 2019). The court also noted that Mr. Kennedy’s analysis raised “concerns about the 

reliability,” and “perhaps, arbitrariness of his opinions.” Id. 

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Id. ¶ 344. 

Mr. Kennedy cannot base his royalty rate on agreements that are incompatible with his 

opinion. In MLC Intellectual Prop., LLC v. Micron Tech., Inc., 10 F.4th 1358, 1368 (Fed. Cir. 

2021), for example, the court affirmed the exclusion of expert testimony that a license agreement 

contained a reasonable royalty rate of 25%, which was “not sufficiently tethered to the evidence 

presented.” Id. “Instead of resting on an accepted scientific theory or technique,” the expert’s 

proposed royalty rate “rest[ed] on an inference from the most favored customer clause that 

[went] well beyond what the clause implies and [was] incompatible with the [license] agreement 

as a whole.” Id. Likewise, here, Mr. Kennedy’s royalty rate is based on an unsupported 

inference related to each agreements’ “whereas” clause that is otherwise unsupported and is 

incompatible with the agreements as a whole. 

In addition to ignoring contradictory terms within the licenses themselves, Mr. Kennedy 

disregarded communications undermining $5.16 as a per-unit royalty rate. See Ex. 9 at 2 

commenting that proposed per-unit royalty rates Ex. 10 

proposing lump sum without reference to per-unit); Ex.12 disputing that

 Mr. Kennedy testified that 

although he was aware of statements that showed the licensees 

 it was 

 Kennedy Depo. at 164:18-21. 

Given the lack of any evidence supporting a rate of Mr. Kennedy’s opinion is 

effectively “plucked . . . out of nowhere.” Exmark Mfg. Co. v. Briggs & Stratton Power 

Products Group, 879 F.3d 1332, 1351 (Fed. Cir. 2018) (“It is not enough for an expert to simply 

assert that a particular royalty rate is reasonable in light of the evidence without tying the 

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proposed rate to that evidence.”). Mr. Kennedy’s failure to address any evidence tending to 

undermine his “litigation-created conclusion” of as a per-unit royalty renders his opinion 

unreliable. See In re Bextra and Celebrex Mktg. Sales Practices and Prod. Liab. Litig., 524 F. 

Supp. 2d 1166, 1176, 1184 (N.D. Cal. 2007) (rejecting as unreliable opinion where “[the expert] 

reaches his opinion by first identifying his conclusion . . . and then cherry-picking observational 

studies that support his conclusion and rejecting or ignoring . . . the evidence that contradicts his 

conclusion.”); Bank of N.Y. Mellon Tr. Co., Nat’l. Assoc. v. Solstice ABS CBO II, Ltd., 910 F. 

Supp. 2d 629, 648 (S.D.N.Y. 2012) (excluding damages calculation based on expert’s “faulty 

assumption” that contradicted contractual terms). 

B. Kennedy’s opinion that is a per-unit reasonable royalty must also be 

excluded because the licenses upon which he relied are not comparable.

Mr. Kennedy’s opinion is also unreliable because the agreements he relies on to show 

that is a reasonable per-unit royalty rate are not comparable to the hypothetical negotiation. 

The second Georgia Pacific “factor examines whether the licenses relied [upon] . . . are 

sufficiently comparable to the hypothetical license.” Lucent Techs., Inc. v. Gateway, Inc., 580 

F.3d 1301, 1325 (Fed. Cir. 2009). Accordingly, “comparisons of past patent licenses to the 

infringement must account for the technological and economic differences between them,” 

Wordtech Sys., Inc., 609 F.3d at 1320, and “[t]he testimony of a damages expert in a patent suit 

who relies on non-comparable licenses in reaching his royalty rate should be excluded,” 

DataQuill Ltd. v. High Tech Computer Corp., 887 F. Supp. 2d 999, 1022 (S.D. Cal. 2011). 

Here, Mr. Kennedy’s testimony as to the licenses with 

should be excluded as because they are not economically comparable to the hypothetical 

negotiation. Mr. Kennedy (1) failed to consider that the licenses were executed to settle pending 

litigation, (2) failed to consider that the patents licensed were patent portfolios distinct from 

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those relevant to the hypothetical negotiation, and (3) opined that was the per-unit royalty 

rate regardless of the number of patents licensed. 

1. Mr. Kennedy fails to take into account that the “comparable” licenses

were negotiated after the date of hypothetical negotiation to settle pending 

litigation. 

Mr. Kennedy’s opinion that per unit is a reasonable royalty should also be excluded 

because he failed to provide any assessment of the litigation context of the three settlement 

agreements. “The propriety of using prior settlement agreements to prove the amount of a 

reasonable royalty is questionable.” LaserDynamics, Inc. Quanta Comput., Inc., 694 F.3d 51, 77 

(2012). Although litigation agreements may be considered, “because litigation licenses are likely 

influenced to some degree by the litigation, the Court must apply scrutiny in determining the 

admissibility of such licenses,” assessing the licenses on a “case-by-case basis.” PerdiemCo, 

LLC v. Industrack LLC, 2016 WL 6611488, at *4 (E.D. Tex. Nov. 9, 2016). Because Mr. 

Kennedy failed to account for the “drastically different backdrop” of the litigations with 

Schneider, and Johnson, his opinion is unreliable and should be excluded. M2M Sols. LLC v. 

Enfora, Inc., 167 F. Supp. 3d 665, 678 (D. Del. 2016). 

In his comparability assessment of the licenses, Mr. Kennedy 

acknowledges only that: 

 Kennedy Rept. ¶ 347. Other than these boilerplate 

observations—which were identical for both Mr. Kennedy provided no 

background information about the litigation preceding these agreements. M2M, 167 F. Supp. 3d 

at 677 (rejecting damages opinion where the expert “provides an almost identical recitation of 

comparability” for two licenses). As for , Mr. Kennedy failed to even offer a generic 

acknowledgment or description of the litigation. See Kennedy Rept. ¶¶ 345-349. Nor did Mr. 

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Kennedy provide these basic facts in his deposition, instead he “virtually ignores” the fact that 

the Schneider license was a litigation settlement. M2M Sols. LLC, 167 F. Supp. 3d at 678. 

On all three licenses, Mr. Kennedy failed to describe basic facts about the litigation. He

does not describe, for example, whether the settlements were executed early in the litigations, 

where the threat of high litigation costs is greatest, see Prism Techs. LLC v. Sprint Spectrum 

L.P., 849 F.3d 1360, 1370 (Fed. Cir. 2017), or on “the eve of trial,” LaserDynamics, 694 F.3d at 

77 (excluding patentee’s reliance on settlement entered into just before trial after the accused 

infringer “had been repeatedly sanctioned,” which “reflects not the value of the claimed 

invention but the strong desire to avoid further litigation.”). Mr. Kennedy also ignored concrete 

evidence that the settlement agreements were influenced by the COVID-19 pandemic and 

appeared to be motivated by the cost of defense. See Ex. 13 at 1 email noting that 

and 

 Similarly, emails from show that it was also motivated to settle by 

 See Ex. 11. Failing to describe these litigations—let alone take that 

context into account—renders Mr. Kennedy’s opinion unreliable. 

2. Mr. Kennedy’s failure to account for EcoFactor’s entire portfolio further 

undermines his opinion. 

Mr. Kennedy also failed to evaluate the differences between the patents asserted against 

the licensees and those to be licensed in the hypothetical negotiation. With respect to the 

and licenses, Mr. Kennedy simply noted that seven patents were asserted by 

EcoFactor, that those patents were 

and that some of those patents are also asserted against Google. See Kennedy 

Rept. ¶¶ 347, 348. As an initial matter, Mr. Kennedy’s assertion that only seven patents were the 

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focus of the negotiations with is unsupported. Mr. Kennedy cites a 

 but he includes no details on the substance of that conversation. 

Kennedy Rept. ¶ 347. And Mr. Kennedy notes that exhibits to the agreements 

 but Mr. Kennedy ignores that the exhibits 

also any based on the asserted patents and 

 See id. ¶ 347; Ex. 2 at 10; Ex. 3 at 

10. Most problematic, Mr. Kennedy fails to acknowledge that most of the patents asserted 

agains —four out of the asserted seven—are not included in the threepatent license that would emerge from a hypothetical negotiation here.

10 

Furthermore, Mr. Kennedy failed to analyze the fact that the settlement agreements with 

all three licensees licensed EcoFactor’s entire patent portfolio, not just the three patents 

implicated in the hypothetical negotiation. “Particularly where a license covers a portfolio of 

patents,” the patentee must present evidence sufficient to allow the jury to weigh the value of the 

patents against the “value of the features and services covered by the license.” LaserDynamics

Inc. v. Quanta Comput., Inc., 2011 WL 7563818, at *3 (E.D. Tex. Jan. 7, 2011). But Mr. 

Kennedy failed to include any basic facts about EcoFactor’s portfolio: he did not provide the 

number of patents or applications included in the portfolio at the time of the hypothetical 

negotiation, list the patents’ expiration dates, or even generally consider the patents’ subject 

matter. See id. Instead, Mr. Kennedy ignored that EcoFactor’s portfolio included 35 issued 

10 And unlike the settlement agreements with , none of the patents asserted 

against are at issue here. See Kennedy Rept. ¶ 345. Given the lack of overlap between 

the asserted patents against and those here, Mr. Kennedy’s failure to provide any 

comparability analysis renders his opinion unreliable. AVM Techs., LLC v. Intel Corp., 927 F. 

Supp. 2d 139, 144 (D. Del. 2013) (“[A] single settlement agreement on a different patent without 

any analysis of the settlement context is not a reliable method for calculating damages.”). 

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it’s one patent or all the patents, the way that Omega licenses them is, it’s five bucks . . . be it 

one or two or three or four or 30.” Id. at 1379. According to Omega’s CEO, the company’s 

licensing policy was “one price for all . . . the first patent’s five bucks. Everything else thereafter 

Omega just threw in.” Id. (cleaned up). Omega’s damages expert thus opined that the defendant 

“should pay the same rate no matter how many claims or how many of the patents it infringes.” 

Id. Overturning the jury’s damages verdict, the Federal Circuit explained that “absent evidence 

of a comparable license or comparable negotiation to support an identical $5.00 rate for a onepatent license to the [patent in the hypothetical negotiation],” the expert’s “patent/claimindependent approach” failed to account for the incremental benefit of the patent-in-suit. Id. 

Likewise, Mr. Kennedy’s opinion that is the per-unit royalty no matter the number 

of patents must be rejected, because such a “theory would permit [EcoFactor] to obtain a 

particular royalty rate merely by relying on its internal policy. . . without regard to 

comparability.” Id. This opinion “would improperly permit [EcoFactor] to hide behind its 

generic licensing arrangement,” and avoid accounting for the incremental value of the patents. 

Id. Mr. Kennedy’s opinion that is a per-unit royalty rate regardless of the number of 

patents or claims ultimately infringed provides another basis for its exclusion. 

V. CONCLUSION

If Mr. Kennedy cannot testify as to a per-unit royalty rate of or the licenses 

purportedly supporting that rate, nothing remains of Mr. Kennedy’s opinion, which was limited 

to a per-unit royalty of See Kennedy Depo. 43:12-13. Google thus respectfully requests 

that the Court exclude Mr. Kennedy’s expert testimony in its entirety.

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Respectfully submitted, 

KEKER, VAN NEST & PETERS LLP

Dated: November 19, 2021

By:

/s/ Jennifer A. Huber, with permission by 

Michael E. Jones

Shamita Etienne-Cummings 

(admitted to the Western District of Texas) 

Allen & Overy LLP

1101 New York Avenue, NW

Washington, DC 20005

Telephone: (202) 683-3810 

GoogleEcofactorWDTX@AllenOvery.com

Bijal V. Vakil

(admitted to the Western District of Texas) 

Eric Lancaster (admitted Pro Hac Vice) 

Allen & Overy LLP

530 Lytton Avenue, 2nd Floor 

Palo Alto, CA 94301

Telephone: (650) 388-1703 

GoogleEcofactorWDTX@AllenOvery.com

ROBERT A. VAN NEST

LEO L. LAM

JENNIFER A. HUBER

KRISTIN HUCEK

ANNA PORTO

PATRICK E. MURRAY

GREGORY WASHINGTONROBERT A. 

VAN NEST

LEO L. LAM

JENNIFER A. HUBER

KRISTIN HUCEK

ANNA PORTO

PATRICK E. MURRAY

GREGORY WASHINGTON

633 Battery Street

San Francisco, CA 94111-1809633 Battery 

Street

San Francisco, CA 94111-1809 

Telephone: 415 391 5400 415 391 5400 

Facsimile: 415 397 7188415 397 7188 

econest-kvp@keker.com 

POTTER MINTON

Michael E. Jones (TX Bar No. 10929400)

mikejones@potterminton.com

Patrick C. Clutter (TX Bar No. 24036374)

patrickclutter@potterminton.com

110 N. College, Suite 500

Tyler, Texas 75702

Tel: 903-597-8311 

Fax: 903-593-0846 

Attorneys for Defendant GOOGLE LLC

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CERTIFICATE OF SERVICE

I hereby certify that all counsel of record who have consented to electronic service are 

being served with a copy of this document via electronic mail on November 19, 2021. 

I also hereby certify that all counsel of record who have consented to electronic service 

are being served with a notice of filing of this document, under seal, pursuant to L.R. CV-5(a)(7) 

on November 19, 2021. 

/s/Michael E. Jones 

CERTIFICATE OF AUTHORIZATION TO FILE UNDER SEAL

I certify that the foregoing document is authorized to be filed under seal pursuant to the 

Protective Order in this case and Judge Albright’s Standing Order Regarding Filing Documents 

Under Seal in patent Cases and Redacted Pleadings. 

/s/ Michael E. Jones 

Case 6:20-cv-00075-ADA Document 119 Filed 11/24/21 Page 26 of 26