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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)

PUBLIC VERSION

GOOGLE LLC’S RESPONSE IN OPPOSITION TO ECOFACTOR, INC.’S MOTION 

TO EXCLUDE EXPERT OPINIONS OF TODD SCHOETTELKOTTE

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TABLE OF CONTENTS

Page 

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

II. ARGUMENT.......................................................................................................................2

A. Mr. Schoettelkotte’s reliance on the Trane Agreement and related 

documentation is proper under Rule 702. ................................................................2

1. EcoFactor executed an Asset Purchase Agreement with Trane that 

included rights to the Asserted Patents. .......................................................2

2. The Trane Agreement is comparable to the license resulting from 

hypothetical negotiation. ..............................................................................4

B. The Trane documents upon which Mr. Schoettelkotte relies were produced 

in this case and there is no basis for excluding them under Rule 37. ......................7

1. Google subpoenaed and deposed Trane in the District Court and 

ITC matters, and EcoFactor obtained the Trane documents in 

discovery. .....................................................................................................7

2. EcoFactor had the Trane documents and used them to depose Mr. 

Schoettelkotte...............................................................................................9

3. The Trane documents were produced in discovery and used by 

EcoFactor, and EcoFactor cannot identify any prejudice. .........................10

C. Mr. Schoettelkotte’s reliance on EcoFactor’s valuations is proper under 

Rule 702. ................................................................................................................14

1. EcoFactor procured several valuations prior to the hypothetical 

negotiation..................................................................................................14

2. EcoFactor’s valuations are relevant to the value of EcoFactor’s 

patents. .......................................................................................................15

D. There is no basis for excluding Mr. Schoettelkotte’s reliance on Google’s 

usage data under Rule 702 or Rule 37. ..................................................................16

1. Mr. Schoettelkotte relied on data related to Nest thermostats’ 

Internet connectivity to rebut EcoFactor’s damages opinion. ...................16

2. Mr. Schoettelkotte’s reliance on the Wi-Fi spreadsheet was 

reliable, and EcoFactor has identified no prejudice based on its 

lack of earlier access to the spreadsheet. ...................................................17

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III. CONCLUSION ..................................................................................................................19

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TABLE OF AUTHORITIES

Page(s) 

Federal Cases

ART+COM Innovationpool GmbH v. Google Inc.,

155 F. Supp. 3d 489 (D. Del. 2016) ...........................................................................................4

Blattman v. Siebel, 

2020 WL 475413 (D. Del. Jan. 29, 2020) ..........................................................................14, 16

Carucel Invs., L.P. v. Novatel Wireless, Inc., 

2017 WL 1215838 (S.D. Cal. Apr. 3, 2017), aff'd, 730 F. App’x 938 (Fed. Cir. 

2018) ..........................................................................................................................................5

In re Complaint of C.F. Bean L.L.C., 

841 F.3d 365 (5th Cir. 2016) ...................................................................................................13

Egenera, Inc. v. Cisco Sys., Inc., 

-- F. Supp. 3d --, 2021 WL 2582406 (D. Mass. June 23, 2021) ........................................15, 16

Gun Barrell Jacksonville LLC v. Depositors Ins. Co., 

2021 WL 5154218 (E.D. Tex. Oct. 9, 2021) .....................................................................13, 19

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

694 F.3d 51 (2012) .....................................................................................................................4

Mformation Techs., Inc. v. Rsch. in Motion Ltd., 

2012 WL 2339762 (N.D. Cal. June 7, 2012) ...........................................................................15

Parthenon Unified Memory Architecture LLC v. Apple Inc., 

2016 WL 7670833 (E.D. Tex. Sept. 21, 2016) ..........................................................................5

Summit 6, LLC v. Samsung Elecs. Co., 

802 F.3d 1283 (Fed. Cir. 2015)..................................................................................................7

Wapp Tech Ltd. P’ship v. Seattle SpinCo, Inc., 

2021 WL 414812 (E.D. Tex. Feb. 5, 2021) .................................................................12, 18, 19

Rules

Federal Rule of Civil Procedure 37 ....................................................................................... passim

Federal Rule of Evidence 702 ..........................................................................................1, 2, 14, 16

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I. INTRODUCTION

In reaching his conclusion as to a reasonable royalty, Google’s damages rebuttal expert, 

Todd Schoettelkotte, relied upon evidence including EcoFactor’s grant of prior licenses to its 

patent portfolio (including the patents-in-suit), third-party valuations of EcoFactor’s business and 

assets, the lack of competition between the parties, the rates paid by Google for comparable 

patents, and testimony of Google and EcoFactor personnel. EcoFactor’s motion raises a 

hodgepodge of arguments seeking to exclude certain evidence relied upon by Mr. Schoettelkotte 

under Federal Rule of Evidence 702 and Federal Rule of Civil Procedure 37. None of 

EcoFactor’s arguments has merit.

First, EcoFactor seeks to exclude Mr. Schoettelkotte’s reliance on EcoFactor’s agreement 

with Trane U.S., Inc. (“Trane Agreement”) as non-comparable to the license produced by a 

hypothetical negotiation, despite the fact that the Trane Agreement was negotiated outside of the 

litigation context and executed prior to the hypothetical negotiation date. In effect, EcoFactor 

seeks to prevent Mr. Schoettelkotte from relying on the most reliable EcoFactor license in the 

record. Second, EcoFactor argues that Mr. Schoettelkotte should not be allowed to rely on 

documents produced by Trane related to its license to EcoFactor’s patents, despite the fact that 

the documents were indisputably in EcoFactor’s possession. EcoFactor’s attempt to exclude 

these documents has more to do with the documents’ contents evidencing the low value Trane 

placed on EcoFactor’s patents than any purported discovery issue or prejudice to EcoFactor. 

Third, EcoFactor argues that Mr. Schoettelkotte cannot rely on EcoFactor’s corporate valuations. 

But such valuations are useful datapoints to assess the value of a company’s intellectual 

property, and EcoFactor has no support for its position that Mr. Schoettelkotte’s reliance on them 

is unreliable. Fourth, EcoFactor argues that Mr. Schoettelkotte should not have relied on a 

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others, in reaching his opinion. EcoFactor also argues that

 was “post hoc” despite that the assessment was dated 20 days prior to 

the execution of the Trane Agreement. See Mot. at 6; Porto Dec., Ex. 1. Finally, EcoFactor 

quibbles with Mr. Schoettelkotte’s reliance on a Trane presentation that noted Trane had 

assumed a patent license arguing that Mr. Schoettelkotte 

lacked sufficient information about the document. See Mot. at 7-8. But Mr. Schoettelkotte 

refers to the only in rebuttal to the opinion of EcoFactor’s damages expert, noting the 

discrepancy between Trane’s assumed rate of and the per-unit royalty rate proposed by 

EcoFactor’s expert. See Porto Decl., Ex. 4 ¶ 85. And again, EcoFactor’s complaint that it did 

not approve of this presentation goes to “the weight of the evidence, not its admissibility” and 

thus has no bearing on the reliability of Mr. Schoettelkotte’s opinion. Summit 6, LLC v. Samsung 

Elecs. Co., 802 F.3d 1283, 1296 (Fed. Cir. 2015). Because Mr. Schoettelkotte’s “methodology is 

reasonable” and his “evidence [is] sufficiently tied to the facts of the case,” any remaining 

“inquiry on the correctness of the methodology and of the results produced thereunder belongs to 

the factfinder.” Id. at 1296. 

B. The Trane documents upon which Mr. Schoettelkotte relies were produced 

in this case and there is no basis for excluding them under Rule 37.

1. Google subpoenaed and deposed Trane in the District Court and ITC 

matters, and EcoFactor obtained the Trane documents in discovery. 

EcoFactor filed actions against Google in the International Trade Commission (“ITC”) 

and in the Western District of Texas claiming that Google’s Nest products infringed EcoFactor’s 

patents. The first case, Investigation No. 337-TA-1185 (“ITC -1185”) was filed in October 

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2019.6 While that investigation was pending, in January 2020, EcoFactor filed a complaint 

against Google (and several other defendants) in the Western District of Texas (the “District 

Court” case). Finally, in February 2021, EcoFactor filed a second ITC case, Investigation No. 

337-TA-1258 (“ITC -1258”), which is scheduled for a hearing on December 13, 2021. 

The three cases substantially overlap in subject matter. For example, two of the patents 

asserted against Google in the District Court case claim priority to the same provisional 

application as several of the patents asserted in ITC -1258. Given the overlap in the cases, the 

parties agreed to consolidate and streamline discovery in many instances, including with respect 

to Trane. The parties agreed, for example, that “[a] party’s documents . . . produced . . . in [ITC -

1185] can be used in” the District Court case. Stipulated Discovery Order, ECF No. 70. The 

parties further agreed that EcoFactor documents produced in ITC -1258 would be “deemed 

produced in Western District of Texas.” Porto Decl., Ex. 6. Furthermore, source code review 

was coordinated in the ITC and District Court matters, 30(b)(6) designations were made for both 

cases together, and fourteen depositions were conducted for purposes of both the ITC and 

District Court matters. See id., Ex. 7; id., Ex. 8. 

On July 23, 2021, Google (along with its codefendants ecobee and Vivint) served a thirdparty subpoena on Trane in the District Court action. Id., Ex. 9.7

 The letter accompanying the 

subpoena made clear that it pertained to all three cases EcoFactor had filed in the Western 

District of Texas and enclosed the District Court protective order. Id., Ex. 9. Trane produced 

documents in response to the subpoenas on September 20, 2021, including those discussed 

6 ITC -1185 was terminated in July 2021 after a finding of no violation of Section 337. 

7 Trane was also served with a subpoena in the ITC -1258 investigation on August 4, 2021. See 

Id., Ex. 10. 

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District Court cases over the past year—including the fourteen depositions that were conducted 

for multiple matters, and the agreements in both cases specifying that the parties’ documents 

produced in the ITC would be “deemed produced” in the District Court cases. Porto Decl. Ex. 6; 

See ECF 70. Perhaps most tellingly, EcoFactor never argues that it didn’t actually possess the 

Trane documents since it indisputably did. EcoFactor’s post hoc attempt to manufacture a 

document production issue should be rejected. 

Second, EcoFactor can articulate no prejudice because Mr. Kennedy made clear that he 

chose not address the Trane Agreement or related documents in his report because he considered 

them irrelevant. Mr. Kennedy testified that he did not consider ” of the Trane 

Agreement because it was part of a Porto Decl., Ex. 13 at 184:13-18. 

Furthermore, Mr. Kennedy testified that 

. Id. at 

184:22-185:19. Thus, even accepting EcoFactor’s premise that the Trane documents were not

produced in the District Court case, it has identified no prejudice, because its damages expert 

testified that he would not have addressed the Trane Agreement under any circumstance. See 

Wapp Tech Ltd. P’ship v. Seattle SpinCo, Inc., 2021 WL 414812, at *3 (E.D. Tex. Feb. 5, 2021) 

(refusing to exclude “untimely” documents where “[p]laintiffs do not specify how they will be 

prejudiced by these new documents”). 

The lack of prejudice to EcoFactor is confirmed by the fact that EcoFactor already used 

the documents to question Mr. Schoettelkotte during his deposition. See e.g., Porto Decl., Ex. 16 

at 65:7-22. What’s more, EcoFactor chose not to seek an extension for its service of Mr. 

Kennedy’s report despite knowing about the outstanding Trane deposition, and following the 

deposition, chose not to request that Mr. Kennedy be permitted to address the Trane discovery. 

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conversations with Google’s finance personnel, Google’s Form 10-Q, the smart thermostat 

market, and deposition testimony. See id. at ¶¶ 159-170. In rebutting the opinion of EcoFactor’s 

expert, David Kennedy, Mr. Schoettelkotte noted that Mr. Kennedy had failed to consider this 

information. Id. ¶ 106. 

2. EcoFactor’s valuations are relevant to the value of EcoFactor’s 

patents. 

 EcoFactor argues that a “valuation of a company as a whole is not an acceptable method 

of valuing that compan[y’s] patents.” Mot. at 8. There is no support for EcoFactor’s position. 

EcoFactor cites Mformation Techs., Inc. v. Rsch. in Motion Ltd., 2012 WL 2339762 (N.D. Cal. 

June 7, 2012), where the court granted a patentee’s motion in limine to exclude certain valuations 

from evidence. The court, however, explicitly permitted the expert to rely on valuations 

generally. Id. at *4. Indeed, the court noted that it did not “find any reason to limit the 

testimony of [the damages expert] due to the fact that she relied in part on these reports,” noting 

that the valuations were “among the factors” considered in arriving at her ultimate damages 

opinion. Id. Mformation thus does not stand for EcoFactor’s extreme position that a valuation is 

“not an acceptable method of valuing [a] company’s patents,” which warrants exclusion under 

Daubert. Mot. at 8. To the extent Mformation is relevant to Daubert, it suggests that reliance on 

valuations does not merit excluding an expert’s opinions, particularly where the expert relies on 

the valuations as a single data point among many others, as Mr. Schoettelkotte does here. See 

Porto Decl., Ex. 4 ¶¶ 159-170 (considering along with valuations, sales data, conversations with 

finance personnel, financial reporting documents, market share data, and deposition transcripts). 

 A damages expert may rely upon corporate valuations to inform the hypothetical 

negotiation. In Egenera, Inc. v. Cisco Sys., Inc., -- F. Supp. 3d --, 2021 WL 2582406, at *13 (D. 

Mass. June 23, 2021), Cisco’s damages expert used a valuation of Egenera “at the time the 

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alleged infringement began as the base for his royalty computation,” excluding portions of the 

valuation “not attributable” to the patent in the hypothetical negotiation. The Egenera court 

rejected the very argument that EcoFactor makes here, that somehow the value of the patents 

might be greater than the overall value of the company, and hence valuations should not be used 

“to cap the value of [the] patents.” Mot. at 9. As the court explained, when a company makes 

and sells “products embodying the patent, the patent’s value . . . [is] subsumed in the valuation of 

[the] company.” 2021 WL 2582406, at *14. A damages expert thus may “treat[] [the patentee’s] 

valuation as the amount of money that someone purchasing the [company], including [the 

asserted patent], would have paid at the time of the infringement.” Id. Thus, to the extent that 

EcoFactor quibbles with Mr. Schoettelkotte’s reliance on these valuations, “[i]t is for the jury, 

with the benefit of rigorous cross-examination” to assess. Id.

EcoFactor’s suggestion that its valuations are otherwise unreliable is also unpersuasive. 

EcoFactor’s management relied upon these valuations for its tax filings with the IRS. See 

Blattman, 2020 WL 475413, at *6 (“a 409A valuation is an appraisal . . . conducted to determine 

for tax purposes” pursuant to the Internal Revenue Code). And EcoFactor cannot support its 

suggestion that the third-party valuators were somehow unaware of EcoFactor’s intellectual 

property—in fact, the 2020 valuation specifically stated that EcoFactor was “currently pursuing 

infringement of its patents.” Mirzaie Decl., Ex. D at 6. The valuator thus accounted for the fact 

that EcoFactor’s business had shifted to patent assertion when assessing EcoFactor’s value. 

D. There is no basis for excluding Mr. Schoettelkotte’s reliance on Google’s 

usage data under Rule 702 or Rule 37. 

1. Mr. Schoettelkotte relied on data related to Nest thermostats’ Internet 

connectivity to rebut EcoFactor’s damages opinion.

In rebutting Mr. Kennedy’s damages opinion, Mr. Schoettelkotte noted that Mr. Kennedy 

failed to consider that not all of the accused products practice the accused features. Porto Decl., 

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Ex. 4 ¶ 71. Mr. Schoettelkotte cited several pieces of evidence illustrating Mr. Kennedy’s 

oversight, including, for example, a survey and deposition testimony showing that only a small 

percentage of Nest users participate in the programs through which Nest offers the accused 

features. Id. (citing NPS Survey, Desai deposition testimony). As additional support, Mr. 

Schoettelkotte cited a Google spreadsheet produced in connection with his report showing that 

 Id. (citing GOOG-ECOFWDTX-000001560, the “Wi-Fi spreadsheet”). Based on this evidence, Mr. Schoettelkotte 

concluded that Mr. Kennedy had overstated the royalty base. Mr. Schoettelkotte made no 

calculations to adjust Mr. Kennedy’s proposed royalty base as a result of the Wi-Fi spreadsheet 

or other evidence. Beyond relying on the Wi-Fi spreadsheet to rebut Mr. Kennedy’s opinion, 

Mr. Schoettelkotte did not otherwise rely upon or cite the document. 

2. Mr. Schoettelkotte’s reliance on the Wi-Fi spreadsheet was reliable, 

and EcoFactor has identified no prejudice based on its lack of earlier 

access to the spreadsheet. 

EcoFactor asserts that the portions of Mr. Schoettelkotte’s report referring to the Wi-Fi 

Spreadsheet should be excluded both because the spreadsheet is unreliable, and because it was 

not produced earlier in discovery. Neither argument has merit.

First, EcoFactor argues that the Wi-Fi spreadsheet itself is unreliable, arguing that Mr. 

Schoettelkotte “assumes, without evidence, that these figures [in the Wi-Fi spreadsheet] are 

representative for accused products sold through other online sales channels.” Mot. at 14. But 

Mr. Schoettelkotte never states in his report or deposition testimony that the spreadsheet was 

representative of other online sales channels, nor does EcoFactor provide a citation to support its 

contention. See Mot. at 14 (asserting without citation that Mr. Schoettelkotte assumes figures in 

the Wi-Fi spreadsheet are representative). By contrast, Mr. Schoettelkotte relies upon the Wi-Fi 

spreadsheet for the uncontroversial proposition that not all Nest thermostats are connected to the 

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Internet. See Porto Decl., Ex. 4 ¶ 71. Mr. Schoettelkotte then uses the Wi-Fi spreadsheet as one 

of several datapoints to show that Mr. Kennedy overstated the royalty base, without providing 

any specific adjustment based on that spreadsheet (or other data). EcoFactor thus has no support 

for its argument that Mr. Schoettelkotte somehow inappropriately extrapolated from the Wi-Fi 

Spreadsheet to EcoFactor’s detriment. 

EcoFactor’s attempts to use Mr. Schoettelkotte’s deposition testimony to argue that the 

Wi-Fi spreadsheet is unreliable fare no better. Mr. Schoettelkotte testified that the Wi-Fi 

spreadsheet identifies the number of users that were activated on a 

 based on his conversations with Google personnel Manu Sharma. Porto Decl., Ex. 16 at 

34:2-14. When EcoFactor’s counsel questioned whether “

” Mr. Schoettelkotte responded that the 

question would be better answered by someone at Google. Id. at 34:23-35:1. But Mr. 

Schoettelkotte’s knowledge of information outside of the document upon which he relies has no 

bearing on whether the spreadsheet itself is reliable. 

Second, EcoFactor’s argument that it was prejudiced by Google’s production of the 

spreadsheet with Google’s rebuttal expert report lacks merit. Mr. Schoettelkotte’s opinion based 

upon the spreadsheet was provided in rebuttal to an issue first raised in Mr. Kennedy’s opinion. 

Whether or how Mr. Kennedy would have addressed the Wi-Fi spreadsheet in his opening 

damages report was not up to Google. In any event, the Wi-Fi spreadsheet was but one of 

multiple examples of the way in which Mr. Kennedy’s royalty base had been overstated. See 

Wapp Tech Ltd. P’ship, 2021 WL 414812, at *3 (plaintiffs suffered “little prejudice” where 

untimely documents were “cumulative” or “fill[ed] a gap in the record in a predictable 

manner.”). And despite its argument that it would have sought to depose Mr. Sharma, EcoFactor 

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Respectfully submitted, 

KEKER, VAN NEST & PETERS LLP

Dated: December 3, 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 WASHINGTON

633 Battery Street

San Francisco, CA 94111-1809 

Telephone: 415 391 5400 

Facsimile: 415 397 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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{A07/07713/0107/W1714005.1 }

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 December 3, 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 December 3, 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 

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