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Case 6:20-cv-00461-ADA Document 136-3 Filed 04/19/22 Page 1 of 11
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IN THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF TEXAS

WACO DIVISION

CloudofChange, LLC, 

 Plaintiff 

-vNCR Corporation, 

 Defendant 

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6:19-CV-00513-ADA 

MEMORANDUM OPINION AND ORDER 

Before the Court is Defendant NCR Corporation (“NCR”)’s Motion to Exclude the opinions 

and testimony of Plaintiff CloudofChange, LLC’s (“CoC”) technical expert Mr. Gregory Crouse 

(“Crouse”). Dkt. 68. The Court heard the parties’ arguments on April 29, 2021 and made oral 

rulings on the Motion during the hearing. Dkt. 127. Consistent with the Court’s oral rulings and 

for the reasons set forth below, Defendant NCR’s Motion is GRANTED-IN-PART and 

DENIED-IN-PART. 

I. BACKGROUND 

This is a patent infringement case involving two patents related to point of sale (“POS”) 

systems. Plaintiff CoC has asserted U.S. Patent Nos. 9,400,640 (“the ’640 patent”) and 

10,083,012 (“the ’012 patent”) (collectively, the “asserted patents”) against Defendant NCR. 

Both asserted patents are entitled “Web-Based Point of Sale Builder” and are directed to a 

system used to build POS terminals for use in a “store or business.” ’640 patent, col. 2, line 57. 

CoC’s technical expert Mr. Crouse has submitted three documents containing his opinions: an 

opening report on infringement, a declaration concerning his apportionment analysis, and a 

rebuttal report on the issue of patent validity. NCR filed its Motion to exclude Crouse’s opinions 

(Dkt. 68), which was subsequently fully briefed (Response, Dkt. 83; Reply 94). 

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II. LEGAL STANDARD 

An expert witness may provide opinion testimony only if “(a) the expert’s scientific, 

technical, or other specialized knowledge will help the trier of fact 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.” Fed. R. Evid. 702. 

Rule 702 requires the district court to act as a gatekeeper to “ensure that any and all 

scientific testimony or evidence admitted is not only relevant, but reliable.” Daubert v. Merrell 

Dow Pharm., Inc., 509 U.S. 579, 592–93 (1993). The “basic gatekeeping obligation” articulated 

in Daubert applies not only to scientific testimony but to all expert testimony. Kumho Tire Co. v. 

Carmichael, 526 U.S. 137, 149 (1999). Accordingly, “a district court may exclude evidence that 

is based upon unreliable principles or methods, legally insufficient facts and data, or where the 

reasoning or methodology is not sufficiently tied to the facts of the case.” Summit 6, LLC v. 

Samsung Elecs. Co., 802 F.3d 1283, 1295 (Fed. Cir. 2015). A district court shall consider 

“whether the theory or technique the expert employs is generally accepted; whether the theory 

has been subjected to peer review and publication; whether the theory can and has been tested; 

whether the known or potential rate of error is acceptable; and whether there are standards 

controlling the technique’s operation.” Knight v. Kirby Inland Marine Inc., 482 F.3d 347, 351 

(5th Cir. 2007) (citing Daubert, 509 U.S. at 593). Further, a district court “must be assured that 

the proffered witness is qualified to testify by virtue of his ‘knowledge, skill, experience, 

training, or education.’” Wilson v. Woods, 163 F.3d 935, 937 (5th Cir. 1999) (quoting FED. R. 

Evid. 702). The ultimate inquiry in a Rule 702 determination is whether the expert’s testimony is 

sufficiently reliable and relevant to be helpful to the finder of fact and thus to warrant admission 

at trial. United States v. Valencia, 600 F.3d 389, 424 (5th Cir. 2010). 

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“[W]hether Daubert’s specific factors are, or are not, reasonable measures of reliability in 

a particular case is a matter that the law grants the trial judge broad latitude to determine.” 

Kumho Tire, 526 U.S. at 147. Thus, “the trial judge must have considerable leeway in deciding 

in a particular case how to go about determining whether particular expert testimony is reliable.” 

Id. at 152. However, in a jury trial setting, the Court’s role under Daubert is not to weigh the 

expert testimony to the point of supplanting the jury’s fact-finding role; instead, the Court’s role 

is limited to that of a gatekeeper, ensuring that the evidence in dispute is at least sufficiently 

reliable and relevant to the issue before the jury that it is appropriate for the jury’s consideration. 

See Pipitone v. Biomatrix, Inc., 288 F.3d 239, 249–50 (5th Cir. 2002) (“‘The trial court’s role as 

gatekeeper [under Daubert] is not intended to serve as a replacement for the adversary system.’ . 

. . Thus, while exercising its role as a gate-keeper, a trial court must take care not to transform a 

Daubert hearing into a trial on the merits.” (quoting Fed. R. Evid. 702 advisory committee 

note)). Rather, “[v]igorous cross-examination, presentation of contrary evidence, and careful 

instruction on the burden of proof are the traditional and appropriate means of attacking shaky 

but admissible evidence.” Daubert, 509 U.S. at 596. 

III. ANALYSIS 

A. Crouse’s Qualification as an Expert 

Witnesses may be qualified as experts if they possess the relevant specialized 

“knowledge, skill, experience, training, or education.” Fed. R. Evid. 702. “The standard for 

qualifying expert witnesses is fairly liberal; the witness need not have specialized expertise in the 

area directly pertinent to the issue in question if the witness has qualifications in the general field 

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related to the subject matter in question.” Wealthmark Advisors Inc. v. Phoenix Life Ins. Co., No. 

SA16CA00485FBESC, 2017 WL 1133506, at *3 (W.D. Tex. Mar. 24, 2017). 

NCR contends that Crouse is not a person of ordinary skill in the art even according to 

his own standard and is therefore not qualified as an expert witness. Dkt. 68 at 3–4. In his 

opening expert report, Crouse opines that a person of ordinary skill in the art would have “at 

least a Bachelor’s of Science in computer engineering, software engineering, computer science, 

or an equivalent degree and/or equivalent practical work experience and two years of work 

experience with point of sale systems.” Dkt. 68, Ex. 3 at 9 (emphasis added). NCR contends that 

Crouse does not meet the education standard because he only has a Bachelor’s degree of 

Business Administration in finance. Dkt. 68 at 4. NCR further contends that Crouse does not 

meet the experience standard because Crouse’s three relevant work experiences with 

BearingPoint, Dell/Perot Systems, and KPMG involved projects for bank clients, and none of the 

projects “involved systems that involved the use of web servers” or “the use of the Internet.” Id. 

at 4–5. However, CoC proffers evidence that during Crouse’s three years at BearPoint from 2004 

to 2007, Crouse worked on two projects involving point of sale solutions for large financial 

institutions and dealt with most of the major point of sale vendors, including “Hypercom, 

Verifone, IBM, and about five others” and their “POS terminals plus software.” Dkt. 83 at 4–5 

and 8. Further, while at Perot Systems (now Dell), Crouse was involved in another point of sale 

system project for a financial institution from 2007 to 2009. Id. NCR contends that Crouse’s 

working experiences are “in the field of banking” and “did not include the manual coding” of the 

point of sale system as described in the asserted patents. Dkt. 68 at 11. However, as courts have 

recognized, a witness “need not have specialized expertise in the area directly pertinent to the 

issue in question if the witness has qualifications in the general field related to the subject matter 

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in question.” Wealthmark, 2017 WL 1133506, at *3; see also Massok v. Keller Indus., Inc., 147 

F. App’x 651, 656 (9th Cir. 2005) (“[A]n expert need not be officially credentialed in the 

specific matter under dispute.”). This same standard also applies to NCR’s own technical expert 

Dr. Chatterjee, whose Ph.D. thesis is not related to point of sale systems specifically (Dkt. 83 at 

7), but he is qualified because of his education in the general field of computer science. Thus, the 

Court finds that Crouse is a person of ordinary skill in the art since he has about five years of 

working experiences involving point of sale systems. Accordingly, the Court finds that Crouse is 

qualified to testify in this case as a technical expert. 

B. Crouse’s Application of the Court’s Claim Construction 

Expert opinions that contradict or disregard a court’s claim constructions should be 

excluded. See, e.g., MarcTec, LLC v. Johnson & Johnson, 664 F.3d 907, 913 (Fed. Cir. 2012) 

(“expert testimony [that] ignored the court’s claim construction ‘is irrelevant to the question of 

infringement’ and is inadmissible under Daubert”). 

The Court previously construed the term “point of sale builder software” to mean 

“software that builds the POS terminals.” Dkt. 44 at 3. NCR contends that Crouse misapplies the 

Court’s claim construction of this term because “he adds the word ‘content’” to the Court’s 

construction. Dkt. 68 at 12. Specifically, NCR argues that the point of sale terminal used in the 

accused NCR Silver product is “static code that is not ‘built or edited,’” but Crouse opines that 

mere data entry in NCR Silver’s “POS content management system” is “building.” Id. In the 

relevant part, Crouse opines that the “POS content [of the accused NCR Silver] can be added or 

managed from both the POS device itself, or from a workstation with access to the back-office 

component.” Dkt. 68, Ex. 3 at 16. The Court does not find anything in Crouse’s opinion that 

contradicts the Court’s claim construction of the term “point of sale builder software.” This is a 

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classical battle between the experts, where the expert from one side opines that adding content 

constitutes “building” of the POS terminal, while the expert from other side opines that it does 

not. Therefore, this is not an inadmissibility issue but an issue for the jury to weigh the 

competing expert opinions. 

C. Crouse’s Apportionment Analysis 

In patent infringement cases, a damages expert may rely on a technical expert’s technical 

analysis regarding which components of the accused products are attributable to the patented 

invention and the economic value of those components. See, e.g., Realtime Data, LLC v. Oracle 

Am., Inc., 2017 U.S. Dist. LEXIS 187717 at *14 (E.D. Tex. Mar. 22, 2017). However, “the 

reasoning and methodology underlying a proffered expert opinion [must be] scientifically valid 

and that the reasoning and methodology [must be] applied properly to the facts in issue.” Allen v. 

Pennsylvania Eng’g Corp., 102 F.3d 194, 196 (5th Cir. 1996) (citing Daubert, 509 U.S. at 592–

93). For every conclusion contained in the expert’s proposed testimony, the Court must 

determine if the methodology leading to that conclusion is sound. Id. 

Crouse’s opening expert report includes an apportionment opinion to assist CoC’s 

damages expert on calculating damages. Dkt. 68, Ex. 3 at 17–20. After concluding that POS 

systems commonly offer six high level components and the first four components are considered 

to be “the core functions of a POS system” (Id. at 17–18), Crouse conducts his whole 

apportionment calculation in one single paragraph: 

Based on my review, it is my opinion that every element of the asserted claims 

of the CloudofChange Patents are contained in the accused NCR Silver 

Essentials system. It is my opinion that approximately 80% of the NCR Silver 

Essentials product embodies the asserted patented components of the 

CloudofChange Patents. My opinion of this approximate 80% apportionment is 

based on my analysis of the value of the patented components based on the 

importance of the patented components to the function of the POS system in the 

manner intended. Accordingly, because the patented components make up 

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approximately 80% of the essential functionality of the POS system, additional 

options such as security and reporting features and other add-on features 

customized for specific uses such as restaurants, fall into categories that are nice 

to have, but that are not essential to a functioning POS system. Accordingly, I 

attribute approximately 20% to all add on components above the essential 

approximately 80% represented by the CloudofChange Patents for a POS 

system. 

Id. at 19–20. 

NCR contends that Crouse’s percentage calculation is conclusory and that NCR has “no 

way to understand or meaningfully rebut that number.” Dkt. 68 at 15. The Court agrees. 

Nowhere in Crouse’s report does Crouse explain how he reached his “80% apportionment” of 

the accused product to the patented features, nor does he provide any factual foundation to 

support this 80% apportionment. In his opening report, Crouse simply offers no explanation on 

how he reaches this 80% apportionment. Therefore, this Court will exclude Crouse’s 

apportionment opinion since his “reasoning or methodology is not sufficiently tied to the facts of 

the case.” See Summit 6, 802 F.3d at 1295. 

Indeed, Crouse’s apportionment calculation is exactly the kind of “plucked out of thin 

air” apportionment that the Federal Circuit and many other district courts have rejected. See, e.g., 

Exmark Mfg. Co. Inc. v. Briggs & Stratton Power Prods. Grp., LLC, 879 F.3d 1332, 1351 (Fed. 

Cir. 2018) (excluding an expert’s damages opinion where the expert “plucked the 5% royalty 

rate out of nowhere” because it “is not enough for an expert to simply assert that a particular 

royalty rate is reasonable in light of evidence without tying the proposed rate to that evidence”); 

LaserDynamics, Inc. v. Quanta Comput., Inc., 694 F.3d 51, 69 (Fed. Cir. 2012) (rejecting 

apportionment that was “plucked out of thin air based on vague qualitative notions of the relative 

importance of the [accused technology]”); NetFuel, Inc. v. Cisco Sys. Inc., Case No. 5:18-cv02352-EJB, 2020 WL 1274985, at *9 (N.D. Cal. Mar. 17, 2020) (excluding apportionment 

analysis where the expert “failed to provide the methodology underlying his apportionment 

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amount or explain how he arrived at that figure based on the facts of this case”); Guardant 

Health, Inc. v. Found. Med., Inc., No. CV 17-1616-LPS-CJB, 2020 WL 2461551, at *18–19 (D. 

Del. May 7, 2020), report and recommendation adopted, No. CV 17-1616-LPS-CJB, 2020 WL 

5994155 (D. Del. Oct. 9, 2020) (excluding a technical expert’s 50% apportionment analysis, 

where the expert failed to tie the relative value of the patented features to the accused products). 

D. Crouse’s Convoyed Sales Analysis 

During the April 29, 2021 hearing, CoC’s counsel represented that its damages expert, 

Ms. Ambreen Salters, does not offer any opinion on convoyed sales and would not rely on any 

convoyed sales analysis by Mr. Crouse. Dkt. 127 at 26–27. Therefore, this issue is moot. 

E. Crouse’s Rebuttal Opinions regarding Secondary Considerations of NonObviousness 

Determining whether an invention is obvious from the prior art can require more than 

merely analyzing the differences between the prior art and the claimed invention. Graham v. 

John Deere Co. of Kansas City, 383 U.S. 1, 17 (1966). Courts may also evaluate “secondary 

considerations” of obviousness, i.e., other objective factors that may show that an invention was 

not obvious from the prior art, even if the differences between the prior art and the claimed 

invention seem slight. Id; see also Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 1052 (Fed. 

Cir. 2016). Such secondary considerations include commercial success enjoyed by devices 

practicing the patented invention, industry praise for the patented invention, copying by others, 

and the existence of a long-felt but unsatisfied need for the invention. Apple, 839 F.3d at 1052. 

However, “a nexus between the copying and the novel aspects of the claimed invention must 

exist for evidence of copying to be given significant weight in an obviousness analysis.” Wm. 

Wrigley Jr. Co. v. Cadbury Adams USA LLC, 683 F.3d 1356, 1364 (Fed. Cir. 2012). 

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In his rebuttal report, regarding secondary considerations, Crouse opines that the asserted 

patents have been “copied by others.” Dkt. 68, Ex. 5 (Crouse Rebuttal Report) at ¶ 215. For this 

proposition, Crouse relies on “letters [sent] to various players in the point-of-sale industry, based 

on CloudofChange’s determination that its patented technology is being used by others.” Id. He 

performed “a superficial review” of those third party products and opines that “others are using 

similar hosted, cloud-based technologies, as NCR’s internal documents show.” Id. at ¶ 216. 

NCR contends that Crouse’s opinions regarding secondary considerations should be excluded 

because “they are admittedly not supported by any opinion that there is a nexus between the 

Asserted Claims and the alleged third party activities.” Dkt. 68 at 17–18. However, Crouse has 

provided at least some evidence of the nexus between the asserted claims and the third party 

products in his rebuttal report, albeit extremely weak. See Dkt. 68, Ex. 5 (Crouse Rebuttal 

Report) at ¶ 216. As such, the Court will not exclude Crouse’s opinion regarding secondary 

considerations because “[i]t is for the fact finder to determine the magnitude of the nexus that 

connects a given piece of evidence to the patents in suit and to give appropriate weight to that 

evidence.” Genband US LLC v. Metaswitch Networks Corp., 2016 U.S. Dist. LEXIS 2651 *5–*6 

(E.D. Tex. Jan. 8, 2016); see also Primrose Operating Co. v. Nat’l Am. Ins. Co., 382 F.3d 546, 

562 (5th Cir. 2004) (The nexus requirement goes primarily to the weight secondary 

considerations should be given.). 

IV. CONCLUSION 

For the foregoing reasons, the Court GRANTES IN-PART and DENIES IN-PART

Defendant NCR’s motion to exclude the opinions and testimony of Mr. Gregory Crouse. 

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Specifically, NCR’s motion is GRANTED with respect to Mr. Crouse’s apportionment analysis, 

is MOOTED as to his convoyed sales analysis, and is DENIED as to the remainder. 

SIGNED this 9th day of November, 2021. 

ALAN D ALBRIGHT 

UNITED STATES DISTRICT JUDGE 

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