IN THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF TEXAS 

WACO DIVISION 

WSOU INVESTMENTS, LLC D/B/A 

BRAZOS LICENSING AND 

DEVELOPMENT, 

 Plaintiff, 

v. 

MICROSOFT CORPORATION 

Defendant. 

Civil Action No. 6:20-cv-454 

Civil Action No. 6:20-cv-461 

Civil Action No. 6:20-cv-465 

PUBLIC VERSION

MICROSOFT CORPORATION’S RESPONSE IN OPPOSITION TO PLAINTIFF 

BRAZOS LICENSING AND DEVELOPMENT’S MOTION TO EXCLUDE 

TESTIMONY OF JEFFERY A. STEC 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 1 of 23
i 

TABLE OF CONTENTS 

Page 

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

II. BACKGROUND .................................................................................................................... 1

A. Discovery Related to WSOU’s Negotiations for the ’160 and ’702 Patents ...................... 2

B. Dr. Stec’s Expert Report ..................................................................................................... 3

1. The ................................................................................................. 3

2. The .................................................................................................... 5

III. LEGAL STANDARD ......................................................................................................... 7

IV. ARGUMENT ...................................................................................................................... 8

A. Dr. Stec’s Analysis of the is Admissible. .......................................... 9

B. Dr. Stec’s Analysis of the is Admissible. ........................................... 13

V. CONCLUSION ..................................................................................................................... 16

 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 2 of 23
ii 

TABLE OF AUTHORITIES 

 Page(s) 

Cases 

Apple Inc. v. Wi-LAN, Inc., 

25 F.4th 960 (Fed. Cir. 2022) ............................................................................................10, 11 

Biscotti Inc. v. Microsoft Corp., 

No. 2:13-cv-01015-JRG-RSP, 2017 WL 2607882 (E.D. Tex. May 25, 2017) .......................16 

Daubert v. Merrell Dow Pharms., Inc., 

509 U.S. 579 (1993) ...................................................................................................................7 

Ericsson, Inc. v. D-Link Sys., Inc., 

773 F.3d 1201 ......................................................................................................................7, 11 

Finjan, Inc. v. Secure Computing Corp., 

626 F.3d 1197 (Fed. Cir. 2010)................................................................................................13 

Guy v. Crown Equip. Corp., 

394 F.3d 320 (5th Cir. 2004) .....................................................................................................7 

i4i Ltd. P’ship, Infrastructure for Information Inc. v. Microsoft Corp., 

598 F.3d 831 (Fed. Cir. 2010)..................................................................................................13 

Intell. Ventures II LLC v. Sprint Spectrum, L.P., 

No. 2:17-CV-0661-JRG-RSP, 2019 WL 1877309 (E.D. Tex. Apr. 26, 2019) ........................10 

Intuitive Surgical, Inc. v. Auris Health, Inc., 

No. 18-cv-1359, 2021 WL 3662842 (D. Del. Aug. 18, 2021) ...........................................14, 15 

LaserDynamics, Inc. v. Quanta Computer, Inc., 

694 F.3d 51 (Fed. Cir. 2012)................................................................................................8, 13 

Nikolova v. Univ. of Texas at Austin, 

No. 1-19-CV-877-RP, 2022 WL 443783 (W.D. Tex. Feb. 14, 2022) .......................................7 

Open Text S.A. v. Box, Inc., 

No. 13-cv-4910, 2015 WL 393858 (N.D. Cal. Jan. 29, 2015) .................................................15 

Sprint Commc’ns Co. L.P. v. Comcast IP Holdings, LLC, 

C.V. No. 12-1013-RGA, 2015 WL 456154 (Jan. 30, 2015) ..............................................12, 13 

Virnetx, Inc. v. Cisco Sys., Inc., 

767 F.3d 1308 (Fed. Cir. 2014)................................................................................................11 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 3 of 23
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Wordtech Sys., Inc. v. Integrated Networks Sols., Inc., 

609 F.3d 1308 (Fed. Cir. 2010)................................................................................................14 

Zak v. Facebook, Inc., 

4:15-CV-13437-TGB-MJH, 2021 WL 4481588 (E.D. Mich. Sept. 30, 2021) ........................10 

Rules 

Federal Rule of Evidence 702 ..........................................................................................................7 

 

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I. INTRODUCTION 

The Court should deny WSOU’s motion to exclude testimony of Microsoft’s damages 

expert, Jeffery A. Stec; there is no basis to exclude his testimony. Dr. Stec’s analysis of licenses 

that include the patents-in-suit is reliable and will be helpful to the trier of fact in making the 

damages determination in this case. 

In seeking to exclude Dr. Stec’s testimony, WSOU mischaracterizes his opinions and 

seeks to impose an unspecified, legally unsupported standard for establishing the comparability 

of licenses in a damages analysis.1 Additionally, WSOU improperly faults Dr. Stec for 

purportedly failing to consider certain information related to WSOU’s licensing negotiations, 

after arguing during discovery that the content of negotiations is irrelevant in this case, and the 

only relevant information from WSOU’s license agreements can be found on the face of the 

agreements themselves. In any event, WSOU’s challenges to Dr. Stec’s report go to the weight 

of his opinions—not their admissibility. 

II. BACKGROUND 

In these related cases, WSOU alleges that Microsoft infringes three patents (collectively, 

the “asserted patents” or “patents-in-suit”): U.S. Patent Nos. 7,366,160 (“the ’160 patent”), 

8,274,902 (“the ’902 patent”), and 7,106,702 (“the ’702 patent”). Specifically, WSOU alleges 

that “Microsoft infringes the ’160 and ’902 Patents . . . by making, using, selling, offering for 

sale, importing and/or distributing Microsoft’s Azure Monitor and other network monitoring 

solutions (e.g., Network Watcher, Network Performance Monitor (‘NPM’)) . . . which primarily 

1

 WSOU refers to Dr. Stec as Mr. Stec throughout its motion. Dr. Stec received a Ph.D. in 

Economics from the Ohio State University. Dr. Stec’s credentials are summarized in his expert 

report. See Stec Rept. at 3 & Exs. 1, 2. Dr. Stec is well qualified to provide expert testimony 

that will be of service to the factfinder in this matter.

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 6 of 23
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service customers of Microsoft’s Azure platform.” Dkt. 134 at 2.2 WSOU accuses Microsoft’s 

Network Policy Server (“NPS”), a feature of Windows Server that “performs centralized 

network access authentication, authorization, and accounting [(“AAA”)],]” of infringing the ’702 

patent. Id. Specifically, NPS is Microsoft’ implementation of a RADIUS server. The RADIUS 

protocol is a common AAA protocol, and a RADIUS server (which would run according to the 

AAA protocol) is an example of a AAA server. 

A. Discovery Related to WSOU’s Negotiations for the ’160 and ’702 Patents

In July 2017, third-party Wade and Company (“Wade”) entered into a Patent Purchase 

Agreement (“PPA”) with Alcatel Lucent, Nokia Solutions and Networks BV, and Nokia 

Technologies Oy (collectively, “Nokia”). Documents appended to the PPA contained specific 

assignments by Nokia to Wade, including the ’160 Patent and the ’702 Patent. (PPA, WSOUMICAL-0000246-247, -253 (identifying the ’160 Patent), -359 (identifying the ’702 Patent).) 

On August 21, 2017, Wade assigned to WSOU Wade’s interest in the PPA (the “PPA 

Assignment”). This assigned WSOU rights in the PPA—specifically, “Wade and Company 

hereby assigns to WSOU Investments LLC and WSOU Investments LLC hereby accepts the 

whole of the interest of Wade and Company in the Patent Purchase Agreement.” (PPA 

Assignment, WSOU-MICAL-0000932). 

The PPA and amendments thereto 

2

 Unless otherwise noted, citations herein are to the docket in Case No. 6:20-cv-00454. 

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certain rights under the agreement, the duration of the license, 

and the 

 (See id. at 39-40.) 

Dr. Stec also evaluated the “for technical comparability and 

economic comparability.” (Id. at 43). He determined that because the 

, “the technology licensed by 

Microsoft at the hypothetical negotiation would be identical to, although a subset of, the 

technology licensed by (Id.) As part of the technical 

comparison between the and the hypothetical license, Dr. Stec’s analyzed 

 and compared this product to the accused Azure 

Monitor. (Id. at 45.) 

In analyzing the economic comparability of the , Dr. Stec evaluated 

the timing of the agreement and “whether any material market developments would have 

occurred” between the date of the hypothetical negotiation and the date of the 

. (Id. at 44.) Dr. Stec’s evaluation included consideration changes in the relevant 

market shares of and Microsoft and a comparison of competing monitoring 

service with Microsoft’s accused Azure Monitor. (Id. at 44-45.) Based on his analysis, Dr. Stec 

opined that “it is reasonable to conclude that has similarities in both the types of 

products and competitive landscape as Microsoft. As a result, both from a technical and 

economic standpoint, the license agreement serves as a reasonable 

benchmark for the hypothetical license agreement that would result from the hypothetical 

negotiation between WSOU and Microsoft.” (Id. at 45.) 

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Beyond this baseline analysis of technological and economic comparability, Dr. Stec 

went on to “provide further economic analyses in the context of the other Georgia Pacific factors 

to determine whether differences exist between the and the 

hypothetical license agreement between WSOU and Microsoft.” (Id. at 45-46; see also, e.g., id.

at 50-51 (describing differences in periods of licensed use of the ’160 and ’902 patents between 

 and license Microsoft would obtain from the hypothetical negotiation), 56-

57 (describing difference in scope of intellectual property licensed under 

and license Microsoft would obtain from the hypothetical negotiation).) Based in part on this 

comparability analysis, Dr. Stec reached his opinion that “the outcome of the February 2017 

hypothetical negotiation would be a

 (Id. at 62.) 

2.

Dr. Stec’s report states that 

 (Stec Rept., Appendix B at 

28.) Dr. Stec addresses the in a similar fashion as the , 

describing the products and services that were licensed under the , certain 

rights under the agreement, the duration of the license, and 

 (Id. at 35.) 

In determining that the is comparable to a hypothetical license to the ’702 

patent, Dr. Stec relied in part on the technical opinions of Microsoft’s technical expert, Alan 

DeKok, (see, e.g., id. at 40-41), who opined that among licensees to the ’702 patent, 

(Id. at 40 (citing 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 10 of 23
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DeKok Rebuttal Rept., ¶ 96).) Based on the expert opinions of Mr. DeKok,5 Dr. Stec’s technical 

comparability analysis includes discussion of the specific use and applications of the ‘702 Patent 

by and Microsoft based on the authentication, authorization, and accounting (“AAA”) 

functionality they provide. (See id. at 40-41, 50, 53, 55, 58, 88-89.) For example, in addition to 

his reliance on Mr. DeKok’s analysis and opinions, Dr. Stec considered publicly 

available information which affirms its use of the RADIUS servers. (Id. at 40-41.) 

As he did for the , Dr. Stec undertook an analysis of economic 

comparability for the . In doing so, Dr. Stec “attempted to identify the portion 

of business that is most closely aligned with the use of RADIUS server and associated 

AAA offerings.” (Id. at 41.) Dr. Stec also “evaluated relevant considerations for comparing 

 and Microsoft, acting as 

licensee, at the time of the hypothetical negotiation with Alcatel-Lucent.” (Id. at 42.) This 

entailed consideration of revenues and net income, as well as the strength of its 

patent portfolio. (See id.) Dr. Stec’s economic comparability analysis also included 

consideration of differences between the negotiations for the and the 

hypothetical negotiation, such as 

 (Id. at 43 (citing Blok Rept.), 

Appendix B, ¶ 78). 

5

 Mr. DeKok personally developed the FreeRADIUS technology (DeKok Rebuttal Rept., ¶ 106). 

Mr. DeKok has also provided invalidity and non-infringement reports addressing the ’702 Patent. 

Mr. DeKok is thus, well positioned to comment on how an entity such as would used the 

RADIUS servers, AAA, as well as its potential use of the claimed inventions in the ’702 Patent. 

Dr. Stec’s reliance on Mr. DeKok’s expert opinions of technical comparability is appropriate. 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 11 of 23
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Based on his analysis, Dr. Stec concluded that “ offers a technically and 

economically comparable benchmark against which the outcome of the hypothetical negotiation 

can be evaluated.” (Id. at 44.) 

III. LEGAL STANDARD 

WSOU does not challenge Dr. Stec’s qualifications or the relevance of his opinions. 

WSOU only challenges Dr. Stec’s opinions as purportedly unreliable. 

Under Federal Rule of Evidence 702, a qualified expert “may testify ... in the form of an 

opinion . . . if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the 

product of reliable principles and methods, and (3) the witness has applied the principles and 

methods reliably to the facts of the case.” Guy v. Crown Equip. Corp., 394 F.3d 320, 325 (5th 

Cir. 2004) (quoting FED. R. EVID. 702). Because the Rule 702 inquiry “focuses on the 

underlying theory on which the opinion is based, the proponent of expert testimony need not 

prove that the expert's testimony is correct, but rather that the testimony is reliable. Nikolova v. 

Univ. of Texas at Austin, No. 1-19-CV-877-RP, 2022 WL 443783, at *2 (W.D. Tex. Feb. 14, 

2022) (citing Moore v. Ashland Chem. Inc., 151 F.3d 269, 276 (5th Cir. 1998)). “[T]he rejection 

of expert testimony is the exception rather than the rule.” FED. R. EVID. 702 advisory committee 

notes (2000 amendments). “Vigorous cross-examination, presentation of contrary evidence, and 

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

shaky but admissible evidence.” Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 596 

(1993). 

The Federal Circuit “has recognized that licenses may be presented to the jury to help the 

jury decide an appropriate royalty award.” Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201, 

1227 (Fed. Cir. 2014 (citations omitted). “Prior licenses, however, are almost never perfectly 

analogous to the infringement action.” Id. (citing Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 12 of 23
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1330 (Fed. Cir. 2014). “Recognizing that constraint, however, the fact that a license is not 

perfectly analogous generally goes to the weight of the evidence, not its admissibility.” Id.

(citations omitted); see also Virnetx, 767 F.3d at 1330 (“we have never required identity of 

circumstances; on the contrary, we have long acknowledged that any reasonable royalty analysis 

necessarily involves an element of approximation and uncertainty.”) (internal quotation marks 

and citations omitted)). 

In LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51 (Fed. Cir. 2012), the 

Federal Court noted that “[a]ctual licenses to the patented technology are highly probative as to 

what constitutes a reasonable royalty for those patent rights because such actual licenses most 

clearly reflect the economic value of the patented technology in the marketplace.” Id. at 79 

(emphasis added). 

IV. ARGUMENT 

WSOU argues that Dr. Stec’s analysis is unreliable because he allegedly “offers no 

analysis about the license amount he took from unrelated agreements” and “fails to account for 

the numerous economic differences in the hypothetical license and the 

” Dkt. 134 at 7. These assertions are belied by even a cursory review of Dr. Stec’s 

report, as set forth above. Without setting forth any applicable standard for what an expert must 

do to demonstrate that a license is sufficiently comparable, WSOU asserts in conclusory fashion 

that the are not comparable. See id. 

Tellingly, WSOU argues that it is “important[]” that 

 licensed under the agreements that Dr. Stec contends are 

comparable. See id. at 3, 4. In reality, this is entirely unremarkable. As the Court is undoubtedly 

aware, it is extremely uncommon for arm’s length license agreements to allocate the royalty 

payment on a per patent basis. In his report, Dr. Stec attributes the lump sum payments taken 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 13 of 23
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from comparable licenses to only the patents-in-suit. If any of the other patents in the 

agreements have value, this is a conservative approach. If none of the other patents in the 

agreement have value, this is correctly attributing the value to the patents-in-suit. WSOU 

appears to suggest a new standard for license comparability, requiring the royalty to be 

apportioned on a per-patent basis within the license agreement itself. Under WSOU’s proposed 

standard it would be all but impossible for arm’s length license agreements to be relied upon as 

evidence of an appropriate royalty unless the arm’s length agreement set forth the payment 

amount allocable to each licensed patent on a per patent basis. As the Court is no doubt aware, 

parties to arm’s length patent license agreements would have no incentive to burden themselves 

with such an undertaking. There is no support in the law for WSOU’s proposed standard, and 

indeed WSOU offers none. 

Ultimately, the probative value of the licenses on which Dr. Stec relies is a matter for the 

jury to decide, and, as discussed below, WSOU’s own cited case law confirms that its criticisms 

of Dr. Stec’s opinions on the go to the weight of his testimony, 

not admissibility. 

A. Dr. Stec’s Analysis of the is Admissible.

As described above, Dr. Stec’s report acknowledged 

while including an analysis of its technological and economic comparability. Thus, 

WSOU’s first argument, that “Mr. Stec did not opine as to how the is 

technologically comparable to the hypothetical negotiation between Nokia and Microsoft[,]” is 

plainly false. Dkt. 134 at 7. Dr. Stec specifically opined that “the technology licensed by 

Microsoft at the hypothetical negotiation would be identical to, although a subset of, the 

technology licensed by ” because the 

 (Stec Rept., Appendix A at 43.) Dr. Stec also undertook an extensive analysis as 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 14 of 23
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to the economic comparability of the , considering the timing of the 

agreement, material market developments between its execution and the time of the hypothetical 

negotiation, and the competitive relationship between and Microsoft in the cloud 

computing sector. (Id. at 44-46.) Moreover, WSOU’s damages experts’ report acknowledges 

that 

 followed by Microsoft Azure. (See Blok Rept., 

Appendix A, ¶ 30. 

That the 

, which is the sole focus of the hypothetical license between Nokia and 

Microsoft” is not a basis for exclusion of Dr. Stec’s opinions. Dkt. 134 at 7-8. Indeed, courts 

routinely reject WSOU’s exact argument. See, e.g., Intell. Ventures II LLC v. Sprint Spectrum, 

L.P., No. 2:17-CV-0661-JRG-RSP, 2019 WL 1877309, at *6 (E.D. Tex. Apr. 26, 2019) 

(rejecting argument that testimony on comparable transaction should be excluded because that 

transaction involved “a license for thousands of patents, the vast majority of which [the expert 

witness] does not assign value,” and explaining that “such arguments should be reserved for 

cross-examination at trial.”); Zak v. Facebook, Inc. ̧ 4:15-CV-13437-TGB-MJH, 2021 WL 

4481588, at *3 (E.D. Mich. Sept. 30, 2021) (denying motion to exclude expert testimony and 

rejecting movant’s argument that expert “inappropriately compared the several patent families 

acquired in the . . . transaction to the single patent at issue here”) ”) (internal quotation marks and 

citations omitted). WSOU’s appeal to Apple Inc. v. Wi-LAN, Inc., 25 F.4th 960 (Fed. Cir. 2022) 

on this point is unavailing. See Dkt. 134 at 11. In Apple, the Federal Circuit held that a 

plaintiff’s expert’s damages methodology was flawed where the expert opined that an asserted 

patent, which was “easily lost in a schedule listing hundreds of Non-Asserted patents[,]” was a 

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The same is true of WSOU’s assertions of differing economic circumstances between the 

parties to the hypothetical negotiation and the parties to the . See Dkt. 134 at 

9-10. WSOU concedes that Dr. Stec’s report “provides examples of how the 

differs from the hypothetical agreement,” but argues that Dr. Stec “does not explain 

how his methodology accounts for these differences.” Dkt. 134 at 9 (citing Virnetx, 767 F.3d at 

1330). WSOU is incorrect. Dr. Stec’s report discusses the relevant differences between the 

 and the hypothetical license throughout his analysis of the Georgia Pacific 

factors, and Dr. Stec adjusted his opinion as to the appropriate payment amount accordingly. 

(See, e.g., Stec Rept., Appendix A at 57 (explaining how “the differences in cloud computing 

market share between and Azure and the differences in scope of the 

 and the license that Microsoft would receive from the hypothetical negotiation 

would support a downward adjustment of the baseline payment”); see also id. at 61 (“There are, 

however, some differences that need to be accounted for in determining the royalty payment 

amount. As noted earlier, the period of Microsoft’s licensed use would be shorter than 

licensed use. Accounting for this and other considerations discussed below and 

throughout my report, would result in 

”).7

WSOU’s cited case law supports Microsoft’s position. In Sprint Commc’ns Co. L.P. v. 

Comcast IP Holdings, LLC, C.V. No. 12-1013-RGA, 2015 WL 456154 (Jan. 30, 2015), in 

excluding four licenses as not sufficiently comparable to the hypothetical licenses, the court 

7

 WSOU asserts that it “faced unique business risks that Nokia would not have faced in the 

hypothetical negotiation[,]” Dkt. 134 at 11, but certain of the risks it identifies are present in 

most, if not all, non-settlement licenses. See id. at 11-12 (listing “uncertainty of patent validity 

and infringement” and “disparate bargaining positions.” 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 17 of 23
13 

expressly relied on the fact that “all of the agreements license a number of patents, all of which 

are not in suit.”) (emphasis added). Sprint, 2015 WL 456154, at *2. Here, the 

. Similarly, in LaserDynamics, 

Inc. v. Quanta Computer, Inc., 694 F.3d 51 (Fed. Cir. 2012), the Federal Circuit held that 

comparability between certain licensing programs and the hypothetical license was absent where 

the licensing programs “did not involve” the asserted patent. Id. at 80. Moreover, the Federal 

Circuit held licenses to the patents-in-suit were “highly probative of the patented invention's 

economic value in the marketplace, and of the form that a hypothetical license agreement would 

likely have taken.” Id. Thus, LaserDynamics supports Dr. Stec’s opinion that the 

is a comparable license. 

Finally, WSOU cites Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1211 (Fed. 

Cir. 2010) for the proposition that an expert must account for “differences in the technologies 

and economic circumstances of the contracting parties,” including consideration of whether the 

license at issue arises under comparable circumstances as the hypothetical negotiation. See Dkt. 

134 at 12. In Finjan, the Federal Circuit affirmed the admission of expert testimony on licenses, 

the comparability of which was disputed. See Finjan, 626 F.3d at 1211-12. Specifically, the 

Federal Circuit held that “[d]espite potential flaws in Finjan’s damages theory, ‘[t]he jury was 

entitled to hear the expert testimony and decide for itself what to accept or reject.’” Id. (quoting 

i4i Ltd. P’ship, Infrastructure for Information Inc. v. Microsoft Corp., 598 F.3d 831, 856 (Fed. 

Cir. 2010)). The Court should follow the Federal Circuit’s guidance in Finjan and i4i here.

B. Dr. Stec’s Analysis of the is Admissible. 

WSOU’s arguments for exclusion of Dr. Stec’s opinions regarding the 

are substantially similar to its arguments regarding the , and fail to support 

WSOU’s Motion for the same reasons. Specifically, WSOU asserts that the 

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14 

“arises from very different circumstances than the hypothetical negotiation between AlcatelLucent and Microsoft. Mr. Stec also failed to isolate the comparable technology at issue.” Dkt. 

134 at 12. Again, WSOU mischaracterizes Dr. Stec’s analysis while failing to provide any legal 

justification for usurping the jury’s role of weighing relevant evidence. 

Contrary to WSOU’s assertion, Dr. Stec did isolate the “isolate the comparable 

technology at issue.” WSOU accuses NPS, an implementation of a AAA server, of infringing 

the ’702 patent. Therefore, in addressing the , Dr. Stec’s report discusses 

AAA and its use by at length, relying on the technical expertise of Mr. DeKok. (See Stec 

Rept., Appendix B at 40-41, 50, 53, 55, 58, 88-89.); see also Intuitive Surgical, Inc. v. Auris 

Health, Inc., No. 18-cv-1359, 2021 WL 3662842, at *4-5 (D. Del. Aug. 18, 2021) (denying 

patentee’s motion to exclude where damages expert “established a baseline comparability 

between the [] licensed patents and the patents-in-suit” by having “discussions with [the] 

technical experts” to inform his understanding that the licenses were comparable) (internal 

quotation marks and citations omitted). 

WSOU attacks a strawman in arguing that “it is unrealistic to assume that Brazos and 

Nokia, respectively, would have had the same bargaining positions.” Dkt. 134 at 13 (citing 

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

Dr. Stec does not assume identical bargaining positions, and WSOU has not (and cannot) 

identify any flawed analysis in Dr. Stec’s report based on such as assumption. Wordtech is 

distinguishable, as in that case, the Federal Circuit’s determination that a damages expert’s 

analysis failed to support the verdict was based on the different payment structure between the 

licenses the expert analyzed and the awarded lump-sum damages. See Wordtech, 609 F.3d at 

1320 (finding there was no basis in the evidence for comparison of running royalty agreements 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 19 of 23
15 

to lump-sum damages). No such concern exists here, where Dr. Stec has analyzed lump-sum 

licenses to reach an opinion as to the appropriate lump sum for the hypothetical license. 

WSOU’s criticism that Dr. Stec “fails to make any adjustments to account for the value 

of the ’702 Patent in the ” is misguided, and does not support excluding Dr. 

Stec’s opinions. Dkt. 134 at 14. As noted above, Dr. Stec’s report acknowledges that the ’702 

patent is one of thousands of patents licensed under the . Despite the fact that 

the license received by the hypothetical license at issue in this 

case, Dr. Stec conservatively did not make any downward adjustment to the royalty amount 

based on this consideration, effectively assigning the full value of the to the 

’702 patent. (See Stec Rept., Appendix B at 45.) 

WSOU’s discussion of “different circumstances” between the and the 

hypothetical license, Dkt. 134 at 14-15, also misses the mark. In particular, WSOU’s speculation 

as to the “mindsets” of Alcatel-Lucent and should not be credited. See id. at 15. After 

arguing during discovery that materials related to negotiations are not discoverable, and stating 

that “the license agreement is what’s relevant, not what the dispute was[,]” WSOU cannot now 

argue that Dr. Stec is required to adjust his damages analysis based on the undocumented 

“mindset” of a licensee rather than the explicit terms of comparable licenses. In any event, as 

discussed with regard to the above, any allegedly “different circumstances” 

go to the weight of Dr. Stec’s testimony, not its admissibility. WSOU will have the opportunity 

to present differences between the and the hypothetical license to the jury. 

Cf. Open Text S.A. v. Box, Inc., No. 13-cv-4910, 2015 WL 393858, at *5-6 (N.D. Cal. Jan. 29, 

2015) (rejecting argument that expert’s assessment of comparability “is deficient,” as “[a]ny 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 20 of 23
16 

differences between the licensed patents and the patents-in-suit can easily be pointed out to the 

jury”).8

 

V. CONCLUSION 

For the foregoing reasons, Microsoft requests that the Court deny WSOU’s Motion. 

DATED: April 26, 2022 Respectfully submitted, 

 

/s/ Richard A. Cederoth (by permission) 

Melissa R. Smith, Bar No. 24001351 

melissa@gillamsmithlaw.com 

James “Travis” Underwood, Bar No. 

24102587 

travis@gillamsmithlaw.com

GILLAM & SMITH, LLP 

303 South Washington Avenue 

Marshall, Texas 75670 

Tel: (903) 934-8450 

Fax: (903) 934-9257 

Michael J. Bettinger

mbettinger@sidley.com 

Irene Yang 

irene.yang@sidley.com 

Brooke S. Boll 

brooke.boll@sidley.com 

SIDLEY AUSTIN LLP 

555 California Street, Suite 2000 

San Francisco, CA 94104 

Tel: (415) 772-1200 

Fax: (415) 772-7400 

Richard A. Cederoth 

rcederoth@sidley.com 

8 Biscotti Inc. v. Microsoft Corp., No. 2:13-cv-01015-JRG-RSP, 2017 WL 2607882 (E.D. Tex. 

May 25, 2017), relied upon by WSOU, Dkt. 134 at 15, is not to the contrary. In Biscotti, the 

court expressly acknowledged that the economic differences between the allegedly comparable 

“HDMI licenses” and the hypothetical license were “due to the fact that the HDMI licenses are 

standard essential[.]” Biscotti, 2017 WL 2607882, at *4. Biscotti’s narrow holding does not 

apply here, where standard-essential patents are not at issue. 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 21 of 23
17 

John W. McBride 

jwmcbride@sidley.com 

Richard M. Chen 

rchen@sidley.com 

Kevin Robert Oliver

kevin.oliver@sidley.com 

SIDLEY AUSTIN LLP 

1 South Dearborn St. 

Chicago, IL 60603 

Tel: (312) 853-7000 

Fax: (312) 853-7036 

ATTORNEYS FOR MICROSOFT 

CORPORATION 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 22 of 23
18 

CERTIFICATE OF SERVICE 

I, Kevin Robert Oliver, certify that on April 26, 2022, the documents filed with the Clerk 

of Court via the Court’s CM/ECF system under seal in the above-captioned cases were 

subsequently served on all counsel of record by electronic mail. 

DATED: April 26, 2022 /s/ Kevin Robert Oliver

Kevin Robert Oliver 

kevin.oliver@sidley.com 

SIDLEY AUSTIN LLP 

1 South Dearborn St. 

Chicago, IL 60603 

Tel: (312) 853-7000 

Fax: (312) 853-7036 

ATTORNEY FOR MICROSOFT 

CORPORATION 

Case 6:20-cv-00454-ADA Document 163 Filed 05/03/22 Page 23 of 23