FTC’S OPP’N TO MOTION TO EXCLUDE EXPERT 

REPORTS OF RICHARD DONALDSON

Case No. 5:17-cv-00220-LHK-NMC

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Jennifer Milici, D.C. Bar No. 987096 

Joseph R. Baker, D.C. Bar No. 490802 

Elizabeth A. Gillen, Cal. Bar No. 260667 

Geoffrey M. Green, D.C. Bar No. 428392 

Daniel Matheson, D.C. Bar No. 502490 

Federal Trade Commission

600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

(202) 326-3695; (202) 326-3496 (fax)

jmilici@ftc.gov

Attorneys for Plaintiff Federal Trade Commission

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

FEDERAL TRADE COMMISSION,

Plaintiff,

vs. 

QUALCOMM INCORPORATED, a Delaware 

corporation, 

Defendant.

Case No. 5:17-cv-00220-LHK-NMC

PLAINTIFF FEDERAL TRADE

COMMISSION’S OPPOSITION TO 

QUALCOMM’S MOTION TO

EXCLUDE EXPERT REPORTS OF

RICHARD L. DONALDSON 

REDACTED VERSION OF 

DOCUMENT SOUGHT TO BE 

SEALED

DATE: October 18, 2018 

TIME: 1:30 p.m. 

CTRM: Courtroom 8 

JUDGE: Hon. Lucy H. Koh 

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Issue to Be Decided

Whether the Court should strike the expert reports and prohibit trial testimony from FTC 

expert Mr. Richard L. Donaldson, whose opinions relate to (i) the negotiation of patent licenses, 

including how negotiation leverage and bargaining power may affect negotiations, and his 

assessment that Qualcomm’s license agreements and related negotiations are atypical based on 

his extensive industry experience; and (ii) the feasibility of a multi-level licensing program. 

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Table of Contents

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

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

III. LEGAL STANDARD......................................................................................................... 6

IV. ARGUMENT...................................................................................................................... 7

A. Mr. Donaldson’s Opinions Are Based on his Specialized Knowledge and 

Extensive Experience .............................................................................................. 7

B. Mr. Donaldson’s Opinions on the Viability of Component-Level Licensing 

Are Reliable ............................................................................................................ 9

C. Qualcomm Mischaracterizes Mr. Donaldson’s Extensive Review of the 

Record, Which Was Not Limited to Considering “Cherry Picked” Data ............. 13

D. Mr. Donaldson Does Not Speculate Regarding Licensees’ State of Mind........... 16

V. CONCLUSION................................................................................................................. 17

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Table of Authorities

Cases

Adams v. Lab. Corp. of Am., 760 F.3d 1322 (11th Cir. 2014)....................................................... 11

AngioScore, Inc. v. TriReme Med., Inc., 87 F. Supp. 3d 986 (N.D. Cal. 2015)............................... 7

Apple, Inc. v. Samsung Elecs. Co., No. 11-CV-01846-LHK, 2012 WL 2571332 (N.D. Cal. June 

30, 2012) ...................................................................................................................................... 3

Best Buy Stores, L.P. v. Russell Constr. Co., Inc., 2012 WL 13018817 (S.D. Iowa July 13, 2012)

................................................................................................................................................ 9, 10

Brickman v. Fitbit, Inc., No. 3:15-CV-02077-JD, 2017 WL 6209307 (N.D. Cal. Dec. 8, 2017).. 17

Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 113 S. Ct. 2786 125 L. Ed. 2d 469 (1993) .. 6

Fierro v. Gomez, 865 F. Supp. 1387 (N.D. Cal. 1994), aff’d, 77 F.3d 301 (9th Cir. 1996), vacated 

and remanded on other grounds, 519 U.S. 918, 117 S. Ct. 285, 136 L. Ed. 2d 204 (1996), 

modified on other grounds on remand, 147 F.3d 1158 (9th Cir. 1998)....................................... 8

Fitzhenry-Russell v. Dr. Pepper Snapple Grp., Inc., No. 17-CV-00564 NC, 2018 WL 3126385 

(N.D. Cal. June 26, 2018) ............................................................................................................ 7

Gen. Elec. Co. v. Wilkins, No. 1:10-CV-00674 LJO, 2012 WL 5398407 (E.D. Cal. Nov. 2, 2012)

.................................................................................................................................................... 14

In re Arris Cable Modem Consumer Litig., No. 17-CV-01834-LHK, 2018 WL 3820619 (N.D. 

Cal. Aug. 10, 2018).............................................................................................................. 16, 17

In re NJOY, Inc. Consumer Class Action Litig., 120 F. Supp. 3d 1050 (C.D. Cal. 2015)............. 18

In re: Tylenol (Acetaminophen) Mktg., Sales Practices, & Prod. Liab. Litig., No. 2:12-CV-07263, 

2016 WL 4039329 (E.D. Pa. July 28, 2016).............................................................................. 10

Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) ................................................................... 10

Murray v. S. Route Maritime SA, 870 F.3d 915 (9th Cir. 2017).................................................. 6, 7

Primiano v. Cook, 598 F.3d 558 (9th Cir. 2010), as amended (Apr. 27, 2010)......................... 7, 11

Rigby v. Corliss, No. C14-0340RSL, 2018 U.S. Dist. LEXIS 108561 (W.D. Wash. June 27, 2018)

...................................................................................................................................................... 8

Sierra Club v. Talen Montana LLC, No. CV 13-32-BLG-DLC-JCL, 2016 WL 11200732 (D. 

Mont. Mar. 25, 2016)................................................................................................................... 7

Smithkline Beecham Corp. v. E. Applicators, Inc., No. 99-CV-6552, 2001 WL 1526273 (E.D. Pa. 

Nov. 29, 2001) ............................................................................................................................. 9

Thermolife Int’l, LLC v. Myogenix Corp., No. 13cv651 JLS (MDD), 2016 U.S. Dist. LEXIS 

96871 (S.D. Cal. July 22, 2016)................................................................................................... 8

Statutes

Fed. R. Evid. 702 ............................................................................................................................. 6

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I. INTRODUCTION

Qualcomm’s motion to exclude the expert testimony of Richard L. Donaldson (the 

“Motion” or “Mot.”) should be denied. Mr. Donaldson’s opinions are relevant, based on reliable 

methods, and will assist the Court in deciding the merits of this case. 

Mr. Donaldson is a licensing professional with over thirty years of experience negotiating 

and evaluating patent license agreements, including but not limited to agreements involving 

FRAND-encumbered standard-essential patents (“SEPs”) relating to semiconductors. Numerous 

courts have accepted his testimony on the subject of patent licensing and royalties. Mr. 

Donaldson’s opinions relate to how licenses are typically negotiated, including the leverage and 

bargaining power brought to bear in typical negotiations. Based on his extensive experience, and 

an examination of the factual record, Mr. Donaldson offers opinions (1) that Qualcomm’s patent 

license negotiations with original equipment manufacturers of cellular handsets (“OEMs”)

proceeded differently from typical negotiations, (2) that in particular, Qualcomm’s “no license-no 

chips” policy provided it with enhanced leverage in negotiations with OEMs that were dependent 

on Qualcomm for modem chips, and (3) that as a result, Qualcomm was consistently able to 

obtain its preferred license terms—terms that were atypical in the industry and that it would not 

have been able to achieve if not for the additional leverage.

Mr. Donaldson also offers opinions relating to the feasibility of licensing both chip sellers 

and OEMs, in response to Qualcomm’s assertion that such a multi-level licensing program would 

not be practicable. Based on his experience and success in implementing and managing a multilevel licensing program at a leading semiconductor company, Mr. Donaldson opines that 

Qualcomm’s stated justifications for its refusal to license competing chip sellers do not withstand 

scrutiny. 

Mr. Donaldson’s opinions are based on his decades of experience negotiating license 

agreements, and his application of that experience to the factual record here. As part of his 

analysis, Mr. Donaldson evaluated hundreds of contemporaneous documents and sworn 

testimony from nearly 40 witnesses, including those from key OEMs. Accordingly, Mr. 

Donaldson’s opinions regarding whether certain negotiation conduct and licensing terms are 

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typical industry practice will assist the Court in resolving the issues in this litigation.

Qualcomm’s motion ignores clear precedent regarding the admissibility of expert 

testimony at trial, particularly with respect to the ability of experts to provide testimony based on 

their experience and expertise. As set out in detail below, Qualcomm’s criticisms of Mr. 

Donaldson’s opinions are properly addressed through cross-examination of Mr. Donaldson at trial 

and do not warrant the exclusion of his opinions where they are otherwise helpful to the Court.

II. BACKGROUND

The FTC engaged Mr. Donaldson in this action to provide opinions relating to the 

negotiation of patent licenses, generally; Qualcomm’s commercial practices and the effects of 

such practices on Qualcomm’s negotiation of patent licenses with OEMs; and Qualcomm’s 

rationale for refusing to license competing modem chip sellers under its standard essential patents 

(“SEPs”). Mr. Donaldson sets forth his opinions in his initial Expert Report, submitted on May 

24, 2018 (the “Report,” attached as Exhibit 1 to the Declaration of Geoffrey T. Holtz in Support 

of the Motion, ECF No. 799-1) and a Rebuttal Report submitted on July 26, 2018 (the “Rebuttal 

Report,” attached as Exhibit 2 to the Declaration of Geoffrey T. Holtz in Support of the Motion, 

ECF No. 799-1).

Mr. Donaldson worked at Texas Instruments, Inc. (“TI”) for over thirty years as an 

executive and patent attorney, until he retired as Senior Vice President and General Patent

Counsel in 2000. Report ¶ 1. At TI, Mr. Donaldson was responsible for developing global patent 

licensing strategies and negotiating patent licenses, including licenses that covered SEPs. Report 

¶ 4. He personally negotiated hundreds of patent license agreements with nearly every major 

computer and semiconductor manufacturer around the world, for patents relating to computers, 

cell phones, and other devices. Id. These negotiations included both inbound and outbound patent

licenses, and licenses for both component-level and system-level patents. Id. As TI’s lead 

negotiator, Mr. Donaldson was responsible for assessing both the legal and business 

considerations relating to each agreement, and for drafting the agreements. Id. ¶ 6. He led TI’s 

pioneering patent licensing program, which has been recognized as having a “profound effect on 

the way technology companies, and in particular semiconductor companies, utilized their patent 

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portfolios to obtain fair value for the use of their patented technology by other companies.” Id. ¶ 

8. During this time, TI also participated in various standard-setting organizations (“SSOs”), and 

Mr. Donaldson was involved in the licensing of SEPs at TI, which included understanding and 

considering FRAND commitments. Id. ¶ 9-10.

Since retiring from TI, Mr. Donaldson has worked as a consultant and testifying expert on 

matters relating to patent licensing and damages in patent infringement litigation, including cases

involving cellular technology and SEPs subject to FRAND commitments. Id. ¶ 11-12; Rebuttal

Report ¶¶ 15, 36, 38-40. He has been engaged in this capacity by some of the top contributors to 

cellular standards. Rebuttal Report ¶ 36. Mr. Donaldson thus has direct and extensive experience 

evaluating the license terms and agreements of numerous cellular wireless industry participants, 

and has gained insight regarding the licensing programs of a broad cross section of this group.

Mr. Donaldson has previously been recognized as an expert in numerous other cases 

relating to patent licensing. See Report ¶ 12 and Exhibit A; Rebuttal Report ¶ 15. He has also 

been recognized as an expert by this Court in the Apple v. Samsung litigation, which related to 

FRAND issues and typical license provisions in the cellular industry. See Apple, Inc. v. Samsung 

Elecs. Co., No. 11-CV-01846-LHK, 2012 WL 2571332 (N.D. Cal. June 30, 2012). In that matter, 

he was permitted to testify “on how particular terms are commonly understood in the industry.” 

Id. at *12 (finding that “such testimony is relevant under FRE 401 and an appropriate exercise of 

Donaldson’s expertise under FRE 702 and Daubert”).

As a result of his experience, Mr. Donaldson is an expert in patent licensing and the 

bargaining dynamics at play in licensing negotiations. Specifically, as set out in his reports, Mr. 

Donaldson explains the process that occurs in a license negotiation, where each party negotiates

based on how the offered license terms compare to its next best alternative. He explains how 

different factors may affect a party’s assessment of the alternative to a negotiated agreement, 

increasing or decreasing its leverage during negotiations. See Report Section VI.A.1. These 

factors include a party’s ability to “design around” a patent, whether SEPs are involved, the 

expected size of a litigation award, and ongoing business relationships linked to the negotiations, 

among others. See id. 

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Armed with his direct experience negotiating license agreements, decades as a licensing 

professional, and extensive knowledge of licensing programs in the cellular industry, Mr. 

Donaldson undertook a review of the factual record in this case, including sworn testimony from 

39 witnesses over 74 days, discovery responses, and hundreds of documents produced by 

Qualcomm and third parties in this action, relating to the license agreements between Qualcomm 

and numerous OEMs. Report Exhibit B; Rebuttal Report Appendix A. These materials include 

contemporaneous negotiation documents as well as the resulting license agreements executed by 

the parties. See id.

After conducting a careful review of the evidence and applying his expertise in patent 

licensing, and the factors that may impact the bargaining power available to parties, Mr. 

Donaldson explains in his report that Qualcomm’s “no license-no chips policy” resulted in 

enhanced leverage that Qualcomm applied on a systematic basis during negotiations with OEMs. 

See Report Section VI.A.2. This leverage exists because where Qualcomm’s chips are or have 

been a commercially necessary input for OEMs in the CDMA and premium LTE market 

segments, OEMs could not afford to lose access to those chips. See id. He further explains that, 

based on his decades of work as a licensing professional, he expects that this type of leverage 

would change the dynamics of a license negotiation whenever Qualcomm’s chips were important 

to the licensee. See id. Specifically, “[i]nstead of the typical situation where a licensee’s 

alternative to accepting a proposed license is the risk of litigation, Qualcomm added the loss of 

Qualcomm modem chips as a consequence.” Id. ¶ 88.

Mr. Donaldson observes a number of specific ways in which Qualcomm’s “no license-no 

chips” policy has resulted in atypical license terms. See Report Section VI.A.3. First, he

concludes, based on the record, that as a result of its ability to threaten OEMs with the loss of 

modem chip supply, Qualcomm has been able to charge and maintain royalty rates that are higher 

than OEMs would otherwise have agreed to, and that are disproportionate to rates charged by 

other SEP holders. See Report Section VI.A.3(i). Mr. Donaldson also observes that the uniformity 

of Qualcomm’s rates over time is atypical. Id. ¶ 109. The value of Qualcomm’s portfolio has been 

called into question in recent years, including due to the expiration of key patents, a shift to new 

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standards in which Qualcomm’s SEP position is weaker, and judicial guidance suggesting a 

reluctance to grant large awards for FRAND-encumbered SEPs. See id. Drawing on his licensing 

expertise, Mr. Donaldson opines that such factors ordinarily result in decreasing royalty rates over 

time. See id. ¶ 17. However, Qualcomm was consistently able to obtain its preferred license terms 

due to OEMs’ need for Qualcomm modem chips. See id. 

Second, Mr. Donaldson observes that 

. See Report Section VI.A.3(ii); Rebuttal Report 

Section II.D. Third, Mr. Donaldson notes that the record reflects that OEMs negotiating with 

Qualcomm 

, and rarely resorted to litigation 

as an alternative to accepting Qualcomm’s preferred license terms. See id. Section VI.A.3(iii). As 

a licensing professional, Mr. Donaldson opines that these negotiating dynamics and outcomes are 

atypical in the industry. See id. Section VI.A.3. He provides several illustrative examples in 

which, based on sworn testimony provided by OEMs in this action, Qualcomm used its “no 

license-no chips policy” to obtain these favorable terms in negotiations with entities such as 

. See id. Section VI.A.4. 

Finally, Mr. Donaldson opines on the feasibility of “multi-level” licensing. See Report 

Section VI.B. Specifically, Qualcomm has a policy of not granting licenses to other modem chip 

sellers, and justifies this policy by claiming that it would not be feasible to license both chip 

sellers and OEMs. See Report ¶ 165. In Mr. Donaldson’s reports, however, he explains that, 

based on his extensive experience, it is in fact possible and practical to license component-level 

patents to component manufacturers, while simultaneously licensing any device-level patents to 

device manufacturers. See Report ¶¶ 166-171; Rebuttal Report ¶¶ 31-36. He also explains that, 

based on his understanding of the industry and his review of Qualcomm’s license agreements, 

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. See Report ¶¶ 172-174. 

III. LEGAL STANDARD

Federal Rule of Evidence 702 provides that testimony from a qualified expert relating to

“scientific, technical, or other specialized knowledge” is allowed if it will “help the trier of fact to 

understand the evidence or to determine a fact in issue.” Fed. R. Evid. 702. Under Rule 702, 

expert testimony is admissible if it is both relevant and reliable. Daubert v. Merrell Dow Pharm., 

Inc., 509 U.S. 579, 589, 113 S. Ct. 2786 125 L. Ed. 2d 469 (1993). An expert witness may 

provide opinion testimony 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 expert has reliably applied 

the principles and methods to the facts of the case. See Fed. R. Evid. 702. 

In Daubert, the Supreme Court identified four factors that may bear on such an analysis, 

including: (1) whether the theory can be and has been tested; (2) whether the theory has been peer 

reviewed and published; (3) what the theory’s known or potential error rate is; and (4) whether 

the theory enjoys general acceptance in the applicable scientific community. Murray v. S. Route 

Maritime SA, 870 F.3d 915, 922 (9th Cir. 2017) (citing Daubert, 509 U.S. at 593-94). The Ninth 

Circuit has explained that these factors are not “‘equally applicable (or applicable at all) in every 

case.’” Id. (quoting Daubert v. Merrell Dow Pharm., Inc., 43 F.3d 1311, 1317 (9th Cir. 1995). 

Instead, their applicability “‘depend[s] on the nature of the issue, the expert’s particular expertise, 

and the subject of his testimony.’” Id. (quoting Kumho Tire Co. v. Carmichael, 526 U.S. 137, 

150, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). The factors are not a “definitive checklist or test” 

and the “reliability analysis remains a malleable one tied to the facts of each case.” Id. 

The trial court’s duty to “act as a gatekeeper” is not a rigid one, and the court has “broad 

discretion and flexibility in assessing an expert’s reliability.” Fitzhenry-Russell v. Dr. Pepper 

Snapple Grp., Inc., No. 17-CV-00564 NC, 2018 WL 3126385, at *2 (N.D. Cal. June 26, 2018). 

The trial court’s duty on a motion to exclude “is to evaluate the soundness of the expert’s 

methodology, not the correctness of the expert’s conclusions.” Id. Expert opinion is typically to 

be “attacked by cross examination, contrary evidence, and attention to the burden of proof, not 

exclusion.” Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010), as amended (Apr. 27, 2010) 

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(citing Daubert, 509 U.S. at 596).

The “Daubert gatekeeping obligation is less pressing in connection with a bench trial.”

AngioScore, Inc. v. TriReme Med., Inc., 87 F. Supp. 3d 986, 1016 (N.D. Cal. 2015) (citing various 

cases); see also Sierra Club v. Talen Montana LLC, No. CV 13-32-BLG-DLC-JCL, 2016 WL 

11200732, at *3 (D. Mont. Mar. 25, 2016). Under Daubert, “the better approach in [a] bench trial 

is to permit the contested expert testimony and allow vigorous cross-examination, presentation of 

contrary evidence and careful weighing of the burden of proof.” Fierro v. Gomez, 865 F. Supp. 

1387, 1395 n.7 (N.D. Cal. 1994), aff’d, 77 F.3d 301 (9th Cir. 1996), vacated and remanded on 

other grounds, 519 U.S. 918, 117 S. Ct. 285, 136 L. Ed. 2d 204 (1996), modified on other 

grounds on remand, 147 F.3d 1158 (9th Cir. 1998) (quoting Daubert, 509 U.S. at 596)). In cases 

tried without a jury, the Daubert decision may be deferred until after the trial is concluded. See, 

e.g., Rigby v. Corliss, No. C14-0340RSL, 2018 U.S. Dist. LEXIS 108561, at *7 (W.D. Wash. 

June 27, 2018) (allowing expert to testify and reserving decision on reliability and relevance);

Thermolife Int’l, LLC v. Myogenix Corp., No. 13-cv-651 JLS (MDD), 2016 U.S. Dist. LEXIS 

96871, at *9 (S.D. Cal. July 22, 2016) (“[G]iven that this is a bench trial, the danger of prejudice 

is lessened” and the challenged testimony “may be stricken and disregarded, as opposed to merely 

given less weight” after cross examination.).

IV. ARGUMENT

Mr. Donaldson unquestionably possesses “specialized knowledge” regarding patent 

license negotiations that may assist this Court’s evaluation of the evidence in this matter.

Nonetheless, Qualcomm argues that Mr. Donaldson’s opinions should be excluded on four 

separate grounds. As set forth below, Qualcomm’s criticisms are fodder for cross-examination, 

not exclusion.

A. Mr. Donaldson’s Opinions Are Based on his Specialized Knowledge and Extensive 

Experience 

Qualcomm argues that “the Court should strike Mr. Donaldson’s opinions because his 

analysis is untethered to any reliable principles or methodology.” Mot. at 9. Mr. Donaldson is a 

licensing professional with more than thirty years of experience negotiating, reviewing, and 

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evaluating patent license agreements, and has expertise in patent license bargaining dynamics.

Because his opinion is based on his extensive experience, and is not scientific in nature, 

Qualcomm’s argument must fail. 

Qualcomm claims that Mr. Donaldson’s opinions “rest only on [his] subjective 

interpretations based on purported review of a discrete set of evidence.” Mot. at 9. These are not 

valid grounds for excluding his opinions. Courts have explained that where “the proffered 

testimony is not scientific in nature, the methodology need not be subjected to rigorous testing for 

scientific foundation or peer review,” and an expert opinion should not be excluded because there 

is no universal standard for conducting its analysis. Smithkline Beecham Corp. v. E. Applicators, 

Inc., No. 99-CV-6552, 2001 WL 1526273, at *3 (E.D. Pa. Nov. 29, 2001) (“Consequently, there 

is no single standard formula for bid estimations, and the fact that both experts have maintained 

successful roofing businesses for many years lead to the conclusion that their estimation 

processes are within the realm of reasonable and acceptable methods.”).

“Experience-based expert testimony,” like Mr. Donaldson’s here, is sufficiently reliable if 

the expert “explains how that experience leads to the conclusion reached, why that experience is a 

sufficient basis for the opinion, and how that experience is reliably applied to the facts.” Best Buy 

Stores, L.P. v. Russell Constr. Co., Inc., 2012 WL 13018817, at *6 (S.D. Iowa July 13, 2012) 

(quoting Notes of Advisory Committee on 2000 Amendments to Rule 702). Where an expert’s 

testimony “relates to what conduct is generally expected of [industry professionals] . . . according 

to industry standards,” the Daubert factors assessing whether the testimony is the product of a 

reliable methodology are not directly applicable. See id.; see also Kumho Tire, 526 U.S. at 141 

(“Daubert’s list of specific factors neither necessarily nor exclusively applies to all experts or in 

every case.”).

Here, Mr. Donaldson reviewed the record, including license agreements and negotiations 

that are the subject of the FTC’s claims in this litigation, and offers the opinion that he has 

“observed a number of features of Qualcomm’s license negotiations and the resulting agreements 

that are unusual based on my experience, and suggest that Qualcomm had significant leverage, 

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 and infrequent litigation.” Report ¶ 101. Mr. Donaldson’s opinions relate to practices 

that are or are not typical with respect to patent licensing in the semiconductor industry. In 

forming these opinions, he relied on his understanding of the industry, the tenets of bargaining 

theory regarding acceptable alternatives in connection with patent infringement and licensing 

negotiations, principles of FRAND licensing, the applicable patent laws, contemporaneous 

documents outlining negotiation histories and goals, and sworn testimony regarding the relevant 

events. These methods are an “acceptable way to offer an opinion about industry standards.” In 

re: Tylenol (Acetaminophen) Mktg., Sales Practices, & Prod. Liab. Litig., No. 2:12-CV-07263, 

2016 WL 4039329, at *5 (E.D. Pa. July 28, 2016) (allowing testimony where expert “considered 

all applicable regulations, relied on her understanding of the industry (as informed by her training 

and experience), reviewed internal company documents outlining the company’s principles and 

credos, reviewed pertinent trade association documents, and read relevant peer-reviewed 

literature”). 

Courts regularly conclude that expert testimony, like Mr. Donaldson’s, that is based on an 

expert’s background and experience will assist the fact finder. For example, in Primiano v. Cook, 

the Ninth Circuit reversed the trial court and allowed a physician to offer an opinion regarding a 

prosthetic elbow that failed more quickly than he would have expected based on his experience. 

There, the expert’s methodology consisted of a “comparison of what happened with [the 

defendant’s] artificial elbow with what surgeons who use artificial elbows ordinarily see.” 

Primiano, 598 F.3d at 567. See also Adams v. Lab. Corp. of Am., 760 F.3d 1322 (11th Cir. 2014) 

(finding that expert’s “experience and general knowledge” are sufficient to satisfy Rule 702 and 

Daubert in interpreting lab specimen where no systematic methodology was used to arrive at 

interpretation). 

B. Mr. Donaldson’s Opinions on the Viability of Component-Level Licensing Are 

Reliable

Qualcomm also contends that Mr. Donaldson’s opinion that multi-level licensing is a 

viable business model must be excluded because it is not based on sufficient or reliable evidence. 

Mot. at 10. Qualcomm misrepresents Mr. Donaldson’s proposed testimony and the experience 

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that it is based upon. 

Qualcomm argues that its refusal to license its SEPs to other modem chip sellers is 

justified because “trying to license handset makers under its handset patents and chip makers 

under its chip patents . . . would be unworkably complex” and is also contrary to industry 

practice. Report ¶ 165. Mr. Donaldson disagrees with Qualcomm for a number of reasons. First, 

he opines that it is “feasible to maintain distinct licensing programs for end-user device sellers 

and component manufacturers.” Id. ¶ 165. Mr. Donaldson personally did so at TI by categorizing 

TI’s patent portfolio into two distinct groups for system patents and chip patents, implementing 

separate licensing programs for each to account for the “significant differences in how patent 

damages law calculates royalties for such patents.” Report ¶ 166. He explains that the law 

requires the apportionment of royalties to ensure that the patentee does not receive a windfall 

based on the technical contributions of patent holders, and that it was efficient for TI to structure 

its licensing program in this way to simplify the apportionment analysis by clarifying the 

appropriate royalty base (the system versus the chip) from the outset. Id. Mr. Donaldson further 

notes that, contrary to Qualcomm’s claims, “TI’s licensing program did not raise any particular 

difficulties of administration.” Id. In his report, he explains that in order to manage these two 

separate but parallel licensing programs for system and chip patents, “it was necessary for TI to 

understand which of its patents were substantially embodied in chips, and which instead read on 

systems,” and describes in detail the method that TI used to categorize its patents. Report ¶¶ 167-

169. 

Mr. Donaldson further opines that Qualcomm’s stated justifications for its refusal to 

engage in multi-level licensing are pretextual for additional reasons. First, Ericsson has 

successfully engaged in multi-level licensing in the cellular industry, including granting a 3G 

license to Qualcomm at the chip level. Report ¶ 170. 

. Report ¶¶ 172-174. 

Qualcomm argues that because Mr. Donaldson testified at his deposition that licensing at 

the device level is typical in the cellular industry, he should be precluded from offering any 

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testimony regarding the feasibility of multi-level licensing. Mot. at 10. Qualcomm 

mischaracterizes Mr. Donaldson’s testimony on this point. While he does not deny the prevalence 

of device-level licensing in the cellular industry, Mr. Donaldson’s opinions are presented for the 

purpose of responding to Qualcomm’s argument that a multi-level licensing program would be 

impracticable or infeasible for a semiconductor company to implement or maintain. See Report 

Section VI.B. 

Qualcomm also contends that Mr. Donaldson’s experience implementing a successful 

multi-level licensing program at TI is insufficient to establish his expertise because he has 

inadequate experience managing a patent portfolio similar to Qualcomm’s in size or scope, and 

“did not have responsibility for formulating corporate strategy with respect to licensing cellular 

patents.” Mot. at 10-11. These arguments are not well-founded.

As Mr. Donaldson explained in his reports and at his deposition, his experience at TI is 

highly relevant to the industry context presented in this litigation. The semiconductor industry in 

which TI participated is very similar to Qualcomm’s semiconductor business and associated 

licensing program, for a number of reasons, including because “both industries involve a highly 

complex end-user device, made up of numerous technical components, the features of which 

drive consumer demand.” Rebuttal Report ¶ 33. During Mr. Donaldson’s tenure at TI, certain 

features such as processor speed were driving the market for end-user computer devices, similar 

to Qualcomm’s claim that its technology drives demand for smartphones today. Id. Mr. 

Donaldson designed TI’s licensing program to “recognize the incremental economic value that 

each individual component such as a microprocessor, DRAM chip, DSP chip and North/South 

Bridges added to the component (and system) functionality.” Id. These components included 

standardized technologies and industry participants sought to determine the incremental economic 

value provided by such components by comparing these solutions with competing ones – similar 

to the licensing of cellular SEPs. Id. 

Finally, it is plainly incorrect that Mr. Donaldson lacks experience in the licensing of 

cellular SEPs. He has been qualified as an expert and has testified on cellular SEP licensing in a 

number of other matters. See Report ¶ 12 and Exhibit A. At his deposition, Mr. Donaldson was 

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asked whether he has any experience licensing patents related to cellular wireless technologies. 

Mr. Donaldson testified that during his time at TI, “Texas Instruments was the major supplier of 

baseband controllers [modem chips] for wireless phones to Nokia, Ericsson, Motorola, to name 

the major companies” and that he negotiated licenses with Nokia, InterDigital, and others relating 

to these products. Declaration of Jennifer Milici in Support of the FTC’s Opposition to 

Qualcomm’s Motion (“Milici Decl.”), Exhibit 1 (Excerpts of Deposition of Richard Donaldson)

at 10:6-17:7. He further explained that, both at TI and since leaving TI, he has negotiated and 

advised on negotiations for a number of licenses, the scope of which “included the right to 

manufacture products under any patents that they owned that related to cellular industry,” and that 

these patents included cellular SEPs. Id. at 17:8-25. Mr. Donaldson also started and oversaw a 

program at TI in which, given TI’s involvement in the market for baseband controllers, patent 

strategy managers at TI studied the relevant technology and associated business risks of obtaining 

licenses in this space, as well as the practices of industry players such as Qualcomm and 

InterDigital. See id. at 12:3-18. Mr. Donaldson has more than sufficient industry experience to 

draw conclusions regarding licensing cellular SEPS.1

 1 Qualcomm also contends that Mr. Donaldson’s testimony regarding his practices at TI should be 

excluded on the grounds that they are “undisclosed fact testimony.” Mot. at 11, n.3. The cases 

Qualcomm cites for this principle are irrelevant; they do not address the issue of an expert witness 

relying on his experience—and by necessity, explaining the factual circumstances surrounding 

that experience— but rather, general failures to disclose fact witnesses. Mr. Donaldson’s opinions 

do not relate to the terms of the TI licenses he negotiated, despite Qualcomm’s suggestion that 

this is a central portion of his testimony. To the contrary, the Court should not disqualify Mr. 

Donaldson merely because his opinions are colored by his personal experience. See Gen. Elec.

Co. v. Wilkins, No. 1:10-CV-00674 LJO, 2012 WL 5398407, at *2 (E.D. Cal. Nov. 2, 2012)

(where movant argued that expert’s opinions were “purportedly based only on his personal 

experiences, the Court declines to disqualify Dr. Chambers as an expert on these matters. 

Mitsubishi and Mr. Wilkins may contest the weight that should be given to such opinions by 

attacking the factual basis for Dr. Chambers' opinions during cross-examination.”). Qualcomm’s 

own experts, including Dr. Huber and Dr. Andrews, propose to testify to opinions based on 

specific personal experiences. See e.g., August 10, 2018 Deposition of Jeffrey G. Andrews at 

69:23-70:23 (explaining that opinion that Qualcomm’s portfolio grew over time is based only on 

his “own knowledge and experience and I visit Qualcomm, you know, not infrequently. I’ve 

given several invited lectures there. Their research center seems to be monotonically increasing in 

size, you know, working on many different things, different standards”); August 8, 2018 

Deposition of Dr. Bertram Huber at 30:11-17 (explaining that his expertise in the meaning of the 

ETSI policy is “based on [his] experience because [he] was there at that time”); 58:9-16 (opinions 

are based on his “industrial experience and. . . all I know about this subject and topic since 

decades and I have learned over time in addition. And, of course, my professional experience and 

background”), attached as Exhibits 2 and 3 to Milici Decl., respectively.

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C. Qualcomm Mischaracterizes Mr. Donaldson’s Extensive Review of the Record, 

Which Was Not Limited to Considering “Cherry Picked” Data

Qualcomm mischaracterizes the depth and breadth of Mr. Donaldson’s review of the 

record in this case by claiming that Mr. Donaldson “reviewed a limited number of documents, 

handpicked by the FTC and which concern negotiations with only six OEMs,” and arrived at 

conclusions “on the basis of this limited review.” Mot. at 7. Mr. Donaldson reviewed the sworn 

testimony of more than 50 witnesses, and hundreds of accompanying exhibits. See Report Exhibit 

B; Rebuttal Report Appendix A. He separately reviewed hundreds of documents produced in this 

action, as well as discovery responses, white papers, and advocacy submissions in the course of 

his study of Qualcomm’s licensing program as a whole, including a review of the “standard” 

license structure Qualcomm negotiated with “several hundred” licensees. See Report ¶¶ 36-44. In 

addition to Qualcomm’s “standard” licenses, Mr. Donaldson analyzed 

. 

Mr. Donaldson’s Opening Report includes detailed descriptions of 

 Mr. Donaldson “also 

reviewed evidence in the record from other OEMs, at least one other modem chip maker, and 

Qualcomm itself, that supports the conclusion that Qualcomm’s no license-no chips policy has a 

material impact on Qualcomm’s licensing arrangements with OEMs,” and his reports cite to 

documents and testimony relating to Apple, Pegatron, and VIA Telecom. Id. ¶ 162 and n.275. Mr. 

 

2 See Milici Decl. at Exhibit 4 (QAPPCMSD07786307, “Global Handset Revenue, ASP and 

Profit in Q2 2017” (Strategy Analytics)); Exhibit 5 ( Q2014FTC04150166, 

; Exhibit 6 

(Q2017MDL1_02944278, “HS Market Share by Vendor”).

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review is unavailing. Over 18 million documents have been produced in this case. The fact that 

counsel provided agreements for Mr. Donaldson to review—agreements that were associated with 

the deposition testimony of witnesses in this case—is not a valid basis upon which to exclude his 

testimony. This Court rejected a similar argument in the In re Arris Cable Modem Consumer 

Litig. action. See In re Arris Cable Modem Consumer Litig., No. 17-CV-01834-LHK, 2018 WL 

3820619 (N.D. Cal. Aug. 10, 2018). In that case, the defendant asserted that the plaintiff’s expert

based his opinion “on documents that were ‘cherry-picked’ from all of the discovery in this case 

and ‘highlighted’ for him by Plaintiffs’ counsel.” The Court found this contention to be 

“disingenuous” and noting there is “no authority for the proposition that an expert must 

independently sort through all of the discovery in a case in order to determine the relevant 

evidence.” Id. at *21. The Court went on to explain that such a “rule would be incredibly costly 

and time consuming for the expert, who necessarily would be duplicating the work that the 

attorneys in the case had already performed.” Id.

Further, if Qualcomm is aware of examples from the record of OEM licenses that are 

inconsistent with or contradict Mr. Donaldson’s opinions, it may identify those examples, and use 

them to cross-examine Mr. Donaldson at trial. See id. (explaining that to the extent the defendant 

believed that the plaintiff’s expert “failed to consider relevant evidence of record or formed 

opinions based on unreliable data, Defendant is free to cross-examine [Plaintiff’s expert] at trial 

on the foundation for his opinions”); see also Brickman v. Fitbit, Inc., No. 3:15-CV-02077-JD, 

2017 WL 6209307, at *4 (N.D. Cal. Dec. 8, 2017) (concluding that where Fitbit contended 

opposing expert “cherry-picked studies that validated the position of her own publications,” this 

“may be fertile grounds for cross-examination, but it does not make [the expert’s] opinions 

inadmissible”).

Qualcomm has identified no such persuasive examples. Qualcomm claims that there are 

“agreements and documents reflecting hundreds of other licensing negotiations that Mr. 

Donaldson has not considered,” but does not show that these other materials cast any doubt on 

Mr. Donaldson’s conclusions. Indeed, at his deposition, Mr. Donaldson testified that learning of

hypothetical OEMs that perhaps were not influenced by Qualcomm’s “no license no chips” 

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leverage would be unlikely to change his opinions due to the quantity and weight of the evidence 

he has reviewed suggesting that Qualcomm’s commercial policies did alter negotiations. See

Milici Decl. Exhibit 1 (Excerpts of Deposition of Richard Donaldson) at 118:6-119:11. Mr. 

Donaldson emphasized the significance of the testimony he reviewed, explaining that “you can’t 

discount in these situations with , who have offered direct testimony that [the no 

license-no chips policy] did have an effect, the existence of one or more examples where the 

question never came up does not offset the testimony of what actually did happen with major 

OEMs.” Id. at 118:20-119:2. He explained that examples of differing license negotiations—if 

they exist—would “not offset the direct sworn testimony of these people who actually were 

affected by the policy.” Id. 

D. Mr. Donaldson Does Not Speculate Regarding Licensees’ State of Mind

Finally, Qualcomm contends that Mr. Donaldson’s opinions regarding negotiation 

dynamics and outcomes consist of mere “speculation concerning the subjective intent and 

motivation of certain third parties who negotiated license agreements with Qualcomm.” Mot. at 4. 

But this is not the case. First, as a general matter, Mr. Donaldson’s reliance on the statements of 

fact witnesses (e.g., that an OEM acceded to Qualcomm’s patent licensing demands in order to 

secure access to Qualcomm chips) “does not automatically render his opinion or methodology 

unreliable.” In re NJOY, Inc. Consumer Class Action Litig., 120 F. Supp. 3d 1050, 1071 (C.D. 

Cal. 2015). It is established law that “[a]n expert is of course permitted to testify to an opinion 

formed on the basis of information that is handed to rather than developed by him—information 

of which he lacks first-hand knowledge and which might not be admissible in evidence no matter 

by whom presented.” Id. (citing Matter of James Wilson Associates, 965 F.2d 160, 172-73 (7th 

Cir. 1992). 

Second, unlike the experts in the cases cited by Qualcomm, Mr. Donaldson is not 

speculating as to the intent or motivation of third parties negotiating licenses with Qualcomm. To 

the contrary, to the extent that Mr. Donaldson’s disclosed testimony refers to the motivations of 

third parties in license negotiations, it is based on contemporaneous documents or sworn 

testimony from parties to those negotiations explaining in plain terms that Qualcomm’s conduct, 

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including its no license-no chips policy, did in fact impact their motivations. Indeed, at his 

deposition, Mr. Donaldson explained he would consider his conclusions disproven only if “all 

these people who provided sworn testimony [were] liars.” Milici Decl. Exhibit 1 (Excerpts of 

Deposition of Richard Donaldson) at 117:14-118:5. He went on to explain that he “accept[ed] 

[the OEMs who provided testimony about their negotiations with Qualcomm] were under oath, 

and I accept[ed] that what they testified to was true, and I don’t see how you then say, well, even 

though they said that based upon this, they were forced to take a license, that that really didn’t 

have an effect.” Id.

Mr. Donaldson’s statements regarding the inability of OEMs to negotiate effectively with 

Qualcomm, including those enumerated in Qualcomm’s Motion, are not his guesses regarding 

“third parties’ purported states of mind and intentions.” Mot. at 6. Rather, these statements are

direct and presently uncontested testimony from the third parties actually involved in negotiating 

with Qualcomm. That testimony, along with documentary evidence, are the factual basis for Mr. 

Donaldson’s opinions. If Qualcomm believes there are examples in which, as Qualcomm puts it, 

the “actual circumstances of each party to the negotiation” (Mot. at 6) suggest that a particular 

OEM was not in fact dependent on Qualcomm for chips and thus was not subject to Qualcomm’s 

enhanced bargaining power, it may cross-examine Mr. Donaldson with those examples at trial.

V. CONCLUSION

For the foregoing reasons, the Court should deny Qualcomm’s motion. 

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Dated: September 24, 2018

Respectfully submitted,

FEDERAL TRADE COMMISSION,

/s/ Jennifer Milici

Jennifer Milici

Joseph R. Baker

Elizabeth A. Gillen

Geoffrey M. Green

Daniel Matheson

Federal Trade Commission 

600 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

(202) 326-2912; (202) 326-3496 (fax)

jmilici@ftc.gov 

Attorneys for Federal Trade Commission

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