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 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

KEKER, VAN NEST & PETERS LLP 

Robert A. Van Nest (SBN 84065) 

rvannest@keker.com 

Eugene M. Paige (SBN 202849) 

epaige@keker.com 

Justina Sessions (SBN 270914) 

jsessions@keker.com 

633 Battery Street 

San Francisco, CA 94111-1809 

Telephone: (415) 391-5400 

Facsimile: (415) 397-7188 

CRAVATH, SWAINE & MOORE LLP 

Gary A. Bornstein (pro hac vice) 

gbornstein@cravath.com 

Yonatan Even (pro hac vice)

yeven@cravath.com 

825 Eighth Avenue 

New York, New York 10019-7475 

Telephone: (212) 474-1000 

Facsimile: (212) 474-3700 

Attorneys for Defendant 

QUALCOMM INCORPORATED 

MORGAN, LEWIS & BOCKIUS LLP 

Richard S. Taffet (pro hac vice)

richard.taffet@morganlewis.com 

101 Park Avenue 

New York, NY 10178-0060 

Telephone: (212) 309-6000 

Facsimile: (212) 309-6001 

MORGAN, LEWIS & BOCKIUS LLP 

Willard K. Tom (pro hac vice)

willard.tom@morganlewis.com 

1111 Pennsylvania Avenue NW 

Washington, DC 20004-2541 

Telephone: (202) 739-3000 

Facsimile: (202) 739-3001 

MORGAN, LEWIS & BOCKIUS LLP 

Geoffrey T. Holtz (SBN 191370) 

gholtz@morganlewis.com 

One Market, Spear Street Tower 

San Francisco, CA 94105-1596 

Telephone: (415) 442-1000 

Facsimile: (415) 442-1001 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

vs. 

QUALCOMM INCORPORATED, a Delaware 

corporation, 

Defendant. 

 Case No. 17-cv-0220-LHK-NMC 

DEFENDANT QUALCOMM 

INCORPORATED’S MOTION TO 

EXCLUDE EXPERT REPORTS OF 

RICHARD L. DONALDSON 

Date: October 18, 2018 

Time: 1:30 p.m. 

Dept.: Courtroom 8, 4th Floor 

Judge: Hon. Lucy H. Koh 

Trial Date: January 4, 2019 

UNREDACTED VERSION OF DOCUMENT SOUGHT TO BE SEALED

Case 5:17-cv-00220-LHK Document 1024-1 Filed 12/18/18 Page 1 of 16
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TABLE OF CONTENTS

Page

i 

 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

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

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

III. LEGAL STANDARD ..........................................................................................................3 

IV. ARGUMENT .......................................................................................................................4 

A. Mr. Donaldson Invades the Province of the Factfinder by Improperly 

Speculating Regarding Licensees’ State of Mind ....................................................4 

B. Mr. Donaldson Improperly Bases Broad Opinions on a Handful of License 

Negotiations Cherry Picked for His Review by FTC Counsel ................................7 

C. Mr. Donaldson Opines on Causation But Makes No Attempt to Test 

Alternative Causes ...................................................................................................8 

D. Mr. Donaldson’s Opinions on the “Viability” of Component-Level 

Licensing Are Not Based Upon Sufficient or Reliable Evidence ..........................10 

V. CONCLUSION ..................................................................................................................11 

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TABLE OF AUTHORITIES

Page(s)

ii 

 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

CASES

Barber v. United Airlines, Inc., 

17 F. App’x 433 (7th Cir. Aug. 16, 2001) .................................................................................. 8 

Bloom v. J.P. Morgan Chase & Co., 

2010 WL 4939951 (N.D. Cal. Nov. 30, 2010) ................................................................... 7, 8, 9 

CFTC v. Moncada, 

2014 WL 2945793 (S.D.N.Y. 2014) ........................................................................................... 4 

Daubert v. Merrell Dow Pharms., Inc., 

509 U.S. 579 (1993) .................................................................................................... 1, 3, 4, 8, 9 

Elsayed Mukhtar v. Cal. State Univ., Hayward, 

299 F.3d 1053 (9th Cir. 2002) .................................................................................................... 3 

Gen. Elec. Co. v. Joiner, 

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

Guzman v. Bridgepoint Educ., Inc., 

305 F.R.D. 594 (S.D. Cal. 2015) .............................................................................................. 11 

Hartford-Empire Co. v. United States, 

323 U.S. 386 (1945) .................................................................................................................. 11 

Hoffman v. Constr. Prot. Servs., Inc., 

541 F.3d 1175 (9th Cir. 2008) .................................................................................................. 11 

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

524 F. Supp. 2d 1166 (N.D. Cal. 2007) ...................................................................................... 8

In re ConAgra Foods, Inc., 

302 F.R.D. 537 (C.D. Cal. 2014) ................................................................................................ 4 

In re Countrywide Fin. Corp. Mortgage-Backed Sec. Litig., 

984 F. Supp. 2d 1021 (C.D. Cal. 2013) ...................................................................................... 8

Kumho Tire Co. v. Carmichael, 

526 U.S. 137 (1999) .................................................................................................................... 3 

Marvel Characters, Inc. v. Kirby, 

726 F.3d 119 (2d Cir. 2013)................................................................................................ 4, 5, 9 

Nationwide Transp. Fin. v. Cass Info. Sys., Inc., 

523 F.3d 1051 (9th Cir. 2008) .................................................................................................... 6 

Parenti v. Cty. of Monterey, 

2017 WL 1709349 (N.D. Cal. May 3, 2017) .......................................................................... 4, 5 

Case 5:17-cv-00220-LHK Document 1024-1 Filed 12/18/18 Page 3 of 16
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TABLE OF AUTHORITIES

(continued) 

Page(s)

iii 

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EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

S.E.C. v. Johnson, 

525 F. Supp. 2d 70 (D.D.C. 2007) .............................................................................................. 5 

Scott v. Chipotle Mexican Grill, Inc., 

313 F.R.D. 33 (S.D.N.Y. 2016) .................................................................................................. 4 

Seaboard Lumber Co. v. United States, 

308 F.3d 1283 (Fed. Cir. 2002)................................................................................................... 4 

United States v. Frazier, 

387 F.3d 1244 (11th Cir. 2004) .................................................................................................. 4 

RULES

Fed. R. Civ. P. 

26(a)(1)(A) ................................................................................................................................ 11 

37(c)(1) ..................................................................................................................................... 11 

Fed. R. Evid. 

702............................................................................................................................. 1, 3, 4, 5, 10 

702(a) ........................................................................................................................................ 10 

702(b) ........................................................................................................................................ 10 

702(c) .......................................................................................................................................... 7 

702(d) .......................................................................................................................................... 7 

703............................................................................................................................................. 10 

704(a) .......................................................................................................................................... 4 

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1 

 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

I. INTRODUCTION 

The FTC has proffered Richard Donaldson as an expert to opine about “the effect of” 

(i) “Qualcomm’s commercial practices relating to” its sale of modem chips “on the negotiation of 

patent licenses,” and (ii) its “practice of refusing to license competitor modem chip sellers under 

its standard essential patents” (“SEPs”). The Court should exclude Mr. Donaldson’s opinions in 

their entirety, for several reasons. 

First, Mr. Donaldson’s opinions on the impact of modem chips on the negotiation of 

patent licenses are nothing more than his improper speculation regarding the subjective intent and 

motivations of the parties to specific licensing negotiations to which Mr. Donaldson was not 

privy. Mr. Donaldson purports to opine that numerous Qualcomm licensees accepted certain 

licensing terms specifically because they subjectively wanted to purchase Qualcomm chips. To 

support these opinions, Mr. Donaldson simply quotes from documents and witness testimony that 

FTC counsel cherry-picked for him pertaining to a handful of negotiations, offers his opinion as 

to how the factfinder should interpret them, and then extrapolates that opinion without basis to 

numerous other negotiations. But that is not proper expert testimony. It is for the finder of fact—

not an expert—to consider admissible evidence, presented through fact witnesses, and reach 

conclusions as to any contracting party’s subjective motivations or intent in agreeing to contract. 

Second, Mr. Donaldson’s attempt to extrapolate his subjective opinions concerning a 

selected body of evidence more broadly is not founded on reliable principles or methods applied 

to the facts of the case, as required under FRE 702 and Daubert v. Merrell Dow Pharms., Inc., 

509 U.S. 579 (1993). Instead, Mr. Donaldson purports to base his conclusions on interpreting just 

six licensing negotiations with Qualcomm and counterparties, among hundreds, based solely on 

documents counsel provided him, while ignoring all other evidence. Mr. Donaldson’s attempt to 

draw sweeping conclusions from the limited documents the FTC selected for him, without any 

independent methodology as to why his narrow sample is representative, is improper expert 

testimony. The Court should strike his opinions for this reason. 

Third, Mr. Donaldson’s opinion regarding Qualcomm’s practice of licensing only device 

makers centers on his assertion that licensing at both the device and chip levels would be a 

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2 

 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

“viable business model.” He bases this opinion solely on his assertion that his former employer, 

Texas Instruments (“TI”), engaged in multi-level licensing of a much smaller portfolio of noncellular and primarily non-standard-essential semiconductor patents more than 20 years ago. 

Importantly, Mr. Donaldson concedes that he neither looked at nor has any knowledge of 

Qualcomm’s patent portfolio, how one would differentiate “chip” patents from “device” patents 

within Qualcomm’s portfolio, how long such a process (if possible) would take, or otherwise how 

Qualcomm’s licensing circumstances are comparable to – or distinguishable from – TI’s licensing 

circumstances. These deficiencies are even more notable as Mr. Donaldson concedes that in the 

cellular industry, licensing only at the device-level is the long-standing industry practice for all 

licensors, not just Qualcomm. As such, Mr. Donaldson’s opinion on this matter lacks any reliable 

methodology or sufficient factual basis and should be excluded.

Accordingly, the Court should strike Mr. Donaldson’s opening and rebuttal reports, and 

should not permit him to testify at trial in this case. 

II. BACKGROUND 

Mr. Donaldson is a former Senior Vice Present and General Patent Counsel of TI who 

retired in 2000. Expert Report of Richard Donaldson (“Report”), ¶ 2, attached as Exhibit 1 to the 

Declaration of Geoffrey T. Holtz In Support of Qualcomm Incorporated’s Motion to Exclude 

Expert Reports of Richard L. Donaldson (“Holtz Decl.”). While at TI, Mr. Donaldson’s 

responsibilities included developing global semiconductor patent licensing strategies and 

negotiating patent licenses. Id., ¶ 4. He holds a bachelor’s degree in electrical engineering and is 

an attorney. In arriving at his opinions, Mr. Donaldson reviewed a curated set of documents 

regarding license agreements between Qualcomm and only six Original Equipment 

Manufacturers (“OEMs”), including Huawei, Samsung and Lenovo, and claims to base his 

opinions on these limited materials and his prior work experience at TI and subsequently as a 

consulting expert. Id., ¶ 13. 

Mr. Donaldson states that he was “asked to provide [his] opinion about the effect of” 

“Qualcomm’s commercial practices relating to” its sale of modem chips “on the negotiation of 

patent licenses,” and its “practice of refusing to license competitor modem chip sellers under its 

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3 

 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

standard essential patents (“SEPs”).” In his Report, Mr. Donaldson provides his understanding of 

SEPs and the requirement that they be licensed on FRAND terms. Report, ¶¶ 21-35. He observes 

that this requirement was set forth by ETSI and similar organizations to ensure access to 

standardized technology. Id., ¶ 22. But Mr. Donaldson confirms that “[i]t was not part of my 

assignment to consider the ETSI IPR Policy and assess whether Qualcomm’s licensing practices 

are permitted by the terms of its contractual obligations as an ETSI participant.” Rebuttal Report 

of Richard Donaldson (“Rebuttal Report”), ¶38, attached as Exhibit 2 to Holtz Decl.; Deposition 

of Richard L. Donaldson (“Tr.”) at 195:6-10, attached as Exhibit 3 to Holtz Decl. 

Mr. Donaldson testified that he only reviewed testimony and documents in this case that 

the FTC selected for him, (Holtz Decl., Ex. 3 (Tr. at 115:22-116:8)), and relies on his purported 

experience (Id. at 67:4-67:8)), and has not taken any steps to test his interpretations (Id. at 61:25-

62:8, 223:2-223:18). He took no initiative to access other available record evidence, particularly 

the nature and scope of the supplier/customer relationship for chips, nor the long history between 

Qualcomm and the licensees he reviewed. Mr. Donaldson also concedes that it is the cellular 

industry norm to license at the device level as Qualcomm does, rather than at the component or 

chip level. Id. at 283:17-283:24. 

III. LEGAL STANDARD 

Federal Rule of Evidence 702 allows an expert to offer opinions at trial only if “(1) 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; (2) the testimony is based on sufficient 

facts or data; (3) the testimony is the product of reliable principles and methods; and (4) the 

expert has reliably applied the principles and methods to the facts of the case.” Fed. R. Evid. 702. 

Courts applying this rule must ensure “that an expert’s testimony both rests on a reliable 

foundation and is relevant to the task at hand.” Daubert, 509 U.S. at 597. The trial court acts as a 

“gatekeeper” by “making a preliminary determination that the expert’s testimony is reliable” and 

excluding evidence that does not meet the standards under Rule 702. Elsayed Mukhtar v. Cal. 

State Univ., Hayward, 299 F.3d 1053, 1063 (9th Cir. 2002); see Kumho Tire Co. v. Carmichael, 

526 U.S. 137, 147-48 (1999). The Rule 702 and Daubert standards apply in a bench trial. 

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4 

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EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

Seaboard Lumber Co. v. United States, 308 F.3d 1283, 1302 (Fed. Cir. 2002). The FTC has the 

burden of proof to establish these requirements are satisfied. Daubert, 509 U.S. at 592. 

A proffered opinion does not meet the standard if it supplies mere emphasis or argument, 

offering “nothing more than what lawyers for the parties can argue in closing arguments.” United 

States v. Frazier, 387 F.3d 1244, 1262 (11th Cir. 2004); accord Scott v. Chipotle Mexican Grill, 

Inc., 313 F.R.D. 33, 48-49 (S.D.N.Y. 2016). Nor may an expert interpret the evidence or render 

legal conclusions. See Fed. R. Evid. 704(a); In re ConAgra Foods, Inc., 302 F.R.D. 537, 558 

(C.D. Cal. 2014) (“[E]xpert should not ‘usurp’ the role of the court by utilizing ‘judicially defined 

terms’ that offer ‘improper legal opinion’”). An expert cannot opine on a party’s or non-party’s 

intent or motivation. See, e.g., Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 136 (2d Cir. 

2013); CFTC v. Moncada, 2014 WL 2945793, at *4 (S.D.N.Y. 2014) (“None of that testimony 

[about market manipulation], which is based on nothing more than [the expert’s] surmise and one 

brief conversation with defendant, is admissible.”). 

IV. ARGUMENT 

Failing to meet any one of the requirements set forth in Rule 702 renders a proffered 

expert opinion inadmissible, and Mr. Donaldson’s opinions fail on a number of independent 

grounds. 

A. Mr. Donaldson Invades the Province of the Factfinder by Improperly 

Speculating Regarding Licensees’ State of Mind 

Mr. Donaldson’s opinions regarding the purported effect of Qualcomm’s conduct are 

nothing more than speculation concerning the subjective intent and motivation of certain third 

parties who negotiated license agreements with Qualcomm. Holtz Decl., Ex. 3 (Tr. at 106:8). 

An expert may not opine on a party’s or non-party’s subjective intent, motivation or state 

of mind. See, e.g., Marvel Characters, 726 F.3d at 136; Moncada, 2014 WL 2945793, at *4 

(testimony based only on expert’s surmise and one brief conversation with defendant, is not 

admissible); Parenti v. Cty. of Monterey, 2017 WL 1709349, at *2 (N.D. Cal. May 3, 2017) 

(excluding expert’s “opinions regarding the state of mind” and noting that “[c]ourts routinely 

exclude as impermissible expert testimony as to intent, motive, or state of mind”). In Marvel 

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EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

Characters, for example, the Second Circuit held that the district court properly excluded 

opinions speculating “as to the motivations and intentions of certain parties” with regard to 

whether certain material was a “work made for hire.” 726 F. 3d at 136. In Parenti, the court 

excluded testimony of an expert in a medical malpractice action who sought to offer her opinion 

on whether hospital staff were “aware” of certain facts and whether they “did not attempt to 

harm” the patient. 2017 WL 1709349, at *2. 

Here, Mr. Donaldson similarly speculates about how various aspects of Qualcomm’s 

licensing practices motivated or affected the state of mind of the OEMs he considered. For 

example, he asserts that “[b]ased on my review of these negotiations, and the fact that licensees 

agreed to pay royalties dramatically higher than one would expect on the basis of little technical 

information, it seems likely that Qualcomm’s no license no chips policy was driving the 

negotiations.” See Report, ¶ 118 (emphasis supplied). That is nothing more than speculation that 

licensees’ motivation or intent in agreeing to certain terms was to obtain access to Qualcomm’s 

chips, as opposed to the myriad other factors that could have motivated licensees’ decisionmaking. Mr. Donaldson similarly opines that licensees “would prefer to take license under 

different terms” (Holtz Decl., Ex. 3 (Tr. at 287:17 (emphasis added)), and that Qualcomm’s 

purported leverage (which Mr. Donaldson does not analyze, either generally or vis-à-vis any 

specific licensee) “caused the other parties to believe they need to accept Qualcomm’s licensing 

terms.” Id., at 109:4-10. Expert testimony drawing conclusions about intent “invades the 

province” of the trier of fact and should be excluded under Federal Rule of Evidence 702. S.E.C. 

v. Johnson, 525 F. Supp. 2d 70, 78-79 (D.D.C. 2007) (excluding opinion that third parties “were 

misled” by defendants). 

Mr. Donaldson’s speculation regarding the meaning of third parties’ statements, whether it 

concerns their motive and intentions or otherwise, is also inadmissible because it is an improper 

attempt to tell the trier of fact – here the Court – how to interpret evidence. That is precisely what 

Mr. Donaldson does here. He spends much of his Report interpreting and characterizing emails, 

testimony and agreements in order to draw a raft of conclusions about the motivations behind the 

parties’ decision-making in negotiations. See Report, ¶¶123-133. For example, regarding 

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6 

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EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

Huawei, he speculates that: 

 “[B]ased on my review of the testimony in this case, it appears that Huawei believed it 

could not lower its rates due to its need for certain Qualcomm chips.” 

 “[Q]ualcomm itself seems to have pressed the advantages of its chips in licensing 

negotiations, which was clearly an effort to use its no license no chips policy to improve 

its licensing outcomes.” 

 “Given that Huawei failed in its principal objective of lowering its royalty rates, my 

opinion is that Qualcomm’s tactic was successful.” Id., ¶133. 

Mr. Donaldson repeats this exercise with respect to other third parties, namely Lenovo, 

Blackberry, LG, Sony and Samsung. See, e.g., Report ¶ 145 (“Based on testimony from 

BlackBerry employees that I have reviewed in this litigation, BlackBerry’s ability to negotiate 

with Qualcomm has been influenced by its concern that Qualcomm might cut off BlackBerry’s 

modem chip supply and engineering support”); id., ¶ 147 (“LG’s reliance on Qualcomm modem 

chips, and its awareness of the related business risk associated with its Qualcomm license 

negotiations, influenced LG’s posture in subsequent licensing negotiations as well”).1

 In doing 

so, Mr. Donaldson does not even attempt to assess the actual circumstances of each party to the 

negotiation – e.g., its need (or lack thereof) for Qualcomm chips, its appetite for litigating the 

licensing terms, the cost to Qualcomm of reaching impasse and foregoing both royalty payments 

and potentially significant chip sales to the putative licensee, and other considerations. Instead, 

Mr. Donaldson simply opines on the meaning, in his view, of some cherry-picked documents, 

based on his purported experience in other, unrelated negotiations largely outside the cellular 

industry, to reach conclusions on what OEMs believed. This is improper. See Nationwide 

Transp. Fin. v. Cass Info. Sys., Inc., 523 F.3d 1051, 1060 (9th Cir. 2008). 

The Court should strike Mr. Donaldson’s Report and Rebuttal Report and exclude his 

testimony as speculative interpretations of third parties’ purported states of mind and intentions. 

 

1

 See also Report, ¶ 149 (“Qualcomm documents likewise suggest that Qualcomm was fully 

aware of the leverage its policy enabled”); id., ¶¶ 160-161 (“Based on my review of Samsung’s 

2009 Amendment and negotiations, it seems clear that Qualcomm was able to use its modem chip 

offerings as leverage in its negotiations” and “the lack of substantive discussion further suggests 

that these technical considerations were not driving the ultimate royalty rate, and instead the loss 

of Qualcomm modem chips that would occur if negotiations failed was more significant”). 

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 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

They are unhelpful to the Court. 

B. Mr. Donaldson Improperly Bases Broad Opinions on a Handful of License 

Negotiations Cherry Picked for His Review by FTC Counsel 

To be admissible, Mr. Donaldson’s opinions must be based upon reliable principles and 

methods applied to the facts of this case. See Fed. R. Evid. 702(c) and (d); Bloom v. J.P. Morgan 

Chase & Co., 2010 WL 4939951, at *3 (N.D. Cal. Nov. 30, 2010) (excluding an expert after 

finding that “she employed no method whatsoever... but instead simply ‘picked’ [her conclusion] 

based on her impression from talking to plaintiff”). Here, Mr. Donaldson applied none. Instead, 

Mr. Donaldson simply reviewed a limited number of documents, handpicked by the FTC and 

which concern negotiations with only six OEMs, and on the basis of this limited review, 

concludes that Qualcomm’s policies, including its policy of not selling chips to infringers of its 

patents “appear to have given Qualcomm significant leverage” in all its negotiations with OEMs 

and “appear to have . . . resulted in several unusual features in Qualcomm’s ultimate licenses” 

with hundreds of OEMs. Report, ¶ 67 (emphasis supplied). This is impermissible expert opinion. 

By his own admission, Mr. Donaldson limited his analysis to reviewing selected portions 

of the discovery record regarding just six license agreements out of the hundreds on which he 

opines (Report, ¶¶ 122-162; Holtz Decl., Ex. 3 (Tr. at 112:22-113:14)), and only the documents 

the FTC provided to him concerning these six license agreements. Mr. Donaldson does not 

explain why his review of cherry-picked documents concerning six licensees is a sufficient basis 

for him to opine on Qualcomm’s licensing practices or licensing terms more generally. Mr. 

Donaldson has done nothing to determine the sufficiency of the documents he was provided – i.e., 

whether they provide a complete picture as to the negotiations they pertain to, let alone their 

sufficiency to form a basis for opinions going well beyond the negotiations with these six OEMs. 

Indeed, in his deposition, Mr. Donaldson conceded that he was not even aware of the volume of 

licensees he failed to consider and yet is purporting to opine on. Undisclosed and unknown to 

Mr. Donaldson are agreements and documents reflecting hundreds of other licensing negotiations 

that Mr. Donaldson has not considered. 

Under these circumstances, Mr. Donaldson does not and cannot offer any opinion that the 

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8 

 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

six license agreements he did review are a representative sample, making his conclusions as to 

Qualcomm’s agreements more broadly necessarily uninformed and unreliable. See In re 

Countrywide Fin. Corp. Mortgage-Backed Sec. Litig., 984 F. Supp. 2d 1021, 1040 (C.D. Cal. 

2013) (“The Court cannot countenance the use of this type of convenience sample . . . . suffering 

from litigation selection bias.”); In re Bextra & Celebrex Mktg. Sales Practices & Prod. Liab. 

Litig., 524 F. Supp. 2d 1166, 1176 (N.D. Cal. 2007) (“[C]herry-picking observational studies that 

support [the expert’s] conclusion and rejecting or ignoring the great weight of the evidence that 

contradicts his conclusion . . . .’ is not derived by the scientific method, and is not ‘good science;’ 

it is therefore inadmissible.”); see also Barber v. United Airlines, Inc., 17 F. App’x 433, 437 (7th 

Cir. Aug. 16, 2001) (“[A] selective use of facts fails to satisfy the scientific method and Daubert, 

and it thus fails to ‘assist the trier of fact.’”). While an expert certainly is not obligated to review 

every discovery document, if the expert is going to purport to opine on a broad program, he or she 

plainly should do more than review a small, skewed sample of the relevant record; at the very 

least, the expert should attempt to understand the scope of the available record evidence and offer 

a reliable methodology for extrapolating general opinions from a narrow review. Mr. Donaldson 

has done none of that. 

C. Mr. Donaldson Opines on Causation But Makes No Attempt to Test 

Alternative Causes 

Mr. Donaldson concedes that there are a number of variables that factor into any licensing 

negotiation, but he makes no effort to assess or control for any of them. Mr. Donaldson’s failure 

to consider clearly relevant facts in reaching his opinions demonstrates that his opinions are not 

based on sufficient facts or data and do not result from the application of any reliable 

methodology to such facts or data. For example, according to Mr. Donaldson, the existence and 

scope of “leverage” would depend, among other things, “[o]n the criticality of [Qualcomm’s] 

chips to a final product, whether there were commercially available alternatives to that product, 

the performance level of that product versus alternatives, the supply amount, are you buying 100 

from them, 80 percent of them.” Holtz Decl., Ex. 3 (Tr. 180:15-22). Yet Mr. Donaldson makes 

no attempt to assess any of the factors he identifies. Id., at 82:24-83:21. Similarly, Mr. 

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 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

Donaldson testified that the expected sales volume of a licensee would be relevant so that it could 

determine whether the costs of litigation of license terms would be warranted, but he also did not 

attempt to control for this factor. Id., at 77:17-78:13. Mr. Donaldson further concedes that where 

a licensee is buying chips in market segments in which there are reasonable substitutes — such as 

those in which the FTC does not (and could not) even allege monopoly power — the licensee

would have the negotiating leverage, not Qualcomm. Id., at 187:2-21. But Mr. Donaldson makes 

no effort to analyze or control for this factor, either. Indeed, he readily concedes that he only 

“focused on those situations where Qualcomm’s chips were important to the licensee,” Id., at 182, 

which would itself be improper cherry-picking. But he further made no effort to determine, 

systematically or at all, whether chips were or were not important to any (or all) licensees, or 

which chips, or in what numbers. He has simply reviewed curated evidence relating to a small 

number of pre-selected licensees and attempted to extrapolate that to every one of the hundreds of 

individualized negotiations that led to a Qualcomm license agreement. 

In these circumstances, the Court should strike Mr. Donaldson’s opinions because his 

analysis is untethered to any reliable principles or methodology. Rather, it rests only on Mr. 

Donaldson’s subjective interpretations based on purported review of a discrete set of evidence 

provided to him by the FTC. This is unreliable expert testimony. See Gen. Elec. Co. v. Joiner, 

522 U.S. 136, 146 (1997) (“[N]othing in either Daubert or the Federal Rules of Evidence requires 

a district court to admit opinion evidence that is connected to existing data only by the ipse dixit

of the expert. A court may conclude that there is simply too great an analytical gap between the 

data and the opinion proffered.”). As the Second Circuit observed in affirming the exclusion of 

experts who merely attempted to relate their interpretations of the evidence to the court: “The 

appropriate way to adduce factual details of specific past events is, where possible, through 

persons who witnessed those events. And the jobs of judging these witnesses' credibility and 

drawing inferences from their testimony belong to the factfinder.” Marvel Characters, 726 F.3d 

at 136. Mr. Donaldson’s opinions should therefore be excluded.

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 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

D. Mr. Donaldson’s Opinions on the “Viability” of Component-Level Licensing 

Are Not Based Upon Sufficient or Reliable Evidence 

Mr. Donaldson also offers an opinion “concerning Qualcomm’s practice of refusing to 

license competitor modem chip sellers under its standard essential patents (“SEPs”) as alleged in 

the FTC’s complaint.” Report ¶ 1. He opines simply that licensing at the chip level would be a 

“viable business model.” Id. ¶165. On two independent grounds, this opinion fails to meet the 

requirements of Rules 702 and 703 because it is not based on sufficient facts or data, and 

therefore is not helpful to the trier of fact. Fed. R. Evid. 702(a), (b), 703. 

First, in his deposition, Mr. Donaldson admits that licensing only at the device level is the 

long-standing industry practice: 

Q. ... What is your opinion, sir, regarding the industry practice of chip level licensing 

versus device level licensing? 

A, I think the practice to date is – has been people take licenses at the device level. 

That’s the way it kind of grew up when you started off with the early phones that 

were just cell phones. 

Holtz Decl., Ex. 3 (Tr. at 283:17-24). In his Report, however, contrary to his sworn deposition 

testimony, Mr. Donaldson asserts that he “disagree[s] with Qualcomm’s argument that there is an 

established industry practice of licensing cellular SEPs only at the handset level.” Report, ¶¶ 

165-174. Accordingly, to the extent Mr. Donaldson still intends to offer any opinion other than 

his admission that the industry practice has long been to license at the device level, the Court 

should exclude it. 

Second, Mr. Donaldson offers no valid basis for his opinion that licensing at the chip level 

by Qualcomm would be “viable” or “feasible.” The sole support he cites for his opinion is that TI 

licensed both computer chip makers and personal computer makers while Mr. Donaldson worked 

there from the 1970s to the 1990s. Report, ¶¶ 166-69. Mr. Donaldson did not have responsibility 

for formulating corporate strategy with respect to licensing cellular wireless patents. Holtz Decl., 

Ex. 3 (Tr. at 11:24-12:7). Mr. Donaldson’s license negotiations at TI typically involved 

“hundreds of patents,” Report ¶ 75, Ex. A at 2, but Qualcomm’s patent portfolio contains tens of

thousands of patents. Mr. Donaldson concedes that he knows nothing about Qualcomm’s patent 

portfolio, has never reviewed any Qualcomm patents to ascertain how one would differentiate 

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 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

“chip” patents from “device” patents, and cannot say how long it would take to do so. Holtz 

Decl., Ex. 3 (Tr. at 271:6-272:13). Without any knowledge of Qualcomm’s patents, 

Mr. Donaldson has no basis to analogize between his past TI experience and the viability of 

alternative licensing practices for Qualcomm. Nor did he make any link between the computer 

industry and the cellular industry, or any attempt to justify why TI’s choice should be imprinted 

onto the cellular industry.2

Mr. Donaldson’s opinion that chip-level licensing is “viable” is thus based upon no 

“methodology” other than what he says was his TI experience 20-plus years ago, the applicability 

of which to Qualcomm’s circumstances he cannot opine on.3 The Court should strike this aspect 

of his opinions. 

V. CONCLUSION 

For the foregoing reasons, the Court should strike Mr. Donaldson’s Report and his 

Rebuttal Report and exclude the improper opinion testimony described herein. 

Dated: August 30, 2018 

By: 

MORGAN, LEWIS & BOCKIUS LLP 

/s/ Geoffrey T. Holtz 

 Geoffrey T. Holtz 

 

2

 Indeed, it is hornbook law that a patentee is free to license or not license its patents as it sees fit. 

See Hartford-Empire Co. v. United States, 323 U.S. 386, 432 (1945) (“A patent owner is not in 

the position of a quasi-trustee for the public or under any obligation to see that the public acquires 

the free right to use the invention. He has no obligation either to use it or to grant its use to 

others.”). Mr. Donaldson expressly declines to offer any opinion that any FRAND commitment 

has affected the industry practice of licensing at the device level or requires anything different. 

Rebuttal Report, ¶38. 

3

 Mr. Donaldson’s testimony of practices at TI should also be excluded because they comprise 

undisclosed fact testimony. A party’s initial disclosures must identify all fact witnesses. Fed. R. 

Civ. P. 26(a)(1)(A). Failure to disclose a witness precludes the party from calling that witness at 

trial. Fed. R. Civ. P. 37(c)(1); Hoffman v. Constr. Prot. Servs., Inc., 541 F.3d 1175, 1179 (9th 

Cir. 2008); Guzman v. Bridgepoint Educ., Inc., 305 F.R.D. 594, 607 (S.D. Cal. 2015). Donaldson 

was not disclosed as a fact witness under Rule 26(a)(1)(A), and Qualcomm suffers obvious 

prejudice by its inability to review, or even to seek, the TI licensing agreements about which 

Donaldson now purports to testify or any other documents to test Mr. Donaldson’s testimony. 

Mr. Donaldson should be precluded from testifying regarding TI’s licenses. 

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12 

 DEFENDANT QUALCOMM INCORPORATED’S MOTION TO EXCLUDE 

EXPERT REPORTS OF RICHARD L. DONALDSON 

Case No. 17-cv-220-LHK-NMC 

 Robert A. Van Nest (SBN 84065) 

Eugene M. Paige (SBN 202849) 

Justina Sessions (SBN 270914) 

KEKER, VAN NEST & PETERS LLP 

633 Battery Street 

San Francisco, CA 94111-1809 

Telephone: (415) 391-5400 

Facsimile: (415) 397-7188 

Gary A. Bornstein (pro hac vice)

Yonatan Even (pro hac vice)

CRAVATH, SWAINE & MOORE LLP 

Worldwide Plaza 

825 Eighth Avenue 

New York, NY 10019-7475 

Tel.: (212) 474-1000 

Fax: (212) 474-3700 

gbornstein@cravath.com 

yeven@cravath.com 

Richard S. Taffet (pro hac vice)

MORGAN, LEWIS & BOCKIUS LLP 

101 Park Avenue 

New York, NY 10178-0060 

Tel.: (212) 309-6000 

Fax: (212) 309-6001 

richard.taffet@morganlewis.com 

Willard K. Tom (pro hac vice)

MORGAN, LEWIS & BOCKIUS LLP 

1111 Pennsylvania Avenue NW 

Washington, DC 20004-2541 

Tel.: (202) 739-3000 

Fax: (202) 739 3001 

willard.tom@morganlewis.com 

Geoffrey T. Holtz (SBN 191370) 

MORGAN, LEWIS & BOCKIUS LLP 

One Market, Spear Street Tower 

San Francisco, CA 94105-1596 

Tel.: (415) 442-1000 

Fax: (415) 442-1001 

gholtz@morganlewis.com 

 Attorneys for Defendant 

QUALCOMM INCORPORATED 

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