Dolby Laboratories Licensing Corporation v. Adobe Inc.

Background

The parties each moved to exclude or strike portions of the opposing side’s expert testimony under Federal Rule of Evidence 702. Dolby challenged testimony from Adobe experts Steven Kursh, Schuyler Quackenbush, and Christian Tregillis. Adobe challenged testimony from Dolby experts John Strawn, Paul Meyer, and Lorin Hitt.

The court explained that Rule 702 requires the judge to determine whether an expert is qualified, whether the testimony will help the jury, and whether the opinion is based on reliable methods applied to sufficiently supported facts or data. Experts may not decide legal questions or simply tell the jury what result to reach.

Industry experts

The court largely granted Dolby’s request to exclude Steven Kursh’s opinions. It excluded Kursh’s opinions about interpreting the parties’ contracts, including opinions presented as software-industry customs and practices, generic business considerations, contract-drafting “best practices,” the effect of payments and receipts on business relationships, and bundling. The court allowed Kursh to testify about the lack of a generally accepted distinction between “consumer” and “professional” software use and about the software-industry certification process generally. The court reserved whether Kursh could offer one further opinion about whether additional implementations of Dolby Plus would be contrary to industry custom and practice, pending a further showing.

The court granted in part Adobe’s request concerning Lorin Hitt’s report. Hitt’s rebuttal opinions addressing portions of Kursh’s testimony that the court excluded were stricken, as were opinions about contract interpretation and generic business practices. Hitt could rebut Kursh’s permitted testimony about consumer and professional software designations and could offer opinions about the product-certification process generally. The court found that Hitt’s study of the industry, academic sources, and publicly available third-party license agreements supplied sufficient expertise; objections about his lack of practical industry experience went to the weight of his testimony rather than its admissibility.

Technical experts

The court denied Dolby’s request to exclude Opinions 2 and 4 of Schuyler Quackenbush’s report. Quackenbush could offer technical opinions that certain object-code libraries contained no elements of expression or creativity. The court found that both sides’ technical experts could help the jury resolve disputed factual issues about the highly technical source code and object code. The experts would receive additional guidance at the pretrial conference, and the factual material supporting their opinions would have to be admitted separately rather than supplied by the experts themselves.

The body of the opinion denied Adobe’s request to exclude Section VIII of John Strawn’s report. Strawn could offer opinions that a MainConcept object-code library used by Adobe matched and incorporated Dolby’s source code. The court concluded that this theory fell within the pleadings’ general allegations concerning infringement of the asserted Dolby works and that Adobe had an opportunity to respond through its expert report. The court nevertheless stated that it would provide further guidance about the permissible limits of Strawn’s testimony at the pretrial conference.

Damages experts

The court denied Adobe’s request to exclude Paul Meyer’s hypothetical-royalty analysis. It was not persuaded that Dolby had expressly abandoned that damages theory. The court also held that disputes about the factual assumptions underlying Meyer’s methodology—such as whether damages should be based on Creative Cloud purchases or application downloads—were issues for the jury rather than grounds for excluding the testimony. Meyer could not offer opinions at trial that were not clearly disclosed in his report.

The court denied Dolby’s request to strike specified portions of Christian Tregillis’s report, including paragraphs 156, 160 through 185, 203 through 207, and 228 through 231. Tregillis could summarize other experts’ opinions or admissible evidence as a framework for his own opinions and could challenge Meyer’s calculations based on economic realities related to royalty transactions. The court rejected Dolby’s argument that the specified passages necessarily contained improper legal conclusions. As with the other experts, Tregillis could not be the source of the factual material underlying his opinions; that material had to be separately admitted.

Disposition

The opinion’s body states that the parties’ motions were granted in part and denied in part. It states that Dolby’s request concerning Kursh was granted, Adobe’s request concerning Hitt was granted in part, Dolby’s request concerning Quackenbush was denied, Adobe’s request concerning Strawn was denied, Adobe’s request concerning Meyer’s hypothetical-royalty analysis was denied, and Dolby’s request concerning the specified Tregillis paragraphs was denied. The order terminated Docket Numbers 159 and 162.

There is an apparent inconsistency in the order’s numbered list: item (1) says “The motion to exclude the opinions of Dr. Strawn is GRANTED, subject to the exceptions set forth above,” but the opinion’s discussion and item (4) say that Adobe’s motion to exclude Section VIII of Strawn’s report was denied. The text also refers to Hitt’s request as granted in part in the discussion, while the numbered list says it was granted subject to exceptions.

Judge

Judge Yvonne Gonzalez Rogers issued the order.