Skillz Platform Inc. v. AviaGames Inc. ( 2023 )

1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 SKILLZ PLATFORM INC., Case No. 21-cv-02436-BLF 8 Plaintiff, ORDER REGARDING MOTIONS IN 9 v. LIMINE 10 AVIAGAMES INC., [Re: ECF No. 353, 356, 358, 359, 368, 370, 11 Defendant. 372, 383] 12 13 On November 9, 2023, the Court held a pretrial conference in this action, during which it 14 issued oral rulings on Plaintiff Skillz Platform Inc.’s and Defendant AviaGames Inc.’s motions in 15 limine. The Court here expands upon those oral rulings. 16 I. SKILLZ’S MOTIONS IN LIMINE 17 Skillz filed four motions in limine. ECF Nos. 358, 368, 370, 372. AviaGames opposed all 18 four motions. ECF Nos. 398, 399, 400, 401. The Court considers each motion in limine in turn. 19 A. Skillz’s Motion in Limine No. 1 to Exclude Evidence or Argument Relating to Unasserted or Invalid Claims and Patents (ECF No. 358) 20 Skillz moves to exclude the facts that Skillz originally asserted more claims and patents 21 than Skillz will present to the jury and that the ’602 Patent was found unpatentable. ECF No. 358 22 at 1. Skillz argues that such evidence is inadmissible under Federal Rules of Evidence 401, 402, 23 and 403 because it is not relevant and it risks prejudice, confusion of issues, and misleading the 24 jury. Id. at 1–2. AviaGames agrees that Skillz’s unasserted claims and patents are not relevant to 25 the validity or infringement of the ’564 Patent and that AviaGames will not point to the fact that 26 the ’602 Patent was found unpatentable to imply that the ’564 patent is invalid. ECF No. 398 at 1. 27 However, AviaGames argues that the ’602 Patent is relevant to damages because Skillz’s damages 1 expert, Jim Bergman, did not consider the ’602 Patent or any of Skillz’s other intellectual property 2 in assigning value to the ’564 Patent. Id. at 1–3. 3 The Court agrees with AviaGames that evidence of the ’602 Patent and Skillz’s other 4 intellectual property is relevant to damages because AviaGames may use this evidence to 5 challenge Bergman’s damages opinion. See SPEX Techs. v. Apricorn, Inc, No. CV 16- 6 07349JVS(AGRX), 2020 WL 1289546, at *1 (C.D. Cal. Jan. 21, 2020) (permitting evidence of 7 other claims as relevant to an expert’s damages opinion). Moreover, evidence of the ’602 Patent 8 and Skillz’s other intellectual property—absent suggestion that the ’602 Patent was found 9 unpatentable—would not prejudice Skillz in the eyes of the jury. 10 Accordingly, the Court GRANTS Skillz’s Motion in Limine No. 1 as to any evidence that 11 the ’602 Patent was invalidated. This ruling does not preclude AviaGames from examining 12 Bergman and, AviaGames’ damages expert, Brian Napper regarding the relative value of the ’564 13 Patent to other patents held by Skillz. 14 B. Skillz’s Motion in Limine No. 2 to Exclude Reasonable Royalty Opinion of Brian W. Napper (ECF No. 368) 15 Skillz argues that Napper’s reasonable royalty opinion should be excluded to the extent 16 that he relies on a November 22, 2016 Software License between Jarrod Epps and AviaGames 17 (“Epps Agreement”) and a May 13, 2020 License between Shanghai Huanyue Network 18 Technology and AviaGames (“Shanghai Agreement”). ECF No. 368 at 1. Skillz raises three 19 arguments. First, Skillz argues that the Shanghai Agreement should be excluded under Federal 20 Rule of Civil Procedure 37(c)(1) because AviaGames failed to timely identify the Shanghai 21 Agreement in its interrogatory responses.1 Id. at 2–4. Second, Skillz argues that the Shanghai 22 Agreement was not at arms-length because AviaGames’ CEO, Vickie Chen, represented both 23 parties in the transaction. Id. at 4–5. Third, Skillz argues that both the Epps and Shanghai 24 25 1 Skillz’s motion in limine originally argued the Shanghai Agreement should be excluded because AviaGames failed to identify or produce the Shanghai Agreement until after the close of fact 26 discovery. ECF No. 368 at 1. At the pretrial conference, Skillz corrected its brief and acknowledged that the Shanghai Agreement was produced before the close of fact discovery. ECF 27 No. 489 at 58:3–8. However, Skillz continued to argue that the Shanghai Agreement should be 1 Agreements represent AviaGames’ cost to obtain the infringing technology, which has no 2 relevance to the question of a reasonable royalty. Id. at 5. 3 AviaGames responds that the Shanghai Agreement was produced 12 days before the close 4 of discovery and that Skillz was put on notice of the Shanghai Agreement and failed to follow up 5 on this information. ECF No. 399 at 1; ECF No. 489 at 64:5–65-11. AviaGames also argues that 6 the record includes evidence that the Shanghai Agreement was negotiated at arms-length: the 7 Shanghai Agreement includes an indemnification clause and Pannel Kerr Forster conducted a 8 third-party valuation to determine the fair market value of the transaction. ECF No. 399 at 2. 9 Finally, AviaGames argues that Napper used the Epps and Shanghai Agreements as valuations, 10 rather than design alternatives, and this approach is not contrary to case law. Id. at 2–4. 11 The Court first concludes that exclusion of the Shanghai Agreement based on Rule 37 is 12 improper. The Court finds that AviaGames’ disclosure of the Shanghai Agreement was in time. 13 The parties agree that AviaGames produced the Shanghai Agreement on May 13, 2023, which was 14 almost two weeks before the discovery deadline and which gave Skillz ample time to seek 15 additional information. See Atari Interactive, Inc. v. Redbubble, Inc., No. 18-CV-03451-JST, 16 2021 WL 6014734, at *4 (N.D. Cal. Oct. 14, 2021) (denying a motion in limine to exclude late- 17 disclosed evidence where the moving party did not file a discovery motion and instead waited 18 until motions in limine to bring its concern to the court’s attention), aff’d, No. 21-17062, 2023 WL 19 4704891 (9th Cir. July 24, 2023). 20 On Skillz’s second argument, there is evidence in the record suggesting that the Shanghai 21 Agreement was not negotiated at arms-length. In particular, Chen negotiated and signed on behalf 22 of both parties to the Shanghai Agreement. ECF No. 367-6 at 10. If the Shanghai Agreement was 23 not negotiated at arms-length, then it is irrelevant to a hypothetical negotiation and Napper’s 24 reliance on the Shanghai Agreement to calculate a reasonable royalty is unreliable. Cf. Sentius 25 Int’l, LLC v. Microsoft Corp., No. 5:13-CV-00825-PSG, 2015 WL 451950, at *2 (N.D. Cal. Jan. 26 27, 2015) (“Damages may take the form of ‘reasonable royalty [the patentee] would have received 27 through arms-length bargaining’ in a hypothetical negotiation.” (alteration in original)); see also 1 states that the Shanghai Agreement was treated as if it was an arms-length deal and notes that a 2 third-party valuation was performed. His only citation for this assertion is his discussion with 3 Chen. ECF No. 369-4 (“Napper Report”) ¶ 158 & n.303. At his deposition, Napper 4 acknowledged that he did not review the written third-party valuation. ECF No. 396-3 (“Napper 5 Depo.”) at 123:6–23. Although the third-party valuation might be a sufficient factual basis for 6 Napper’s conclusion that the Shanghai Agreement was negotiated at arms-length, AviaGames has 7 never produced the third-party valuation and Skillz has not had the opportunity to challenge it. 8 ECF No. 368 at 4. As the pretrial conference, the Court denied Skillz’s motion in limine with 9 respect to this argument, but its denial was conditional upon AviaGames’ production of the 10 independent valuation report within one week of the conference. See ECF No. 489 at 73:12–16. 11 The Court further noted that Skillz’s damages expert, Bergman, will be permitted to opine on the 12 third-party valuation, but Skillz need not make Bergman available for further deposition. Id. at 13 66:19–24. 14 Third, assuming that the Shanghai Agreement was negotiated at arms-length, the Court 15 finds that the Epps and Shanghai Agreements are relevant to the question of a reasonable royalty. 16 The Epps Agreement conveyed rights to software that AviaGames used to run its back-end 17 systems prior to 2020. Id. ¶ 147. After 2020, the Shanghai Agreement conveyed rights to 18 software, documentation, material, content, and other elements that AviaGames used to run 19 Pocket7Games. Id. ¶¶ 152–54. Skillz argues that these agreements represent the “actual cost of 20 developing” the infringing system, which is of little probative value and is unfairly prejudicial to 21 the question of a reasonable royalty. ECF No. 368 at 5. But Skillz relies on inapposite case law. 22 Skillz relies three cases in which the same expert offered “cost savings” opinions that were based 23 on the cost of building the infringing system from scratch rather than considering the costs and 24 availability of non-infringing alternatives. See Finjan, Inc. v. Cisco Sys. Inc., No. 17-CV-00072- 25 BLF, 2020 WL 13180005, at *4 (N.D. Cal. Apr. 21, 2020); Finjan, Inc. v. ESET, LLC, No. 17- 26 CV-183-CAB-BGS, 2019 WL 5212394, at *4 (S.D. Cal. Oct. 16, 2019); Acceleration Bay LLC v. 27 Activision Blizzard Inc., No. 1:16-CV-00453-RGA, 2019 WL 4194060, at *3 (D. Del. Sept. 4, 1 opinion on building the infringing system from scratch. Instead, the Epps and Shanghai 2 Agreements represent what AviaGames paid for licenses that included comparable technology to 3 the ’564 Patent and may be used as data points under Georgia-Pacific factor 12, especially 4 considering that Skillz has never licensed the ’564 Patent. Napper Report ¶ 139. 5 Accordingly, the Court DENIES Skillz’s Motion in Limine No. 2 with respect to the Epps 6 Agreement. The Court’s DENIAL of the motion with respect to the Shanghai Agreement was 7 conditioned upon AviaGames’ production of the independent valuation report no later than 8 November 16, 2023 such that Bergman can review the report and offer a rebuttal. ECF No. 489 at 9 73:12–16. If AviaGames did not timely produce the independent valuation report, then the Court 10 will GRANT Skillz’s motion with respect to the Shanghai Agreement. 11 C. Skillz’s Motion in Limine No. 3 to Exclude Evidence Regarding Alleged Skillz’s Conduct and Other Litigation (ECF No. 370) 12 Skillz seeks to exclude evidence and argument regarding four categories of information. 13 ECF No. 370 at 3–4. First, Skillz argues that its alleged use of bots is irrelevant to the issues in 14 this patent litigation and would be prejudicial and confuse the jury. Id. at 4–5. Second, Skillz 15 argues that accusations that Skillz is acting on “racial animus” would unfairly prejudice Skillz and 16 mislead the jury. Id. at 5. Third, Napper suggests that there could be errors in Skillz’s financial 17 statements because Skillz previously restated its consolidated financial statements. Napper Report 18 ¶ 10; ECF No. 369-5 (“Napper Depo.”) at 145:1–150:19. Skillz argues that such accusations are 19 irrelevant to the suit and are highly prejudicial because there is no reasonable dispute about 20 whether Skillz’s restatement corrected any issues with the company’s financial statements. ECF 21 No. 370 at 5–6. Fourth, Skillz argues that evidence of other litigation and regulatory actions to 22 which Skillz has been a party are irrelevant and overly prejudicial. Id. at 6. 23 AviaGames agrees that evidence and argument regarding racial animus and other litigation 24 should be excluded. ECF No. 400 at 3–4. However, AviaGames argues that evidence of Skillz’s 25 use of bots is relevant because Bergman’s damages opinion is based on how AviaGames’ use of 26 bots would make Skillz reluctant to license to AviaGames in a hypothetical negotiation and 27 because Skillz CEO Andrew Paradise misrepresented to the public that Skillz never uses bots. Id. 1 at 2–3. AviaGames also argues that Skillz’s restatement of its financial statements are relevant 2 because Skillz argues that it is losing market share to AviaGames and Skillz’s misrepresentations 3 offer an alternative explanation for Skillz’s loss in market share. Id. at 3–4. 4 On the first disputed issue, the Court finds that evidence of Skillz’s use of bots is relevant 5 to damages issues and witness credibility. See Fed. R. Evid. 401 (defining relevant evidence as 6 “having any tendency to make the existence of any fact that is of consequence to the determination 7 of the action more probable or less probable than it would be without the evidence.”). Bergman’s 8 damages opinion states that Skillz is entitled to a larger royalty rate because AviaGames’ use of 9 bots, among other things, puts Skillz at a competitive disadvantage and risks harm to the 10 competitive gaming industry. ECF No. 351-4 (“Bergman Supp. Report”) ¶¶ 11–14. Put 11 differently, Bergman calculated an increase in the reasonable royalty rate calculations based in 12 part on an assumption that AviaGames uses bots and Skillz does not. Thus, evidence of Skillz’s 13 use of bots is relevant because it would allow AviaGames to challenge Bergman’s damages 14 opinion. Similarly, Skillz’s use of bots will be relevant in the cross-examination of Paradise 15 because Paradise previously stated that Skillz has never used bots and Skillz’s damage theory is 16 based in part on the importance of fairness to Skillz and the ’564 Patent. See ECF No. 218-19 17 (Paradise stating publicly that Skillz does not use bots); Bergman Supp. Report ¶¶ 11–14. 18 Evidence that Skillz also uses bots is thus relevant to challenge Paradise’s credibility and Skillz’s 19 arguments about fairness. The Court does not find that this evidence, when offered for the 20 purposes described above, would unduly prejudice Skillz. 21 On the second disputed issue, the Court finds that evidence of Skillz’s correction of its 22 consolidated financial statements is substantially more prejudicial than probative. Napper opines 23 that because Skillz previously had to restate its consolidated financial statements, that there is a 24 possibility that Skillz’s financial statements continue to be inaccurate or unreliable. See Napper 25 Report ¶ 10; Napper Depo. at 147:15–24. But Napper has no basis for this assertion other than the 26 fact of the restatement itself—he did not audit Skillz’s SEC filings and there is otherwise no 27 evidence to suggest that Skillz’s restated financial statements are inaccurate. See Napper Depo. At 1 opinion on the reliability of Skillz’s restated financial statements would be inflammatory and 2 highly prejudicial to Skillz. Although AviaGames argues that the evidence and opinion are 3 relevant to address Skillz’s “market share” theory, Skillz’s damages theory is not based on a loss 4 of market share. The only reference to this market share theory is not a damages argument but a 5 passing statement made by Skillz’s counsel at a hearing to show continuing harm to Skillz from 6 delay of this case. See ECF No. 400 at 4. 7 Accordingly, the Court DENIES Skillz’s Motion in Limine No. 3 with respect to evidence 8 of bots. As stated at the pretrial conference, evidence of bots may be introduced for the discussion 9 of damages under the Georgia-Pacific factors and for the cross-examination of Paradise on the 10 issues of fairness and Paradise’s credibility. ECF No. 489 at 85:15–18, 86:13–16. The Court 11 GRANTS Skillz’s Motion in Limine No. 3 with respect to evidence of racism, Skillz’s restatement 12 of its consolidated financial statements, and other litigation and regulatory actions. As discussed 13 and agreed to at the pretrial conference, any remarks suggesting racial animus must be redacted 14 from evidence presented at trial. Id. at 79:11–80:25. 15 D. Skillz’s Motion in Limine No. 4 to Exclude Evidence Regarding Employee Wealth and Compensation and Skillz’s Financial Condition (ECF No. 372) 16 Skillz seeks to exclude evidence regarding the compensation and wealth of individuals at 17 Skillz because such evidence is irrelevant and likely to mislead the jury. ECF No. 372 at 2. Skillz 18 also seeks to exclude references to its financial condition, including its stock price and changes to 19 its stock price, as irrelevant, unduly prejudicial, and likely to mislead the jury. Id. AviaGames 20 does not oppose the exclusion of evidence regarding employee wealth and compensation and 21 Skillz’s stock price. See ECF No. 401 at 1. However, AviaGames argues that information about 22 Skillz’s financial condition is relevant to damages, the parties’ relationship, and Skillz’s reason for 23 filing suit. Id. at 1–2. AviaGames also argues that Skillz has not explained why such evidence 24 would confuse the jury. Id. at 2–3. 25 On the contested issue, AviaGames has articulated a sufficient basis for why Skillz’s 26 financial condition is relevant to damages. For example, Skillz is asking for almost $38 million in 27 damages and its market capitalization is approximately $100 million. Skillz’s market 1 capitalization thus serves as a data point by which the jury may determine whether Skillz’s 2 requested damages are reasonable. Although Skillz argues that the comparison of its damages 3 request to its market cap is irrelevant because the reasonable royalty rate considers AviaGames’ 4 financial gain from the accused product rather than Skillz’s financial condition, this is a point to be 5 made through cross-examination rather than a basis for exclusion. The Court also concludes that 6 evidence of Skillz’s market capitalization and profits are not unfairly prejudicial. Skillz has not 7 identified why any of its financial information, which is publicly available, would mislead the jury 8 or otherwise prejudice Skillz. 9 The Court finds, however, that Skillz’s motivation for bringing this lawsuit is not relevant 10 to any of the issues at trial. At the pretrial conference, AviaGames agreed that it would not offer 11 evidence of Skillz’s financial condition to show its motivation for suing unless Skillz put its 12 motivation into dispute. ECF No. 489 at 93:21–94:20. 13 Accordingly, the Court GRANTS Skillz’s Motion in Limine No. 4 with respect to evidence 14 of Skillz’s employees’ compensation and wealth, evidence of Skillz’s stock price, and evidence 15 regarding Skillz’s motive for bringing the case. The Court DENIES the motion with respect to the 16 use of Skillz’s financial condition (i.e., market share and profits) by the damages experts to show 17 the reasonableness or unreasonableness of the damages demand. 18 II. AVIAGAMES’ MOTIONS IN LIMINE 19 AviaGames filed five motions in limine. ECF Nos. 353, 356, 359, 383, 383-1. Skillz 20 opposed all five motions. ECF Nos. 406, 410, 415, 424, 427. The Court considers each motion in 21 limine in turn. 22 A. AviaGames’ Motion in Limine No. 1 to Exclude Evidence or Argument Referencing Skillz’s Non-Patent Allegations (i.e., Copyright Infringement, 23 “Fraud,” or “Criminal” Activity) (ECF No. 353) 24 AviaGames seeks to exclude evidence and argument regarding Skillz’s non-patent 25 allegations, including allegations about copyright, fraud, and criminal activity because these 26 allegations are not relevant to this patent litigation and unduly prejudicial, risk confusing the jury, 27 and would waste time. ECF No. 353 at 1–3. In particular, AviaGames points to Jose Zagal’s 1 device to implement the ROBOT functionality and present a fake user and false impressions of 2 fairness.” Id. at 1 (quoting ECF No. 352-4 (“Zagal Supp. Report”) ¶ 62). AviaGames also argues 3 that Skillz’s allegations of AviaGames’ wrongdoing should be excluded as propensity evidence 4 barred by Fed. R. Evid. 404(b)(1). Id. at 4–5. 5 Skillz characterizes AviaGames’ motion as a request to exclude evidence related to bots 6 and argues that evidence of bots and related fairness principles are relevant to Skillz’s theory of 7 infringement, damages, and willfulness. ECF No. 406 at 1–3. Skillz further argues that evidence 8 of bots is not unfairly prejudicial and does not risk wasting time or confusing the jury. Id. 3–5. 9 Finally, Skillz argues that it is not offering evidence of bots as propensity evidence and, to the 10 extent that it is, Skillz’s evidence would fall under the exception to Fed. R. Evid. 404 that permits 11 such evidence to attack a witness’s character for truthfulness. Id. at 5 (discussing Fed. R. Evid. 12 608). 13 At the pretrial conference, the parties agreed that evidence of other parallel litigation or 14 investigation will not be offered at trial. ECF No. 489 at 112:1–3. On evidence of fraud or 15 criminal activity, the Court notes that evidence of bot use is relevant to infringement, damages, 16 and willfulness and will allow evidence of bot use to prove the elements of the patent claims in 17 this lawsuit. However, evidence of bot use may be unfairly prejudicial if presented in a way that 18 suggests that AviaGames cheats customers or is committing a crime or fraud because such 19 allegations are irrelevant to the patent dispute and would unduly prejudice AviaGames. Because 20 the Court’s ruling will depend on how particular evidence is presented, the Court will defer ruling 21 on AviaGames’ motion with respect to allegations of fraud and criminal activity and AviaGames 22 may raise specific objections at trial. 23 Accordingly, the Court GRANTS AviaGames’ Motion in Limine No. 1 with respect to 24 evidence of the copyright lawsuit and DEFERS ruling the motion with respect to fraud or criminal 25 activity. AviaGames may raise objections to specific evidence under Fed. R. Evid. 403 and 404 at 26 trial. 27 B. AviaGames’ Motion in Limine No. 2 to Exclude New “Bot” Arguments (ECF 1 No. 383) 2 AviaGames seeks to exclude Skillz’s theory that AviaGames infringes the ’564 Patent 3 through its use of bots.2 AviaGames argues that Skillz’s bot theory is inconsistent with Skillz’s 4 previously disclosed infringement theories and thus is in violation of the Court’s order reopening 5 discovery and the Northern District’s Patent Local Rules. ECF No. 383 at 1–3. Skillz responds 6 that the theory of infringement described by Zagal in his supplemental report is consistent with 7 Skillz’s infringement contentions and Zagal’s original report. ECF No. 424 at 1–4. Skillz also 8 argues that AviaGames is using its motion in limine to relitigate Skillz’s diligence in pursuing its 9 claims. Id. at 4. 10 As stated above, the Court finds that evidence of bots is relevant to infringement, damages, 11 and willfulness. The Court disagrees with AviaGames’ argument that Zagal’s supplemental report 12 is inconsistent with his original report. Zagal’s supplemental report clarifies that: 13 Avia puts the systems into use, performs the methods, and implements the instructions claimed in the ’564 patent on the user device as soon 14 as the user enrolls in the match using the Accused Products. Once a user is paired with a ROBOT for a match, the rest of the process is 15 entirely under Avia’s control and operates under Avia’s control and for Avia’s benefit in the same or similar manner to that on which I 16 opined in my Opening Report constitutes infringement. 17 Zagal Supp. Report ¶ 13. In essence, Zagal’s supplemental report opines that AviaGames uses 18 bots to practice the asserted claim limitations in the same way that the limitations are practiced in 19 games without bots. Thus, the theory of infringement is consistent between Zagal’s opening and 20 supplemental report and the difference is what practices the asserted claim limitations. 21 Accordingly, the Court DENIES AviaGames’ Motion in Limine No. 2. 22 C. AviaGames’ Motion in Limine No. 3 to Exclude Evidence or Argument 23 Referencing Third Party Statements (ECF No. 356) 24 AviaGames argues that statements by third parties, including customer reviews and news 25 coverage, should be excluded as hearsay and no exception to the hearsay rule applies. ECF No. 26 27 2 AviaGames’s Motion in Limine No. 2 also sought to exclude evidence referencing bot use as 1 356 at 1–3. AviaGames also argues that such evidence should be excluded under Fed. R. Evid. 2 403 as unduly prejudicial to AviaGames. Id. at 4–5. Skillz responds that AviaGames’ motion is 3 overbroad because it does not identify any specific evidence. ECF No. 310 at 1. Skillz also 4 argues that customer reviews and news articles may be offered for non-hearsay purposes. Id. at 2– 5 3. Finally, Skillz argues that customer reviews and news articles are relevant to show 6 infringement, willfulness, and damages and are not unfairly prejudicial. Id. at 4–5. 7 Although AviaGames may be correct that certain customer reviews and news coverage 8 could be excluded at trial as hearsay or under Fed. R. Evid. 403, AviaGames has not identified or 9 described any specific evidence it seeks to exclude. “Because the admissibility of such evidence is 10 an individualized and fact-specific inquiry,” the Court cannot determine based on AviaGames’ 11 motion in limine whether any particular evidence is admissible. JIPC Mgmt., Inc. v. Incredible 12 Pizza Co., No. CV 08-04310 MMM PLAX, 2009 WL 8591607, at *12 (C.D. Cal. July 14, 2009). 13 Accordingly, the Court DEFERS ruling on AviaGames’ Motion in Limine No. 3. 14 AviaGames may raise any hearsay or Fed. R. Evid. 403 objections to specific evidence at trial. 15 D. AviaGames’ Motion in Limine No. 4 to Exclude Certain Opinions of Jim W. Bergman (ECF No. 383-1) 16 AviaGames seeks to exclude the opinion of Skillz’s damages expert, Bergman for three 17 reasons.3 First, AviaGames argues that Bergman’s use of a 30% royalty and his supplemental 18 adjustment from 30% to 35% is arbitrary and unsupported. ECF No. 383-1 at 1. Second, 19 AviaGames argues that Bergman’s identification of five “key” features of Skillz’s Software 20 Development Kit (“SDK”) is arbitrary. Id. at 2. Third, AviaGames argues that Bergman’s 21 decision to weigh the five key features equally is not supported by facts and is the equivalent of 22 unreliable feature counting. Id. at 3–4. 23 Skillz first argues that Bergman’s 30% royalty is supported by his analysis of the 2016 24 SDK Agreement and his explanation for why the Epps Agreement is not technically or 25 economically comparable. ECF No. 427 at 1–2. Skillz also argues that Bergman’s adjustment 26 27 3 AviaGames originally raised an argument in its Motion in Limine No. 4 challenging the opinion 1 from 30% to 35% is supported by AviaGames’ data regarding bot use and AviaGames’ 2 “Pocket7Games User Impression Survey.” Id. at 2–3. Second, Skillz argues that Bergman’s 3 identification of five key features is reasonably based on Skillz’s public statements in SEC filings 4 and AviaGames ultimately challenges the factual underpinnings of Bergman’s analysis, which is 5 not a basis for exclusion. Id. at 3–4. Third, Skillz argues that Bergman’s apportionment opinion 6 is grounded in the facts of the case. Id. at 4–5. 7 The Court will address each of AviaGames’ arguments in turn. First, Bergman’s 30% 8 royalty and adjustment to 35% are neither arbitrary nor unsupported. Although AviaGames faults 9 Bergman for relying on the SDK Agreement, which is not a patent license, and dismissing the 10 Epps Agreement, the SDK Agreement is sufficiently comparable to be probative of the 11 hypothetical negotiation because it involves the actual parties, includes the relevant technology, 12 and was close in time to the hypothetical negotiation. See SSL Servs., LLC v. Citrix Sys., Inc., 769 13 F.3d 1073, 1093–94 (Fed. Cir. 2014) (affirming the district court’s conclusion that non-patent 14 license agreements were sufficiently comparable to be probative of the hypothetical negotiation). 15 The fact that Bergman found the SDK Agreement comparable and the Epps Agreement not 16 comparable is not a basis for exclusion, but an argument going to the weight of Bergman’s opinion 17 that AviaGames can make in cross-examination. Similarly, Bergman’s adjustment from 30% to 18 35% based on AviaGames’ use of bots is based on data. For example, Bergman considered the 19 number of games in which bots participated, bot win rates, and user surveys about the importance 20 of fairness to calculate the 5% adjustment. See Bergman Supp. Report ¶¶ 9–14. As above, 21 AviaGames’ arguments that Bergman’s adjustment is based on suggestions, that Bergman ignores 22 Skillz’s use of bots, and that bot use does not impact fairness in any way that pertains to the ’564 23 Patent go to the weight of Bergman’s opinion rather than admissibility. 24 Second, Bergman’s reliance on Skillz’s public filings to identify five “key benefits” of the 25 SDK is not arbitrary. See ECF No. 381-3 (“Bergman Report”) ¶ 143. AviaGames primarily 26 argues that it was arbitrary for Bergman to decide on five key features when other documents 27 identify different numbers of features. See, e.g., ECF No. 383-8 at 5 (Skillz’s Form 10-K, which 1 Agreement, which AviaGames argues identifies 8 separate features). However, it is not arbitrary 2 for Bergman to rely on Skillz’s SEC filings, which the parties agree list the same features year- 3 after-year. See Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1312–13 (Fed. Cir. 2018) 4 (holding that it was not error for an expert to apportion revenues for a royalty base using internal 5 diagrams identifying different features); see also Bergman Report ¶ 143 n.262 (noting that the 6 Skillz’s public filings identifying the key features have identical language); ECF No. 489 at 7 104:19–105:3 (AviaGames accepting that the public filings tout five features). Ultimately, 8 AviaGames’ argument is a dispute over the factual underpinnings of Bergman’s analysis, which 9 go to the opinion’s weight, not admissibility. See Finjan, Inc. v. Cisco Sys. Inc., No. 17-CV- 10 00072-BLF, 2020 WL 13180005, at *9 (N.D. Cal. Apr. 21, 2020). Put differently, whether 11 Bergman properly excluded 195 other features is an argument that AviaGames may properly raise 12 during cross-examination. 13 Third, Bergman’s decision to assign equal value to the five key features is appropriately 14 supported by evidence. After concluding, based on Zagal’s opinion, that the fair play feature is 15 attributed to and enabled by the ’564 patent, Bergman further concluded that “on a relative basis, 16 the value attributable to fair gaming, as enabled by the ’564 patent, would be at least equivalent to 17 the average value of all the features.” Bergman Report ¶ 170. This apportionment was not 18 “plucked out of thin air” as AviaGames suggests. Instead, Bergman reviewed, among other 19 things, Skillz’s developer presentations, Skillz’s marketing materials, Skillz’s and AviaGames’ 20 user responses to surveys, and depositions of witnesses for both parties. Bergman Report ¶¶ 148– 21 67. Bergman’s reliance on these documents is not arbitrary, and to the extent that AviaGames 22 contests Bergman’s conclusion that fair gaming is at least equally valuable as the average value of 23 all features, AviaGames may do so in cross-examination. See Blue Coat, 879 F.3d at 1312–13 24 (affirming the district court’s admission of an expert’s apportionment opinion that assigned equal 25 value to 24 features because the analysis was based architectural diagrams and a technical expert’s 26 analysis). 27 Accordingly, the Court DENIES AviaGames’ Motion in Limine No. 4. E. AviaGames’ Motion in Limine No. 5 to Preclude Discussion, Evidence, and 1 Argument Regarding the Parties’ Discovery Disputes (ECF No. 359) 2 AviaGames seeks to exclude evidence of the discovery disputes that occurred earlier in this 3 case because such evidence is not relevant to the patent claims at issue. ECF No. 359 at 1. 4 AviaGames also wishes to exclude Chen’s and other witnesses’ assertion of their Fifth 5 Amendment rights and to preclude Skillz from requesting an instruction that the jury draw 6 negative inferences against AviaGames based on its witnesses’ assertion of their Fifth Amendment 7 rights. Id. at 2–3. Skillz agrees that details about the parties’ discovery disputes will not be 8 offered at trial, but Skillz wishes to present evidence of AviaGames’ interrogatory responses and 9 testimony before and after the Court reopened discovery as evidence going to AviaGames’ 10 credibility. ECF No. 415 at 1. Skillz further argues that AviaGames’ request to exclude 11 witnesses’ invocation of their Fifth Amendment rights is contrary to law, which permits adverse 12 inference instructions in this context, and is overbroad and premature. Id. at 2–4. 13 At the pretrial conference, the parties agreed that discovery disputes are not relevant and 14 Skillz may read interrogatory responses, subject to relevance objections by AviaGames. ECRF 15 No. 489 at 125:6–13. On AviaGames’ request to exclude its witnesses’ invocation of their Fifth 16 Amendment rights and to preclude Skillz from requesting an adverse inference, the Court finds 17 that AviaGames’ request is premature. Whether a witness’s invocation of their Fifth Amendment 18 rights should be excluded and whether Skillz may request an adverse inference instruction requires 19 “a case-by-case [determination] under the microscope of the circumstances of that particular civil 20 litigation.” Nationwide Life Ins. Co. v. Richards, 541 F.3d 903, 912 (9th Cir. 2008) (quoting Doe 21 ex rel. Rudy-Glanzer v. Glanzer, 232 F.3d 1258, 1265 (9th Cir. 2000)). Thus, the Court cannot 22 determine at this time whether any particular invocation of the Fifth Amendment should be 23 excluded or whether an adverse inference would be appropriate. 24 Accordingly, the Court GRANTS AviaGames’ Motion in Limine No. 5 with respect to 25 evidence of the discovery disputes in this case and DEFERS ruling on the motion with respect to 26 witnesses’ invocation of their Fifth Amendment rights. This ruling does not preclude Skillz from 27 offering AviaGames’ interrogatory responses as evidence at trial. Regarding the Fifth Il. ORDER For the foregoing reasons, IT IS HEREBY ORDERED that: 1. Skillz’s Motion in Limine No. 1 (ECF No. 358) is GRANTED. ° 2. Skillz’s Motion in Limine No. 2 (ECF No. 368) is DENIED. 3. Skillz’s Motion in Limine No. 3 (ECF No. 370) is GRANTED IN PART and ° DENIED IN PART. ° 4, Skillz’s Motion in Limine No. 4 (ECF No. 372) is GRANTED IN PART and ’ DENIED IN PART. ° 5. AviaGames’ Motion in Limine No. 1 (ECF No. 353) is GRANTED IN PART and ° DEFERRED IN PART. 8 6. AviaGames’ Motion in Limine No. 2 (ECF No. 383) is DENIED. " 7. AviaGames’ Motion in Limine No. 3 (ECF No. 356) is DEFERRED. 8. AviaGames’ Motion in Limine No. 4 (ECF No. 383-1) is DENIED. 9. AviaGames’ Motion in Limine No. 5 (ECF No. 359) is GRANTED IN PART and DEFERRED IN PART 2 16 Dated: November 27, 2023 18 BETH LABSON FREEMAN 19 United States District Judge 20 21 22 23 24 25 26 27 28