Carnegie Mellon University v. LSI Corporation, et al.

• Court: District Court, N.D. California
• Decided: May 1, 2026
• Docket: 3:18-cv-04571
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CARNEGIE MELLON UNIVERSITY, Case No. 18-cv-04571-JD

8 Plaintiff, ORDER RE FRE 702 RE WITNESS 9 v. LAWTON

10 LSI CORPORATION, et al., Defendants. 11

12 13 In this patent infringement case, Carnegie Mellon University (CMU) sued LSI Corporation 14 and Avago Technologies U.S. Inc. (collectively, LSI) alleging infringement of two CMU patents 15 related to hard-disk drives. See Dkt. No. 1 ¶ 2. The parties filed a slew of motions under Federal 16 Rule of Evidence 702 challenging the other side’s expert witnesses. See Dkt. Nos. 320, 322, 326, 17 and 330. The Court resolved the challenges to Brian Napper and Dr. Christopher Bajorek in other 18 orders. See Dkt. Nos. 444, 445. This order resolves LSI’s request to exclude the opinions of 19 CMU’s damages witness, Catharine Lawton. Dkt. No. 326. 20 Lawton’s damages opinions are excluded in part. Her reasonable royalty opinions with 21 respect to Seagate and Hitachi Global Storage Technologies (HGST) are based on acts of 22 infringement that are time-barred under 35 U.S.C. Section 286. Her opinion about an 23 improvement in signal-to-noise ratio between LSI’s product generations attributable to the 24 patented technology did not properly apportion for unpatented improvements. The request to 25 exclude Lawton is denied in all other respects.

26 27 1 BACKGROUND 2 The parties’ familiarity with the record is assumed. CMU’s damages theory is somewhat 3 exotic, and so a brief overview is useful. 4 CMU owns related United States Patent Nos. 6,201,839 (the ‘839 patent, Dkt. No. 1-3) and 5 6,438,180 (the ‘180 patent, Dkt. No. 1-4) (collectively, the Patents-in-Suit). CMU asserts one 6 method claim from each of the patents. See Dkt. No. 413 (Joint Pretrial Statement) at 1. At a high 7 level, the asserted methods teach an improved process for accurately reading bits, particularly 8 those stored on hard disks. See Dkt. No. 391 (§ 101 Order) at 2-3. CMU alleges that LSI and its 9 customers infringed during the testing, validation, and operation of LSI products, when they 10 practiced the claimed methods millions to billions of times per second. Dkt. No. 413 at 3. 11 Because CMU asserts method claims, and not system claims, it acknowledges that direct 12 infringement arises not from the sale of LSI’s products, but from its use of the claimed methods. 13 Dkt. No. 413 at 4. Even so, CMU bases its damages on such sales. CMU says this is appropriate 14 because, but for the use of the asserted method claims, “LSI’s customers would not have 15 purchased LSI’s SoCs, LSI would not have reached the volume production stage of the sales 16 cycle, and LSI would not have achieved profits.” Id. Consequently, CMU says that LSI’s sales 17 are the “best and most appropriate metric” on which to base the calculation of a reasonable 18 royalty. Id. at 5. The Federal Circuit accepted a similar theory in CMU’s earlier litigation against 19 Marvell involving the same patents. Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., 807 F.3d 20 1283, 1303 (Fed. Cir. 2015). 21 LSI sold its read channel system-on-a-chip (SoC) products to four customers: Western 22 Digital, Toshiba, Seagate, and HGST. Dkt. No. 336-01 (Lawton Report) at Tables 8.7A and 8.7B.2 23 These were not similarly situated customers. As the record established without genuine dispute 24 during summary judgment proceedings, Seagate and HGST held a license to the asserted patents 25 and enjoyed have-made rights to the technology. Dkt. No. 196 (Order re Partial Summary 26 1 For documents filed under seal in their entirety, this order cites to the sealed versions. 27 1 Judgment). Unlike Western Digital and Toshiba, Seagate and HGST were legally entitled to have 2 LSI manufacture for them read channel SoCs using CMU’s technology, and LSI cannot be liable 3 for damages arising from having made those products. See Vulcan Eng’g Co. v. Fata Aluminium, 4 Inc., 278 F.3d 1366, 1378 (Fed. Cir. 2002). 5 These circumstances would seem to have spelled the end of CMU’s damages theory based 6 on sales to Seagate and HGST, leaving only the factual question of how much of CMU’s alleged 7 royalty base was to be excluded. Dkt. No. 196 at 9. But CMU took the view that the summary 8 judgment determinations did not curtail its alleged damages in any meaningful way. This is so, 9 according to CMU, because LSI directly infringed the patents during a customer-independent 10 platform development stage “before customer-specific customization,” namely, before have-made 11 rights would apply. Dkt. No. 209-3 (CMU SJ Opposition Brief) at 4. 12 LSI asks to exclude Lawton’s opinions that incorporate this theory. LSI also asks to 13 exclude Lawton’s opinion that the 0.6 dB of signal-to-noise ratio (SNR) improvement between 14 two LSI product generations -- Redback and Redtail -- was entirely attributable to the Patents-in- 15 Suit. Dkt. No. 336-0 ¶ 1010. LSI’s attack is based on testimony by CMU’s technical expert, Dr. 16 Steven McLaughlin, that at least “some portion” of the 0.6 dB gain between generations was 17 attributable to non-patented features. Dkt. No. 336-13 (McLaughlin Deposition) at 130:6-12. LSI 18 says that Lawton did not properly apportion damages in view of Dr. McLaughlin’s testimony. 19 DISCUSSION 20 I. LEGAL STANDARDS 21 Federal Rule of Evidence 702 provides that a “witness who is qualified as an expert by 22 knowledge, skill, experience, training, or education may testify in the form of an opinion or 23 otherwise if the proponent demonstrates to the court that it is more likely than not that,” inter alia, 24 “the testimony is based on sufficient facts or data,” “the testimony is the product of reliable 25 principles and methods,” and “the expert’s opinion reflects a reliable application of the principles 26 and methods to the facts of the case.” Fed. R. Evid. 702(b)-(d). 27 “At all stages, Rule 702 . . . tasks a district court judge with ensuring that an expert’s 1 Play Store Antitrust Litig., No. 21-md-02981-JD, 2023 WL 5532128, at *5 (N.D. Cal. Aug. 28, 2 2023) (cleaned up). “The test of reliability is flexible, and the Court looks at whether the 3 reasoning and methodology underlying the testimony is scientifically valid and whether that 4 reasoning or methodology properly can be applied to the facts in issue.” Reflex Media, Inc., 2024 5 WL 4903267, at *2 (cleaned up) (quotations omitted). 6 FRE 702 “does not license a court to engage in freeform factfinding, to select between 7 competing versions of the evidence, or to determine the veracity of the expert’s conclusions at the 8 admissibility stage.” Elosu v. Middlefork Ranch Inc., 26 F.4th 1017, 1026 (9th Cir. 2022). Even 9 so, the Court may evaluate whether the expert proffered sufficient facts or data to “support . . . 10 every necessary link” in her theory, Domingo ex rel. Domingo v. T.K., 289 F.3d 600, 606 (9th Cir. 11 2002), with an eye toward “foundation, not corroboration,” Elosu, 26 F.4th at 1025. If the 12 evidence does not suffice, the Court may “conclude that there is simply too great an analytical gap 13 between the data and the opinion proffered.” Id. at 1026 (quoting Gen. Elec. Co. v. Joiner, 522 14 U.S. 136, 146 (1997)). As the Advisory Committee aptly stated, “nothing . . . requires the court to 15 nitpick an expert’s opinion,” but the rule “does not permit the expert to make claims that are 16 unsupported by the expert’s basis and methodology.” Fed. R. Evid. 702, advisory committee’s 17 note to 2023 amendment. 18 II. CMU’S INFRINGEMENT THEORIES 19 CMUS’s infringement theories frame the discussion of Lawton’s damages opinions. As 20 CMU alleges, “LSI infringes in 3 ways: (i) direct infringement by its use of the Asserted Claims in 21 the U.S.; (ii) induced infringement when LSI’s customers (and their customers) use the Asserted 22 Claims in the U.S. pursuant to LSI’s directions; and (iii) contributory infringement by selling 23 SoCs that LSI’s customers (and their customers) use to practice the Asserted Claims.” Dkt. No. 24 342-1 (CMU Opp. to Mtn. to Exclude Lawton) at 2. 25 For the sales to Western Digital and Toshiba, all three of CMU’s infringement theories are 26 in play. Id. at 2-3. 27 For the sales to Seagate and HGST, only theory (i) is said to apply. Seagate and HGST are 1 Metal Equip. Innovations, Inc., 72 F.3d 872, 878 (Fed. Cir. 1995); 35 U.S.C. § 271(a) 2 (“[W]hoever without authority makes, uses, offers to sell, or sells any patented invention . . . 3 infringes the patent.”) (emphasis added). Without direct infringement by Seagate or HGST, there 4 cannot be indirect infringement by LSI, whether induced or contributory, because indirect 5 infringement requires a predicate act of direct infringement. See Limelight Networks, Inc. v. 6 Akamai Techs., Inc., 572 U.S. 915, 921 (2014). (“Our case law leaves no doubt that inducement 7 liability may arise if, but only if, there is direct infringement.”) (cleaned up); Fujitsu Ltd. v. 8 Netgear Inc., 620 F.3d 1321, 1326 (Fed. Cir. 2010) (“To establish contributory infringement, the 9 patent owner must show . . . that there is direct infringement”). 10 Even so, CMU says LSI directly infringed the patents-in-suit during the customer- 11 independent development stage before any have-made rights kicked in. Dkt. No. 336-0 ¶¶ 775-76; 12 Dkt. No. 209-3 at 6; Dkt. No. 342-1 at 2-3. This direct infringement is said to have enabled the 13 development of platforms that produced sales to Seagate and HGST, which CMU concludes is 14 grounds for including the sales within the royalty base. See, e.g., Dkt. No. 413 at 4. 15 III. LAWTON’S OPINIONS RE HGST AND SEAGATE 16 The problem for CMU, and Lawton’s damages opinions, is that this theory fatally collides 17 with the statutory command in Section 286 that “no recovery shall be had for any infringement 18 committed more than six years prior to the filing of the complaint or counterclaim for 19 infringement in the action.” 35 U.S.C. § 286. CMU extended this period briefly with a tolling 20 agreement, but, even with that agreement, both sides agree that the damages period in this case 21 reaches back to September 1, 2011, six years and some months before this case was filed in July 22 2018. Dkt. No. 336-0 ¶ 947; Dkt. No. 375-39 (Napper Report) ¶ 207. 23 Lawton determined that the royalty base in this case should be “the total number of units of 24 Accused Products that Defendants have shipped between September 1, 2011 and April 3, 2018 25 (the expiration date of both Patents-in-Suit).” Dkt. No. 336-0 ¶ 57. Although this date range 26 would seem to be consistent with Section 286, the appearance is deceiving. Lawton in fact 27 proposes to award damages to CMU based on infringement that occurred before September 1, 1 The nature of the method claims for the Patents-in-Suit makes this error plain. In a patent 2 case involving infringement of system claims, Lawton’s determination might have been 3 appropriate. The sale of an infringing product is an act of direct infringement of a system claim. 4 See 35 U.S.C. § 271(a). Consequently, the accused infringer realizes revenue at approximately the 5 same time it commits the act of infringement, and so Section 286 applies to limit both when the 6 infringement must have occurred and when the sale must have happened. 7 Method claims are different. The sale of a product that might practice the claim is not an 8 act of direct infringement. See Embrex, Inc. v. Serv. Eng'g Corp., 216 F.3d 1343, 1352 (Fed. Cir. 9 2000) (“[A]s a matter of law, an offer to sell a device cannot infringe a method patent without 10 evidence of the device's actual use to carry out the method.”). CMU seeks damages from LSI’s 11 practice of the methods during a customer-independent platform development stage, a prerequisite 12 to the actual sales of read channel SoCs. Dkt. No. 336‑0 ¶¶ 775-76; Dkt. No. 209-3 at 6; Dkt. No. 13 342-1 at 2. 14 This necessarily entails a time lag between LSI’s alleged acts of direct infringement 15 (design and development of the chips) and the events that form Lawton’s royalty base (actual sale 16 of the chips), which calls Lawton’s approach into immediate question. Lawton calculated the total 17 amount of sales made during the period from September 2011 to April 2018. But LSI’s sales are 18 based on prior infringing acts that occurred when LSI practiced the patented methods during the 19 development of the chip platform. Under Section 286, any infringement that occurred before 20 September 2011 cannot be the basis for recovery. Lawton made no attempt to account for this 21 circumstance or cabin sales based on pre-September 2011 infringement from her royalty base. 22 These shortcomings are not questions of weight for the jury to decide, but methodological flaws. 23 This is enough to warrant exclusion of Lawton’s opinions about HGST and Seagate. It 24 bears mention that Lawton also elected to ignore the Court’s summary judgment order in her 25 opinions about HGST and Seagate, even though the order was issued four years before her report 26 was written. Compare Dkt. No. 196 with Dkt. No. 336-0. Lawton’s report is a gargantuan 27 document that runs to just shy of 1,000 pages. See Dkt. No. 336-0. Nonetheless, Lawton made no 1 it. To the contrary, even though the Court concluded that LSI had an implied license for the 2 products it made for Seagate and HGST, Lawton dismissed the implied license as merely a 3 “contention” by LSI, Dkt. No. 336-0 ¶ 1083, a “claim,” id. ¶ 1092, and a “purported” 4 circumstance, id. ¶ 1185. In effect, Lawton simply disregarded the conclusions in the summary 5 judgment order about the scope of damages available in this lawsuit, which created a fatal gap 6 between the data and the opinions Lawton proffered. The lack of fit is an independent reason to 7 exclude the opinions about HGST and Seagate. See Klein v. Meta Platforms, Inc., 766 F. Supp. 3d 8 956, 960-61 (N.D, Cal. 2025) (and cases cited therein). 9 In response to all of this, CMU says that the Federal Circuit approved Lawton’s overall 10 approach in Marvell, the prior case involving the Patents-in-Suit, and the same should go here. 11 But the question is not whether Lawton’s hypothetical negotiation methodology is valid as a 12 whole. Rather, the question is whether Lawton properly applied the methodology in the 13 circumstances presented in this case. As discussed, she did not do so. Consequently, Marvell is 14 not the lifeline that CMU suggests. 15 Marvell also was silent on the key issue here, namely the effect of Seagate’s license on 16 potential liability. The Court parted company with the district court in Marvell about the Seagate 17 license. The Marvell district court said that “Marvell did not present uncontroverted evidence that 18 Seagate had a license to the patents” and that “Marvell did not . . . show[] Seagate exercised any 19 DSSC rights in conjunction with its dealings with Marvell.” Carnegie Mellon Univ. v. Marvell 20 Tech. Grp., Ltd., 986 F. Supp. 2d 574, 651 n.111 (W.D. Pa. 2013). Here, the Court has 21 determined that Seagate (and HGST) are licensees, Dkt. No. 196 at 2-3, and that they did not need 22 to “affirmatively state in their contracts with LSI that they were using their have made rights.” 23 Dkt. No. 196 at 7 (internal quotations omitted). The factual and legal circumstances are materially 24 different in these cases, which is further reason to conclude that Lawton’s opinions are not old 25 news under Marvell, as CMU urges. 26 IV. APPORTIONMENT 27 Another problem is that Lawton did not properly apportion damages. The Supreme Court 1 the defendant’s profits and the patentee’s damages between the patented feature and the 2 unpatented features.” Garretson v. Clark, 111 U.S. 120, 121 (1884). A patentee may seek “only 3 those damages attributable to the infringing features.” Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 4 1308, 1326 (Fed. Cir. 2014); see also Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1311 5 (Fed. Cir. 2018) (vacating jury’s damages award for failure to apportion unpatented features). 6 Consequently, a failure to apportion results in exclusion of the offending opinions. See, e.g., MLC 7 Intell. Prop., LLC v. Micron Tech., Inc., 10 F.4th 1358, 1373 (Fed. Cir. 2021) (affirming exclusion 8 of damages expert who did not properly apportion). 9 Lawton did not honor these principles. She based her damages opinions on the premise 10 that the entire 0.6 dB in SNR gain from the Redback to the Redtail product generations was 11 attributable to the Patents-in-Suit. Dkt. No. 336-0 ¶ 1010. But CMU’s own technical expert, Dr. 12 Steven McLaughlin, opined that the patented feature, referred to as “data-dependent noise- 13 prediction maximum likelihood,” was only responsible for “part” of the 0.6 dB improvement. 14 Dkt. No. 332-1 (McLaughlin Report) ¶ 8.221. McLaughlin expressly testified that “some portion” 15 of the SNR gain came from the unpatented improvement regarding “parity” and being “optimized 16 for longitudinal and perpendicular.” Dkt. No. 336-13 at 130:6-12. Dr. McLaughlin is clear that 17 the patented technology contributes a significant portion of the SNR gain, but that unpatented 18 technology contributes some other part. Id. at 129:16-130:12. It bears repeating that Lawton is a 19 damages expert, not a technical expert, so she must rely entirely on Dr. McLaughlin’s opinions to 20 conduct technical apportionment. 21 If even some portion of the SNR gain came from an unpatented feature, Lawton should 22 have accounted for that unpatented portion before valuing the SNR gain attributable to the 23 patented “data-dependent NPML” feature. Dkt. No. 332-1 ¶ 8.221. She did not. Because Lawton 24 failed to apportion out SNR gain improvements attributable to unpatented technology, her opinion 25 as it relates to “Redtail’s estimated SNR gain of 0.6 dB” must be excluded. Dkt. No. 336-0 26 ¶ 1010. 27 LSI suggests that the same goes for Lawton’s opinions about the estimated SNR gain of ] identify a similar opinion by Dr. McLaughlin that unpatented features contributed to the SNR gain 2 || forthe Copperhead product. 3 || V. LAWTON’S OPINIONS RE WESTERN DIGITAL AND TOSHIBA 4 LSI’s request to exclude Lawton’s opinions with respect to Western Digital and Toshiba is 5 denied. Neither of these companies were licensees, and so the problem of a time lag that sank 6 || Lawton’s HGST and Seagate opinions is not present. The attendant damages analysis is much 7 || more straightforward. For example, under infringement theory (111), contributory infringement, 8 || LSI would be liable when it “offers to sell or sells . . . a component of a patented machine... . 9 || constituting a material part of the invention, knowing the same to be especially made or especially 10 || adapted for use in an infringement of such patent, and not a staple article or commodity of 11 commerce suitable for substantial non-infringing use... .” 35 U.S.C. § 271(c). Put more directly, 12 || LSI’s contributory infringement -- a sale -- occurs at the same time the damages accrue -- also 13 from the sale. See Glenayre Elecs., Inc. vy. Jackson, 443 F.3d 851, 858-59 (Fed. Cir. 2006) 14 || ([W]here a patentee alleges that a manufacturer contributes to and induces infringement by its 3 15 customers simply because it sells infringing products to its customers, damages assessed for a 16 || indirect infringement normally will be the same as damages that would be assessed had the 17 || patentee sued and obtained a judgment against the customers.”). Without have-made rights, the Zz 18 other infringement theories could also support both infringement and damages within Lawton’s 19 September 1, 2011 to April 3, 2018 window. 20 CONCLUSION 21 Lawton’s opinions about a reasonable royalty based on LSI’s sales to Seagate and HGST 22 || are excluded. Her opinion about the improvement in signal-to-noise ratio between Redback and 23 Redtail attributable to the Patents-in-Suit is also excluded. 24 IT IS SO ORDERED. 25 || Dated: May 1, 2026 26 JAMES PONATO 27 United ftates District Judge 28