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The Battle Over Android: Oracle and Google Experts Differ by Billions on Damages So Court Appoints Its Own Expert

In the continuing battle over the Android operating system, the United States District Court for the Northern District of California decided to appoint its own damage expert. The district court explained that under Fed.R.Evid. 706(a), the district court “may appoint expert witnesses of its own selection” and noted that the Supreme Court has long recognized the constitutionality of court-appointed experts. The district court also noted that the Federal Circuit and the Ninth Circuit have acknowledged and recognized that the district courts enjoy wide latitude in making such appointments.

After explaining the authority for the appointment of expert witnesses, the district court turned to why such an appointment was necessary in the ongoing battle between Google and Oracle. Stating that “[t]he damages aspect of this controversy is particularly involved,” the district court noted that “[t]he accused items are not entire products but rather elements of products, whose roles and relative importance within the larger units are disputed.” The parties also further complicated the damage analysis by using elaborate nontraditional business models for distributing and monetizing the relevant products. “For example, Google allegedly distributes its accused Android software free of charge, hoping to later benefit from improved market position and advertising revenue generated by Google searches on Android devices. Oracle, for its part, claims to have been harmed by the supposed fragmentation of its Java platform and developer community due to Google’s allegedly selective use of Java elements in Android.”

The district court also noted that the retained experts differed widely on damages with Oracle’s expert opining that the fair market value of a hypothetical license would have been at least $1.4 billion and could be as much as $6.1 billion and Google’s expert opining that the damages would at most be a figure around $100 million.

After discussing the procedural mechanism for appointing neutral experts, the district court appointed an expert to serve as the damages expert and also appointed an attorney to serve as pro bono counsel for the expert. With respect to the expert fees, the district court ordered the parties to pay the costs of the expert and that each party would be required to pay one-half of the fee.

“In sum, [the expert] was selected and appointed in accordance with the Federal Rules of Evidence and the guidance of our courts of appeals. The assistance of an independent economic expert was and remain necessary to aid the jury in this complex technical action in light of the parties’ vastly divergent views on damages. The scope of [the expert’s] assignment and the arrangements for his compensation were crafted so as not to interfere with the parties’ abilities to make their own presentations of the case.”

Oracle America, Inc. v. Google Inc., Case No. C 10-03561 WHA (N.D. Cal. Nov. 9, 2011)

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