Openwave Systems Inc. v. Myriad France S.A.S.

Filing 258

ORDER EXCLUDING EXPERT TESTIMONY re 253 Document E-Filed Under Seal filed by Myriad France S.A.S.. Signed by Judge Alsup on May 17, 2011. (whalc1, COURT STAFF) (Filed on 5/17/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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OPENWAVE SYSTEMS INC.,

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For the Northern District of California

United States District Court

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Plaintiff,
v.

ORDER EXCLUDING
EXPERT TESTIMONY

MYRIAD FRANCE S.A.S.,
Defendant.
/

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No. C 10-02805 WHA

AND RELATED COUNTERCLAIMS
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Openwave desires to introduce expert testimony concerning the market value of the

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disputed patent assets. Myriad moves to exclude Openwave’s proffered expert testimony for two

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reasons. First, Myriad asserts that Openwave’s April 15 disclosure of its intent to offer the expert

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testimony was untimely. Myriad cites the case management scheduling order, which set an

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April 1 deadline for each party to serve a list of issues on which it intended to offer expert

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testimony in its case-in-chief. Second, Myriad argues that the proffered valuation testimony is

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“irrelevant to any matter before this Court, given that patent valuation has no bearing upon either

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party’s claims, much less the threshold issues under consideration in the first phase of this case”

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(Dkt. No. 253). This order finds that Openwave’s valuation expert testimony is untimely and of

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minimal relevance to this phase of the action.

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In November 2010, this action was divided into phases, and the following threshold issues

June 2008 agreement; (2) the validity and meaning of the contract clause providing for

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assignment of “Missing Assigned Patents”; and (3) the meaning of the word “cover” in the

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definition of Missing Assigned Patents (Dkt. No. 26 at 1). Valuation of the disputed patent assets

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was not one of the issues to be resolved in this first phase of the action. Openwave explains that

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its expert’s valuation of the disputed patents would be offered to show “that Openwave’s Board

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of Directors would not have approved the 2008 transaction between Openwave and Purple Labs if

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it believed it also was transferring” the disputed patents, which Openwave’s expert values at a

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sum many times larger than the amount Purple Labs paid in the entire 2008 deal (Dkt. No. 227

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For the Northern District of California

were to be resolved first: (1) the standing of Myriad France SAS to assert rights under the

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United States District Court

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at 3–4).

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If Openwave intends to offer such valuation evidence as part of its case-in-chief on the

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contract issues during this phase, then Openwave is the proponent of the valuation

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evidence/issues because it would be injecting it as an issue otherwise not in play. It bears the

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burden of proof on any such issues. The case management order required each party to serve a

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list of issues on which it intended to offer expert testimony in its case-in-chief by April 1, 2011.

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Openwave did not disclose its intent to offer valuation expert testimony until April 15 — two

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weeks after the deadline. Because Openwave did not timely disclose its intent to offer valuation

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expert testimony in this phase of the action, it will not be allowed to do so.

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Openwave argues that its April 15 disclosure was timely because “Openwave believes that

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Myriad bears the burden of proof on its claim seeking assignment of the purported Missing

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Assigned Patents” (Dkt. No. 227 at 4). For issues on which a party does not bear the burden of

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proof, the case management order set a later deadline for disclosure of expert testimony. As

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explained, however, Openwave bears the burden of proof regarding the valuation and intent

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issues it has raised and which would otherwise not be in play in this phase. The April 1

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deadline controls.

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Openwave also argues that its expert’s testimony should not be precluded even if its
April 15 disclosure was untimely. In Openwave’s estimation, Myriad was not prejudiced by the
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timing of the disclosure, and multiple other factors “cut strongly against preclusion”

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(Dkt. No. 227). Openwave’s arguments are not persuasive. The disclosure was untimely, and

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Myriad was prejudiced by the failure to alert it timely so that Myriad could line up an

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opposition expert.

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Moreover, the proffered expert testimony is only minimally relevant to the first phase of

value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or

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misleading the jury, or by considerations of undue delay, waste of time, or needless presentation

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of cumulative evidence.” The proposed valuation testimony is only tenuously related to the intent

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of Openwave’s Board of Directors in approving the June 2008 deal, and, by extension, the mutual

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For the Northern District of California

the action, if at all. Pursuant to FRE 403, relevant evidence “may be excluded if its probative

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United States District Court

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intent of the parties as to the meaning of the word “cover.” The proposed detour into a patent-

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valuation analysis during this first phase of the action would not provide enough probative value

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to the issues at hand to justify the time and effort it would require. Accordingly, Openwave’s

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expert’s valuation testimony is also inadmissible pursuant to FRE 403, at least during this first

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phase of the action.

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Openwave “does not believe now is the time or this is the proper procedure to address the

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admissibility of Openwave’s expert testimony on relevance or any other substantive grounds”

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(Dkt. No. 227 at 4 n.1). As Openwave acknowledges, however, Myriad has explicitly raised the

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relevance issue. Openwave does not cite any authority that would support delaying the

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inevitable.

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For all of the foregoing reasons, Myriad’s motion to exclude Openwave’s expert’s

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valuation testimony is GRANTED. Openwave will not be permitted to introduce expert valuation

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testimony during this phase of the action, but this is without prejudice to the possibility of using

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the valuation evidence in a later phase.

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IT IS SO ORDERED.

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Dated: May 17, 2011.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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