Fitness Anywhere LLC v. Woss Enterprises LLC
Filing
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ORDER REGARDING 156 157 158 159 160 163 168 171 172 173 MOTIONS IN LIMINE. Signed by Judge Beth Labson Freeman on 3/6/2017. (patentlcsjS, COURT STAFF) (Filed on 3/6/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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FITNESS ANYWHERE LLC,
Case No. 14-cv-01725-BLF
Plaintiff,
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v.
ORDER REGARDING MOTIONS IN
LIMINE
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WOSS ENTERPRISES LLC,
Defendant.
United States District Court
Northern District of California
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Plaintiff Fitness Anywhere LLC (“TRX”) brings this lawsuit against Defendant WOSS
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Enterprises LLC (“WOSS”), alleging infringement of U.S. Patent No. 7,044,896 (the “’896
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patent”), infringement of U.S. Trademark Registration Nos. 3,255,160, 3,255,161, and 2,975,844,
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unfair competition, and tortious interference with prospective economic relationships. See
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Amended Complaint ¶¶ 28-55, ECF 46. This Order addresses the parties’ motions in limine. For
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the reasons explained below and on the record at the February 23, 2017 pretrial conference, the
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motions are decided as follows:
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Plaintiff’s Motion in Limine No. 1: WITHDRAWN BY STIPULATION.
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Plaintiff’s Motion in Limine No. 2: WITHDRAWN BY STIPULATION.
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Plaintiff’s Motion in Limine No. 3: GRANTED IN PART and DEFERRED IN PART.
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Plaintiff’s Motion in Limine No. 4: GRANTED.
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Plaintiff’s Motion in Limine No. 5: DENIED.
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Defendant’s Motion in Limine No. 1: GRANTED IN PART and DENIED IN PART.
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Defendant’s Motion in Limine No. 2: DENIED.
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Defendant’s Motion in Limine No. 3: DENIED.
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Defendant’s Motion in Limine No. 4: DENIED.
Defendant’s Motion in Limine No. 5: DENIED.
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I.
TRX’S MOTIONS IN LIMINE
TRX’s Motion in Limine No. 1 to Bar Dr. Glen Stevick from Testifying at Trial
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A.
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TRX’s motion seeks to exclude Dr. Glen Stevick from testifying as an expert witness.
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Pl.’s MIL 1, ECF 156. However, the parties have since stipulated that WOSS will neither call Dr.
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Stevick as a witness nor introduce his reports at trial, and TRX has withdrawn its motion. ECF
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178. Accordingly, TRX’s Motion in Limine No. 1 is WITHDRAWN BY STIPULATION.
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B.
TRX’s Motion in Limine No. 2 to Bar Dr. Glen Stevick from Testifying at Trial
Regarding his Second and Third Reports
TRX’s motion seeks to exclude Dr. Glen Stevick from testifying as an expert witness
regarding the subject matter of his second and third expert reports. Pl.’s MIL 2, ECF 157.
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United States District Court
Northern District of California
However, the parties have since stipulated that WOSS will neither call Dr. Stevick as a witness
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nor introduce his reports at trial, and TRX has withdrawn its motion. ECF 178. Accordingly,
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TRX’s Motion in Limine No. 2 is WITHDRAWN BY STIPULATION.
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C.
TRX’s Motion in Limine No. 3 to Exclude Evidence or Argument in Support of
an “Advice of Counsel” Defense
TRX moves to exclude any evidence or argument in support of an “advice of counsel”
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defense to TRX’s claim that WOSS willfully infringed claim 1 of the ’896 patent. Pl.’s MIL 3,
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ECF 171. TRX argues that WOSS should be so precluded because it never identified an attorney
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in its Rule 26(a) disclosures, nor complied with Patent L.R. 3-7, which requires certain
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productions and disclosures for parties relying on an “advice of counsel” defense. Id. at 2-4.
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WOSS responds that TRX’s motion is moot because WOSS has elected to not pursue an
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“advice of counsel” defense. Def.’s Opp. 3 at 1, ECF 184. WOSS also argues that, should TRX
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“open the door” by suggesting that WOSS should have but did not consult an attorney, a witness
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should be allowed to truthfully answer (including, if applicable, that (s)he did consult an attorney)
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and that doing so is not an “advice of counsel” defense. Id.
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Because WOSS does not dispute that it failed to make the prerequisite disclosures, the
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Court GRANTS TRX’s Motion in Limine No. 3 to the extent that it seeks to preclude WOSS from
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presenting evidence in support of an “advice of counsel” defense. However, the Court will not
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categorically exclude questions for which the honest answer is that an attorney was involved. The
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Court must judge the propriety of such questions in context, and the parties are free to make
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objections and motions as appropriate. Accordingly, the Court DEFERS ruling on these issues at
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this stage. In addition, the parties are advised that certain questions and answers may waive the
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attorney-client privilege, and counsel bears the responsibility of protecting against this.
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D.
TRX’s Motion in Limine No. 4 to Bar Defendant from Referencing or ReLitigating Any Issues Which Were Previously Resolved by This Court
TRX moves to bar WOSS from referencing or attempting to re-litigate any issues that were
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previously resolved by this Court. Pl.’s MIL 4, ECF 172. In particular, TRX argues that WOSS
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should not be permitted to make claim construction arguments that are inconsistent with this
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United States District Court
Northern District of California
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Court’s Order Construing Claims (ECF 97), including that “flexible portion having a loop” should
be construed as “rigid loop.” Id. at 3-4. TRX also argues that WOSS should not be permitted to
reference the Court’s ruling on summary judgment, including the fact that the Court invalidated
TRX’s U.S. Patent No. 7,806,814 (the “’814 patent”) and found that WOSS did not infringe
certain claims of the ’896 patent and U.S. Patent No. 8,043,197 (the “’197 patent”). Id. at 4. TRX
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contends that none of these rulings are relevant to the remaining issues in the case, and that
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references to the Court’s summary judgment rulings would be highly prejudicial. Id. at 4.
WOSS responds that TRX’s motion is premature, as the relevance and potential prejudice
of these rulings depends on the context in which they are used at trial. Def.’s Opp. 4 at 1, ECF
185. In particular, WOSS urges that it is entitled to “broad latitude in impeaching witnesses” and
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the Court remains free to alter its rulings before trial, both of which may make it appropriate to
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reference or re-argue the Court’s prior rulings. Id.
The Court agrees with TRX that references to the Court’s summary judgment rulings per
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se are highly prejudicial, and not relevant to the issues that remain to be tried. Accordingly, the
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Court GRANTS TRX’s Motion in Limine No. 4 to the extent that it seeks to preclude WOSS from
introducing the fact that the Court has previously ruled that the ’814 patent is invalid and that
certain claims of the ’896 and ’197 patents are not infringed. WOSS may acknowledge that the
’814 patent and certain claims of the ’896 and ’197 patents are not in this case (e.g., by making
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statements such as “X patent is not in this trial,” or “TRX owns X patent, but is not asserting it
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against WOSS”), but no more.1
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The Court also agrees with TRX that WOSS may not re-litigate the Court’s claim
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constructions, or the Court’s ruling at summary judgment that “claim 1 does not require the loop
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to be flexible.” Summ. J. Order 26, ECF 150. WOSS will be expected to present evidence and
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arguments at trial that comply with these constructions. As discussed in detail with respect to
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WOSS’s Motion in Limine No. 2, infra, any attempt by WOSS to seek reconsideration of the
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Court’s constructions at this point is untimely and inappropriate and, even if the Court were to
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reconsider its constructions, WOSS’s arguments are incorrect on the merits. Accordingly, the
Court also GRANTS TRX’s Motion in Limine No. 4 to the extent that it seeks to preclude WOSS
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United States District Court
Northern District of California
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from re-litigating claim constructions (decided either by the Court’s claim construction order or at
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summary judgment) or presenting evidence or arguments that are inconsistent with these
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constructions.
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E.
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TRX’s Motion in Limine No. 5 to Bar WOSS from Introducing Testimony at
Trial Regarding New Non-Infringement Theories
TRX moves to bar WOSS from introducing non-infringement theories that it did not
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disclose in its responses to TRX’s non-infringement interrogatory, Interrogatory No. 3. Pl.’s MIL
5, ECF 173. Specifically, TRX argues that WOSS’s responses confine it to two theories: (1) the
accused products do not contain a “flexible loop,” and (2) the accused products are delivered “as a
kit of separate components with instructions for assembly” and therefore do not contain “a main
strap attached to an anchor.” Id. at 4. This, TRX contends, precludes WOSS from making noninfringement arguments relating to other claim elements, including “(i) a pair of ends separated by
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a length and a mechanism for adjusting said length; (ii) where said pair of ends includes a first end
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At the parties’ pretrial conference, WOSS expressed concerns about the impact the Court’s
ruling would have on its ability to defend against TRX’s willfulness claims. The Court’s ruling
does not preclude WOSS from introducing evidence regarding the steps that it took before the
lawsuit was filed that may be probative of willfulness. It simply precludes discussion of what the
Court did after the lawsuit was filed. Moreover, this ruling does not affect post-trial argument to
the Court regarding the Court’s final determination of willfulness. Halo Elecs., Inc. v. Pulse
Elecs., Inc., 136 S. Ct. 1923, 1935 (2016) (“Section 284 gives district courts the discretion to
award enhanced damages against those guilty of patent infringement.”).
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having a first grip and a second end having a second grip; (iii) an anchor; and (iv) wherein said
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elongated member passes through said loop.” Id. at 4-5.
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WOSS responds that TRX’s infringement contentions and infringement expert report
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address how each element of claim 1 is met by the accused products, and thus WOSS should be
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free to argue that TRX failed to meet its burden of proving infringement with respect to any of
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these elements. Def.’s Opp. 5, ECF 186. WOSS also argues that all of the non-infringement
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theories it intends to offer at trial have been known and considered by TRX, and thus, there is no
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prejudice. Id. at 2-3. In particular, WOSS emphasizes that its original interrogatory response cites
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the “all elements rule” (i.e., that every claim limitation must be met in order for there to be
infringement), that TRX addressed the extent to which each element infringed in its expert reports,
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United States District Court
Northern District of California
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and that, as a prophylactic measure, WOSS served third supplemental responses to TRX’s non-
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infringement interrogatory on September 19, 2016, which additionally clarified its non-
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infringement theories. Id.
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The Court agrees with WOSS that WOSS should be permitted to rebut (e.g., through cross-
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examination and responsive attorney argument) TRX’s evidence and arguments that the accused
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products practice any element of the claim. This is the prerogative of any infringement defendant
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seeking to hold a plaintiff to its burden of proof.
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In addition, as to affirmative evidence of non-infringement, the Court finds that WOSS
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should be permitted present all of the non-infringement positions disclosed in its interrogatory
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responses, up to and including its third supplemental responses, dated September 19, 2016. Under
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Rule 37(c), a party who has “fail[ed] to provide information . . . as required by Rule 26(a)” may
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still be permitted to use that information if “the failure was substantially justified or is harmless.”
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The Court finds that, given the substantial amount of time that has passed since WOSS served its
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third supplemental interrogatory responses in September, TRX has had sufficient notice of all of
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the non-infringement positions disclosed therein. Thus, any failure by WOSS to previously
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disclose these positions is harmless. TRX does not disagree, as, at the parties’ pretrial conference,
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it stated that it would not object to WOSS being limited to the non-infringement theories disclosed
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in its third supplemental responses or previously served responses.
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For these reasons, TRX’s Motion in Limine No. 5 is DENIED. WOSS may rebut TRX’s
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elements of proof, as well as present affirmative evidence of non-infringement consistent with the
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positions disclosed in its interrogatory responses, up to and including its third supplemental
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responses, dated September 19, 2016.
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United States District Court
Northern District of California
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II.
WOSS’S MOTIONS IN LIMINE
A.
WOSS’s Motion in Limine No. 1 to Strike Portions of Dr. Harvey Voris’s Report
and Exclude Testimony
i.
WOSS’s Motion in Limine No. 1
WOSS moves to strike certain portions of Dr. Harvey Voris’s expert report, which it
contends are new theories that were not disclosed in TRX’s infringement contentions. Def.’s MIL
1, ECF 158. Specifically, WOSS contends that: (1) for the “flexible portion” element, Dr. Voris’s
report newly identifies two rigid rings, whereas TRX’s infringement contentions identify flexible
webbing material; and (2) for the “pair of ends” element, Dr. Voris’s report newly identifies hand
grips at the end of the flat strap and a length adjusting mechanism, whereas TRX’s infringement
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contentions identify the ends of the flat strap elongated member. Id. at 2-5. WOSS also contends
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that Dr. Voris’s report violates Patent L.R. 3-1(g) because it asserts that a TRX trainer practices
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claim 1, even though TRX did not disclose in its infringement contentions, pursuant to this rule,
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that any of its products practice claim 1. Id. at 5.
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TRX responds that Dr. Voris’s opinions fall within the same theories disclosed in its
infringement contentions because (1) for the “flexible portion” element, its infringement
contentions identify the “flexible portion” as being one or more metal rings and a portion of
webbing, and (2) for the “pair of ends” element, its infringement contentions identify the “ends” as
a combination of a buckle, loops, and handgrips. Pl.’s Opp. 1 at 2-4, ECF 191. TRX also
contends that, because WOSS’s motion only addresses the Titan accused product, the Court
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should consider it as applying only to that product and permit Dr. Voris to testify as to the other
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five accused products. Id. at 4-5.
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As an initial matter, the Court disagrees with TRX that WOSS needed to separately
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address each accused product in its motion. The parties have agreed that the Titan is
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representative for all infringement issues in this case and, in any event, all of the accused products
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have the same types of alleged inconsistencies that WOSS identifies with respect to the Titan.
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Thus, the Court’s consideration of the parties’ arguments with respect to the Titan is sufficient to
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decide WOSS’s motion for all accused products.
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The Court now turns to the substance of WOSS’s motion and addresses each allegedly
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“new” theory in turn. With respect to the “flexible portion” element, the Court agrees with WOSS
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that there appears to be some inconsistency between TRX’s infringement contentions and Dr.
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Voris’s report: The infringement contentions identify the “flexible portion” as webbing that is
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attached to several metal rings and the “loop” (which the claim states “the flexible portion
includes”) as those metal rings. Ex. 2 to Def.’s MIL 1 at 5-7, ECF 158-3 at 6-8. In contrast, Dr.
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United States District Court
Northern District of California
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Voris’s report identifies the “flexible portion” as metal rings and the “loop” as one part of these
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rings. Ex. 1 to Def.’s MIL 1 at 3-5 (Ex. G to Voris Report at 3-5), ECF 158-2 at 4-6; see also Ex.
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C to Witness List ¶ 87, ECF 200-4 (“[E]ach of the Post-Redesign products . . . includes . . . a
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second portion which includes a loop in the form of a WOSS Triangular Ring for supporting the
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central strap. The WOSS Triangular Ring is attached to the remainder of the anchor using a
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carabiner or quick link, thereby forming a flexible portion (i.e., a portion that is capable of bending
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easily without breaking).”). However, the Court also agrees with TRX that the infringement
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contentions do not preclude Dr. Voris from opining that the “flexible portion” is both webbing and
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rings, as claim 1 recites that the “flexible portion includes a loop” and the infringement
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contentions identify the “loop” as rings. The salient point is that Dr. Voris cannot go outside the
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scope of the notice that TRX’s infringement contentions gave. At the pretrial conference, TRX
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agreed to confine Dr. Voris’s testimony to the scope of its infringement contentions. Accordingly,
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the Court GRANTS WOSS’s Motion in Limine No. 1 to the extent that it seeks, with respect to
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“flexible portion,” to preclude Dr. Voris from giving testimony that is inconsistent with TRX’s
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infringement contentions.
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With respect to the “pair of ends” element, the Court agrees with TRX that Dr. Voris’s
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report does not disclose a new infringement theory. As both parties agree, Dr. Voris’s report
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discloses that the “pair of ends” in the accused products are hand grips and a length adjusting
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mechanism on the flat strap. Ex. 1 to Def.’s MIL 1 at 1-2 (Ex. G to Voris Report at 1-2), ECF
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158-2 at 2-3. TRX’s infringement contentions also disclose that the “pair of ends” includes both
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hand grips and length-adjusting mechanisms. Ex. 2 to Def.’s MIL 1 at 4, ECF 158-3 at 5.
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Accordingly, the Court DENIES WOSS’s motion with respect to “pair of ends,” as it seeks to
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preclude TRX from taking a position to which it is plainly entitled.
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With respect to Patent L.R. 3-1(g), TRX does not dispute that it failed to identify any of its
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products in its infringement contentions, or that this failure precludes it from asserting at trial that
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a TRX trainer practices claim 1. Accordingly, the Court GRANTS WOSS’s Motion in Limine
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No. 1 to the extent that it seeks to preclude Dr. Voris from testifying that a TRX trainer practices
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claim 1.
United States District Court
Northern District of California
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ii.
WOSS’s Supplemental Motion
At the parties’ pretrial conference, WOSS additionally raised the concern that, in TRX’s
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pretrial brief, it stated that Dr. Voris planned to testify regarding the doctrine of equivalents.
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WOSS argued that Dr. Voris should be precluded from doing so, since TRX did not disclose the
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doctrine of equivalents in its infringement contentions. TRX responded that Dr. Voris may need
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to testify regarding the doctrine of equivalents in order to respond to WOSS’s late-arising
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arguments regarding “substantially” inelastic flat straps.
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The Court agrees with WOSS that, because TRX did not disclose the doctrine of
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equivalents in its infringement contentions, Dr. Voris is precluded from testifying regarding the
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doctrine of equivalents at trial. Accordingly, the Court GRANTS WOSS’s motion to the extent
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that it seeks to preclude Dr. Voris from testifying regarding the doctrine of equivalents. However,
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should WOSS open the door (i.e., by raising arguments relating to “substantially” inelastic flat
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straps), Dr. Voris may provide rebuttal.
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B.
WOSS’s Motion in Limine No. 2 to Bar Testimony that an Elongated Member
that is Supported on a Rigid Portion or that Passes Through a Rigid Support is
Within the Scope of Claim 1
WOSS moves to bar TRX from “presenting at trial any evidence, testimony or argument
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that an elongated member that is supported on a rigid portion or an elongated member that passes
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through a rigid support (loop) is within the scope of [claim 1].” Def.’s MIL 2 at 1, ECF 159.
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WOSS argues that applicants disclaimed rigid supports during prosecution to overcome rejections
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based on a prior art reference, U.S. Patent No. 5,352,172 to Suzaki (“Suzaki”). Id. at 2-4. WOSS
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also argues that claim differentiation does not compel a different conclusion. Id. at 5.
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TRX responds that WOSS’s motion is an improper attempt to re-litigate claim construction
and should be denied. Pl.’s Opp. 2, ECF 192. As to WOSS’s specific arguments, TRX contends
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that claim differentiation is relevant, that WOSS’s prosecution history arguments refer to
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characterizations of limitations that do not appear in claim 1, and that WOSS incorrectly conflates
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prosecution history estoppel (a limitation on the doctrine of equivalents) with prosecution
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disclaimer (a claim construction principle). Id. at 2-4. TRX also argues that, even if the Court
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were to entertain the possibility of prosecution disclaimer, there is none here because nowhere
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United States District Court
Northern District of California
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during prosecution did TRX unequivocally and unambiguously disavow a rigid loop. Id. at 4-5.
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The Court agrees with TRX that WOSS’s motion is, at bottom, a thinly-veiled motion for
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reconsideration. Almost two years ago, on March 20, 2015, the parties filed a joint claim
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construction statement setting forth the claim construction disputes that the Court must resolve.
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Although the parties identified “loop” as a term for construction, neither of the parties’ proposed
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constructions addressed whether the “loop” must be flexible. See ECF 48. From that point
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forward, there was no indication throughout the entire Markman process that this was an issue the
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Court needed to resolve. See ECF 48, 67, 71, 75. On the contrary, TRX agreed at the Markman
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hearing to accept WOSS’s proposed construction for “loop”: “a length of material made of one or
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more pieces formed into a ring or closed or partially closed curved section.” Order Construing
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Claims 4, ECF 97. The Court so construed the term. Id. at 5.
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It was not until summary judgment—roughly one year later—that the Court became aware
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that the parties’ disputed whether the “loop” must be flexible. In its motion for summary
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judgment, WOSS argued that the “loop” must be flexible and thus, because the “loop” in the
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accused products was a rigid metal ring, they did not infringe. WOSS’s SJ Mot. 15, ECF 122.
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TRX disagreed. TRX’s SJ Mot. 18, ECF 130. In its August 22, 2016 order on summary
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judgment, the Court considered each party’s arguments and directly addressed this issue: “[t]he
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Court finds claim 1 does not require the loop to be flexible.” Summ. J. Order 26, ECF 149.
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Although this conclusion did not issue as a part of the Court’s claim construction order (nor could
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it have, given the parties’ failure to bring this dispute before the Court sooner), it was a
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determination on claim scope, issued after both sides had the opportunity to be heard on the
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issue—effectively, a claim construction ruling.
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WOSS did not formally seek reconsideration of the Court’s decision. It did, however, file
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an administrative motion on September 2, 2016 seeking permission to file a second summary
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judgment motion that the ’896 patent is invalid “based on the court’s recent construction of Claim
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1 of the 896 Patent that the ‘loop’ is or can be rigid.” ECF 151. It also suggested that the Court
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“sua sponte reconsider that construction.” Id. The Court carefully considered WOSS’s
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United States District Court
Northern District of California
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arguments, but ultimately rejected them. ECF 155.
Now, WOSS’s Motion in Limine No. 2 effectively asks the Court to reconsider its ruling
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that “claim 1 does not require the loop to be flexible.” Summ. J. Order 26, ECF 149. At this
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juncture, this request is inappropriate. Motions in limine are not vehicles for re-litigating issues
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that have already been before the Court. This district’s local rules set out specific procedures for
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seeking reconsideration of an interlocutory order. See Civil L.R. 7-9. If WOSS had wanted the
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Court to reconsider its ruling, it should have followed these procedures. WOSS’s request is also
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untimely. For months the parties have been operating under the Court’s determination that “loop”
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is not required to be flexible. Expert opinions have been based on this, and the parties have likely
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factored this into their preparation of witnesses and evidence for trial. To reverse course now
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would create severe prejudice, and inject significant uncertainty into trial preparations. The Court
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declines to do this. Finally, this is not a case where O2 Micro compels the Court to go outside its
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ordinary course of proceedings and resolve outstanding claim construction issues. O2 Micro Int’l
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Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351 (Fed. Cir. 2008). O2 Micro simply requires
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that “[w]hen the parties raise an actual dispute regarding the proper scope of . . . claims, the court,
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not the jury, must resolve that dispute.” 521 F.3d at 1360. The Court did precisely this in its
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summary judgment ruling.
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Because reconsideration is not warranted, the Court need go no further and can deny
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WOSS’s Motion in Limine No. 2 on this basis. However, to be thorough, the Court has also
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considered the merits of WOSS’s claim construction arguments and found that its previous
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conclusion that “claim 1 does not require the loop to be flexible” is correct.
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Generally, the words of a claim should be given their “ordinary and customary meaning,”
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which is “the meaning that the term[s] would have to a person of ordinary skill in the art in
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question at the time of the invention.” Phillips v. AWH Corp., 415 F.3d 1303, 1312-13 (Fed. Cir.
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2005) (en banc). Courts may deviate from this in only two limited instances: (1) inventor
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lexicography, and (2) specification or prosecution history disavowal. Hill-Rom Servs., Inc. v.
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Stryker Corp., 755 F.3d 1367, 1371 (Fed. Cir. 2014). “[T]he standard for disavowal is exacting,
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requiring clear and unequivocal evidence that the claimed invention includes or does not include a
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particular feature.” Poly-America, L.P. v. API Indus., Inc., 839 F.3d 1131, 1136 (Fed. Cir. 2016).
United States District Court
Northern District of California
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Here, the specification of the ’896 patent does not unequivocally disavow non-flexible
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loops. There is no recitation that “the present invention” (not just an “embodiment” or “aspect” of
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the invention) has the feature of flexible loops. See Poly-America, 839 F.3d at 1136; Luminara
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Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1353 (Fed. Cir. 2016). There is also no
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statement disparaging prior art solutions that have non-flexible loops. See Poly-America, 839 F.3d
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at 1136; Openwave Sys., Inc. v. Apple Inc., 808 F.3d 509, 513-14 (Fed. Cir. 2015); SightSound
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Techs., LLC v. Apple Inc., 809 F.3d 1307, 1317 (Fed. Cir. 2015). Finally, although it is true that
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all of the preferred embodiments of the anchor (two total, depicted in Figs. 5 and 14), have “loops”
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made of flexible material, this is a small enough sample size that disclaimer remains ambiguous.
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Cf. GE Lighting Sols., LLC v. AgiLight, Inc., 750 F.3d 1304, 1309 (Fed. Cir. 2014) (“A patent that
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discloses only one embodiment is not necessarily limited to that embodiment. It is improper to
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read limitations from a preferred embodiment described in the specification—even if it is the only
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embodiment—into the claims absent a clear indication in the intrinsic record that the patentee
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intended the claims to be so limited.”) (internal citations omitted). Moreover, these descriptions
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are not also coupled with the fact that “every section of the specification indicates the importance
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of [flexible loops],” which means that any consistency in disclosure here, by itself, cannot rise to
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the level of disclaimer under Poly-America. See 839 F.3d at 1137 (“Every embodiment described
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in the specification has inwardly extended short seals and every section of the specification
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indicates the importance of inwardly extended short seals. These two facts provide together a
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proper reason to limit the claims in this way.”). For all of these reasons, there is no “clear and
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unequivocal evidence” of specification disavowal. As such, this case stands apart from Poly-
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America, a case which WOSS heavily relies on, which had all of these aspects: (1) limiting
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statements about “the present invention;” (2) disparaging statements about the prior art; and (3)
6
consistency across embodiments, coupled with statements praising the common feature. See id. at
7
1136-37. Thus, the Court’s decision is consistent with this precedent.
The prosecution history of the ’896 patent also does not unequivocally disavow non-
8
9
flexible loops. WOSS is correct that Suzaki discloses a metal component, which appears to serve
a similar function to the “loop” in the ’896 patent. See, e.g., Suzaki at col. 2 ll. 27-63, Ex. 9 to
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United States District Court
Northern District of California
10
Def.’s MIL 2 at 11-172, ECF 159-6 at 38-44. WOSS is also correct that, during prosecution, one
12
of the ways in which the applicants argued their invention differed from Suzaki was that Suzaki
13
did not disclose a flexible or non-rigid loop. See, e.g., Ex. 9 to Def.’s MIL 2 at 38, ECF 159-6 at
14
65 (“Suzaki thus does not teach or suggest a flexible (that is, non-rigid) support.”). However, it is
15
not clear that this was the specific basis upon which the examiner eventually allowed the ’896
16
patent to issue. Instead, the applicants also argued that Suzaki still permitted the rope to move
17
through its support while the invention did not, and made amendments that required the elongated
18
member to be a “flat strap” (Suzaki used a rope) and to pass through a “loop” (Suzaki’s
19
component was rectangular with bars). See id. at 37-38; Ex. 5 to Opening CC Br. at 11, ECF 67-5
20
at 13. In the end, the examiner gave, as his reasons for allowance, a statement which
21
acknowledged a combination of these aspects: “the prior art does not disclose an exercise device
22
as claimed wherein the elongate member is a flat strap that is passed through the loop of a flexible
23
portion of the anchor.” Id.
In this sense, this prosecution history is distinguishable from that in Poly-America: there,
24
25
the applicant specifically argued that one specific feature (“short seals” that extended inward to
26
reduce the opening width of the patented trash bag) was what distinguished the invention over the
27
28
Unless otherwise noted, page numbers corresponding to Ex. 9 to Def.’s MIL 2 refer to the
pagination that WOSS has added.
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2
1
prior art, and the examiner allowed the claims on that basis. See 839 F.3d at 1135 (quoting
2
applicant argument that “[t]hus, applying Applicant’s claimed definitions of the terms, the ‘relaxed
3
upper opening width’ of Schneider is the exact same as the ‘bag proper width,’ not less than the
4
‘bag proper width’ as required by Applicant's independent claims” and examiner response that
5
“the prior art fails to teach elastic drawstrings welded into the bag hem at short seals that form an
6
upper opening that is smaller than the width of the bag”). By contrast, there is no clear statement
7
here by either the applicants or the examiner that make it clear that the mere flexibility of the loop
8
was what distinguished Suzaki. Thus, the clear example of prosecution history disclaimer that
9
animated Poly-America is not present here. Because the standard for disavowal is so “exacting,”
10
United States District Court
Northern District of California
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the Court will not infer disavowal from something less.
Accordingly, because WOSS’s Motion in Limine No. 2 is untimely and inappropriate, and,
even if the Court were to consider it, incorrect on the merits, WOSS’s motion is DENIED.
C.
WOSS’s Motion in Limine No. 3 to Prevent Plaintiff From Calling as Witnesses
Previously Undisclosed Persons
WOSS moves to exclude certain of TRX’s witnesses from testifying at trial: Marisa
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Christie, Pete Dickman, Kiran Gowda, Todd Herschberg, Anil Shetty, and Paul Zadoff. Def.’s
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MIL 3, ECF 160. WOSS contends that none of these witnesses was disclosed before September
17
13, 2016, when TRX listed them on a draft witness list. Id. at 1.
18
TRX responds that this is not true, and that these witnesses were disclosed on July 26,
19
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2016. Pl.’s Opp. 3, ECF 193. Specifically, TRX points out that its supplemental Rule 26(a)(1)
disclosures, served July 26, 2016, identify “[a]ll individuals identified in the reports of TRX’s
testifying experts” and that the opening report of its damages expert, Ms. Kimberly Schenk,
22
identified each of the disputed witnesses as people with whom she had discussions and/or relied
23
on. Id. at 1-2.
24
The Court agrees with TRX that the July 26, 2016 disclosures sufficiently identify the
25
witnesses. WOSS’s Motion in Limine No. 3 is DENIED.
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D.
WOSS’s Motion in Limine No. 4 to Prevent Plaintiff from Offering Kimberly
Schenk’s Testimony as an “Expert” on Lost Profits Damages
WOSS moves to exclude the opinions relating to lost profits damages of TRX’s expert,
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1
Ms. Kimberly Schenk, under Federal Rules of Evidence 403 and 702 and Daubert v. Merrell Dow
2
Pharmaceuticals, Inc., 509 U.S. 579, 589 (1993). Def.’s MIL 4, ECF 163. WOSS complains that
3
Ms. Schnek’s lost profits opinions are based on a “fatally flawed” methodology because (1) her
4
calculations are based on the entire price of TRX’s products instead of apportioning for the anchor
5
component, which WOSS contends is the true subject of the ’896 patent; (2) she wrongly assumes
6
that all three of the patents originally asserted in this action are valid; (3) she wrongly assumes that
7
all three of the patents originally asserted in this action are infringed; (4) she assumes that there
8
are no non-infringing alternatives, which WOSS contends is incorrect because certain of its
9
products that are not accused in this action and products offered by third-party competitors qualify
as non-infringing alternatives; (5) she assumes that TRX’s suspension trainers practice the ’896
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Northern District of California
10
patent, even though TRX never complied with Patent L.R. 3-1(g) and disclosed that its products
12
practice the ’896 patent; and (6) she has no reliable, evidentiary basis for her opinion that, but for
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WOSS’s infringement, TRX’s sales would grow 20%. Id. at 1-4.
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In opposition, TRX argues that the majority of WOSS’s complaints are directed to the
15
factual bases of Ms. Schenk’s opinion, which are properly addressed through cross-examination,
16
not exclusion under Daubert. Pl.’s Opp. 4, ECF 194. TRX also argues that these factually-
17
focused attacks are wrong because (1) the Court’s summary judgment rulings on infringement and
18
validity have no impact on Ms. Schenk’s opinions; (2) Ms. Schenk did address non-infringing
19
alternatives and factored price sensitivity into her analysis; (3) the assumption that TRX practices
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the ’896 patent is immaterial, as the Federal Circuit has held that lost profits are available for
21
products that directly compete with the infringing devices, even if they do not themselves practice
22
the invention; and (4) Ms. Schenk’s 20% growth opinion is supported by a reliable evidence and
23
methods. Id. at 2-4. TRX admits that WOSS’s complaints regarding apportionment go beyond
24
attacking factual assumptions, but argues that this is also unfounded because (1) Ms. Schenk
25
considered apportionment and correctly concluded it does not apply here; and (2) regardless,
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apportionment is not legally required to establish lost profits in this case. Id. at 4-5.
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i.
Legal Standard
Federal Rule of Evidence 702 provides that a qualified expert may testify if “(a) the
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1
expert’s scientific, technical, or other specialized knowledge will help the trier of fact to
2
understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient
3
facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert
4
has reliably applied the principles and methods to the facts of the case.” Fed. R. Evid. 702. In
5
Daubert, 509 U.S. at 589, the Supreme Court held that Rule 702 requires the district court to act as
6
a gatekeeper to “ensure that any and all scientific testimony or evidence admitted is not only
7
relevant, but reliable.” In Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 147 (1999), the
8
Supreme Court clarified that the “basic gatekeeping obligation” articulated in Daubert applies not
9
only to scientific testimony but to all expert testimony. The Supreme Court also made clear that
the reliability inquiry is a flexible one, and “whether Daubert’s specific factors are, or are not,
11
United States District Court
Northern District of California
10
reasonable measures of reliability in a particular case is a matter that the law grants the trial judge
12
broad latitude to determine.” Id. at 153; see also Micro Chem., Inc. v. Lextron, Inc., 317 F.3d
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1387, 1391 (Fed. Cir. 2003).
14
“Daubert and Rule 702 are safeguards against unreliable or irrelevant opinions, not
15
guarantees of correctness.” i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831, 854 (Fed. Cir. 2010)
16
aff’d, 131 S. Ct. 2238 (2011). So long as an expert’s methodology is sound and his opinions
17
satisfy the requirements of Rule 702, underlying factual disputes and how much weight to accord
18
the expert’s opinion are questions for the jury. Micro Chem., 317 F.3d at 1392; Primiano v. Cook,
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598 F.3d 558, 565 (9th Cir. 2010).
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ii.
Discussion
21
The Court addresses each of WOSS’s alleged deficiencies in turn. First, with respect to
22
apportionment, the Court agrees with TRX that Ms. Schenk need not address apportionment for
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her opinions to pass muster under Rule 702. Ms. Schenk conducted her lost profits analysis
24
according to the Panduit factors. Although the Federal Circuit has not commented on this
25
approach, at least one court in this district has found that apportionment is not required when a
26
patentee claims lost profits based on Panduit, reasoning:
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Panduit is an alternative theory of establishing lost profits, see
Presidio Components Inc., 702 F.3d at 1360, DePuy Spine, 567 F.3d
at 1331, and A10 has not provided case law that supports its argument
15
1
2
3
4
that under that theory, apportionment is necessary. The Federal
Circuit very recently opined that the Panduit factors “place no
qualitative requirement on the level of demand necessary to show lost
profits,” see Versata Software, Inc. v. SAP America, Inc., ––– F.3d –
––– (Fed. Cir. 2013), thus suggesting that apportionment—at least as
consumer demand stands as a way of showing apportionment—is
unnecessary under Panduit.
Brocade Communications Systems, Inc. v. A10 Networks, Inc., 2013 WL 10601009, *2-3 (N.D.
5
Cal. 2013). The Court finds this reasoning persuasive and adopts it here. Thus, Ms. Schenk’s
6
failure to apportion does not render her lost profits opinions unreliable.
7
With respect to WOSS’s second and third arguments that Ms. Schenk assumes the wrong
8
set of asserted patents and claims in her analysis, the Court observes that Ms. Schenk addressed
9
10
the Court’s summary judgment rulings in her supplemental report. Thus, the current version of
her opinions correctly reflect the current scope of TRX’s infringement case. These are not valid
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United States District Court
Northern District of California
grounds to exclude her opinions.
12
With respect to non-infringing alternatives, the Court finds that Ms. Schenk also addressed
13
these topics in her report. See Ex. 1 to Def.’s MIL 4 ¶¶ 49-50, ECF 163-1. This is also not a basis
14
upon which to exclude her opinions.
15
With respect to WOSS’s concerns regarding Patent L.R. 3-1(g), the Court agrees with
16
TRX that it need not show that it is selling products that practice the patented invention. In Rite17
Hite Corp. v. Kelley Co., 56 F.3d 1538, 1548 (Fed. Cir. 1995), the Federal Circuit confirmed that
18
“[w]hether a patentee sells its patented invention is not crucial in determining lost profits
19
damages.” It suffices that it is selling products for which it is allegedly losing profits. Id. There
20
is no dispute here that TRX sells such products.
21
With respect to WOSS’s final set of arguments regarding the reliability of Ms. Schenk’s
22
opinions on projected sales growth and related figures, the Court agrees with TRX that these
23
constitute proper Rule 702 testimony. Ms. Schenk appears to have consulted reliable sources,
24
including financial reports, industry reports, and knowledgeable TRX personnel, and used a
25
reasoned approach in coming up with her opinions. WOSS’s concerns regarding Ms. Schenk’s
26
assumptions or decisions to consult certain sources are the proper subject of cross-examination.
27
Accordingly, because none of WOSS’s alleged deficiencies provide a basis for excluding
28
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1
2
3
Ms. Schenk’s opinions under Daubert or Rule 702, WOSS’s Motion in Limine No. 4 is DENIED.
WOSS’s Motion in Limine No. 5 to Prevent Plaintiff from Offering Kimberly
Schenk’s Testimony as an “Expert” on Reasonable Royalty Damages
E.
WOSS moves to exclude the opinions relating to reasonable royalty damages of TRX’s
4
expert, Ms. Kimberly Schenk, under Federal Rules of Evidence 403 and 702 and Daubert, 509
5
6
U.S. at 589. Def.’s MIL 5, ECF 168. WOSS’s motion challenges Ms. Schenk’s opinions relating
to both TRX’s trademark claims and patents claims, so the Court addresses each in turn.
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8
9
i.
Trademark Damages
WOSS attacks what it perceives as Ms. Schenk’s reasonable royalty opinions relating to
TRX’s trademark claims, arguing that (1) she wrongly equated the Nautilus negotiation with a
10
hypothetical TRX negotiation, even though, according to WOSS, these situations are
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United States District Court
Northern District of California
distinguishable because infringement was not disputed with Nautilus to the same extent it is here;
12
(2) she incorrectly inflated the value of the Icon licensing agreements; (3) she failed to determine
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14
15
16
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19
what portion of WOSS’s sales was attributable to its infringing acts; and (4) she failed to
demonstrate actual confusion or likelihood of confusion, and did not account for this “weakness”
in TRX’s claims in her assessment of a hypothetical negotiation. Id. at 4-5.
TRX responds that WOSS’s complaints are “nonsensical” because Ms. Schenk did not use
a reasonable royalty methodology in assessing trademark damages. Pl.’s Opp. 5 at 2, ECF 195.
Instead, TRX points out, trademark law bases damages on a defendant’s profits. Id. at 2-3. TRX
also refutes WOSS’s remaining complaints, arguing that (1) Ms. Schenk did not need to prove
20
actual confusion or likelihood of confusion, as these are liability issues; and (2) the license
21
agreements that WOSS takes issue with are not part of Ms. Schenk’s trademark damages opinions
22
(but were instead part of her patent damages opinions). Id. at 3-4.
23
The Court agrees with TRX that a reasonable royalty analysis is not applicable to
24
trademark damages. The Lanham Act provides that a plaintiff may recover lost profits subject to
25
26
27
principles of equity. 15 U.S.C. § 1117(a). Further, WOSS’s remaining complaints relate to
liability, not damages. Accordingly, the Court DENIES WOSS’s Motion in Limine No. 5 to the
extent it seeks to exclude Ms. Schenk’s testimony regarding trademark damages.
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17
1
ii.
Patent Damages
WOSS complains that Ms. Schenk’s reasonable royalty opinions relating to TRX’s patent
2
claims are unreliable because (1) she did not apportion the value of patented features as compared
3
to non-patented features; and (2) she wrongly assumed that non-infringing features do not
4
5
6
7
contribute value. Def.’s MIL 5 at 1-3, ECF 168. WOSS particularly faults Ms. Schenk for
characterizing the handle grip of the ’814 patent as “fundamental” and leading to “significant
commercial success,” when it was ultimately invalidated at summary judgment. Id. at 2.
According to WOSS, “no jury could unscramble what a proper royalty base might be.” Id. at 3.
8
TRX disagrees, arguing that Ms. Schenk appropriately addressed apportionment in her
9
opinions. With respect to royalty base, TRX argues that Ms. Schenk considered apportionment
10
United States District Court
Northern District of California
11
and reasonably determined that none was warranted. Pl.’s Opp. 5 at 4, ECF 195. With respect to
royalty rate, TRX argues that Ms. Schenk’s opinions reflect apportionment because “[h]er analysis
12
of the income approach, market approach, and the Georgia-Pacific factors all take into account the
13
relative importance of TRX’s inventive contribution” and that she reasonably determined,
14
ultimately, that no apportionment of the royalty base was warranted. Id. at 4-5. TRX also argues
15
that, to the extent WOSS’s motion attacks Ms. Schenk’s use of the license agreements in
16
connection with her patent damages opinion, its complaints are legally and factually unfounded.
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Id. at 6.
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The Court addresses each of WOSS’s complaints in turn. With respect to apportionment,
the Court notes, as an initial matter, that it agrees with WOSS that Ms. Schenk’s apportionment
analysis is deficient. Although the Federal Circuit has recognized that “there may be more than
21
one reliable method for estimating a reasonable royalty,” Commonwealth Sci. & Indus. Research
22
Organisation v. Cisco Sys., Inc., 809 F.3d 1295, 1301 (Fed. Cir. 2015) (“CSIRO”), it has generally
23
found that a reliable apportionment analysis should be conducted by adjusting the royalty base, not
24
the royalty rate. See, e.g., LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 67, 68
25
(Fed. Cir. 2012) (rejecting the use of a royalty base associated with the complete product and a
26
27
one-third apportionment adjustment of the royalty rate). This is because the alternative “cannot
help but skew the damages horizon for the jury,” as “[a]dmission of . . . overall [product]
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18
1
revenues, which have no demonstrated correlation to the value of the patented feature alone, only
2
serve to make a patentee’s proffered damages amount appear modest by comparison, and to
3
artificially inflate the jury’s damages calculation beyond that which is ‘adequate to compensate for
4
the infringement.’” Id. (quoting Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1320 (Fed.
5
Cir. 2011)). In addition, the Federal Circuit has held that “qualitative testimony that an invention
6
is valuable—without being anchored to a quantitative market valuation—[is] insufficiently
7
reliable.” CSIRO, 809 F.3d at 1302. Ms. Schenk’s opinion appears to run afoul of both of these
8
principles, as she attempts no apportionment of the royalty base, and to the extent that any royalty
9
rate calculations “reflect apportionment,” Pl.’s Opp. 5 at 4, they largely rely on qualitative
assessments about the relative important of TRX’s invention and adjustments to the royalty rate.
11
United States District Court
Northern District of California
10
However, in this case, Ms. Schenk’s failure to adequately address apportionment is not a
12
basis for exclusion under Rule 702. “‘The essential requirement’ for reliability under Daubert ‘is
13
that the ultimate reasonable royalty award must be based on the incremental value that the
14
patented invention adds to the end product.’” CSIRO, 809 F.3d at 1301 (quoting Ericsson, Inc. v.
15
D-Link Sys., Inc., 773 F.3d 1201, 1226 (Fed. Cir. 2014)). This does not mean that an expert must
16
always apportion; instead, the expert remains free to determine that this “incremental value” and
17
the value for the entire product are one in the same. Here, Ms. Schenk has done precisely that.
18
Ex. A to Pl.’s Opp. 5 ¶ 31, ECF 195-1; Ex. 1 to Def.’s MIL 5 ¶¶ 42-43, ECF 168-1. In reviewing
19
Ms. Schenk’s reasons and bases for concluding that apportionment is not needed, the Court finds
20
that, although they are stated at a relatively high level, they are sufficient to pass muster under
21
Rule 702. If WOSS disagrees with any of Ms. Schenk’s reasons or underlying assumptions, this is
22
the proper subject of cross-examination. They are not so deficient so as to warrant exclusion at
23
this stage.
24
The Court also notes that WOSS’s specific reasons for why Ms. Schenk should have
25
apportioned—because the’896 patent concerns just the anchor portion of the accused products—
26
does not make sense. By its plain language, claim 1 concern an “exercise device,” not just an
27
anchor. Thus, the Court cannot fault Ms. Schenk for not apportioning based on this component.
28
While it is possible that there may be other non-patented components in the accused products such
19
1
that apportionment is still needed to reflect only the contribution of the ’896 patent, WOSS has not
2
identified these components here. Thus, for this reason as well, WOSS’s motion is unpersuasive.
3
Turning to Ms. Schenk’s use of the license agreements, to the extent WOSS’s motion
4
attacks this in connection with her patent damages opinion, the Court agrees with TRX that this is
5
proper Rule 702 testimony. Ms. Schenk appears to have consulted reliable sources and she
6
adequately explains her reasoning in conducting her “market approach” analysis. To the extent
7
WOSS disagrees with certain factual assumptions or Ms. Schenk’s decisions to consult certain
8
sources, these are are the proper subject of cross-examination.
Accordingly, because none of WOSS’s alleged deficiencies provide a basis for excluding
10
Ms. Schenk’s opinions under Daubert or Rule 702, WOSS’s Motion in Limine No. 5 is DENIED
11
United States District Court
Northern District of California
9
to the extent it seeks to exclude Ms. Schenk’s testimony regarding patent damages.
12
13
IT IS SO ORDERED.
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Dated: March 6, 2017
______________________________________
BETH LABSON FREEMAN
United States District Judge
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