AVM Technologies LLC v. Intel Corporation

Filing 690

MEMORANDUM ORDER regarding expert testimony (see Memorandum Order for further details). Signed by Judge Richard G. Andrews on 4/30/2017. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

AVM TECHNOLOGIES, LLC,
Plaintiff;
V.

Civil Action No. 15-33-RGA

INTEL CORPORATION,
Defendant.
MEMORANDUM ORDER
"Shoot for the moon, but remember that if you miss, you will be floating off into the inky
blackness of space with no hope of survival or rescue." 1 A VM shot for the moon, and, in my
opinion, missed. The question now is whether it can survive. I think the answer is yes.
A VM proffers a variety of sources from which a jury could find a reasonable royalty. I
believe that A VM can put evidence into the record from which a jury could find a reasonable
royalty. Such evidence includes historical facts, such as how much A VM paid for the patent,
what its licensing approach was, and what sorts of offers Mr. Tran made to Intel in the past to
license the patent. There may be problems at the margins in terms of when testimony becomes
expert testimony or when it is hypothetical (see Civ. Act. No. 10-630, D.I. 283 at 9-14), but
AVM can certainly put on fact testimony giving the jury some basis for finding a reasonable
royalty. And, as I decide below, A VM can call Julie Davis as a witness and put on her expert
testimony should it decide to do so.
Much oflntel's argument is that A VM has violated the rules. The disclosures and
interrogatory answers may be inadequate, but, under a Pennypack analysis, I will permit AVM to

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I am not sure of the source of this, but it is not original with me.

proceed. Under Pennypack, factors to consider when determining whether to exclude evidence
include:
(1) the prejudice or surprise in fact of the party against whom the excluded
witnesses would have testified, (2) the ability of that party to cure the prejudice,
(3) the extent to which [allowing the late-offered testimony] would disrupt the
orderly and efficient trial of the case or of other cases in the court, and (4) bad
faith or willfulness in failing to comply with the court's order.

Meyers v. Pennypack Woods Home Ownership Assn., 559 F.2d 894, 904-05 (3d Cir. 1977).
Since I do not think A VM acted willfully or in bad faith here, the fourth factor weighs in favor of
allowing the testimony. Since I am only allowing testimony that has already been disclosed
during discovery, and because trial will proceed as scheduled, the third factor also weighs in
favor of allowing the testimony. As to prejudice, I am not persuaded that there is incurable
prejudice to Intel by allowing Mr. Tran to testify to the facts I discussed above. Intel has
deposed Mr. Tran extensively on these subjects and there is nothing that A VM is proposing to
present at trial (or that I will allow to be presented) that was not already disclosed. The proposed
testimony and evidence are not new to Intel. On the whole, the Pennypack factors weigh in
favor of admitting the testimony.
As for A VM calling Julie Davis to testify if Intel does not call her, it is within my
discretion to allow A VM to call Intel's expert witness to testify even if Intel chooses not to call
her. Peterson v. Willie, 81F.3d1033, 1037-38 & n.4 (I Ith Cir. 1996). In making this
discretionary decision, courts weigh the interests of the party seeking to call the expert and of the
court in reaching an informed resolution of the case against the possible prejudice to the party
who originally retained the expert. N5 Techs. LLC v. Capital One NA., 56 F. Supp. 3d 755, 766
(E.D. Va. 2014). Here, I am hard pressed to see the prejudice to Intel. Intel designated Ms.
Davis as an expert witness, she was deposed, and Intel presumably is quite knowledgeable about
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the testimony she has offered. In contrast, to preclude A VM from eliciting her testimony once it
has been disclosed through the expert report and deposition process would inhibit A VM's ability
to proceed with the case. A VM is in a comer, and the bits of historical fact that it can produce
are a thin reed on which to obtain a reasonable royalty that would withstand appellate review
(assuming it satisfies the jury and me). On the other hand, Ms. Davis's opinions would likely
provide a sound basis for a damages award. lfthere is liability here, the court and the jury would
benefit from hearing Ms. Davis's opinions in reaching an informed resolution. Thus, I think it is
fair to allow A VM to call Ms. Davis as a witness in its case if it chooses to do so. If A VM does
not call Ms. Davis, Intel will have complete freedom, just as it would anyway, to call her or not
to call her. This does not mean, however, that A VM has free reign to explore any topics with her
that it wishes. Ms. Davis's testimony must be limited to what was disclosed in her expert report.

Penn Nat. Ins. v. HNI Corp., 245 F.R.D. 190, 194-95 (M.D. Pa. 2007). Further, of course, at
AVM's request, I have excluded some of her testimony already.

If A VM does not call her, and if Intel does not call her, her report is inadmissible hearsay
that does not fall within one of the exceptions to the hearsay rule. N5 Technologies, 56 F. Supp.
3d at 765.
Intel is directed to ensure Ms. Davis is present at trial if necessary. If AVM wants to call
her as a witness, A VM needs to make that decision and advise Intel of its decision by 11 :00 p.m.
tonight. If A VM decides that it will call her as a witness by 11 :00 p.m. tonight, it is responsible
to reimburse Intel for all of Ms. Davis's contractual obligations effective beginning tomorrow.
A VM can, of course, change its mind during the trial about calling Ms. Davis, but it will still be
obligated to reimburse Intel through to the point where A VM releases her.
All this being said, if A VM does not put on an expert computation of damages, A VM
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cannot make arguments based on non-expert testimony that it could not make based on expert
testimony.

Entered this ?Oday of April, 2017.

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