Fleming v. Escort Inc. et al
Filing
232
MEMORANDUM DECISION AND ORDER granting 174 Motion to Exclude; granting 184 Motion for Leave to File. Plaintiff's request for attoreny fees is denied. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
HOYT A. FLEMING,
Plaintiff,
Case No. 1:CV 09-105-BLW
v.
MEMORANDUM DECISION AND
ORDER
ESCORT, INC. and BELTRONICS
USA, INC.,
Defendants.
INTRODUCTION
The Court has before it a motion to exclude filed by plaintiff Fleming. The motion
is fully briefed and at issue. For the reasons explained below, the Court will grant the
motion and exclude any evidence of the ‘721 patent from this case.
LITIGATION BACKGROUND
The ‘721 patent issued to Steven Orr on August 16, 2011, about 7 months after
discovery closed. Escort provided the patent to Fleming in a supplemental discovery
response because Fleming had earlier requested all patents held by Steven Orr that Escort
intended to use at trial. Escort did not, however, explain how it intended to use the ‘721
patent at trial, despite Fleming’s requests.
During a trial setting conference, Fleming asked this Court to order that Escort
identify the relevance of the ‘721 patent or commit to not using the patent at trial. Escort
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objected, claiming that Fleming’s request sought work product. The Court disagreed. In
its Order setting trial, the Court rejected Escort’s work product defense. See Order (Dkt.
No. 172). While finding that the late production of the ‘721 patent was justified by its
late issuance, the Court held that “the defendant cannot use that late production to obtain
an advantage by concealing how it intends to use the patent at trial until the pretrial
submissions are filed on the eve of trial. That promotes trial by ambush.” Id. at p. 7. The
Court explained that it could give full consideration to the admissibility of the ‘721 patent
only after reviewing all the briefing on a motion to exclude, and that the Court would
resolve the issue prior to trial if it received the briefing early enough.
Fleming responded by filing a motion to exclude the ‘721 patent on the ground that
it was irrelevant. Escort responded that the ‘721 patent is relevant to damages because
the patent covers portions of the allegedly infringing products “and therefore informs the
trier of fact that the profit realized from the products accused of infringement is derived
from Escort’s own intellectual property, not that of Fleming.” See Escort Brief (Dkt. No.
180) at p. 1. In support of this, Escort files the Declarations of Thomas Humphrey, John
Kuhn, and the previously-submitted report of its damage expert Vincent Thomas.
Fleming objected to the Declarations of Humphrey and Kuhn, arguing that they contain
expert opinions and that Escort is ignoring the fact that the deadline for the submission of
such opinions expired long ago.
The Court turns first to the expert report of Vincent Thomas, submitted by Escort
within the deadline imposed for expert reports. In his report, Thomas offers an opinion
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about calculating a reasonable royalty due to Fleming if Escort’s products are found to be
infringing. See Exhibit C (Dkt. No. 180-3). One factor he examines is the profit Escort
has made on the infringing products. Id. at p. 14. To arrive at a reasonable royalty figure,
Thomas asserts, Escort’s profit must be reduced by that portion of the profit attributable
to features of the Escort products that are not covered by Fleming’s patents. Id. at p. 15.
For example, Thomas points to a feature known as the Database, which Escort alleges is
not covered by Fleming’s patents. The Database is offered on two of Escort’s devices
and contains the location of known red-light cameras, fixed speed-monitoring cameras,
and speed trap locations. Id. at p. 14, n. 56. Thomas asserts that because the Database is
a very popular feature, and not covered by Fleming’s patents, the profit attributable to the
Database must not be considered in arriving at a reasonable royalty figure. Id. at 15.
With the issuance of the ‘721 patent, Escort argues that its features such as the
Database are not only outside the reach of the Fleming patents but now covered by
Escort’s ‘721 patent. This establishes the relevance of the ‘721 patent, Escort argues,
because it is entitled to a credit in the reasonable royalty calculation to the extent of its
profits attributable to features covered by the ‘721 patent.
Under Escort’s argument, the relevance of the ‘721 patent is based entirely on the
premise that it covers certain features of Escort’s products at issue. In support of this
point, Escort submits Declarations from Thomas Humphrey and John Kuhn. Humphrey
is a patent attorney with the law firm representing Escort and was involved in the
prosecution of the original patent application – the ‘147 patent application – that was
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eventually issued as the ‘721 patent. See Humphrey Declaration (Dkt. No. 180-1) at pp.
1-2. He offers his opinion that the ‘721 patent covers certain portions of Escort’s
products, including the Database. Id. at p. 3. John Kuhn, Escort’s Vice President of
Engineering, offers a similar opinion.
Fleming objects to the opinions of Humphrey and Kuhn, arguing that these are
expert opinions offered long after the deadline expired. Escort responds that Humphrey
and Kuhn are merely testifying as to facts rather than offering expert opinions.1
Both Humphrey and Kuhn offer their opinion on how to interpret the claims of the
‘721 patent. Commenting on opinions offered by patent attorneys like Humphrey, the
Federal Circuit has “noted the impropriety of patent lawyers testifying as expert witnesses
and giving their opinion regarding the proper interpretation of a claim as a matter of law,
the ultimate issue for the court to decide.” Endress & Hauser, Inc. v. Hawk Measurement
Systems Pty. Ltd., 122 F.3d 1040 (Fed.Cir. 1997). With regard to Kuhn, who is not an
attorney, his claim construction opinion is nevertheless a legal opinion rather than a
factual recitation.
Ultimately, under Escort’s argument, the ‘721 patent is only relevant and
admissible if its claims are construed to cover certain features of the Escort products, such
as the Database, which would affect the calculation of a reasonable royalty. Thus, to find
the ‘721 patent relevant, the Court must make a Markman inquiry and interpret the claims
1
The Court will grant Escort’s motion to file a sur-reply brief, and did consider it in this
decision.
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of the ‘721 patent. See Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996)
(holding that claim construction was question of law for the court and a threshold inquiry
in infringement action). This would require reopening discovery more than a year after it
closed, and would result in a substantial delay of the trial, now just weeks away. When
the Court set this trial date – in an Order filed January 19, 2012 – the Court stated that
“any further extension of the trial date is unacceptable. This is a standard patent
infringement action that will be over three years old at the time of trial and no further
delays will be allowed.” See Order (Dkt. No. 172).
In addition to causing additional delay, the admission of the ‘721 patent would add
little to the reasonable royalty analysis. Escort raised – in the timely report of Thomas –
the argument that Escort should get a credit in the reasonable royalty calculation for
profits attributable to features that fell outside of Flemings’ patents. Authority for this
credit is well-established in Federal Circuit case law that considers, in calculating a
reasonable royalty, “[t]he portion of the realizable profit that should be credited to the
invention as distinguished from non-patented elements, the manufacturing process,
business risks, or significant features or improvements added by the infringer.” Lucent
Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1331 (Fed.Cir. 2009). While this
requires Escort to show that features like the Database are not covered by Fleming’s
patent, it imposes no additional requirement on Escort to also show that it has a separate
patent on the features.
Thus, the ‘721 patent is of marginal relevance to the reasonable royalty issue and
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would cause a substantial delay in a trial that has already suffered substantial delays.
Under Rule of Evidence 403, the Court may exclude evidence if its probative value is
substantially outweighed by a danger of undue delay. That is the case here, and the Court
will therefore grant Fleming’s motion to exclude the ‘721 patent. The Court will deny
Fleming’s request for attorney fees.
ORDER
In accordance with the Memorandum Decision set forth above,
NOW THEREFORE IT IS HEREBY ORDERED, that Escort’s motion to file surreply brief (docket no. 184) is GRANTED.
IT IS FURTHER ORDERED, that plaintiff’s motion to exclude defendants’ use of
the ‘721 patent at trial (docket no. 174) is GRANTED.
IT IS FURTHER ORDERED, that plaintiff’s request for attorney fees is DENIED.
DATED: May 18, 2012
Honorable B. Lynn Winmill
Chief U. S. District Judge
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