Days Corporation v. Lippert Components Inc
Filing
275
OPINION AND ORDER DENYING 245 Motion to Preclude Expert Testimony on Invalidity filed by Innovative Design Solutions, Inc., Lippert Components Inc. Signed by Judge Philip P Simon on 4/27/2022. (mrm)
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
DAYS CORPORATION,
Plaintiff,
vs.
LIPPERT COMPONENTS, INC. and
INNOVATIVE DESIGN
SOLUTIONS, INC.
Defendants.
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CAUSE NO. 3:17CV208-PPS /MGG
consolidated with
INNOVATIVE DESIGN
SOLUTIONS, INC.,
Plaintiff,
vs.
DAYS CORPORATION,
Defendant.
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CAUSE NO. 3:17CV327-PPS/MGG
OPINION AND ORDER
In this patent litigation, Robert Sturges is an expert witness for alleged infringer
Days Corporation. He offers opinions in support of defenses of obviousness and
anticipation as to certain claims of Innovative Design Solutions, Inc.’s Patent No.
6,584,385 (the ‘385 Patent) for a Vehicle Leveling Assembly. Now before me is IDS’s
motion to prohibit Sturges from testifying. [DE 245.]
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Applicable Standard of Proof for Obviousness
One defense to a claim of patent infringement is to show that the patent is invalid
on grounds of obviousness. Under 35 U.S.C. §103, a patent is invalid for obviousness
“if the differences between the subject matter sought to be patented and the prior art are
such that the subject matter as a whole would have been obvious at the time the
invention was made to a person having ordinary skill in the art to which said subject
matter pertains.” Four factors, known as the Graham factors, have been identified as
pertinent to an obviousness analysis: (1) the scope and content of the prior art; (2) the
differences between the claims and the prior art; (3) the level of ordinary skill in the art;
and (4) objective indicia of nonobviousness.” Graham v. John Deere Co. of Kansas City,
383 U.S. 1, 17-18 (1966).
IDS’s first argument is that Sturges applied the wrong obviousness standard.
[DE 245 at 11.] When an application for a patent is made with the U.S. Patent and
Trademark Office and the examiner asserts an issue of obviousness, she must first set
forth a prima facie case of obviousness, after which the burden shifts to the patentee to
rebut the showing. ACCO Brands Corp. v. Fellowes, Inc., 813 F.3d 1361, 1365-66 (Fed.Cir.
2016). The examiner ultimately applies a preponderance of the evidence standard
weighing the evidence establishing the prima facie case with the patentee’s rebuttal
evidence. In re Earley, 836 Fed.Appx. 905, 912-13 (Fed.Cir. 2020).
By contrast, once a patent is granted, and litigation ensues, the standard changes.
At that point, there is a presumption that the patent is valid, and any challenge on the
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grounds of obviousness places the burden on the challenger to demonstrate by clear
and convincing evidence that a skilled artisan would have been motivated to combine
the teachings of the prior art references to achieve the claimed invention, and that the
skilled artisan would have had a reasonable expectation of success in doing so. Eli Lilly
and Company v. Teva Pharma. Int’l GmbH, 8 F.4th 1331, 1344 (Fed.Cir. 2021). In short,
once a challenge to a patent on obviousness grounds moves into litigation, the standard
of proof gets elevated from a preponderance of the evidence to clear and convincing.
Sturges’s report discloses his understanding that the Graham factors apply to an
obviousness determination, and of the elements of a prima facie case of obviousness.
[DE 245-1 at 6, 7.] He also understands “that a rationale to combine that merely
describes the resulting combination without explaining the particular reason why one
of ordinary skill would combine the elements of the prior art so as to form Day’s (sic)
claimed invention is merely conclusory and based on impermissible hindsight
reasoning.” [Id. at 6.] What IDS complains of is Sturges’s failure to reference the clear
and convincing standard of proof that applies to an obviousness defense in court. [DE
245 at 11; DE 264 at 2.]
The Federal Court of Claims has rejected such an argument, for the same reasons
that occur to me. In that case, as here, an expert’s report and testimony were challenged
“because he ‘did not specify a standard of proof . . .’” Hitkansut LLC v. United States, 127
Ct.Cl. 101, 113 (Ct.Cl. 2016). The court observed that the expert is a scientist not a legal
scholar, and “may testify ‘even if unaware of what burden of proof will ultimately be
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required.’” Id., citing Formax, Inc. v. Alkar-Rapidpak-MP Equip., Inc., No. 11-C-298, 2014
WL 3057116, at *2 (E.D.Wisc. July 7, 2014). The Court of Claims noted that the
Wisconsin case, which it cited with approval, involved our very scenario, “rejecting
plaintiff’s argument that a defense expert on obviousness must be aware of the ‘clear
and convincing’ evidentiary standard applicable to that defense.” Hitkansut, 127 Fed.Cl.
at 113. In other words, the question at trial will be whether the jury is persuaded that
the clear and convincing standard of obviousness has been met. What Sturges believes
the standard is, is neither here not there. Sturges will be permitted to state his opinion
on obviousness and then the jury will take the evidence and apply it to the clear and
convincing standard. In short, there is no basis to preclude his testimony on a perceived
lack of understanding (if there is a lack of understanding at all) on the proper standard
of proof.
Indicia of Nonobviousness
The fourth Graham factor expresses the relevance of objective evidence that a
patent is not obvious. Examples include “[s]uch secondary considerations as
commercial success, long felt but unsolved needs, [and] failure of others.” Graham, 383
U.S. at 17-18. IDS argues that Sturges’s report is flawed because it “omits any mention
of the objective indicia of non-obviousness.” [DE 245 at 12.] IDS relies on InTouch Tech.,
Inc. v. VGO Communications, Inc., 751 F.3d 1327 (Fed.Cir. 2014). There the issue
presented was not whether an expert’s testimony should have been excluded, but
whether the defense of obviousness was supported at trial by sufficient evidence. In
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that context, the Federal Circuit found that an expert’s conclusion that certain patent
claims were obvious was supported by an incomplete analysis because she failed to
account for the objective evidence of nonobviousness offered by the patentee. Id. at
1352. The court of appeals reversed the district court’s denial of judgment as a matter of
law and its judgment of invalidity, because the defendant had failed to meet its burden
of proving obviousness by clear and convincing evidence. Id. at 1353.
InTouch does not involve a Daubert motion to exclude the expert’s testimony.
The Federal Circuit expressly notes that “technical experts may testify to matters like
the level of skill in the art at the time of the invention and what a skilled artisan might
find obvious in light of the prior art without addressing objective indicia of
nonobviousness.” Id. at 1352, n.8. IDS contends that Sturges’s conclusions are not so
limited, and that the next sentence of the InTouch footnote applies: “where...an expert
purports to testify, not just to certain factual components underlying the obviousness
inquiry, but to the ultimate question of obviousness, the expert must consider all factors
relevant to that ultimate question.” [DE 264 at 4-5, citing Id.]
IDS does not identify any secondary factors of nonobviousness that Sturges
should have considered, or reference any evidence to support them. It is true that
Sturges couches his conclusions in ultimate terms, for example, “Claim 7 is obvious.”
[DE 245-1 at 27.] But the analysis immediately offered is focused on the relevant claims
of the prior art and the reasoning and motivation of a hypothetical POSITA to combine
certain elements to achieve what Claim 7 teaches. Id. If Sturges overstates his ultimate
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conclusions, his testimony could be subjected to cross-examination challenging its
weight for failure to consider additional factors pertinent to obviousness. But I am not
persuaded that Sturges’s failure to consider unidentified indicia of nonobviousness is a
basis for excluding Sturges’s report or precluding his testimony.
The How and Why
Expert reports are to be “detailed and complete,” and to offer an explanation of
the expert’s analysis. Fed.R.Civ.P. 26 Advisory Committee’s note. They ”must include
‘how’ and ’why’ the expert reached a particular result, not merely the expert’s
conclusory opinions.” Salgado ex rel. Salgado v. Gen. Motors Corp., 150 F.3d 735, 741, n.6
(7th Cir. 1998). See also Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 641 (7th Cir. 2008).
IDS argues that Sturges’s report fails to meet these requirements and is merely his ipse
dixit (which is fancy Latin for “because I said so, that’s why”). [DE 245 at 14.] More
specifically, IDS contends that:
Dr. Sturges’ report is not complete in that no bases or reasons are
provided for Dr. Sturges’ invalidity positions on anticipation or
obviousness. Dr. Sturges merely provides quotations from the cited art
and juxtaposes them with a claim limitation. There is no explanation of
how or why the quoted language meets the respective claim limitation.
[Id.]
In the example IDS points to [DE 245 at 10] on page 16 of Sturges’s report,
Sturges expresses the view that each limitation of Claim 1 of the ‘385 Patent is
anticipated by the prior art identified as Schneider ‘700. [DE 245-1 at 16.] The
explanation that follows identifies for each limitation of Claim 1 the precise language
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from Schneider ‘700 that Sturges believes teaches the limitation. [Id.] It is true that
Sturges doesn’t amplify every one of his claim comparisons with additional discussion,
but IDS doesn’t demonstrate that his attempt to explain his anticipation analysis is not
merely brief as opposed to entirely conclusory. Conclusory would be if Sturges merely
asserted that each limitation of Claim 7 is taught by Schneider ‘700, without more.
Sturges offers more detailed explanation of his obviousness conclusions. For example,
his treatment of Claim 7 includes identification of references to specific elements of the
relevant prior art and a brief discussion of the motivation to combine those elements to
achieve what IDS’s patent claims. [DE 245-1 at 71.] At trial, IDS may attack Sturges’s
conclusions as weak but that goes to weight of the evidence rather than to its
admissibility.
In a case relied on by IDS, the Seventh Circuit reminds me that “[d]istrict judges
have ‘considerable leeway in deciding in a particular case how to go about determining
whether particular expert testimony is reliable.’” Manpower, Inc. v. Ins. Co. of
Pennsylvania, 723 F.3d 796, 806 (7th Cir. 2013). Reliability, the Court of Appeals explains,
“is primarily a question of the validity of the methodology employed by an expert, not
the quality of the data used in applying the methodology or the conclusions produced.”
Id. IDS does not suggest that Sturges fails to understand the doctrines of anticipation or
obviousness, and does not challenge the pertinence of Sturges’s comparison of the
elements of Patent ‘385 claims with those of prior art. IDS just complains that Sturges’s
explanation of the analysis of his comparisons is inadequate. Sturges has identified the
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comparisons he makes and offered explanatory detail where he believed the basis for
his conclusion is not self-evident. But he has not merely offered conclusions. District
courts are warned against scrutinizing the reliability of an expert’s conclusions if he has
used reliable methods. Stollings v. Ryobi Technologies, Inc., 725 F.3d 753, 765 (7th Cir.
2013). I am not persuaded that Sturges’s report and testimony must be excluded for
being too conclusory.
Determinative Legal Conclusions
IDS next contends that Sturges’s opinions on obviousness are inadmissible
because they “state legal conclusions that, if adopted, would determine the outcome of
the case.” [DE 245 at 15-16.] IDS cites no case applying this principle to an expert
addressing the doctrine of patent obviousness. It’s true that the ultimate conclusion of
obviousness is a question of law, with underlying factual issues as identified in Graham.
Intel Corp. v. Qualcomm Inc., Nos. 2020-2092, 2020-2093, 2022 WL 880681, at *3 (Fed.Cir.
2022). But the Federal Circuit has expressly discussed the helpfulness of an expert’s
opinion on the legal conclusion of obviousness “as relevant to the factual aspects of the
analysis leading to that legal conclusion.” High Point Design LLC v. Buyers Direct, Inc.,
730 F.3d 1301, 1313-14 (Fed.Cir. 2013). See also Soverain Software LLC v. Newegg Inc., 705
F.3d 1333, 1341 (Fed. Cir. 2013). IDS has not urged this argument again in its reply, and
appears to have waived it. Golden IT, LLC v. United States,
Fed.Cl.
, 2022 WL
334369, at *12 (Ct.Cl. Feb. 4, 2022); Pack v. Middlebury Community Schools, 990 F.3d 1013,
1021 (7th Cir. 2021).
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Expert Compensation
In support of its motion, IDS initially asserted that Sturges’s Invalidity Report
fails to comply with the requirement of Rule 26(a)(2)(B)(vi) to include a “statement of
the compensation to be paid for the study and testimony in the case.” [DE 245 at 16.] In
opposition, Days points out that in his separate Expert Report of Noninfringement
Sturges discloses that he is “being compensated for all work in this matter at
$450/hour.” [DE 253 at 19, quoting 253-3 at 3.] IDS’s reply contains no further
reference to the matter, which I need not address further.
Harmlessness of any Failure to Comply with Rule 26 Disclosure Requirements
I have already concluded that Sturges’s Invalidity Report is not defectively
conclusory. And IDS has conducted a full-day deposition of Dr. Sturges and availed
itself of the opportunity to explore his invalidity positions in greater detail. [DE 253 at
10.] Although deposition testimony should not be relied upon to remedy shortcomings
of an expert report, it can obviously be used to adduce a fuller understanding of an
expert’s analysis, as appears to have happened in this case. And here, where I am not
convinced that the report failed to comply with Rule 26, Sturges’s deposition testimony
should doubly eliminate any significant surprise in his trial testimony. Days readily
agrees that Sturges will not “provide any previously undisclosed reasoning for the first
time at trial.” [DE 253 at 20.]
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Conclusion
IDS has offered no persuasive basis for the exclusion of the report and testimony
of Days’ expert Dr. Robert Sturges. I agree with the Federal Circuit when it observed
(albeit in a summary judgment context) that “the refining fire of cross examination” is
“a more effective means of arriving at the legal conclusion of obviousness vel non than
perusal of ex parte affidavits and declarations of partisan experts lobbed at each other
from opposing trenches.” Hodosh v. Block Drug Co., 786 F.2d 1136, 1143 (Fed.Cir. 1986).
The same can be said of the fact question posed by an anticipation defense. The parties
in this litigation have fired various artillery at one another from their respective
trenches for more than five years now. If the matter cannot be settled, it is time for their
positions to be tested at trial.
ACCORDINGLY:
Innovative Design Solutions, Inc.’s Motion to Prohibit Dr. Sturges from
Testifying as to Anticipation or Obviousness of the Asserted Claims [DE 245] is
DENIED.
SO ORDERED this 27th day of April, 2022.
/s/ Philip P. Simon
United States District Judge
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