BOSTON SCIENTIFIC CORPORATION ET AL V. COOK GROUP INCORPORATED ET AL
Filing
974
ORDER granting in part and denying in part 735 Defendant's Motion to Exclude Plaintiffs' Technical Expert, Karl Leinsing; granting in part and denying in part 740 Defendant's Motion to Exclude Plaintiffs' Patent Law Expert, S tephen Kunin; granting in part and denying in part 752 Plaintiffs' Motion to Exclude Defendant's Damages Expert, Vincent A. Thomas; denying 760 Defendant's Motion to Exclude Plaintiffs' Damages Expert, John Bone. (See Order.) Signed by Judge James R. Sweeney II on 02/02/2023. (SNB) Modified on 2/2/2023 (SNB).
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
BOSTON SCIENTIFIC CORP. and
BOSTON SCIENTIFIC SCIMED, INC.,
Plaintiffs,
v.
COOK MEDICAL LLC,
Defendant.
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No. 1:17-cv-03448-JRS-MJD
Order on Motions to Exclude Expert Testimony
This is a patent infringement case. Before the Court are Defendant's following
motions: (1) Motion to Exclude Plaintiffs' Technical Expert, Karl Leinsing, (ECF No.
735); (2) Motion to Exclude Plaintiffs' Patent Law Expert, Stephen Kunin, (ECF No.
740); and (3) Motion to Exclude Plaintiffs' Damages Expert, John Bone, (ECF No.
760). Additionally, the Court will address Plaintiffs' Motion to Exclude Defendant's
Expert, Vincent A. Thomas, (ECF No. 752).
I.
Legal Standard for Expert Testimony
"A witness who is qualified as an expert by knowledge, skill, experience, training,
or education may testify in the form of an opinion or otherwise if: (a) the expert's
scientific, technical, or other specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue; (b) the testimony is based on
sufficient facts or data; (c) the testimony is the product of reliable principles and
methods; and (d) the expert has reliably applied the principles and methods to the
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facts of the case." Fed. R. Evid. 702. As part of its "gatekeeping" responsibility, "[i]t
is the district court's role to ensure that expert testimony is both relevant and
reliable." Bielskis v. Louisville Ladder, Inc., 663 F.3d 887, 893 (7th Cir. 2011) (citing
Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 589 (1993)). "In performing this
role, the district court must engage in a three-step analysis, evaluating: '(1) the
proffered expert's qualifications; (2) the reliability of the expert's methodology; and
(3) the relevance of the expert's testimony.'" Kirk v. Clark Equip. Co., 991 F.3d 865,
872 (7th Cir. 2021) (quoting Gopalratnam v. Hewlett-Packard Co., 877 F.3d 771, 779
(7th Cir. 2017)). The proponent of the expert bears the burden of demonstrating the
admissibility of the expert's testimony. Lewis v. CITGO Petroleum Corp., 561 F.3d
698, 705 (7th Cir. 2009). "[T]he district court's role as gatekeeper does not render the
district court the trier of all facts relating to expert testimony. . . . The jury must still
be allowed to play its essential role as the arbiter of the weight and credibility of
expert testimony." Stollings v. Ryobi Techs., Inc., 725 F.3d 753, 765 (7th Cir. 2013)
(citations omitted).
II.
Plaintiffs' Technical Expert, Karl Leinsing
Defendant makes three challenges in its Motion to Exclude Karl Leinsing: (1)
Leinsing's opinions that contradict "findings from the IPR proceedings" should be
excluded under the doctrine of collateral estoppel, (ECF No. 738 at 9); (2) Leinsing's
"conclusory" testimony is cumulative, (id. at 19); and (3) Leinsing's written
description opinions are "legally-flawed", (id. at 24). The Court addresses these
arguments in turn.
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A. Collateral Estoppel of Leinsing's "Contradictory" Opinions
Defendant seeks to preclude three opinions that contradict arguments and issues
raised and decided during the Inter Partes Review ("IPR") conducted before the Patent
Trial and Appeal Board ("PTAB") of the U.S. Patent and Trademark Office ("USPTO"
or "Patent Office"): (1) opinions regarding the relevance of prior art biopsy forceps to
the asserted patents, (ECF No. 738 at 9); (2) opinions regarding the scope and content
of Nishioka's prior art biopsy forceps, (id. at 13); and (3) opinions regarding the scope
and content of Sackier's prior art clamps, (id. at 14).
Collateral estoppel, also called issue preclusion, "bars successive litigation of an
issue of fact or law actually litigated and resolved in a valid court determination
essential to the prior judgment, even if the issue recurs in the context of a different
claim." Dexia Credit Loc. v. Rogan, 629 F.3d 612, 628 (7th Cir. 2010). Collateral
estoppel applies if "(1) the issue sought to be precluded is the same as that involved
in the prior action; (2) the issue was actually litigated; (3) the determination of the
issue was essential to the final judgment; and (4) the party against whom estoppel is
invoked was fully represented in the prior action."
Id.
Seventh Circuit law
determines the general procedural question of whether collateral estoppel applies;
Federal Circuit law applies on issues of collateral estoppel that implicate substantive
patent law, or issues of collateral estoppel that implicate the scope of previous Federal
Circuit decisions. Soverain Software LLC v. Victoria's Secret Direct Brand Mgmt.,
LLC, 778 F.3d 1311, 1314 (Fed. Cir. 2015).
Defendant chiefly relies on XY, LLC v. Trans Ova Genetics in support of its
argument.
890 F.3d 1282 (Fed. Cir. 2018).
3
In that case, the Federal Circuit
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considered two appeals on the same patent claims: first, the Federal Circuit affirmed
a finding of invalidity by the PTAB as to certain claims challenged in the IPR; based
on this affirmance, the Federal Circuit dismissed the subsequent appeal from the
district court that invalidated those same claims. XY, 890 F.3d at 1294–95. After
affirming the PTAB's decision, the Federal Circuit dismissed the appeal of the district
court decision as moot and held that "an affirmance of an invalidity finding,
whether from a district court or the Board, has a collateral estoppel effect on all
pending or co-pending actions." Id. at 1294 (emphasis added). From this, Defendant
wishes to preclude Plaintiffs (and Leinsing, in particular) from making any
arguments that contradict any "findings" made by the Patent Office at the IPR. For
the following reasons, this is an overbroad reading of XY.
In B & B Hardware, Inc. v. Hargis Industries, Inc., the Supreme Court stated that
because issue preclusion "can be challenging to implement," the Court "regularly
turns to the Restatement (Second) of Judgments for a statement of the ordinary
elements of issue preclusion." 575 U.S. 138, 148 (2015). Continuing, the Court stated
that, per the Restatement, "subject to certain well-known exceptions, the general rule
is that '[w]hen an issue of fact or law is actually litigated and determined by a valid
and final judgment, and the determination is essential to the judgment, the
determination is conclusive in a subsequent action between the parties, whether on
the same or a different claim.'" Id. (citing Restatement (Second) of Judgments § 27,
p. 250 (1980)). One such exception to issue preclusion provided in the Restatement
is when "the adversary [seeking preclusion] has a significantly heavier burden than
4
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he had in the first action." Restatement (Second) of Judgments § 28(4) (1980). The
Supreme Court has applied this principle frequently. See, e.g., Grogan v. Garner, 498
U.S. 279, 284–85 (1991). Importantly in the patent context and relevant to the
parties' arguments here, the burden of proof to show invalidity in an IPR is much less
stringent than the burden of proof required at the district court. See Celgene Corp. v.
Peter, 931 F.3d 1342, 1362 (Fed. Cir. 2019) ("IPRs use a preponderance of the evidence
burden of proof rather than the district court's clear and convincing evidence burden
of proof."). Despite this, in XY, the Federal Circuit did not apply the exception
articulated in the Restatement and instead issued its holding quoted above that an
affirmance of an invalidity finding can have a preclusive effect on all pending actions.
But this holding is a narrow one: namely, if there is an affirmance of an IPR's finding
of invalidity, then the patentee is precluded from disputing that invalidity finding in
all other pending actions. There is nothing in XY that suggests all findings and
arguments resolved at the IPR are then also precluded at the district court.
Not only does it make sense to preclude a patentee from later disputing the
invalidity of claims (or materially identical claims) that were found invalid at the
IPR, but to find otherwise would neuter IPR proceedings. Indeed, the foundation
underlying the holding in XY can be stated as follows: By having his claims
invalidated at the IPR, the patentee effectively has no leg left to stand on; the cause
of action as to those invalidated claims dies. See Fresenius USA, Inc. v. Baster Int'l,
Inc., 721 F.3d 1330, 1340 (Fed. Cir. 2013) ("[W]hen a claim is cancelled, the patentee
loses any cause of action based on that claim, and any pending litigation in which the
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claims are asserted becomes moot."); see also Intell. Ventures I, LLC v. Lenovo Grp.
Ltd., 370 F. Supp. 3d 251, 256 (D. Mass. 2019) (citation omitted) ("The holding in XY
is necessitated by the IPR statutory scheme because if the PTAB finds that a claim
is unpatentable during an IPR proceeding, 'the PTO is required to issue a certificate
cancelling the claim.' . . . Thus, 'the patent holder may no longer assert that claim in
litigation or otherwise.'").
This is precisely what Federal Circuit Judge Bryson,
sitting by designation at the District of Delaware, explained in IOENGINE, LLC v.
PayPal Holdings, Inc: "The Federal Circuit in XY reached a result roughly equivalent
to the result it reached in Fresenius, as the court in XY dismissed the appeal from the
district court litigation over certain [claims] after upholding the PTAB's decision
invalidating those same claims. To be sure, the court in XY granted that relief before
the PTO had formally canceled the claims. Perhaps for that reason, the Federal
Circuit in XY treated its decision as being based on collateral estoppel rather than on
a direct application of Fresenius." No. 18-452-WCB, 2022 WL 2800861, at *14 (D.
Del. June 15, 2022) (emphasis added). Like the defendant in IOENGINE, Defendant
here "ignores the special circumstances in which [XY] arose" and attempts to broaden
its holding such that "any issue decided by the PTAB in addressing invalidity has
collateral estoppel effect in subsequent district court litigation notwithstanding the
differences in the standard of proof between the two forums." Id.
While both parties try to paint this issue as one of "settled law," district courts
have reached different conclusions in interpreting XY. Defendant's citations to many
of these district court cases are unpersuasive. First, most of these citations are to
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cases interpreting XY much as the Court does today, applying issue preclusion only
to findings of invalidity at the IPR. See, e.g., Cisco Sys., Inc. v. Capella Photonics,
Inc., No. 20-cv-01858-EMC, 2020 WL 7227153, at *4 (N.D. Cal. Dec. 8, 2020) (citing
to both XY and Fresenius and applying collateral estoppel to preclude subsequent
litigation over the validity of claims that had already been invalidated at the IPR);
Fellowes, Inc. v. Acco Brands Corp., No. 10 cv 7587, 2019 WL 1762910, at *3–7 (N.D.
Ill. Apr. 22, 2019) (applying collateral estoppel to preclude the plaintiff from asserting
patent claims that were materially identical to claims invalidated at the IPR); Intell.
Ventures, 370 F. Supp. 3d at 256–57 (same). As discussed in this Court's order on the
parties' motions for summary judgment, (ECF No. 962), issue preclusion could
potentially apply in situations where one patent claim is invalidated at an IPR, and
another "materially identical" claim (which was not challenged at the IPR), is
asserted at the district court.
But Defendant is not asking the Court to apply
collateral estoppel to preclude Plaintiffs from asserting a specific patent claim that
was either previously invalidated at the IPR or that is materially identical to a
previously invalidated claim. Instead, Defendant wishes to estop Plaintiffs from
making any of the arguments (e.g., opinions on scope, content, and relevance of prior
art) they previously made in the IPR and which were unsuccessful in that proceeding.
The one case Defendant cites that stretches the holding in XY this far, University of
Pennsylvania v. Eli Lilly & Co., conducts no meaningful analysis of the XY opinion,
and this Court finds its reasoning unpersuasive. See No. 15-6133, 2022 WL 3973276,
at *5–6 (E.D. Pa. Jan. 14, 2022). This Court's conclusion aligns with the reasoning
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in IOENGINE. See 2022 WL 2800861, at *14 ("To read XY that broadly would mean
that the Federal Circuit, without saying so, has created an exception to the general
rule of the law of judgments that collateral estoppel does not apply in circumstances
in which the standard of proof that the party asserting collateral estoppel is more
exacting in the second forum than in the first.").
For the aforementioned reasons, the Court declines to apply collateral estoppel to
Leinsing's opinions that "contradict" arguments resolved at the IPR. Defendant's
Motion is denied to this extent.
B. "Conclusory" Cumulativeness Testimony
Defendant next argues that Leinsing's cumulativeness opinions should be
excluded because they are conclusory and thus unreliable and/or unhelpful to the
trier of fact. (ECF No. 738 at 18–24.) Because the Court considered Leinsing's
opinion and fully resolved the issue of cumulativeness at the motion for summary
judgment stage, there are no longer any cumulativeness issues remaining for trial;
accordingly, Defendant's Motion is denied as moot; Leinsing will not be allowed to
testify concerning cumulativeness at trial.
C. Leinsing's Written Description Testimony
Defendant next argues that Leinsing's testimony as to whether the '048 and '731
patents adequately meet the written description requirement of 35 U.S.C. § 112
should be excluded at trial because he applies the wrong legal standard in reaching
his conclusions, thus making his testimony unreliable. (ECF No. 738 at 24–25.) For
the following reasons, the Court agrees.
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A patent specification is required to have a written description. 35 U.S.C. § 112(a).
To satisfy the written description requirement, "the description must 'clearly allow
persons of ordinary skill in the art to recognize that [the inventor] invented what is
claimed.'" Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010)
(citation omitted). "In other words, the test for sufficiency is whether the disclosure
of the application relied upon reasonably conveys to those skilled in the art that the
inventor had possession of the claimed subject matter as of the filing date." Id.
Importantly, the Federal Circuit has also made clear that while the specification need
not "recite the claimed invention in haec verba, a description that merely renders the
invention obvious does not satisfy the requirement." Id. at 1352 (citing Lockwood v.
Am. Airlines, 107 F.3d 1565, 1571–72 (Fed. Cir. 1997)). The claimed invention must
be disclosed in the specification "as an integrated whole rather than as a collection of
independent limitations." Novozymes A/S v. DuPont Nutrition Biosciences APS, 723
F.3d 1336, 1349 (Fed. Cir. 2013). A patentee cannot use "an amalgam of disclosures
plucked selectively" from the specification to meet the written description
requirement.
Id.
Stated differently, "[a] patent owner cannot show written
description support by picking and choosing claim elements from different
embodiments that are never linked together in the specification." Flash-Control, LLC
v. Intel Corp., 2020-2141, 2021 WL 2944592, at *4 (Fed. Cir. July 14, 2021). Further
still, the key question is not whether the claimed invention is obvious in hindsight,
but whether it is actually fully disclosed; thus, boilerplate language in the
specification teaching a person of ordinary skill in the art that the scope of the
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invention includes various combinations and permutations of the disclosure is not
helpful nor sufficient for the written description requirement. See D Three Enters.,
LLC v. SunModo Corp., 890 F.3d 1042, 1050–51 (Fed. Cir. 2018) (stating that such
boilerplate language is not sufficient to show adequate disclosure of the actual
combinations pertinent to the claimed invention).
As an initial matter, some of Leinsing's testimony as to the written description
requirement is sufficiently reliable and will not be excluded. For example, as to the
'048 patent, Leinsing argues that Figures 12A and 12B represent the embodiments
disclosing all of the pertinent claim limitations at issue. For the claim limitation of
independent claim 1 requiring a control wire that is "operable both to open the clip
legs and to close the clip legs," which Defendant challenges as not adequately
described in the specification, Leinsing points to various passages in the specification
that discuss the importance of the "reversibly closable" feature of the clip and then
states that, based on this, one of ordinary skill in the art would understand that the
control wire of Figures 12A and 12B is operable to both open and close the clip as
required by the asserted claim. (ECF No. 737-1 at 48–49.) While Leinsing's analysis
is rather sparse, the Court will not exclude this testimony. Leinsing offers at least
some explanation and reasonable reliance on the specification to explain why one of
ordinary skill in the art would understand Figures 12A and 12B to disclose an
embodiment with the required control wire; whether this testimony is convincing will
be left to the finder of fact.
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However, Leinsing's testimony as to certain other claim limitations is more
problematic. For instance, claim 7 of the '048 patent requires a "spring member"
positioned between the clip legs and "biased to urge the first and second clip legs
away from one another."
(ECF No. 451-2 at 38.)
Leinsing admits that the
embodiment depicted in Figures 12A and 12B does not include a spring member
positioned between the clip legs. (ECF No. 736-11 at 5.) Instead, Leinsing argues
that the written description requirement is still met as to this limitation because a
different disclosed embodiment, the embodiment of Figure 8A, contains the requisite
spring member, and a person of ordinary skill in the art would know that the Figure
8A embodiment could be combined with the embodiment of Figures 12A and 12B.
(ECF No. 736-1 at 56–57.) But this is precisely the hindsight obviousness analysis
that the Federal Circuit stated does not satisfy the written description requirement.
See Ariad Pharms., 598 F.3d at 1352. Leinsing has not shown what links these
embodiments together in the specification. Plaintiffs argue that Leinsing is not
stating what would be "obvious" to a person of ordinary skill; rather, he is stating
what would actually be disclosed to a person of ordinary skill. (ECF No. 751 at 23.)
But to make this argument, Plaintiffs point to the portions of Leinsing's report where
he relies on boilerplate language from the '048 patent. (Id.) Namely, Leinsing states
that the patent adequately discloses the combination of the Figure 8A and Figures
12A/12B embodiments to a person of ordinary skill because of the final paragraph of
the specification, which states that "[i]t will be obvious to those skilled in the art,
having regard to this disclosure, that other variations on this invention beyond those
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specifically exemplified here may be made." (ECF No. 451-2 at 38; see also ECF No.
737-1 at 57 n.81 (Leinsing quoting the aforementioned language as his sole support
of why a person of ordinary skill would be led to combine the embodiments).) But
this boilerplate language is directly analogous to the boilerplate language rejected by
the Federal Circuit in D Three as adequate support for the written description
requirement. Such language does nothing to disclose combinations of embodiments
to one of ordinary skill in the art. And Leinsing makes these same arguments as to
other limitations.1 (ECF No. 737-1 at 57–58.)
The Court will handle the testimony related to the '731 patent in the same way as
the testimony related to the '048 patent. Where Leinsing argued that a single
embodiment disclosed all the relevant features of the claimed invention, the Court
will allow the testimony.
(See, e.g., ECF No. 737-1 at 84 (discussing how the
embodiment of Figures 15A-D discloses all of the pertinent limitation).) However,
where he opined that one of ordinary skill in the art would know to combine various
embodiments of the specification based on boilerplate language, the Court will
exclude the testimony. (See, e.g., id. (relying solely on boilerplate language to support
a showing that one with ordinary skill in the art would combine the embodiments of
Figures 8A, 10A, and 10B with those of Figures 11, 12A, and 12B).)
The Court notes that in his August 2017 report, Leinsing made slightly different arguments as to
this claim limitation. Rather than argue a combination of embodiments, he argues that one of ordinary
skill in the art would understand that the embodiment of Figure 12A and 12B in fact does contain a
link not integral with the control wire. (See ECF No. 737-2 at 61–62.) Such an argument is appropriate
in the written description context and will therefore not be excluded pursuant to this Order.
1
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Leinsing's expert opinion testimony that relies solely on boilerplate language as
support to combine disclosed embodiments of the asserted patents would go against
Federal Circuit written description precedent and not be helpful or reliable to a finder
of fact. To avoid confusing the jury, the Court grants Defendant's motion to this
extent.
D. Conclusion
For the foregoing reasons, Defendant's Motion to Exclude Plaintiffs' Technical
Expert, Karl Leinsing, (ECF No. 735), is granted in part and denied in part.
The pertinent portions of Leinsing's testimony to be excluded are the following:
paragraphs 16, 19, 255 through 264, and 384 of his February 2022 report, (ECF No.
737-1); and paragraph 555 of his August 2017 report, (ECF No. 737-2).
III.
Plaintiffs' Patent Law Expert, Stephen Kunin
Defendant intends to assert a prosecution laches defense, an equitable issue that
both parties agree is for the Court, not the jury, to decide. In support of their
counterargument, Plaintiffs plan to present the testimony of Stephen Kunin.
Defendant seeks exclusion of this testimony on three grounds, arguing that: (1) Kunin
improperly issues opinions on legal standards, a domain that is reserved for the
Court; (2) Kunin offers opinions on issues for which he is not qualified; and (3) Kunin's
testimony regarding USPTO practices and procedures is not relevant and will not
assist the trier of fact. (ECF No. 743 at 6–7.)
A. Opinions on Legal Standards
Defendant first argues that Kunin is providing impermissible opinions on legal
standards. The Court is not persuaded.
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Undoubtedly, "[a]s a general rule, . . . an expert may not offer legal opinions."
Jimenez v. City of Chicago, 732 F.3d 710, 721 (7th Cir. 2013). However, there is a
difference between opining on a legal issue and simply relying on legal standards to
produce a proper, admissible expert opinion. See id. (differentiating between legal
opinions as opposed to opinions that merely have "direct implications for applying
legal standards"); see also Medicines Co. v. Mylan Inc., No. 11–cv–1285, 2014 WL
1257943, at *2 (N.D. Ill. Mar. 27, 2014) ("In the course of offering his opinions on
commercial success, [the expert] references the legal standard upon which he bases
his economic analysis and opinions. Contrary to TMC's assertions, [the expert] is not
offering an impermissible legal opinion. Instead, he is merely setting forth his
understanding of the legal standards upon which he relies for his opinions. This
reference is appropriate and puts his testimony in context.").
In the Court's view, Kunin does not provide an impermissible legal opinion.
Rather, based on his extensive experience with the USPTO, (see ECF No. 741-1 at 4–
10 (discussing experience which includes reviewing the work of patent examiners,
serving as Deputy Commissioner for Patent Examination Policy, and more)), he
provides an opinion as to whether there was any unreasonable delay in the
prosecution of the asserted patents. This "unreasonable delay" inquiry is derived
from established legal standards that Kunin summarized and properly relied on in
his report. (See id. at 20–26 (summarizing the applicable prosecution laches legal
standards); see also Symbol Techs., Inc. v. Lemelson Med., 277 F.3d 1361, 1363 (Fed.
Cir. 2002) (“[T]he equitable doctrine of prosecution laches may be applied to bar
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enforcement of patent claims that issued after an unreasonable and unexplained
delay in prosecution”).) And Kunin did not admit he would opine on the law. (ECF
No. 770 at 5–6.) The entirety of Kunin's report, and the crux of his conclusions,
centers on whether the prosecution of the asserted patents was unreasonably
delayed. (ECF No. 741-1 at 55–64.) Kunin's deposition testimony likewise supports
this conclusion. While Defendant asserts that it caught Kunin in an admission, (ECF
No. 770 at 5–6), Kunin's deposition, which involved him conducting some mental
gymnastics around Defendant's clearly pointed questions, does nothing more than
reiterate his intention to opine on unreasonable delay, not the law. (See ECF No. 7421 at 7 (Kunin stating that he referenced case law only as a foundation for his opinion
and his opinion was confined to whether there was an unreasonable delay in
prosecution).) Kunin's outlining of relevant legal standards is quite similar to the
legal framework sections of Defendant's own experts, except Kunin's report contained
citations and quotations from caselaw; the Court does not understand how
Defendant's experts engaged in "simple recitation of the legal standards informing
their opinions" whereas Kunin did not. (ECF No. 770 at 7; see also ECF No. 747-2 at
3–5 (Nicosia outlining a legal framework as foundation for his opinion).)
And
Defendant's citations to cases where experts were excluded for providing legal
opinions are inapposite here; unlike the case here, those cases involved experts
actually opining on how to interpret statutes or contract terms. See, e.g., United
States v. Lupton, 620 F.3d 790, 799 (7th Cir. 2010) (excluding testimony of expert who
offered interpretations of Wisconsin statutes and the parties' contract, despite
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conceding that he had absolutely no personal experience with the statutes he was
interpreting). In short, the Court views Kunin's report as one based on extensive
USPTO experience that opines on whether Plaintiffs unreasonably delayed the
prosecution of their patents; Kunin has provided useful expert opinions on this issue
before and his opinion here, though it implicates legal standards, does not opine on
legal issues or conclusions. See Hyatt v. Hirshfeld, 998 F.3d 1347, 1357 (Fed. Cir.
2021) (discussing Kunin's expert testimony, including the factors he discussed in
support, in analyzing the patentee's unreasonable delay during prosecution).
To the extent that Defendant takes issue with Kunin's particular citations or
interpretations of some caselaw, their concerns have no weight here. (See, e.g., ECF
No. 743 at 10–12 (arguing that some of Kunin's legal standards are not supported by
the cases he cites, like Kingsdown, or are supported by cases/journal articles not
binding on this Court).) The Seventh Circuit has made clear that while Daubert
requirements still apply in a bench trial, "the court in a bench trial need not make
reliability determinations before evidence is presented" as "the usual concerns of the
rule—keeping unreliable expert testimony from the jury—are not present in such a
setting." Metavante Corp. v. Emigrant Sav. Bank, 619 F.3d 748, 760 (7th Cir. 2010);
see also Medicines, 2014 WL 1257943, at *3 (citing to Metavante and assuring the
parties that "[t]he Court is fully aware of the law of obviousness and commercial
success" and that it "will not construe [the expert's] comments or his understanding
of the law on which he bases his commercial success opinions as any type of expert
opinion on the law"); United States v. Brown, 415 F.3d 1257, 1269 (11th Cir. 2005)
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(“There is less need for the gatekeeper to keep the gate when the gatekeeper is
keeping the gate only for himself.”). While the case here is not a bench trial, the issue
on which Kunin opines is one that will be decided by the Court. There is no risk of
exposing a jury to unreliable expert testimony. The Court will determine the law of
prosecution laches and will apply it accordingly.
Kunin's testimony will not be
construed as an opinion on the law, and to the extent that his opinion misconstrues
or misapplies a legal standard, the Court will disregard it.
B. Kunin's Alleged Lack of Experience or Expertise
Defendant next argues that portions of Kunin's testimony should be excluded
because he lacks any expertise or experience to render it reliable.
First, Defendant asks the Court to exclude Kunin's opinions pertaining to patent
prosecution in the medical device field. The Court agrees that these opinions are
unreliable. In his report, Kunin opines that "the prosecution of the patents-in-suit
was typical of patents in the medical device field." (ECF No. 741-1 at 61 (emphasis
added).) He then states that patent families with prosecutions spanning more than
a decade are "quite common in the medical device field," and he references multiple
Cook patent families in support. (Id. at 62–63.) This portion of Kunin's opinion is
unreliable and is of no value to the Court. By Kunin's own admission, he is "not an
expert in the medical device field." (ECF No. 742-1 at 20.) When asked about his
statement that it is "quite common" for prosecutions to span more than a decade in
the medical device field, he responded that this was an understanding he "obtained
from counsel from Boston Scientific." (Id.) And as for the Cook patent families he
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cites in support, Kunin admits that he did not find these patent families himself
either and that they were "provided to [him]." (Id. at 21.)
Plaintiffs argue that "Kunin need not have personally prosecuted medical device
patents to make informed observations on whether he observed strategies during
prosecution of the Patents-in-Suit that resulted in unreasonable delays." (ECF No.
748 at 15.) The Court does not disagree with this assertion. Kunin is qualified to
opine, based on his general experience with patent prosecution before the USPTO,
whether the prosecution of certain patents in this case was unreasonably delayed;
the Court is not excluding these opinions. It is Kunin's opinions on prosecution
practice in the medical device field specifically that are unsupported and unreliable.
These opinions are not based on Kunin's expertise; it is unhelpful to the Court in
considering the evidence and will be excluded.
Accordingly, the Court excludes
paragraphs 216 through 218 of Kunin's report.
Second, Defendant asks the Court to exclude Kunin's opinions related to the
prosecution of claims to exclude competitors. Again, the Court finds that Kunin, by
his own admission, lacks the expertise to provide a reliable opinion on this particular
issue. Defendant plans to argue that Plaintiffs obtained certain patent claims after
learning of the Instinct clip. (ECF No. 741-1 at 59–60.) In response, Plaintiffs hope
to have Kunin testify that this conduct is not improper and that "it is actually quite
common for clients to target their competitor's products by filing claims directed to
those competitor products." (Id. at 63.) However, Kunin lacks experience to provide
such an opinion. (ECF No. 748 at 19–20.) As the Court has already noted, Kunin
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clearly does have the expertise to provide opinions on whether or not certain delays
in the timeline of the asserted patents' prosecution were generally "unreasonable," or
whether there were unusual gaps or suspect events in the prosecution history of the
pertinent patents. But his expertise does not stretch so far as to allow him to opine
specifically on whether patent clients commonly target their competitor's products.
In fact, Kunin admits that while working in private practice, he did not perform any
work in patent prosecution or preparation. (ECF No. 742-1 at 5.) When asked about
the number of instances he is aware of where clients targeted their competitors'
products, Kunin testified that he had not "personally . . . interacted with a client" and
had "only heard anecdotally from other attorneys in the firm in terms of things that
they have done." (Id. at 12.) Continuing, he stated that he has not been "personally
involved in those discussions with a client" or with "preparing that type of an
opinion." (Id.) The Court sees no reason to admit Kunin's testimony on this issue;
paragraph 219 of Kunin's report is therefore excluded.2
C. Whether Kunin's Opinion Assists the Trier of Fact
Defendant next seeks to exclude the entirety of Kunin's testimony because it will
not assist the trier of fact, which in this case is the Court. (ECF No. 743 at 16.) The
Court has already analyzed this argument in the context of matters tried to the
2The
Court would not rely on this section of Kunin's report anyway. Kunin did not give an opinion on
anything that would not have been commonly known or discoverable. Prospective patentees naturally
prosecute claims directed at excluding particular competitor products, and the Federal Circuit has
acknowledged as much. See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 874
(Fed. Cir. 1988) ("[T]here is nothing improper, illegal or inequitable in filing a patent application for
the purpose of obtaining a right to exclude a known competitor's product from the market; nor is it in
any manner improper to amend or insert claims intended to cover a competitor's product the
applicant's attorney has learned about during the prosecution of a patent application.").
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bench. That analysis applies here.
Defendant's arguments go to the weight of
Kunin's testimony; because the Court is deciding this issue itself and there is no risk
of influencing a jury improperly, the Court will give Kunin's testimony whatever
weight it deserves. See Metavante, 619 F.3d at 760. There is no reason to exclude
the entirety of Kunin's testimony at this stage.
Defendant relies on cases excluding expert testimony about "procedures at the
PTO" that are not binding or relevant here. (See ECF No. 743 at 17.) In AstraZeneca
UK Ltd., IPR v. Watson Labs., Inc., the expert was offered as a "legal expert" to opine
on how a chemical patent practitioner would read the patent's claims. No. 10–915–
LPS, 2012 WL 6043266, at *1 (D. Del. Nov. 14, 2012). Such is not the case here.
Corning Inc. v. SRU Biosystems is likewise inapposite as the expert in that case
provided opinions that were primarily on ultimate issues of law. No. 03–633 JJF,
2004 WL 5523178, at *1 (D. Del. Nov. 5, 2004). As stated, Kunin is not providing
legal opinions.
Defendant also argues that Kunin's testimony about the United States patenting
process and the prosecution histories of the patents-in-suit are not helpful because
(1) prosecution laches is an equitable issue for the Court to decide and (2) because the
Federal Circuit has stated that prosecution laches "may be applied to bar enforcement
of a patent that issued after unreasonable and unexplained delay in prosecution, even
though the patent applicant complied with pertinent statutes and rules." In re
Bogese, 303. F.3d 1362, 1367 (Fed. Cir. 2002) (emphasis added). But experts can still
be helpful on equitable issues. See, e.g., Hyatt, 998 F.3d at 1357 (relying on Kunin's
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testimony for the same issue). Of course, Defendant is correct that "the Court is fully
capable of understanding the parts of a patent application, the statutes and rules
governing the patenting process itself, and what occurred during the prosecution of
the patents-in-suit." (ECF No. 743 at 17.) But this does not mean that testimony
from an expert on whether there was "unreasonable delay" in the prosecution of a
patent is unhelpful, particularly when the expert has had decades of experience with
the USPTO and with the intricacies of patent prosecution procedure. Finally, just
because the prosecution laches defense "may" still apply despite full compliance with
USPTO rules and procedures does not mean that expert testimony on the subject is
rendered completely useless; laches may still apply, but full compliance with the rules
and procedures at least provides circumstantial evidence on the matter.
Defendant further takes issue with Kunin's reliance on patent term adjustment
("PTA") data, arguing that his analysis requires no special knowledge or expertise.
(ECF No. 743 at 18.) This argument, too, goes to the weight of Kunin's testimony
rather than his methodology. Kunin relied on the data to interpret, based on his
experience with prosecution procedure before the USPTO, whether the delays were
"unreasonable" or "unexplained." (See, e.g., ECF No. 741-1 at 34.) This testimony
could be helpful to the Court in this regard. Defendant will be able to cross examine
Kunin and provide its argument on this issue; ultimately, the weight of his opinion
may end up negligible, but his testimony should not be excluded for this reason.
D. Conclusion
For the foregoing reasons, Defendant's Motion to Exclude Plaintiffs' Patent Law
Expert, Stephen Kunin, (ECF No. 740), is granted in part and denied in part.
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Due to a lack of expertise on the issues, paragraphs 216 through 219 of Kunin's
report are excluded. The remainder of Kunin's testimony is admissible.
IV.
Plaintiffs' Damages Expert, John R. Bone
Defendant asks the Court to exclude Plaintiffs' damages expert, John R. Bone,
because (1) his lost profits analysis is unreliable and (2) his reasonable royalty
analysis is unreliable. (ECF No. 762 at 10–11.)
A. Lost Profits
Both parties rely on the same legal test for calculating lost profits, a four-factor
test derived from Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th
Cir. 1978). "Under [Panduit], a patentee is entitled to lost profits if it can establish
four things: (1) demand for the patented product, (2) absence of acceptable, noninfringing alternatives to the patented product, (3) manufacturing and marketing
capability to exploit the demand for the patented product, and (4) that the patentee
would have made a profit if it had made the infringer's sales." TEK Glob., S.R.L. v.
Sealant Sys. Int'l, Inc., 920 F.3d 777, 789–90 (Fed. Cir. 2019) (citation omitted).
Defendant makes several arguments as to why Bone's lost profits analysis is
improper or unreliable, none of which is persuasive. Bone's analysis utilized the
proper legal standards discussed above and is reliable; his credibility and conclusions
are to be weighed by the jury. Bone's expert report properly goes through an analysis
of the Panduit factors one by one to provide an opinion on lost profits damages. (See
ECF No. 761-33 at 37.)
As to the first Panduit factor, Bone assessed demand for the patented product.
But Defendant takes issue with some of Bone's focus on the "open/close" feature of
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the claimed invention, first arguing that the claimed invention does not cover such a
feature, and in any case, arguing that Bone's reliance on this "faulty premise" renders
his overall opinion unreliable. (ECF No. 762 at 23.)
While the Court need not
determine on this Motion what exact features the Asserted Patents cover, it notes
there is some evidence that the patents do in fact cover an open/close feature of a
hemostatic clip. (See ECF No. 451-2 at 32 (discussing the key advantage of the device
being its ability to reopen and close); id. at 38 (requiring an actuator coupled to a
control wire to open and close the clip legs).) And Bone properly relied on Plaintiffs'
technical expert in assessing the features of the claimed invention. (See, e.g., ECF
No. 761-33 at 27–28 (citing to Leinsing's expert report in support of the open/close
capability via the control wire of the claimed invention).) Additionally, the Federal
Circuit has made clear that the first factor of Panduit requires analysis of demand of
the patented product, not of a patented feature. DePuy Spine, Inc. v. Medtronic
Sofamor Danek, Inc., 567 F.3d 1314, 1330 (Fed. Cir. 2009) (citation omitted) ("All that
the first factor states, and thus requires, is 'demand for the patented product.' . . .
This factor does not require any allocation of consumer demand among the various
limitations recited in a patent claim. Instead, the first Panduit factor simply asks
whether demand existed for the 'patented product,' i.e., a product that is 'covered by
the patent in suit' or that 'directly competes with the infringing device.'"). Any
allocation of the particular patented features is encompassed in the second Panduit
factor discussed below. As for this first factor, Bone properly considered demand for
the patented product. (ECF No. 761-33 at 38–40.)
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Within the first factor, Defendant also took issue with Bone's consideration of
Defendant's activities prior to the 2014 issuance of the asserted patents. (See ECF
no. 762 at 29–30.) But argument on this issue was sparse, and the Court fails to see
where Defendant's examples of Bone's pre-issuance considerations actually affected
his conclusions as to lost profits. Also, the Federal Circuit itself has considered the
effect of pre-issuance activities on lost profits damages calculations in various
circumstances. See, e.g., Brooktree Corp v. Advanced Micro Devices, Inc., 977 F.2d
1555, 1579–81 (Fed. Cir. 1992). More importantly, Defendant's cited examples do not
show any flaw in Bone's methodology. The first example, where Bone states that
"BSC began to lose market share after Cook's Instinct hemoclip was introduced in
2011," is a statement made in the background section of Bone's opinion discussing
the evolution of the hemoclip market. (See ECF No. 761-33 at 33.) There is no
indication that this vague contextual statement influenced any lost profits
calculations. Defendant's second example, Bone's reliance on correspondence from
2012, is likewise proper. Bone relied on this internal BSC correspondence (as well as
numerous other post-2014 documents3) to help determine whether an adjustment was
necessary to BSC's relative market share during the damages period. (Id. at 57–61.)
Even though Defendant was not infringing in 2012 prior to the asserted patents'
issuance, Bone was permitted to rely on correspondence and documentation from this
time period to help determine BSC's appropriate relative market share during the
The other documents that Bone relied on, all of which were describing post-2014 activity,
independently supported Bone's conclusions as to market share, whether or not he considered the 2012
document.
3
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alleged infringing period. The Court has not found, nor has Defendant pointed to,
any law that prohibits such analysis and that would render Bone's opinion inherently
unreliable.
Bone's analysis of the second Panduit factor is likewise proper.
In State
Industries, Inc. v. Mor-Flo Industries, Inc., the Federal Circuit endorsed a market
shares analytical framework for the second Panduit factor in situations where, as
here, the market consisted of more than just two suppliers. 883 F.2d 1573, 1577 (Fed.
Cir. 1989). Under this framework, a patentee can recover lost profits based on the
market share of the various suppliers, assuming the infringer was not in the market
(i.e., in the "but for" world where the infringement did not occur).
See Grain
Processing Corp. v. Am. Maize-Prods. Co., 185 F.3d 1341, 1350 (Fed. Cir. 1999)
("Within this framework, trial courts, with this court's approval, consistently permit
patentees to present market reconstruction theories showing all of the ways in which
they would have been better off in the 'but for world,' and accordingly to recover lost
profits in a wide variety of forms."). Bone properly applied this framework to the
second Panduit factor in devising his expert opinion. (ECF No. 761-33 at 56–61.) Any
disagreement with Bone's conclusions that Defendant may have is not to be resolved
in this Motion to Exclude.
Defendant also takes issue with Bone's opinions regarding non-infringing
alternatives (also relevant for the second Panduit factor). Namely, Defendant argues
that Bone's analysis for the '731 patent is unreliable because it does not consider
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Defendant's own Instinct clip as a non-infringing alternative.4 (ECF No. 762 at 27.)
But Plaintiffs and Bone provided ample explanation as to why the Instinct was not
considered a non-infringing alternative for the '731 patent.
Namely, Plaintiffs
pointed to evidence that considered Defendant's own perspective (rather than the
customer perspective) in marketing and selling the Instinct clip; because the Instinct
clip was more expensive to manufacture, Bone testified that, based on Cook's
interrogatory responses, Cook itself would not have considered the Instinct as a noninfringing alternative because of its higher cost. (See ECF No. 761-36 at 20–21.) Bone
was entitled to develop his opinion relying on this evidence in the record.
As
explained, he is relying on the correct legal standard and assessing the second
Panduit factor accordingly; a disagreement with his conclusions (e.g., what he did or
did not consider a non-infringing alternative) is to be resolved at trial.
Slimfold Manufacturing Co. v. Kinkead Industries, Inc., 932 F.2d 1453 (Fed. Cir.
1991), also cited in support of Defendant's argument on the second Panduit factor, is
not pertinent here. In that case, the Federal Circuit affirmed the denial of lost profits
damages because the district court was not clearly erroneous in finding that the
patentee had failed to establish a lack of acceptable non-infringing alternatives. Id.
at 1458. Specifically, the Federal Circuit concluded that the patentee in that case not
only failed to make any showing of a lack of acceptable non-infringing alternatives,
but the evidence in the record strongly suggested the opposite conclusion. Id. That
4
Plaintiffs only asserted the '731 patent against the Instinct Plus and not the Instinct.
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is not the case here, where Bone conducted an analysis of non-infringing alternatives
to include the Defendant's own TriClip. (ECF No. 761-33 at 41.)
And Defendant's argument that Bone's analysis fails to properly "apportion" value
attributable to the asserted patents is likewise unpersuasive. (See ECF No. 782 at
12.) The Federal Circuit has made clear that analysis under the second Panduit
factor inherently results in the necessary apportionment for lost profits. See Mentor
Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1288 (Fed. Cir. 2017) ("Panduit's
requirement that patentees prove demand for the product as a whole and the absence
of non-infringing alternatives ties lost profit damages to specific claim limitations and
ensures that damages are commensurate with the value of the patented features.").
Bone's analysis of the third Panduit factor, the manufacturing/marketing capacity
to exploit the demand for the patented product, was also based on proper methods
and legal standards. Defendant's chief concern is that Bone's analysis is "speculative"
and comprised of "guesswork." (ECF No. 762 at 34 (citing cases for the general
proposition that projections of lost profits cannot be based on speculation or
guesswork).)
But Defendant's only reasoning in support of Bone's analysis as
"speculative" is that his opinion never confirms whether Plaintiffs' suppliers had the
capacity to sell additional clip components to Plaintiffs. (Id.) Defendant cites to no
law suggesting that this purported deficiency warrants exclusion of Bone's testimony,
and the Court has not found any either.
In any case, Bone's analysis was not
"guesswork" at all; he relied on Plaintiffs' documentation as well as the deposition
testimony of various Boston Scientific employees in order to assess, in detail,
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Plaintiffs' capacity during two distinct manufacturing periods (which consisted of (1)
the Freudenberg period and (2) the Costa Rica period). (See ECF No. 761-33 at 61–
64; see also Sprint Commc'ns Co. LP v. Charter Commc'ns, Inc., No. 17-1734-RGA,
2021 WL 982732, at *10 (D. Del. Mar. 16, 2021) (refusing to exclude expert testimony
on manufacturing capacity under Panduit factor 3 because the expert relied on
deposition testimony and interviews with company executives, and such evidence was
the same type used by the Federal Circuit in TEK Global, S.R.L. v. Sealant Systems
International, Inc., 920 F.3d 777, 790 (Fed. Cir. 2019), to conclude that a jury could
infer manufacturing capacity).) Defendant further complains, though, about certain
considerations missing from Bone's analysis, such as the effect that the COVID-19
pandemic would have on Plaintiffs' capacity or whether Plaintiffs would have access
to the requisite materials to make their clips. (See ECF No. 782 at 21–22.) But these
arguments do not go to the issue of whether Bone used proper methodology or relied
on appropriate legal standards in producing his opinion; rather, they go to the weight
of the evidence at trial. See Smith v. Ford Motor Co., 215 F.3d 713, 718 (7th Cir.
2000) ("The soundness of the factual underpinnings of the expert's analysis and the
correctness of the expert's conclusions based on that analysis are factual matters to
be determined by the trier of fact.").
Bone's analysis under the fourth factor of Panduit is also sufficient to avoid
exclusion at this stage. Defendant's objection to Bone's testimony in this section
revolves around one central issue: whether it was appropriate for Bone to calculate
damages on behalf of BSC, the parent company of BSSI, rather than BSSI itself, the
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patentee. When Defendant filed this Motion to Exclude, the Court had not yet ruled
on Defendant's Motion to Dismiss BSC for Lack of Jurisdiction. The Court has now
denied that Motion, (see ECF No. 914), as well as its associated Motion for
Reconsideration, (see ECF No. 958), and concluded that BSC does have standing in
the present action. Accordingly, Defendant's argument on the fourth Panduit factor
is moot. Bone properly relied on the finances of BSC. (See ECF No. 761-33 at 70–
71.) He calculated the revenue BSC would have received from the infringing sales,
(id.), and relied on BSC's financial statements to deduct variable costs associated with
the goods, (id. at 66–68).
For the foregoing reasons, Defendant's Motion to Exclude Plaintiffs' Damages
expert, John Bone, (ECF No. 760), is denied as to Bone's lost profits opinions.
B. Reasonable Royalty
Both parties, and the Federal Circuit, rely on the fifteen factors articulated in
Georgia-Pacific Corp. v. United States Plywood Corp. in making a reasonable royalty
determination. 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970) (listing the factors); Lucent
Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324–26 (Fed. Cir. 2009) (relying on
Georgia-Pacific).
Defendant complains that Bone's reasonable royalty opinions are inadmissible.
For context, Bone provided two alternative reasonable royalty opinions (assuming
that infringement is found). The first scenario is if the jury were to award Plaintiffs
lost profits damages. In that scenario, Defendant would be expected to compensate
Plaintiffs for the lost profits that Plaintiffs would have obtained had Defendant not
been selling an infringing product during the damages period; additionally, because
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not all of Defendant's infringing sales would go to Plaintiffs in this scenario,
Defendant would also have to compensate Plaintiffs with a reasonable royalty for the
fraction of the "infringing sales" that third-party competitors would have made. The
second, alternative scenario is if the jury determines that the Panduit factors are not
met and therefore does not award lost profits damages. In that scenario, Defendant
would still have to compensate Plaintiffs with a reasonable royalty, but it would be
based on all infringing sales made by Defendant and the third-party competitors.
Here, Bone opines that there would be a shift in the hypothetical negotiating power
of the parties under the fifteenth Georgia-Pacific factor that would result in an
increased reasonable royalty rate. (Compare ECF No. 761-33 at 103–08 (scenario
where lost profits are awarded) with id. at 112–14 (scenario where no lost profits are
awarded).)
Troubled by this increase in royalty rate under the second scenario, Defendant
cites to SmithKline Diagnostics, Inc. v. Helena Labs. Corp., 926 F.2d 1161 (Fed. Cir.
1991) to argue that, like the patentee in that case, Bone here has simply taken the
lost profits damages Plaintiffs would have received in the first scenario and baked
them into the increased royalty rate of the second scenario. (ECF No. 762 at 37.)
Thus, they continue, Bone's opinion should be disregarded like the one in SmithKline.
See 926 F.2d at 1165–68. But this is not what Bone did here. Bone's Georgia-Pacific
analysis does not simply "translate" the lost profits figure into the reasonable royalty
rate like the expert in SmithKline. (See ECF No. 761-33 at 9–11 (concluding that
there would be about $165 million in damages in the lost profits plus reasonable
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royalty rate scenario while the damages would amount to approximately $43 million
in the scenario where no lost profits are awarded).) Rather, Bone adjusted his
analysis of the factors under this scenario, (see id. at 112–14); and nothing indicates
that he simply baked in the lost profits of the first scenario into the reasonable royalty
increase of the second scenario (for if he did, the two damages figures would be much
more similar to one another as was the case in SmithKline).
Defendant next seeks exclusion of Bone's opinions because they argue that his
reliance on four surveys was fundamentally flawed. Bone relied on surveys produced
by both Plaintiffs and Defendant, as well as a survey produced by a third party, (ECF
No. 761-33 at 97–99), in support of his opinion that Plaintiffs are entitled to a price
premium in their reasonable royalties. Defendant argues that Bone does not "hold
himself out as a survey expert" and that his interpretations of the surveys are flawed.
But Bone does not need to be a survey expert. To the extent Defendant disagrees
with the particular data points that Bone relies on from the surveys, such
disagreements go to the weight of the evidence.
See Summit 6, LLC v. Samsung
Electronics Co., 802 F.3d 1283, 1297-99 (Fed. Cir. 2015) (stating expert need not be a
survey expert to testify about information used from surveys to form opinions and
concluding that "[t]o the extent [the expert's] credibility, data, or factual assumptions
have flaws, these flaws go to the weight of the evidence, not to its admissibility).
Finally, Defendant's issues with the populations that were surveyed similarly go
to weight rather than admissibility.5 (See ECF No. 762 at 39.)
The surveys polled physicians and asked them about the relative importance of different features in
the hemostatic clips; while the physicians indicated that the ultimate purchasing decisions were
5
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Defendant finally argues that Bone's reasonable royalty opinions are unreliable
because he fails to consider the circumstances of a hypothetical negotiation for a
license to only the '731 patent. (ECF No. 762 at 40–41.) Specifically, Defendant
argues that the price premium analysis under Georgia-Pacific factor 13 would be
different if only the '731 patent is found to be infringed. But Defendant does not
directly attack Bone's analysis under factor 13. (See ECF No. 761-33 at 92–102.)
Bone relied on consumer survey data, hemoclip market data, and other evidence to
render his opinion on the reasonable royalty; this was proper. To the extent that
Defendant believes Bone erred by not considering a unique circumstance in one
particular infringement scenario (namely, that the Instinct Plus alone, and not the
Instinct, is the product accused of infringing the '731 patent), they may undermine
and challenge Bone's testimony on cross examination; at this time, the Court finds
Bone's testimony to be rooted on reliable legal standards and methods to survive a
motion for exclusion.
See Gayton v. McCoy, 593 F.3d 610, 616 (7th Cir. 2010)
("Determinations on admissibility should not supplant the adversarial process;
'shaky' expert testimony may be admissible, assailable by its opponents through
cross-examination.").
C. Conclusion
For the foregoing reasons, Defendant's Motion to Exclude Plaintiffs' Damages
Expert, John Bone, (ECF No. 760), is denied.
heavily influenced by other groups (such as purchasing administrators), (ECF No. 761-44 at 11), this
alone does not render the survey sample unreliable. Of course, other groups may influence the
purchasing decision. But the end user of these hemostatic clips, the physicians, will undoubtedly have
a major, if not the most significant, role in choosing which clips to purchase.
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V.
Motion to Exclude Defendant's Damages Expert, Vincent Thomas
Plaintiffs seek exclusion of Defendant's Damages Expert, Vincent Thomas, for
three reasons: (1) Thomas improperly analyzed the first Panduit factor, rendering his
testimony on the factor unreliable; (2) Thomas's analysis under the second Panduit
factor is unreliable due to speculation; and (3) Thomas's analysis under the first
Georgia-Pacific factor improperly relies on licensing agreements that are not
economically comparable to this case, rendering his testimony unreliable.
A. Panduit Factor One
Plaintiffs argue that Thomas's opinion as to the first Panduit factor, demand for
the patented product, relies on the wrong legal standard. Specifically, they point to
Thomas's rebuttal expert report as exemplary of the deficiency in his testimony. In
that report, Thomas begins by correctly outlining the four factors of the Panduit test,
and explicitly as to factor one, he correctly states that it consists of the demand for
the patented product. (ECF No. 784-1 at 5–6.) The section is then broken down into
four subsections, with each section seeming to correspond to each Panduit factor. (Id.
at 6–11.) However, the first section, corresponding to the first Panduit factor, is titled
"Demand for the Patented Features." (Id. at 6 (emphasis added).) And the ensuing
paragraphs focus on the demand of patented features, namely an "open/close
capability" (which Thomas argues is not a patented feature at all). (See, e.g., ECF
No. 753-1 at 8 (discussing Bone's "failure" to properly target his analysis to the
patented aspects of the patents-in-suit).)
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As the Court has already noted, when it comes to Panduit factor one, the Federal
Circuit has squarely rejected Thomas's premise. DePuy Spine, Inc. v. Medtronic
Sofamor Danek, Inc., 567 F.3d 1314, 1330 (Fed. Cir. 2009) (citation omitted) ("All that
the first factor states, and thus requires, is 'demand for the patented product.' . . .
This factor does not require any allocation of consumer demand among the various
limitations recited in a patent claim."). Defendant acknowledges this, and rather
than dispute the law, argues that this section of Thomas's rebuttal was actually
dealing with the second Panduit factor. (See ECF No. 772 at 9.)
Accepting Defendant's proposition about Thomas's report as true, this means that
no section of the report rebuts Bone's analysis of the first Panduit factor. And in any
event, Thomas has already effectively admitted that the first Panduit factor favors
Plaintiffs. When asked whether there has been demand for the Instinct since it
launched in the market, Thomas responded affirmatively. (See ECF No. 753-2 at 11.)
He did the same when asked about demand of the Instinct Plus. (Id. at 13.) Further,
contrary to Defendant's understanding of the law, the Instinct and Instinct Plus, as
the alleged infringing devices, qualify as the "patented product" under Panduit factor
one based on Federal Circuit precedent. DePuy Spine, 567 F.3d at 1330 (quoting Rite–
Hite Corp. v. Kelley Co., 56 F.3d 1538, 1548–49 (Fed. Cir. 1995)) ("[T]he first Panduit
factor simply asks whether demand existed for the 'patented product,' i.e., a product
that is 'covered by the patent in suit' or that 'directly competes with the infringing
device.'"). The Instinct and Instinct Plus meet this definition.
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Thus, Because Defendant now argues that Thomas's "patented features" section
of his report actually corresponded to the second Panduit factor, and because Thomas
himself concedes demand for the patented product at all relevant times, the Court
excludes Thomas's testimony as to Panduit factor one.
B. Panduit Factor Two
Plaintiffs also argue that a portion of Thomas's Panduit factor two analysis is
conclusory and unhelpful and should therefore be excluded. Defendant responds that
the burden for the issue was on Plaintiffs' expert, Bone.
Because Defendant
misinterprets the law, the pertinent portions of Thomas's testimony are excluded.
Panduit factor two requires a showing of an absence of acceptable non-infringing
substitutes. Defendant is correct that the burden is initially on the patentee to make
this showing. (See ECF No. 754 at 8.) But, once the patentee analyzes the possible
substitutes on the market and finds that none are available non-infringing
alternatives for the alleged infringer, an inference of unavailability of an acceptable
non-infringing alternative arises; the burden then shifts to the accused infringer to
overcome this inference of unavailability:
When an alleged alternative is not on the market during the accounting
period, a trial court may reasonably infer that it was not available as a
non-infringing substitute at that time. . . . The accused infringer then
has the burden to overcome this inference by showing that the substitute
was available during the accounting period. . . . Mere speculation or
conclusory assertions will not suffice to overcome the inference.
Grain Processing Corp. v. Am. Maize-Prods. Co., 185 F.3d 1341, 1353 (Fed. Cir. 1999)
(citations omitted); see also id. (emphasis added) ("Acceptable substitutes that the
infringer proves were available during the accounting period can preclude or limit
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lost profits; substitutes only theoretically possible will not."); DePuy Spine, 567 F.3d
at 1331 ("However, because Medtronic [the accused infringer] did not actually have a
non-infringing substitute 'on the market' during the relevant accounting period, it
was Medtronic that bore the burden of overcoming the inference of unavailability.").
In this case, Bone properly met his initial burden for the second Panduit factor; it
is Thomas's rebuttal that is conclusory and unhelpful to the trier of fact, therefore
warranting exclusion. Bone analyzed available alternatives on the market that could
be available to Defendant and concluded there were none. (See generally ECF No.
761-33 at 40–56.) Specifically, he focused on Defendant's early generation product,
the TriClip, and discussed why he did not believe it was an acceptable non-infringing
alternative. (Id.) To the extent there is an alternative that is not on the market, the
Court, per Federal Circuit precedent, may infer that it is not an available, noninfringing alternative for Defendant. Defendant then bears the burden of overcoming
this inference.
But in his report, Thomas does next to nothing to overcome this inference. He
spends a paragraph discussing how Defendant has, in the past, made design changes
in as little as several months, (ECF No. 753-1 at 11–12), without providing any
analysis on why this means a non-infringing alternative design was available to
Defendant. Thomas then points to other competitor products on the market (from
some competitors that Plaintiffs have also sued and settled with) as an indication
that having an alternative non-infringing design is feasible; but this opinion is not
helpful on this issue. Thomas does not indicate how these other designs would be
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available to Defendant or why some of these designs are even non-infringing; any
analysis of the second Panduit factor is missing. Simply put, Thomas fails to identify
any specific alternative designs that would have been available to Defendant, stating
in conclusory fashion that "[i]t is reasonable to assume Cook Medical would reenter
the market with a non-infringing alternative product as well." (Id. at 12.) An
assumption is not enough. Experts of accused infringers in district court cases where
Panduit factor two is at issue regularly identify specific alternative designs, as
Thomas needed but failed to do here.
See, e.g., LaserDynamics, Inc. v. Quanta
Comput., Inc., No. 2:06–CV–348, 2011 WL 197869, at *1 (E.D. Tex. Jan. 20, 2011)
(noting that the defendant's expert identified four prior-art patents that disclose
alternative designs); AU New Haven, LLC v. YKK Corp., 15-CV-3411 (GHW)(SN),
2019 WL 1254763, at *20 (S.D.N.Y. Mar. 19, 2019) (noting that the defendant's expert
identified three specific zippers as alternative non-infringing designs).
Without identifying any alternative design in response to Bone's proper analysis,
the jury would have no way of determining whether an alternative non-infringing
design was available to Defendant during the damages period; Thomas's testimony
is unhelpful and excluded on this issue.
Specifically, the Court excludes
paragraphs 80 and 81 of Thomas's Supplemental Rebuttal Expert Report.6 (ECF No.
753-1.)
Plaintiffs also seek exclusion of paragraphs 69–79 of the report (which the Court had discussed in
the section on Panduit factor one) because Defendants had essentially argued that these paragraphs
actually related to Panduit factor two. (ECF No. 785 at 18.) However, Plaintiffs provide no further
explanation as to why the testimony in these paragraphs is inadmissible, and the Court finds that the
subject matter (demand for patented features) is indeed relevant and useful in analyzing Panduit
factor two. See Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1285–86 (Fed. Cir. 2017).
These portions of Thomas's testimony are not excluded.
6
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C. Georgia-Pacific Factor One
Plaintiffs lastly ask the Court to exclude a portion of Thomas's reasonable royalty
analysis under factor one of Georgia-Pacific. Specifically, they argue that Thomas's
reliance on BSC intracompany R&D agreements from 1998 (the "1998 Agreements")
is unreliable and should be excluded. (ECF No. 754 at 19.)
The first Georgia-Pacific factor considers "[t]he royalties received by the patentee
for the licensing of the patent in suit, proving or tending to prove an established
royalty." Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120
(S.D.N.Y. 1970). In other words, parties often look to previous licensing agreements
involving the patents-in-suit (or the claims-in-suit) to help inform the fact finder
about a reasonable royalty rate in the present hypothetical negotiation (in this case,
a hypothetical negotiation in 2014).
The Federal Circuit has "stressed that
comparisons of past patent licenses to the infringement must account for 'the
technological and economic differences' between them."
Wordtech Sys., Inc. v.
Integrated Networks Sols., Inc., 609 F.3d 1308, 1320 (Fed. Cir. 2010) (emphasis
added) (quoting ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 873 (Fed. Cir. 2010)).
Plaintiffs argue that while Thomas may have provided a baseline technological
comparison between the 1998 Agreements and the pertinent 2014 hypothetical
negotiation, there was no analysis of any economic comparison between these
scenarios; in other words, they argue that Thomas has provided no reason why R&D
agreements between a parent company and its subsidiaries from 1998 would be
considered as a "starting point" for reasonable royalty determinations in a
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hypothetical licensing negotiation between that company and a competitor in 2014.
The Court agrees; without any meaningful analysis on this front at all, Thomas's
opinion on this issue is unreliable and must be excluded.
Defendant's reliance on Bio-Rad Laboratories, Inc. v. 10X Genomics Inc. for the
proposition that the "degree of comparability [between the licensing agreement and
the hypothetical negotiation] is a factual issue best addressed through cross
examination" is unpersuasive.
967 F.3d 1353, 1374 (Fed. Cir. 2020) (citation
omitted). Defendant is correct that the degree of comparability is a factual issue that
should not bar admissibility. However, as the court in Bio-Rad noted, the district
court in that case concluded that the expert had made a showing of "baseline
comparability." Id. It is here that Defendant's expert, Thomas, has critically erred.
Thomas has made a showing of "baseline comparability" as to technological
comparison. (See ECF No. 753-1 at 16–17 (discussing how the agreements either
involved the same products as those pertinent to the patents-in-suit or dealt with the
research and development of those same products).) However, Thomas conducts no
analysis whatsoever on economic comparability, instead simply making conclusory
assertions that "[t]hese amounts [i.e., the rates from the 1998 Agreements] would
have been considered by the parties during the hypothetical negotiation" without
explaining why they would have been considered in a radically different situation
between different parties almost twenty years later in 2014. (Id. at 19.) Relying on
the Federal Circuit precedent discussed above, other district courts have excluded
expert testimony in almost identical circumstances. DataQuill Ltd. v. High Tech
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Comput. Corp., 887 F. Supp. 2d 999, 1023 (S.D. Cal. 2011) (excluding expert report
where the expert had sufficient factual support for technological comparability but
where the report appeared "to have no analysis at all of the economic differences
between the 'significant patent agreements' and the license reached at the
hypothetical negotiation."); IP Innovation L.L.C. v. Red Hat, Inc., 705 F. Supp. 2d
687, 691 (E.D. Tex. 2010) (Rader, J.) (excluding expert testimony for relying on noncomparable licenses); see also Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292,
1316 (Fed. Cir. 2011) (citation omitted) (noting that when conducting an analysis
under the first Georgia-Pacific factor, one cannot "rely on license agreements that
were 'radically different from the hypothetical agreement under consideration' to
determine a reasonable royalty"). Relying on the same law, the Court must exclude
Thomas's testimony on this issue here as unreliable.
For the aforementioned reasons, the Court excludes the testimony found in
paragraphs 128 through 135 of Thomas's Supplemental Rebuttal Expert Report,
(ECF No. 753-1).
D. Conclusion
Plaintiffs' Motion to Exclude Defendant's Damages Expert, Vincent A. Thomas,
(ECF No. 752), is granted in part and denied in part.
The Court precludes Thomas from testifying as to Panduit factor one. Further,
the Court excludes the testimony found in paragraphs 80–81 and 128–35 of
Thomas's Supplemental Rebuttal Expert Report, (ECF No. 753-1).
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VI.
Summary
Defendant's Motion to Exclude Plaintiffs' Technical Expert, Karl Leinsing, (ECF
No. 735), is granted in part and denied in part.
The pertinent portions of
Leinsing's testimony to be excluded are the following: paragraphs 16, 19, 255–64,
and 384 of his February 2022 report, (ECF No. 737-1); and paragraph 555 of his
August 2017 report, (ECF No. 737-2).
Defendant's Motion to Exclude Plaintiffs' Patent Law Expert, Stephen Kunin,
(ECF No. 740), is granted in part and denied in part. Due to a lack of expertise
on the issues, paragraphs 216–19 of Kunin's report are excluded.
Defendant's Motion to Exclude Plaintiffs' Damages Expert, John Bone, (ECF No.
760), is denied.
Plaintiffs' Motion to Exclude Defendant's Damages Expert, Vincent A. Thomas,
ECF No. 752), is granted in part and denied in part. The Court precludes
Thomas from testifying as to Panduit factor one and excludes the testimony found
in paragraphs 80–81 and 128–35 of Thomas's Supplemental Rebuttal Expert Report,
(ECF No. 753-1).
SO ORDERED.
Date:02/02/2023
Distribution by CM/ECF to registered counsel of record
41
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