IA Labs CA, LLC v. Nintendo Co., Ltd. et al

Filing 331

MEMORANDUM OPINION signed by Judge Peter J. Messitte on 2/13/2012. (bf2, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
IA LABS CA, LLC
Plaintiff
v.
NINTENDO CO., LTD and
NINTENDO OF AMERICA, INC.
Defendants

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Civil No. PJM 10-833

MEMORANDUM OPINION
IA Labs, CA LLC (“IA Labs”), has sued Nintendo Co., Ltd. and Nintendo of
America, Inc. (collectively, “Nintendo”), alleging patent infringement. Presently before the
Court is Nintendo’s Motion in Limine to Exclude Evidence of the Reexamination Proceedings
[Docket No. 284]. For the reasons that follow, Nintendo’s Motion is GRANTED.
Nintendo seeks to exclude at trial evidence regarding the initial determination
made by the U.S. Patent and Trademark Office (“PTO”) upon an inter partes reexamination of
the patent at issue in this case. Nintendo argues that this non-final determination, currently on
appeal before the Board of Patent Appeals and Interferences, is not probative evidence of the
patent’s validity and carries a high risk of misleading and confusing the jury, citing FED. R. EVID.
402 and 403. Nintendo also argues that the evidence at issue is inadmissible hearsay and is not
subject to the exception for public records because (1) the statements in the PTO documents are
not “factual findings” and (2) the decisions lack the requisite “trustworthiness” because they are
preliminary and non-final. FED. R. EVID. 802, 803(8). IA Labs counters that Nintendo is
judicially estopped from making these arguments because, at an earlier stage of this litigation,
Nintendo lauded the expertise of the PTO and the importance of the reexamination process. IA

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Labs further contends that evidence of the reexamination proceedings is probative, is not
prejudicial, and is admissible under the public records exception to the hearsay rule. Id. 402,
403, 803(8).
IA Labs’ judicial estoppel argument is easily dispatched. This argument assumes,
among other things, that a motion to exclude evidence relating to the reexamination proceedings
is “clearly inconsistent” with statements by counsel touting the expertise of the PTO. See New
Hampshire v. Maine, 532 U.S. 742, 750 (2001) (identifying non-exclusive factors to consider
when applying the doctrine of judicial: (1) whether a party’s later position is “clearly inconsistent
with its earlier position,” (2) whether a court accepted the party’s earlier inconsistent position,
and (3) whether estoppel is necessary to preclude an “unfair advantage” or “unfair detriment”).
This is simply not so. Even if Nintendo were arguing that the evidence should be excluded
because the PTO does not have a special expertise in patents, it is hardly clear that an attorney’s
statement of opinion in such a matter would in any way have preclusive effect. But Nintendo is
not arguing this. Its argument for exclusion relies on the non-final nature of the determination at
issue, the different standards at play in the PTO and civil litigation, and the general issue of juror
confusion. For these reasons, it is clear that this does not fit within the “narrowest of
circumstances” where judicial estoppel is appropriate. Lowery v. Stovall, 92 F.3d 219, 224 (4th
Cir. 1996).
As for the probative value and potential prejudice of the reexamination
proceedings, the Court agrees with the vast majority of courts that such evidence has “little
relevance to the jury’s independent deliberations on the factual issues underlying the question of
obviousness” and that “risk of jury confusion” is “high.” Callaway Golf Co. v. Acushnet Co.,
576 F.3d 1331, 1343 (Fed. Cir. 2009) (“The district court did not abuse its discretion in

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concluding that the prejudicial nature of the evidence concerning the ongoing parallel reexamination proceeding outweighed whatever marginal probative or corrective value it might
have had in this case.”); see also, e.g., Belden Techs., Inc. v. Superior Essex Commc’ns, LP, 802
F. Supp. 2d 555, 569 (D. Del. 2011) (“Admitting evidence about the . . . patent’s reexamination,
the outcome of which is not binding on the court, would have only served to confuse the jury and
was ultimately far more prejudicial than probative.”); Transamerica Life Ins. v. Lincoln Nat’l
Life Ins. Co., 597 F. Supp. 2d 897, 907 (N. D. Iowa 2009) (“This court agrees with its brethren
that evidence of incomplete patent reexamination proceedings is not admissible to prove
invalidity of a patent, because it has no probative value on that issue . . . and even if the evidence
has some marginal probative value, that probative value is outweighed by its potential for undue
prejudice or confusion of the jury about the presumption of validity of the patent.”).1
Presenting the jury with a document entitled “Action Closing Prosecution” would
run an unnecessary risk that jurors would accord undue weight to what appears to be a final
document and might improperly defer to the PTO’s initial determination. See Tesco Corp. v.
Weatherford Int’l, Inc., 750 F. Supp. 2d 780, 794 (S.D. Tex. 2010) (excluding evidence of a
reexamination interim determination given the “serious risk that a jury would view the examiners
as expert and authoritative”). Delving into the details of the reexamination and providing the
necessary context of the PTO structure and processes would inevitably “waste time and distract
from the key issues in the lawsuit.” Cardiovention, Inc. v. Medtronic, Inc., 483 F. Supp. 2d 830,

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The only case IA Labs has cited to counter this proposition addressed the district court’s
responsibility in evaluating a motion for preliminary injunction and, as such, is inapposite.
Proctor & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842 (Fed. Cir. 2008)
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843 (D. Minn. 2007). Accordingly, the Court WILL EXCLUDE evidence relating to the PTO
reexamination from trial, pursuant to FED. R. EVID. 402 and 403.2
For the foregoing reasons, Nintendo’s Motion in Limine to Exclude Evidence of
the Reexamination Proceedings [Docket No. 284] is GRANTED.
A separate Order will ISSUE.

/s/________________
PETER J. MESSITTE
UNITED STATES DISTRICT JUDGE
February 13, 2012

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Although the Court need not decide the question of hearsay, the Court recognizes that
documents created in the course of the reexamination proceedings may well fall within the
exception to hearsay for public records. FED. R. EVID. 803(8); see Ellis v. Int’l Playtex, Inc., 745
F.2d 292 (4th Cir. 1984) (finding that it is the challenging party’s burden to prove that a public
record is untrustworthy and that it is non-final or subject to amendment is insufficient);
Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc., No. 03-1431, 2006 WL 1330003, at *34 (N.D. Cal. May 15, 2006) (finding that various PTO documents—including an opinion of the
Board of Patent Appeals and Interferences, an Office Action by a PTO Examiner, and two
Orders Granting Reexamination—are admissible under the public records exception to hearsay,
but further noting that they may be inadmissible under FED. R. EVID. 403).
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