Prism Technologies v. T-Mobile USA, Inc.

Filing 278

ORDER - In Case 8:12CV123, plaintiff's motion (Filing No. 252) to supplement its reports is granted and plaintiff's motion (Filing No. 261) for a hearing is denied. In Case 8:12CV124, plaintiff's motion (Filing No. 263 ) to supplemen t its reports is granted and plaintiff's motion (Filing No. 274 ) for a hearing is denied. In Case 8:12CV125, plaintiff's motion (Filing No. 253) to supplement its reports is granted and plaintiff's motion (Filing No. 260) for a hearing is denied. In Case 8:12CV126, plaintiff's motion (Filing No. 235) to supplement its reports is granted and plaintiff's motion (Filing No. 244) for a hearing is denied. Ordered by Senior Judge Lyle E. Strom. (GJG)

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
PRISM TECHNOLOGIES LLC,

)
)
Plaintiff,
)
)
v.
)
)
SPRINT SPECTRUM L.P.,
)
d/b/a SPRINT PCS,
)
)
Defendant.
)
______________________________)
PRISM TECHNOLOGIES LLC,
)
)
Plaintiff,
)
)
v.
)
)
T-MOBILE USA, INC.,
)
)
Defendant.
)
______________________________)
PRISM TECHNOLOGIES LLC,
)
)
Plaintiff,
)
)
v.
)
)
UNITED STATES CELLULAR
)
CORPORATION, d/b/a U.S.
)
CELLULAR,
)
)
Defendant.
)
______________________________)
PRISM TECHNOLOGIES LLC,
)
)
Plaintiff,
)
)
v.
)
)
CELLCO PARTNERSHIP d/b/a
)
VERIZON WIRELESS,
)
)
Defendant.
)
______________________________)

8:12CV123

8:12CV124

8:12CV125

8:12CV126

ORDER

This matter is before the Court on two sets of motions
filed by plaintiff Prism Technologies (“Prism”) against Sprint
Spectrum (“Sprint”), T-Mobile U.S.A. (“T-Mobile”), United States
Cellular Corp. (“U.S. Cellular”), and Cellco Partnership
(“Cellco”) (collectively, the “Carrier Defendants”) in four
related, though separate, cases.

In Prism’s first set of motions

(Filing No. 252 in 8:12CV123; Filing No. 263 in 8:12CV124; Filing
No. 253 in 8:12CV125; and Filing No. 235 in 8:12CV126), Prism
seeks to supplement its expert reports.
In its second set of motions (Filing No. 261 in
8:12CV123; Filing No. 274 in 8:12CV124; Filing No. 260 in
8:12CV125; and Filing No. 244 in 8:12CV126),1 Prism requests oral
argument regarding its request to supplement its reports.

The

Court finds as follows.
I.

BACKGROUND
Prism accuses the Carrier Defendants of infringing upon

its patents, 8,127,345 (“the ‘345 Patent”) and 8,287,155 (“the
‘155 Patent”).

Though Prism filed different actions against each

Carrier Defendant, the parties agreed to common resolution of
certain issues which traversed the cases.

1

For example, Prism,

The briefs of the parties are substantially identical
across the four cases and the Court will cite to Case 8:12CV123
throughout the remainder of this opinion.
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AT&T Mobility, and the remaining Carrier Defendants agreed to
resolve “common” issues in summary judgment and Daubert motions
in addition to case specific issues (Filing No. 214).

The Court

adopted this policy and resolved the common issues pertaining to
Prism’s expert witnesses and various legal issues.

The Court

made two determinations which play into Prism’s current motions.
First, the Court granted the Carrier Defendants’ motions to
exclude the expert report and opinions of Mr. Malackowski,
Prism’s damages expert, due to the method of his damages
calculations (Filing No. 246).

Second, the Court did not grant

Prism’s motion to exclude AT&T’s damages expert on the basis that
he relied upon settlements, instead of licenses, in computing
damages.

Case 8:12CV122, Filing No. 410, at 10-14.
Now, Prism seeks leave to amend the expert reports of

its damages and validity experts based on new agreements executed
by Prism and AT&T Mobility, LLC (“AT&T”) that resolved the matter
of Prism Technologies LLC v. AT&T Mobility, LLC (Docket No.
8:12CV122) (the “AT&T Matter”).

More specifically, the parties

in the AT&T Matter executed a Memorandum of Agreement on October
23, 2014 (the “AT&T MOA”), and a Settlement and License Agreement
(the “AT&T Settlement License”) (collectively the “AT&T
Documents”), executed on November 13, 2014, both of which reflect
a confidential settlement agreement between the parties that
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resolved the AT&T Matter.

Prism wishes to use this new evidence

to extrapolate cost-savings of each of the Carrier Defendants and
to amend its validity contentions.
II. LEGAL STANDARDS
Federal Rule of Civil Procedure 26(e) provides that a
party has a duty to supplement its expert report in a timely
manner when the party obtains additional information or learns
that in some material respect the disclosure or response is
“incomplete or incorrect.”

Fed. R. Civ. P. 26(e)(1)(A); (2).

Courts may permit amended expert reports past the Rule 26(e)
deadline pursuant to Fed. R. of Civ. P. 37©, if the failure to
timely disclose the amendment was substantially justified or
harmless.

While the Court “need not make explicit findings

concerning the existence of a substantial justification or the
harmlessness of a failure to disclose,” the Court should be
guided by the following factors: (1) the prejudice or surprise to
the party against whom the testimony is offered; (2) the ability
to cure any prejudice; (3) the potential for trial disruption if
the testimony is allowed; and (4) the erring party’s bad faith or
willfulness.

Sibley v. Sprint Nextel Corp., No. 08-2063-KHV,

2013 WL 1819773, at *7 (D. Kan. April 30, 2013).
III. DISCUSSION

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The Carrier Defendants object to the admission of the
new reports on various grounds.

First, the Carrier Defendants

argue that the evidence upon which the experts rely in their new
reports was available at the time of the original submissions.
The Court finds that the AT&T Documents constitute new evidence.
This evidence was unavailable prior to the experts’ original
reports and prior to the Court’s “common” Daubert motion
excluding Mr. Malackowski.
remaining cases.

The new evidence is relevant to the

See Case 12CV122, Filing No. 410, at 10-14.

The prejudice to the Carrier Defendants, if any exists, is
negligible.

The Court, with the support of Prism and the Carrier

Defendants, has attempted to balance the interests of Prism to
file five separate, closely related, law suits and the interests
of the Court and the Carrier Defendants to dispose of as many
common issues as possible.

Though the amendment comes after the

deadlines which spanned all cases, the Carrier Defendant has time
before its trial with Prism which the Court deems sufficient not
to prejudice them or the remaining Carrier Defendants.
prejudice exists, sufficient time exists to cure it.

If
The Court

finds that the inclusion of some damages model is certainly
preferable to the absence of one and, therefore, there would be a
benefit, and no disruption, at trial.

Finally, the Court finds

no evidence of bad faith on behalf of any party.
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Second, the Carrier Defendants object because the
methodology Mr. Malackowski wishes to use is drastically
different than what he original submitted.

The Court finds no

reason to exclude an amended report because of its dissimilarity
to the original report.
Third, the Carrier Defendants make arguments as to the
admissibility of the report.

The Court finds that such arguments

are more appropriate in a case-specific Daubert motion following
submission of these amended reports.
Fourth, the Carrier Defendants argue that Mr. Duman’s
reasonable royalty rate of 5% is not admissible because he
asserted privilege until the time of the AT&T Matter.

The Court

also finds such argument more appropriate in a case-specific
Daubert motion following submission of this amended report.
Fifth, the Carrier Defendants object to the new damages
calculations because the figures are larger.

The Court did not

strike Mr. Malackowski’s report because the numbers were large or
small; the Court struck the report because the methodology was
capricious.
Sixth, Sprint specifically objects because it states
the filing of an amended report will necessitate “significant”
additional discovery, which in turn will delay the trial.

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Sprint

knows a great deal about the report now, at the time of its
briefing.

It has, in fact, already begun to lodge objections to

the amended report’s admissibility and methodology.

Sprint also

claims that the information in Mr. Malackowski’s report has been
known for some time.

The Court finds it difficult to believe

that additional fact discovery will be necessary, but will
accommodate the parties as necessary.
Finally, the Carrier Defendants object to the Court’s
schedule.

If Prism is permitted to amend its damages and

validity contentions following the AT&T Matter, then Prism will
seek to amend its expert reports following the conclusion of
every case.

The Carrier Defendants and the Court did not

anticipate this contingency in the trial schedules.

To the

extent that the current trials schedules must be altered, the
Court will accommodate the parties.

For the foregoing reasons,

IT IS ORDERED:
1) In Case 8:12CV123, plaintiff’s motion (Filing No.
252) to supplement its reports is granted and plaintiff’s motion
(Filing No. 261) for a hearing is denied.
2) In Case 8:12CV124, plaintiff’s motion (Filing No.
263) to supplement its reports is granted and plaintiff’s motion
(Filing No. 274) for a hearing is denied.

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3) In Case 8:12CV125, plaintiff’s motion (Filing No.
253) to supplement its reports is granted and plaintiff’s motion
(Filing No. 260) for a hearing is denied.
4) In Case 8:12CV126, plaintiff’s motion (Filing No.
235) to supplement its reports is granted and plaintiff’s motion
(Filing No. 244) for a hearing is denied.
DATED this 23rd day of January, 2015.

BY THE COURT:

/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court

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