Prism Technologies v. T-Mobile USA, Inc.

Filing 482

MEMORANDUM AND ORDER that the Plaintiff's motion (Filing No. 355 ) to strike defendant's untimely document production is denied. Plaintiff's motion (Filing No. 355 ) to strike defendant's non-infringing alternative theories is g ranted. Plaintiff's motion (Filing No. 369 ) to exclude the expert testimony of T-Mobile's damages expert W. Christopher Bakewell is denied. However, Bakewell may not present testimony regarding non-infringing alternatives. Ordered by Senior Judge Lyle E. Strom. (LAC)

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

)
)
Plaintiff,
)
)
v.
)
)
T-MOBILE USA INC.,
)
)
Defendant.
)
______________________________)

8:12CV124

MEMORANDUM AND ORDER

This matter is before the Court on two related motions
filed by plaintiff Prism Technologies, LLC (“Prism”).

First,

Prism filed a motion (Filing No. 355) to strike the defendant, TMobile USA, Inc.’s (“T-Mobile”), untimely document production and
non-infringing alternative theories.

Second, Prism filed a

motion (Filing No. 369) to exclude the expert testimony of TMobile’s rebuttal damages expert W. Christopher Bakewell.

After

reviewing the motions, briefs, indices of evidence, and the
relevant law, the Court finds as follows.
Background
Prism alleges infringement of two patents, U.S. Patent
No. 8,127,345 (“‘345 patent”), and U.S. Patent No. 8,387,155
(“‘155 patent”) by defendant.

In this matter, fact discovery

closed on February 14, 2014 (Filing No. 161).
closed on June 6, 2014 (Id.).

Expert discovery

Mr. Proctor, T-Mobile’s technical

expert, served his report on May 27, 2014.

Prism’s damages

expert submitted a supplemental damages report on November 26,
2014.

T-Mobile’s served its rebuttal damages report by W.

Christopher Bakewell on August 9, 2015.
Prism moves this Court to strike T-Mobile’s reliance on
ten documents that were produced after the close of fact
discovery.

Prism alleges that T-Mobile produced untimely

documents on August 19, 2015, that should have been produced
pursuant to a motion to compel.

After the filing of the motion

to compel in September of 2013, the parties agreed that T-Mobile
would produce its “backhaul network documents, specifically
relating to alternative access vendors . . . .”
Exhibit 2).

(Filing No. 357,

T-Mobile contends that the documents produced on

August 19, 2015, are either Internet service provider agreements
(“ISP agreements”), which were not covered by Prism’s document
request, or the documents were created after the close of fact
discovery.
In addition, Prism moves this Court to strike TMobile’s non-infringing alternative theories and prevent TMobile’s experts from testifying at trial on these matters.
Prism alleges that T-Mobile denied the existence of a noninfringing alternative during fact discovery and did not produce
any documents regarding a non-infringing alternative.

However,

T-Mobile experts disclosed a non-infringing alternative after the
-2-

close of fact discovery.

T-Mobile argues that the factual

background relating to the non-infringing alternatives and the
experts reports discussing non-infringing alternatives are timely
and proper.
Prism also moves this Court to exclude the expert
testimony of W. Christopher Bakewell (“Bakewell”).

Prism

contends that the testimony of T-Mobile’s rebuttal damages expert
Bakewell is fundamentally flawed and unreliable.

In addition,

Bakewell intends to rebut Prism’s damages expert based on the
non-infringing alternatives.

T-Mobile argues that Bakewell’s

rebuttal opinion is grounded in the Georgia-Pacific factors and
Prism’s objections go more to weight than admissibility.
Law
I. Motion to Strike
Pursuant to Federal Rule of Civil Procedure 37, if a
party fails to provide information as required by Rule 26(a) or
(e), “the party is not allowed to use that information or witness
to supply evidence on a motion, at a hearing, or at a trial,
unless the failure was substantially justified or is 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
-3-

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).
II. Daubert Motion
Federal Rule of Evidence 702 provides that expert
opinion testimony is permissible if it is based on scientific,
technical, or other specialized knowledge and will assist the
trier of fact.

Expert opinion testimony must be given by a

person qualified as an expert based on experience, training, or
education.

Under Rule 702, the Court must consider whether (1)

the testimony is based upon sufficient facts or data, (2) the
testimony is the product of reliable principles and methods, and
(3) the witness has applied the principles and methods reliably
to the facts of the case.

A trial judge has a gatekeeping

responsibility to “ensure that an expert’s testimony rests on a
reliable foundation and is relevant to the task at hand.”

Kumho

Tire Co. v. Carmichael, 526 U.S. 137, 141, 119 S.Ct. 1167, 143
L.Ed.2d 238 (1999) (citing Daubert v. Merrell Dow Pharm., Inc.,
509 U.S. 579, 597, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)).

The

proponent of the expert testimony must prove its admissibility by
a preponderance of the evidence.

Daubert, 509 U.S. at 592.

-4-

Rule 702 is one of admissibility rather than exclusion.
Lauzon v. Senco Products, Inc., 270 F.3d 681, 686 (8th Cir.
2001).

Case law shows that rejection of expert testimony is the

exception rather than the rule.

Robinson v. GEICO Gen. Ins. Co.,

447 F.3d 1069, 1101 (8th Cir. 2006).

“Vigorous cross

examination, presentation of contrary evidence, and careful
instruction on the burden of proof are the traditional and
appropriate means of attacking shaky but admissible evidence.”
Daubert, 509 U.S. at 596.
Discussion
I. Motion to Strike
A. Ten Disclosed Documents
The ten documents Prism moves to strike include two ISP
agreements and eight alternative access backhaul vendor
agreements (“AAV agreements”) that were created after the close
of fact discovery.

T-Mobile alleges that it was not obligated or

able to produce the documents during discovery.

T-Mobile

eventually provided the documents to Prism, and the disclosure
was only possible after the close of discovery.

The Court will

deny Prism’s motion to strike and rule on the admissibility of
the documents at trial.

-5-

B. Non-Infringement Alternatives
T-Mobile argues that Prism’s interrogatory, request for
production, and Rule 30(b)(6) deposition topic relating to noninfringing alternatives were only directed to efforts T-Mobile
made to not infringe on Prism’s patents.

Prism’s requests never

asked the question of what non-infringing alternatives would have
been available at a hypothetical negotiation.

T-Mobile always

stated that it made no efforts to implement non-infringing
alternatives because it did not infringe the patents.

T-Mobile

never disclosed a non-infringing alternative theory during fact
or expert discovery.
T-Mobile points to case law that draws a distinction
between efforts to design non-infringing alternatives and the
existence of such alternatives.

See Ameritox Ltd. v. Millenium

Health, LLC, No. 13-cv-832-wmc, 2015 WL 1520821 (W.D. Wis. April
3, 2015).

However, T-Mobile produced no documents or witnesses

to support a theory on non-infringing alternatives.

T-Mobile now

wants its experts to testify to the availability of noninfringing alternatives without any proof of the existence of
such alternatives.

T-Mobile points to its technical expert

Proctor who interviewed T-Mobile engineers, but cannot recall
which of the four engineers he spoke with provided the facts he
relied upon to form his opinion on non-infringing alternatives.
-6-

Prism will be prejudiced by T-Mobile’s failure to produce any
documents or witnesses on non-infringing alternatives.

Prism was

denied the opportunity to conduct discovery on this issue.

As a

result, the Court will grant Prism’s motion to strike the
portions of the expert reports that rely on non-infringing
alternatives and prevent any argument or evidence to be presented
at trial on the matter.
II. Daubert Motion
After reviewing the briefs, and indices of evidence,
the Court finds that Bakewell is qualified to testify as an
expert in this matter.

Prism’s objections to Bakewell’s

methodology go more to the weight to be afforded rather than
admissibility.

Prism will have the opportunity to cross-examine,

present contrary evidence, and highlight any weaknesses in
Bakewell’s testimony.

However, Bakewell will be excluded from

testifying about any non-infringing alternative pursuant the
Court’s ruling on the motion to strike.

As a result, the Court

will deny Prism’s motion to exclude the testimony of Bakewell.
Accordingly,
IT IS ORDERED:
1) Plaintiff’s motion (Filing No. 355) to strike
defendant’s untimely document production is denied.

-7-

2) Plaintiff’s motion (Filing No. 355) to strike
defendant’s non-infringing alternative theories is granted.
3) Plaintiff’s motion (Filing No. 369) to exclude the
expert testimony of T-Mobile’s damages expert W. Christopher
Bakewell is denied.

However, Bakewell may not present testimony

regarding non-infringing alternatives.
DATED this 8th day of October, 2015.
BY THE COURT:
/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court

-8-