OPTOLUM INC. v. CREE INC.
Filing
357
REDACTED MEMORANDUM OPINION AND ORDER Signed by JUDGE WILLIAM L. OSTEEN, JR on 11/24/2021. Re 343 SEALED MEMORANDUM OPINION AND ORDER. See 356 Order.(Taylor, Abby)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
OPTOLUM, INC.
Plaintiff,
v.
CREE, INC.,
Defendant.
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1:17CV687
FILED UNDER SEAL
MEMORANDUM OPINION AND ORDER
ADDRESSING EXPERT WITNESS AND DAUBERT MOTIONS
(Docs. 193, 197, 199)
OSTEEN, JR., District Judge
Presently before this court are Defendant Cree, Inc.’s
(“Cree”) motion to exclude certain testimony of William B.
Scally, (Doc. 193); Defendant Cree’s motion to exclude certain
testimony of Charles McCreary, (Doc. 197), and Plaintiff
OptoLum, Inc.’s (“OptoLum”) motion to exclude certain testimony
of Dr. Eric Bretschneider, (Doc. 199). Although these issues may
be moot as a result of the jury’s verdict, the parties are
entitled to consider this court’s reasoning in full for purposes
of any Motion for Judgment as a Matter of Law or appeal.
I.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff and Defendant are companies that produce lighting
products using light-emitting diodes (“LEDs”). (Amended
Case 1:17-cv-00687-WO-JLW Document 357 Filed 12/14/21 Page 1 of 42
Complaint (Doc. 32) ¶¶ 12, 20, 22-23, 29.)1 Plaintiff seeks to
enforce U.S. Patents 6,831,303 (the “‘303 Patent”), and
7,242,028 (the “‘028 Patent”) in this action (together, the
“Patents”). (Id. ¶¶ 25-27.)
Both parties plan to present evidence at trial through
expert witnesses. Relevant to this order, Plaintiff has offered
William Scally as an expert on a reasonable royalty for
Defendant’s alleged infringement. (Scally Report (Doc. 299).)
Plaintiff has also offered Charles McCreary as an expert to
testify about Defendant’s alleged infringement. (McCreary Report
(Doc. 212-2).) Defendant has offered Dr. Eric Bretschneider as
an expert to rebut Mr. McCreary’s infringement opinion.
(Bretschneider Am. Report (Doc. 201-3).)
Defendant moved to exclude certain testimony of Mr. Scally,
(Doc. 193), and submitted a brief in support of its motion.
(Mem. of Cree, Inc. in Supp. of Daubert Mot. Precluding Certain
Testimony of William B. Scally (“Def.’s Scally Br.”) (Doc.
194).) Plaintiff responded, (OptoLum, Inc.’s Opp’n to Cree,
Inc.’s Daubert Mot. to Exclude Certain Testimony of William B.
Scally (“Pl.’s Scally Resp.”) (Doc. 205)); and Defendant
1
All citations in this Memorandum Opinion and Order to
documents filed with the court refer to the page numbers located
at the bottom right-hand corner of the documents as they appear
on CM/ECF.
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Case 1:17-cv-00687-WO-JLW Document 357 Filed 12/14/21 Page 2 of 42
replied, (Doc. 216). Defendant also moved to exclude certain
testimony of Mr. McCreary, (Doc. 197), and submitted a brief in
support of its motion. (Mem. of Cree, Inc. in Supp. of its
Daubert Mot. to Exclude Certain Testimony of Charles McCreary
(“Def.’s McCreary Br.”) (Doc. 198).) Plaintiff responded,
(OptoLum, Inc.’s Opp’n to Cree, Inc.’s Mot. to Exclude Certain
Testimony of Charles McCreary (“Pl.’s McCreary Resp.”) (Doc.
209)), and Defendant replied, (Reply Mem. of Cree Inc. in Supp.
of its Daubert Mot. to Exclude Certain Testimony of Charles
McCreary (“Def.’s Scally Reply”) (Doc. 217)).
Plaintiff moved for leave to file a surreply, (Pl.’s Mot.
and Mem. for Leave to File a Surreply in Opp’n to Cree Inc.’s
Daubert Mot. to Exclude Certain Testimony of Charles McCreary
(Doc. 219)). Defendant responded to Plaintiff’s motion for leave
to file a surreply, (Doc. 222), and Plaintiff replied, (Doc.
225).
Plaintiff moved to exclude certain testimony of
Dr. Bretschneider, (Doc. 199), and submitted a brief in support
of its motion, (OptoLum, Inc.’s Mem. in Supp. of its Mot. to
Exclude Certain Testimony of Dr. Eric Bretschneider (“Pl.’s
Bretschneider Br.”) (Doc. 200)). Defendant responded, (Def.
Cree, Inc.’s Mem. in Opp’n to Pl. OptoLum, Inc.’s Mot. to
Exclude Certain Testimony of Dr. Eric Bretschneider (“Def.’s
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Bretschneider Resp.”) (Doc. 203)); and Plaintiff replied, (Doc.
215).
On October 8, 2021, this court held an evidentiary hearing
on the parties’ motions to exclude certain expert testimony.
(Minute Entry 10/08/2021.)
II.
ANALYSIS
Federal Rule of Evidence 702 provides:
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 facts of the case.
Fed. R. Evid. 702. In Daubert v. Merrell Dow. Pharms., Inc., 509
U.S. 579 (1993), the Supreme Court clarified “that it is the
duty of the trial court to perform the gatekeeping function with
respect to expert testimony: ‘the trial judge must ensure that
any and all scientific testimony or evidence admitted is not
only relevant, but reliable.’” United States v. Prince-Oyibo,
320 F.3d 494, 498 (4th Cir. 2003) (quoting Daubert, 509 U.S. at
589). The Supreme Court in Daubert provided a list of
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non-exclusive factors a court should consider in assessing the
reliability of expert testimony: (1) whether the particular
scientific theory “can be (and has been) tested”; (2) whether
the theory “has been subjected to peer review and publication”;
(3) “the known or potential rate of error”; (4) the existence
and maintenance of standards controlling the technique’s
operation; and (5) whether the technique has achieved general
acceptance in the relevant scientific or expert community.
Daubert, 509 U.S. at 591.
A.
Motion to Exclude Certain Testimony of Mr. Scally
Defendant moves to exclude certain testimony of Mr. Scally
for three reasons: (1) Mr. Scally included a 5% “incremental
value” to Defendant’s brand in addition to the royalty rate for
infringement; (2) Mr. Scally did not apportion his damages
calculation; and (3) his opinion is based on unreliable facts.
(Def.’s Scally Br. (Doc. 194) at 6-7.)
Mr. Scally opines “that a reasonable royalty equal to at
least 10% of the net sales revenue generated through the sale of
the accused Cree LED light bulbs represents the proper form of
damages in this matter.” (Scally Report (Doc. 299) at 6.)
Mr. Scally further states in his report that “Cree expected that
the benefit from the technology would extend beyond the Accused
Products by enabling Cree to build a company-wide brand and thus
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boost overall company sales. This incremental value is
considered in my calculation of the 10% royalty rate[.]” ( Id.)
He thus concludes that “Cree would have been willing to pay an
incremental rate of at least 5% in order to leverage the Accused
Products to build the broader Cree brand, suggesting a final
negotiated royalty rate of at least 10%.” (Id. at 67.)
In a patent infringement suit, damages shall “in no event
[be] less than a reasonable royalty for the use made of the
invention by the infringer, together with interest and costs as
fixed by the court.” 35 U.S.C. § 284. The Federal Circuit has
explained that, in “litigation, a reasonable royalty is often
determined on the basis of a hypothetical negotiation, occurring
between the parties at the time that infringement began.” Uniloc
USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1312 (Fed. Cir.
2011) (citing Wang Labs. Inc. v. Toshiba Corp., 993 F.2d 858,
869–70 (Fed. Cir. 1993)). “A comprehensive (but unprioritized
and often overlapping) list of relevant factors for a reasonable
royalty calculation appears in Georgia-Pacific Corp. v. United
States Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970).”
ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 868-69 (Fed.
Cir. 2010) (internal citation omitted).
The Federal Circuit’s embrace of the Georgia-Pacific
factors reflects that an expert must rely on evidence “tied to
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the relevant facts and circumstances of the particular case at
issue and the hypothetical negotiations that would have taken
place in light of those facts and circumstances at the relevant
time.” Uniloc USA, 632 F.3d at 1318.
1.
Incremental Value
Defendant argues that “[t]his add-on brand development
Incremental Rate is unreliable” because it “accounts for value
other than the value that the patents-in-suit allegedly
contributed to the Accused Products.” (Def.’s Scally Br. (Doc.
194) at 19-20.) Plaintiff argues that it was reliable for
Mr. Scally to consider the value of the use of the technology to
Defendant beyond the technology itself. (Pl.’s Scally Re sp.
(Doc. 205) at 7.) Plaintiff cites Georgia-Pacific Factor 11 –
the extent to which the infringer has made use of the invention;
and any evidence probative of the value of that use – in support
of that argument. (Id.)
Georgia-Pacific Factor 11 “informs the court and jury about
how the parties would have valued the patented feature during
the hypothetical negotiation.” Lucent Techs., Inc. v. Gateway,
Inc., 580 F.3d 1301, 1333 (Fed. Cir. 2009). “In doing so, Factor
11 relies on evidence about how much the patented invention has
been used. Implicit in this Factor is the premise than an
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invention used frequently is generally more valuable than a
comparable invention used infrequently.” Id.
Mr. Scally’s report relies on a number of assumptions in
defining the hypothetical royalty negotiation. Notably to the
analysis contained herein, Mr. Scally recognized that success by
Cree in the sale of LED lightbulbs required hitting a specific
price point, which he identified as $10.00. (Doc. 299 at 32.)
Furthermore, Mr. Scally also assumed that the hypothetical
license was non-exclusive. (Id. at 34.) Finally, Mr. Scally
acknowledged that the look of the Cree bulbs, similar to
traditional incandescent bulbs, was critical to the success of
the product. (Id. at 50.)
Against the facts assumed by Mr. Scally as a basis for the
hypothetical negotiation as to a royalty payment, Mr. Scally
opined, inter alia, that the sale of LED bulbs by Defendant
resulted in an increase in “brand value” resulting from the sale
of the accused products. (Id. at 57.) In turn, the sale of the
infringing LED bulbs placed “significant upward pressure” on the
hypothetical negotiated royalty rate. (Id. at 61-62.) As a
result, Mr. Scally concluded that there was an incremental value
of the patents to Defendant in building its brand, and that
Defendant would hypothetically pay in royalty 5% for that
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factor, (id. at 62), resulting in a total royalty amount of 10%.
Defendant challenges this 5% brand value calculation.
During Mr. Scally’s deposition, he admitted that the 5%
incremental rate accounts for value other than the value the
patents contributed to the accused products. Mr. Scally stated
that “brand” was something he considered in assessing the
incremental value, and that he viewed “brand” as “s omething
other than being able to make, use, and sell the accused
lightbulbs.” (Scally Dep. (Doc. 196-2) at 35-36.)
Q.
Okay. So the value of the brand was
something other than being able to make, use and sell
the accused lightbulbs? Correct?
MR. MISIC: Objection.
A.
Yes. It was something else.
BY MR. HARPER:
Q.
Okay. And that something else was what you
have labeled brand? Right?
MR. MISIC: Objection.
A.
Yes.
BY MR. HARPER:
Q.
And that 5 percent was a straight addition
to the existing – to the 5 percent that you determined
for the rest of the factors of your analysis? Correct?
MR. MISIC: Objection.
A.
Yes. It is incremental.
(Id. at 36.)
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Plaintiff’s argument that under Georgia-Pacific Factor 11,
Mr. Scally can consider the value of the Patents on Cree’s
overall brand and its effect on Cree’s products other than the
accused products appears contrary to the Federal Circuit’s
interpretation of Georgia-Pacific Factor 11. In Lucent
Technologies, the Federal Circuit interpreted Factor 11 as
considering how often the accused products were used by the
infringer, not – as Plaintiff contends – how the patented
technology affected the use of an infringer’s other products or
overall brand. See Lucent Techs., 580 F.3d at 1333. Because a
plaintiff is entitled to damages only related to infringing
activities, it is inappropriate for Mr. Scally to include in his
damages calculation any value the Patents conferred on Cree’s
overall brand or its products other than the accused products.
See Power Integrations, Inc. v. Fairchild Semiconductor Int’l,
Inc., 904 F.3d 965, 977 (Fed. Cir. 2018) (“A patentee is only
entitled to a reasonable royalty attributable to the infringing
features.”); see also Enplas Display Device Corp. v. Seoul
Semiconductor Co., 909 F.3d 398, 411-12 (Fed. Cir. 2018)
(vacating a jury’s damages award where the only evidence
supporting the damages award was testimony from a damages expert
that included non-infringing device sales in the royalty
calculation).
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While there may be circumstances under which a “brand value
increase” might be a factor in assessing a reasonable royalty,
this court finds that Mr. Scally’s testimony does not meet the
threshold requirements of Daubert and Federal Rule of Evidence
104 with respect to an opinion that brand value increase
supports an upward royalty rate of 5%.
Federal Rule of Evidence 702 requires expert testimony be
based on “sufficient facts or data,” “the product of reliable
. . . methods,” and that the expert reliably apply “the
principles and methods to the facts of the case.” Fed. R. Evid.
702(b)-(d). Additionally, Federal Rule of Evidence 104 requires
a trial court to determine whether these elements are met by a
preponderance of the evidence before admitting expert testimony.
Fed. R. Evid. 104(a). This court finds the brand value damage
calculation is not based on sufficient facts, and there is
insufficient data to support the opinion.
Mr. Scally presents information from both Cree and third
parties that the sale of the infringing LED bulbs helped Cree
build its “brand.” While there may be certain logical force to
Scally’s analysis in assessing damages – that increase in brand
value recognized by Cree through the sale of the infringing
bulbs should be captured as damages – this court finds
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Mr. Scally’s conclusion in determining a reasonable royalty rate
not supported by the assumptions and facts.
First, Mr. Scally’s opinion is about a reasonable royalty
arising from a hypothetical negotiation entered into prior to
infringement. (Doc. 299 at 28.) However, the brand value
calculation is based on facts and assumptions that occurred in a
market not affected by, or that even addressed, a hypothetical
non-exclusive licensing agreement. Mr. Scally’s data is based
upon hindsight, that is, Defendant’s sales of infringing
products and brand development in the absence of a non-exclusive
license from OptoLum. Mr. Scally never explains how or why a
hypothetical negotiation prior to infringement would take into
consideration an increase in brand value from the use of a nonexclusive license from OptoLum or the relationship between a
non-exclusive license and brand development in establishing the
parameters of a hypothetical negotiation. Mr. Scally
acknowledges Cree’s success, if any, with respect to sales, were
the result of a specific price point and the look of the bulb
Cree developed. Resultingly, the principle applied – the
calculation of a hypothetical reasonable royalty agreed -upon
prior to infringement – is based upon post-infringement success
on facts derived from the absence of a hypothetical licensing
agreement and the payment of a royalty. While the “brand value”
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increase might otherwise be compelling as a measure of wrongful
profits, Mr. Scally’s damage calculation is, as it must be,
based on a hypothetical reasonable royalty.
Second, Mr. Scally offers no data or support to suggest any
brand success could have been derived from product sales arising
from a hypothetical non-exclusive license in the same way and
manner that those sales occurred without a license agreement.
That in turn makes it speculative that any brand success Cree
may have realized from sales without a non-exclusive license
agreement are probative of what facts or factors Cree or Opto Lum
might have hypothetically considered in negotiating a royalty
with a component of brand value using a non-exclusive licensing
agreement. It appears to this court that Mr. Scally’s opinion that brand value increase would have put upward pressure on the
likely negotiated royalty - is entirely speculative. Mr. Scally
offers no assumptions or facts to explain how a hypothetical,
non-exclusive license negotiation would have been impacted by
potential brand value increases or, more significantly, how
those facts in turn would have impacted the calculation of a
hypothetical reasonable royalty. Instead, Mr. Scally seems to
assume, without explanation or support, that any brand value
increases realized in the absence of a licensing agreement would
have been recognized in a similar fashion during the
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hypothetical negotiation prior to infringement. This
determination should not be based on “a hindsight evaluation of
what actually happened, but on the basis of what the parties to
the hypothetical license negotiations would have considered at
the time of negotiations.” Hanson v. Alpine Valley Ski Area,
Inc., 718 F.2d 1075, 1081 (Fed. Cir. 1983).
Third, even assuming that Plaintiff’s interpretation of
Georgia-Pacific Factor 11 is correct under certain
circumstances, Mr. Scally fails to explain how or why the
trademark contract he used for guidance – the G.E./Safety Quick
contract and the Hoover/Capstone Industries contract – apply to
the hypothetical royalty negotiation between OptoLum and Cree.
No data, facts, or analysis are provided to explain whether the
value of the trademark licenses is derived from total sales,
non-exclusive licenses, unique products, ownership of
technology, or anything else. The analysis appears to rely
exclusively on “brand name,” (Scally Report (Doc. 299) at 62),
without any analysis of the parameters of the hypothetical
negotiation, including the effect, if any, of the technology on
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subject to a non-exclusive license instead of ownership of the
technology.2 (Id.)
Mr. Scally’s royalty calculation includes a 5% “increase in
brand value” that is not based on relevant facts or data and has
not been shown to reliably apply the principles and methods to
the facts of this case. A proffer of expert testimony must be
reliable and may not be based on belief or speculation. Daubert,
509 U.S. at 592-93. Mr. Scally’s opinion that the hypothetical
calculation would have included a 5% increase for brand value
should be excluded.
2.
Entire Market Value Rule
This court further finds that Mr. Scally’s damages opinion
should not be excluded as a matter of law for failure to
apportion.
“The entire market value rule is a narrow exception to
[the] general rule” that “royalties be based not on the entire
product, but instead on the ‘smallest salable patent-producing
unit.’” LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d
51, 67 (Fed. Cir. 2012) (quoting Garretson v. Clark, 111 U.S.
2
Mr. Scally, in discussing brand development, quotes Cree
extensively regarding the importance of Cree’s technology. ( See,
e.g., Scally Report (Doc. 299) at 24 (“Cree itself called the
introduction of the Filament Tower™ ‘game-changing’[.]”); and
id. at 59 (“[L]eading with innovation and building the Cree
brand were the first and second priorities.”).)
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120, 121 (1884)). In other words, “[t]he entire market value
rule allows for the recovery of damages based on the value of an
entire apparatus containing several features, when the feature
patented constitutes the basis for customer demand. ” Lucent
Techs., 580 F.3d at 1336 (quoting TWM Mfg. Co. v. Dura
Corp., 789 F.2d 895, 901 (Fed. Cir. 1986)). The entire market
value rule is derived from Supreme Court precedent requiring
that “[t]he patentee . . . must in every case give evidence
tending to separate or apportion the defendant’s profits and the
patentee’s damages between the patented feature and the
unpatented features, and such evidence must be reliable and
tangible, and not conjectural or speculative.” Garretson, 111
U.S. at 121. The Supreme Court explained that “the entire value
of the whole machine, as a marketable article, [must be]
properly and legally attributable to the patented feature.” Id.
“Under the entire market value rule, if a party can prove that
the patented invention drives demand for the accused end
product, it can rely on the end product’s entire market value as
the royalty base.” Commonwealth Sci. & Indus. Rsch. Organisation
v. Cisco Sys., Inc., 809 F.3d 1295, 1302 (Fed. Cir. 2015)
(emphasis added) (quoting LaserDynamics, 694 F.3d at 67).
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The entire market value rule is “a demanding alternative to
[the] general rule of apportionment.” Power Integrations, 904
F.3d at 977 (citation omitted).
If the product has other valuable features that
also contribute to driving consumer demand — patented
or unpatented — then the damages for patent
infringement must be apportioned to reflect only the
value of the patented feature. This is so whenever the
claimed feature does not define the entirety of the
commercial product. In some circumstances, for
example, where the other features are simply generic
and/or conventional and hence of little distinguishing
character, such as the color of a particular product,
it may be appropriate to use the entire value of the
product because the patented feature accounts for
almost all of the value of the product as a whole.
Id. at 978 (citation omitted).
In Power Integrations, the royalty rate was premised on the
patent’s frequency reduction feature as driving consumer demand
for the infringer’s controller chips. Id. The plaintiff
presented evidence that the frequency reduction feature was
“essential to many customers,” and “that some customers asked
for the [patented] feature, that products with the [patented]
feature outsold other products, and that technical marketing
materials promoted the [patented] feature.” Id. Further, both
parties agreed that the accused products contained other
valuable features. Id.
The Federal Circuit held that it is not enough to
affirmatively prove that the patented feature is essential, or
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that the product would not be commercially viable without the
patented feature, or that customers would not purchase the
product without the patented feature. Id. at 978-79. Instead,
the patentee must prove that the other features do not cause
consumers to purchase the accused product. Id. at 979-80. The
patented feature must be the “sole driver of customer demand.”
Id. at 979. The court in Power Integrations then explained how a
patentee proves the patented feature drives demand:
Where the accused infringer presents evidence that its
accused product has other valuable features beyond the
patented feature, the patent holder must establish
that these features do not cause consumers to purchase
the product. A patentee may do this by showing that
the patented feature “alone motivates customers to
purchase [the infringing product]” in the first place.
Id. (quoting LaserDynamics, 694 F.3d at 69). Because the patent
owner “did not meet its burden to show that the patented feature
was the sole driver of consumer demand,” the Federal Circuit
vacated the damage award. Id. at 979-80; see also Lucent Techs.,
580 F.3d at 1337-38 (reversing the district court’s decision
where the jury applied the entire market value rule because
“Lucent did not carry its evidentiary burden of proving that
anyone purchased Outlook because of the patented method” where
“Lucent’s damages expert conceded that there was no ‘evidence
that anybody anywhere at any time ever bought Outlook . . .
because it had a date picker’”).
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Plaintiff argues the patented technology enables the
features of the Cree products that drove demand, and that
therefore the entire market value rule is appropriate. (Pl.’s
Scally Resp. (Doc. 205) at 15.) Defendant has presented evidence
that the value of the technology should not be subject to the
entire market value rule because features such as omnidirectional light, similar form to incandescent bulbs, and price
point were the features which drove demand. (Scally Report (Doc.
299) at 30.) On the other hand, Plaintiff has forecast evidence
that the Filament Tower™ is “game changing” and allowed “LED
bulbs to be introduced at a retail price point that gave
consumers a reason to switch to LED lighting.” (Id. at 24.)
Mr. Scally’s report identifies a statement from Cree’s corporate
marketing department that describes “the Filament Tower™
technology as an ‘elegant solution’ that not only . . . but also
created the traditional ‘omni-directional’ light of incandescent
A-type bulbs.” (Id. at 45.) Mr. Scally’s report also notes that
Cree has said “Cree LED Filament Tower™ Technology represents a
breakthrough in LED bulb design. It provides an optically
centered and balanced light source within a real glass bulb that
is nearly indistinguishable from a traditional incandescent
filament.” (Id. at 52.) Cree’s own statements, as cited by
Mr. Scally, support Plaintiff’s contention that the Filament
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Tower™ enabled the customer demand. This court is therefore
unable to find, as a matter of law, that Plaintiff will be
unable to show that the infringing technology is subject to the
entire market value rule.
3.
Facts Underlying Mr. Scally’s Opinion
This court further finds that Mr. Scally’s damages opinion
is based on data sufficiently tied to the facts of this case.
Defendant argues that Mr. Scally should not be permitted to
testify because his opinion is based on information not tied to
the facts of this case. (Def.’s Scally Br. (Doc. 194) at 31-43.)
Specifically, Defendant contests Mr. Scally’s reliance on (1) a
; (2) Degnan & Horton Survey; (3) Licensing
Economics Review article; (4) RoyaltySource licenses; (5) prior
Cree licenses; and (6) a sensitivity analysis. (Id.)
First, regarding Mr. Scally’s consideration of the
, Defendant argues it is unacceptable to
use a party’s
. ( Id. at
31-32.) However, Defendant misconstrues Mr. Scally’s use of the
. Unlike Defendant’s assertion, Mr. Scally
did not use the
but
rather as consideration of Georgia-Pacific Factor 1 – the
royalties received by the patentee for the licensing of the
patents-in-suit, proving or tending to prove an established
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royalty. (Scally Report (Doc. 299) at 34.) Here, Mr. Scally
noted that the asserted patents have never been licensed but
that
(Id.) Mr. Scally goes on to note
that because OptoLum has never licensed the asserted patents and
because
(Id.) Essentially, Mr. Scally noted the
prior
he valued
and then explained why
as neutral. This court finds Mr. Scally
provided sufficient reasoning for his reliance on
and his analysis was sufficiently tied to the
facts of this case. Therefore, this court finds Mr. Scally’s
opinion should not be excluded because he relied in part on the
Second, Defendant contests Mr. Scally’s reliance on the
Degnan & Horton survey because Mr. Scally does not know the
technologies, licenses, and parties on which the survey is
based. (Def.’s Scally Br. (Doc. 194) at 32-35.) Plaintiff
responds that in considering Georgia-Pacific Factor 12 – the
portion of the profit or the selling price that may be customary
in the particular business or in comparable businesses to allow
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for the use of the invention or analogous inventions – Mr.
Scally reasonably relied on publicly available information in
marketing surveys. (Pl.’s Scally Resp. (Doc. 205) at 21.)
“[T]o establish a reasonable royalty, the ‘licenses relied
on by the patentee in proving damages [must be] sufficiently
comparable to the hypothetical license at issue in suit.’”
Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1330 (Fed.
Cir. 2014) (quoting Lucent Techs., 580 F.3d at 1325). Although
“alleging a loose or vague comparability between different
technologies or licenses does not suffice,” LaserDynamics, 694
F.3d at 79, the Federal Circuit “ha[s] never required identity
of circumstances[.]” Virnetx, 767 F.3d at 1330. Rather, the
Federal Circuit has “long acknowledged that ‘any reasonable
royalty analysis necessarily involves an element of
approximation and uncertainty.’” Id. (quoting Lucent Techs., 580
F.3d at 1325).
For example, in Virnetx, the Federal Circuit held the
district court did not abuse its discretion in allowing the
damages expert to rely on licenses that were either related to
the actual patents-in-suit or were drawn to related technology.
Id. The Federal Circuit noted that the differences between the
licenses and the hypothetical negotiation between the parties
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were presented to the jury, who ultimately determined the
relevancy of those licenses. Id.
In Mr. Scally’s report, he relies on the Degnan & Horton
Survey for evidence of licensing rates depending on whether the
technology is “revolutionary,” a “major improvement,” or a
“minor improvement.” (Scally Report (Doc. 299) at 64.) Based on
Cree’s own statements that the technology was “game -changing,”
Mr. Scally considered the technology would at least be
considered a “major improvement.” (Id.) This court finds the
Degnan & Horton Survey is sufficiently tied to the facts of this
case. Mr. Scally used the survey as evidence of the range of a
reasonable royalty for patented technology that is a major
improvement. Mr. Scally relied on Cree’s own statements to
reasonably determine the technology was at least a ma jor
improvement over prior LED lightbulbs. Therefore, this court
finds Mr. Scally’s opinion should not be excluded because he
relied in part on the Degnan & Horton survey.
Third, Defendant argues the Licensing Economic Review
article is not sufficiently tied to the facts of this case.
(Def.’s Scally Br. (Doc. 194) at 35-37.) As part of Mr. Scally’s
consideration of Georgia-Pacific Factor 12, Mr. Scally relied on
a Licensing Economics Review article on royalty rates from
twenty-eight years’ worth of licensing agreements, broken down
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by industry. (Scally Report (Doc. 299) at 63-64.) Mr. Scally
noted the median royalty rate for the Electrical and Electronics
industry was 4.3%, and the median royalty rate for the Consumer
Goods, Retail, and Leisure industry was 5.0%. (Id.)
This court finds the Licensing Economics Review article is
sufficiently tied to the facts of this case. Although consumer
goods and electrical and electronics may be broad categories
that encompass other technology than LEDs, this is not a case
where the subject matter of the licenses is not ascertainable
from the evidence. See Lucent Techs., 580 F.3d at 1327-28. That
the licenses relied on by Mr. Scally concern a broader category
of patentable technology is not sufficient, as a matter of law,
to warrant exclusion. See ActiveVideo Networks, Inc. v. Verizon
Commc’ns, Inc., 694 F.3d 1312, 1333 (Fed. Cir. 2012) (affirming
the district court’s allowance of expert testimony where the
expert relied on two licensing agreements, one of which post dated the hypothetical negotiation, did not involve the patents in-suit, and did not cover the technologies in the case, and the
other involved both patents and software services). “The ‘degree
of comparability’ of the license agreement [is] ‘[a] factual
issue[] best addressed by cross examination and not by
exclusion.’” Virnetx, 767 F.3d at 1331 (quoting ActiveVideo
Networks, 694 F.3d at 1333). Therefore, this court finds
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Mr. Scally’s opinion should not be excluded because he relied in
part on the Licensing Economics Review article.
Fourth, Defendant argues the RoyaltySource licenses are not
sufficiently tied to the facts of this case because those
licenses were trademark licenses. (Def.’s Scally Br. (Doc. 194)
at 37-39.) Specifically, Defendant argues the RoyaltySource
licenses are not comparable subject matter because they
concerned OLEDs. (Id. at 37-38.) Additionally, Defendant argues
the RoyaltySource licenses are not economically comparable
because they “transferred world-wide patent rights and know-how”
which the hypothetical negotiation would not have involved, and
yet Mr. Scally did not adjust for that difference. (Id. at 38.)
This court finds that as a matter of law, Mr. Scally’s
opinion is not inadmissible because he relies in part on the
RoyaltySource licenses. Mr. Scally explains in his report how he
determined the degree of comparability between the RoyaltySource
licenses and the hypothetical negotiation. (See Scally Report
(Doc. 299) at 63.) He also concedes that:
the terms and technology of the license agreements
identified . . . via RoyaltySource do not precisely
align with the patented technology asserted in this
matter nor the terms of the hypothetical negotiation
. . . [but] they provide a representative range . . .
of customary royalty rates actually paid by companies
licensing technology related to LED lighting.
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(Id. at 64.) Because Mr. Scally has sufficiently explained
the comparability between the RoyaltySource licenses and
the hypothetical negotiation, Mr. Scally’s opinion should
not be excluded as a matter of law. The degree of
comparability of the RoyaltySource licenses is a question
for the jury. Virnetx, 767 F.3d at 1331.
Fifth, Defendant contests Mr. Scally’s reliance on prior
Cree licenses because those licenses arose out of litigation and
were cross-licenses that involved combinations of lump sum and
running royalty payments. (Def.’s Scally Br. (Doc. 194) at 3942.)
The Federal Circuit has held that a damages expert’s opinion
should not be excluded as a matter of law because the licenses
relied on by the expert involve a lump sum rather than a running
royalty. See Finjan, Inc. v. Secure Computing Corp., 626 F.3d
1197, 1212 (Fed. Cir. 2010) (affirming the damages award based
on licenses involving a lump sum rather than a running royalty
because “[those] differences permitted the jury to properly
discount the . . . license”).
Here, Mr. Scally explained the differences between the Cree
licenses and the hypothetical negotiation in his report. ( See
Scally Report (Doc. 299) at 63.) Mr. Scally also notes that the
agreements were negotiated in the context of ongoing litigation
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but nevertheless “provide a representative range of customary
royalty rates actually paid by companies licensing technology
related to LED lighting.” (Id.) Whether that opinion is credible
is for the jury to decide. Virnetx, 767 F.3d at 1331. Therefore,
this court finds that Mr. Scally’s opinion should not be
excluded because he relies in part on the Cree licenses.
Finally, Defendant contests Mr. Scally’s sensitivity
analysis and argues 20% is unsupported by the facts of this
case. (Def.’s Scally Br. (Doc. 194) at 42.) Plaintiff responds
that Mr. Scally uses 20% as a “sanity check” to show that his
opinion of a reasonable royalty is reasonable. (Pl.’s Scally
Resp. (Doc. 205) at 26.) Mr. Scally opines that “if Cree paid a
20% royalty rate on the Accused Sales from FY13 to FY18, the
median gross profit margin of Cree remains constant at 30%.”
(Scally Report (Doc. 299) at 67.)
This court finds that, while the logic of Mr. Scally’s
sensitivity analysis may be appealing, a reasonable royalty of
20% is not justified by the evidence relied upon by Mr. Scally.
A sensitivity analysis showing that Cree’s profit margin remains
constant despite paying a royalty on the Accused Sales is
plainly relevant to a determination of a reasonable royalty
because it tends to make it more probable that Mr. Scally’s
proffered royalty rate is reasonable. See Fed. R. Evid. 401.
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However, this court finds that because 20% is not supported by
the evidence, the jury would be misled by an implicit suggestion
that 20% is reasonable, when in fact that number is unsupported
by the evidence. See Fed. R. Evid. 403. Accordingly, this court
finds that Mr. Scally may testify about performing a sensitivity
analysis, and that his sensitivity analysis showed that a
royalty of 5% (his admissible royalty rate) is reas onable, but
he may not testify about a 20% royalty.
B.
Motion to Exclude Certain Testimony of Mr. McCreary
Plaintiff seeks to have Mr. McCreary testify as an expert
at trial and give an opinion on infringement. Mr. McCreary
opines that certain Cree products infringed claims 2-4 and 6-9
of the ‘303 patent and 1-3, 5-8, 14 and 16 of the ‘028 patent.
(See McCreary Report – Def.’s Excerpts (Doc. 198-5) at 2-5.)
Defendant moves to exclude certain testimony of Mr. McCreary
because (1) Mr. McCreary is not qualified; and (2)
Mr. McCreary’s opinion lacks a reliable methodology. (Def.’s
McCreary Br. (Doc. 198) at 5-6.) Plaintiff responds that
Mr. McCreary is qualified to testify as an expert and used a
reliable methodology in forming his opinion. (Pl.’s McCreary
Resp. (Doc. 209) at 2-3.)
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1.
Mr. McCreary’s Qualifications
Defendant argues that Mr. McCreary is not qualified as an
expert to offer an opinion on infringement. (Def.’s McCreary Br.
(Doc. 198) at 35-41.) Specifically, Defendant takes issue with
Mr. McCreary’s lack of experience designing or studying LED
lightbulbs. (Id. at 38-39.) Although Mr. McCreary’s deposition
testimony reflects that he does not have experience with LED
lightbulbs, he does have experience in the general area of
thermal analysis. Further, Mr. McCreary’s report reflects he has
experience in thermal modeling, thermal analysis, and design and
manufacturing of numerous LED lighting products. (McCreary
Report – Pl.’s Excerpts (Doc. 212-2) at 9-11.)
Defendant argues that Mr. McCreary’s “testimony ca nnot be
elicited under Fed. R. Evid. 702 absent some experience in the
specific design of LED light bulbs.” (Def.’s McCreary Reply
(Doc. 217) at 21.) That is not so. In Belk, Inc. v. Meyer Corp.,
U.S., the Fourth Circuit upheld the district court’s refusal to
exclude an expert as unqualified where the expert had general
experience in survey design but had no experience designing
trade dress or trademark surveys. 679 F.3d 146, 162 (4th Cir.
2012). The Fourth Circuit noted that the party seeking exclusion
of the expert “provide[d] no support for its argument that
consumer survey research in trade dress litigation is sui
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generis such that an expert’s lack of experience in designing
these specific surveys necessarily disqualifies him from giving
an expert opinion.” Id.
Here, Defendant has not shown that LED lightbulbs are so
unique such that Mr. McCreary must have firsthand experience
with them to opine on infringement. Mr. McCreary’s curriculum
vitae indicates he has experience in the design and manufacture
of LED lighting products and in thermal design and analysis.
This shows that Mr. McCreary has the requisite skill, training,
experience, knowledge, or education in the general area of
thermal analysis/LED lighting. See Fed. R. Evid. 702; Kumho Tire
Co. v. Carmichael, 526 U.S. 137, 147 (1999).
Further, Plaintiff argued at the October 8 evidentiary
hearing that the relevant question is not whether the LEDs are
“configured to” (or specifically designed to) conduct heat away
from solid state light sources. Rather, Plaintiff asserts the
relevant question is whether the elongate thermally conductive
member is specifically designed to conduct heat away from said
solid state light sources to fluid contained by said elongate
thermally conductive member. This court agrees. The “configured
to” claim limitation is related to the elongate thermally
conductive member, not the LEDs. See Patent ‘028 (Doc. 32-2)
col. 4, lines 43-53. This court has considered Mr. McCreary’s
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qualifications as they relate to the offered opinions a nd finds
no reason to exclude the challenged expert opinion based on the
standards articulated in Daubert and Fed. R. Evid. 702.
Mr. McCreary’s experience (or lack thereof) in the design of LED
lightbulbs can be appropriately handled through “[v]igorous
cross-examination, presentation of contrary evidence, and
careful instruction on the burden of proof,” Summit 6, LLC v.
Samsung Elecs. Co., 802 F.3d 1283, 1296 (Fed. Cir. 2015), and
left to the factfinder to determine credibility.
2.
Mr. McCreary’s Methodology
Defendant also argues that Mr. McCreary’s testimony should
be excluded because Mr. McCreary fails to identify any
methodology for his selection of the A19 Gen 1 and A19 Gen 2
computer models as representative of 47 Single Ring Accused
Products. (Def.’s McCreary Br. (Doc. 198) at 24-26.) Similarly,
Defendant argues Mr. McCreary fails to identify any methodology
for his selection of the A21 Gen 1 and Par38 computer models as
representative for the remaining 26 accused products. ( Id. at
31-32.) Plaintiff responds that Mr. McCreary’s opinion “is based
upon a comprehensive and detailed methodology.” (Pl.’s McCreary
Resp. (Doc. 209) at 6.)
In forming his opinion, Mr. McCreary “review[ed] the ‘303
and ‘028 patents and their file histories, . . . examined
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various samples of the Cree LED Bulbs as well as Cree produced
SOLIDWORKS® assembly files, technical documentation,
specifications, and literature concerning the Cree LED Bulbs
. . . .” (McCreary Report – Def.’s Excerpts (Doc. 198-5) at 6.)
Defendant produced six SOLIDWORKS files that were supposed to be
representative of at least some of the accused products.
(McCreary Report – Pl.’s Excerpts (Doc. 212-2) at 13.)
Mr. McCreary and Plaintiff’s counsel identified several
deficiencies in this production. (Id. at 14-16.) Mr. McCreary
then created SOLIDWORKS assembly files based on the Cree produced SOLIDWORKS files and modified Cree’s files to fix the
deficiencies. (Id. at 16-17.) Defendant later informed Plaintiff
of the errors in its assembly files and provided correct ed
SOLIDWORKS assembly files. (Id. at 17.) Mr. McCreary compared
the corrected files with his model “and found that the changes
mirrored the changes [he] had already made with the exception of
the shape of the LEDs that [he] had added to [his] own files
which was immaterial to the thermal simulation and its results.”
(Id.) He then performed thermal simulations in SOLIDWORKS, which
led him to conclude that the SOLIDWORKS models were
representative of the accused products, and therefore Cree’s
products infringed the Patents. (McCreary Report – Def.’s
Excerpts (Doc. 198-5) at 8-12.) This court finds that
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Mr. McCreary has sufficiently explained his methodology for
comparing the accused products to the Patents and that exclusion
of Mr. McCreary’s infringement opinion is inappropriate.
This court finds that Mr. McCreary’s methodology was based
on reliable principles and was sufficiently tied to the facts of
this case. Mr. McCreary reviewed Cree’s own SOLIDWORKS assembly
files, in which he noticed several errors and fixed the
deficiencies based on his review of physical samples of Cree
bulbs. Based on his experience in the field of LED lighting, he
determined which accused products were represented by the
assembly files. He then used the SOLIDWORKS files to perform
thermal analysis and determined that the accused products
infringed the Patents. Mr. McCreary’s methodology was
structurally sound and tied to the facts of this case.
That Mr. McCreary’s methodology was not peer-reviewed or
published does not require exclusion. “Where an expert otherwise
reliably utilizes scientific methods to reach a conclusion, lack
of [peer review or publication] may go to the weight, not the
admissibility of the expert’s testimony.” Summit 6, 802 F.3d at
1298 (quoting Knight v. Kirby Inland Marine Inc., 482 F.3d 347,
354 (5th Cir. 2007)) (internal quotation marks omitted). “To the
extent [Mr. McCreary’s] credibility, data, or factual
assumptions have flaws, these flaws go to the weight of the
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evidence, not to its admissibility.” Id. at 1299. Therefore,
this court will deny Defendant’s motion to exclude
Mr. McCreary’s testimony.3
C.
Motion to Exclude Certain Testimony of
Dr. Bretschneider
Plaintiff seeks to exclude certain testimony of
Dr. Bretschneider for four reasons: (1) Dr. Bretschneider’s
testimony “asked the wrong question”; (2) Dr. Bretschneider’s
testing protocol was flawed; (3) the testing was executed in a
flawed way; and (4) key evidence is no longer available for
inspection. (Pl.’s Bretschneider Br. (Doc. 200) at 23, 25, 30,
35.)
Defendant seeks to have Dr. Bretschneider testify at trial
regarding non-infringement. (Id. at 2.) To support his opinion
that Cree did not infringe OptoLum’s patents, Dr. Bretschneider
designed an experiment to test his opinion. (Bretschneider Am.
Report (Doc. 201-3) ¶ 337.) Dr. Bretschneider’s experiment was
3
This court finds that Defendant’s reply did not raise new
arguments, and therefore Plaintiff’s motion for leave to file a
surreply, (Doc. 219), should be denied. In this district
“[s]urreplies are generally disfavored.” Olvera-Morales v. Int’l
Labor Mgmt. Corp., 246 F.R.D. 250, 254 (M.D.N.C. 2007).
“Generally, courts allow a party to file a surreply only when
fairness dictates based on new arguments raised in the previous
reply.” DiPaulo v. Potter, 733 F. Supp. 2d 666, 670 (M.D.N.C.
2010). This court finds Plaintiff has failed to demonstrate that
fairness “justif[ies] the additional filing.” Hunter v. Town of
Mocksville, 271 F. Supp. 3d 787, 791 n.2 (M.D.N.C. 2017).
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“designed to prove that the Accused Bulbs do not comprise ‘an
elongate thermally conductive member configured to conduct heat
to fluid therein.’” (Pl.’s Bretschneider Br. (Doc. 200) at 23.)
He conducted “a series of thermal analyses to evaluate the
impact of any heat conducted to air contained within the heat
sink tower structures in different bulbs” by directly measuring
the temperature within the accused products. (Bretschneider Am.
Report (Doc. 201-3) ¶ 337.)
1.
Relevance of Experiment to Claim Limitation
Plaintiff argues Dr. Bretschneider’s testimony should be
excluded because his experiment is not relevant to the claim
element it purports to address. (Pl.’s Bretschneider Br. (Doc.
200) at 23-25.) Defendant responds that the data from
Dr. Bretschneider’s experiment “addresses the infringement
allegation because, in the absence of at least a detectable
effect from airflow in the tower structure, a heat sink
structure has not been specifically designed to transfer heat to
the airflow.” (Def.’s Bretschneider Resp. (Doc. 203) at 25
(citing Bretschneider Am. Report (Doc. 201-3) ¶ 469).) The
relevant claim limitation for purposes of Dr. Bretschneider’s
opinion is the “configured to” limitation: “said elongate
thermally conductive member being configured to conduct heat
away from said light emitting diodes to fluid contained by said
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elongate thermally conductive member.” Patent ‘303 (Doc. 32-1)
col. 4, lines 43-46; Patent ‘028 (Doc. 32-2) col. 4, lines 3831.
Dr. Bretschneider’s experiment sought to determine what
happens to the “conduction of heat to a fluid inside the
filament tower” of the accused products. (See Bretschneider Dep.
(Doc. 201-6) at 49:4-9.) This court finds that
Dr. Bretschneider’s experiment is sufficiently related to the
“configured to” claim element. The “configured to” claim element
concerns the elongate thermally conductive member being
specifically designed to conduct heat away from the LEDs. If the
accused products are also specifically designed to conduct heat
away from the LEDs, then the accused products would infringe the
Patents. Dr. Bretschneider’s opinion is that the accused
products do not meet the “configured to” claim limitation
because there were no noticeable differences in temperature
inside the filament towers, and therefore the accused products
do not infringe. (Bretschneider Am. Report (Doc. 201-3) ¶ 192.)
Dr. Bretschneider’s experiment also serves to rebut Plaintiff’s
expert’s opinion on infringement. (Id. ¶ 591.) Because
Dr. Bretschneider sought to determine whether the accused
products met the “configured to” claim element, his experiment
is relevant to the infringement claims in this case.
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2.
Dr. Bretschneider’s Methodology
Plaintiff also argues that Dr. Bretschneider’s testimony
should be excluded because his methodology was flawed. (Pl.’s
Bretschneider Br. (Doc. 200) at 25-30.) Defendant responds that
Dr. Bretschneider’s report reflects he used reliable methodology
based on industry standards, and his experiment was rep licable
and controlled for error. (Def.’s Bretschneider Resp. (Doc. 203)
at 30; Bretschneider Am. Report (Doc. 201-3) ¶ 338.)
This court finds that Dr. Bretschneider used reliable
methodology. Based on Dr. Bretschneider’s experience designing,
manufacturing, testing, and developing LED lightbulbs as well as
his experience developing and monitoring testing procedures and
standards for LED lightbulbs, Dr. Bretschneider developed his
testing methodology and incorporated appropriate industry
protocols to ensure reliability and accuracy of the data.
(Bretschneider Am. Report (Doc. 201-3) ¶ 338.) Dr. Bretschneider
used “industry accredited test facilities, properly calibrated
of the testing equipment and measurement tools, industry
standard environmental conditions and industry standard
statistical data analysis.” (Id.) In short, Dr. Bretschneider’s
experience with LED lightbulbs and testing LED lightbulbs
informed his methodology.
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Plaintiff points to the foam used to block air flow in the
filament tower as evidence of a flawed methodology. (Pl.’s
Bretschneider Br. (Doc. 200) at 25.) Plaintiff complains that it
is impossible to know the thermal properties of the foam used by
Dr. Bretschneider. (Id.) Dr. Bretschneider explains why he used
the foam in his report. (Bretschneider Am. Report (Doc. 201-3)
¶ 342.) “Open celled foam was chosen over closed cell foam to
minimize any pressure applied to the thermocouple inside the
filament tower. Pressure applied to the thermocouple could shift
its position relative to the interior surface and create
temperature artifacts that would have impacted the integrity of
the data.” (Id.) Plaintiff has not offered any reason why it was
inherently unreliable for Dr. Bretschneider to use that foam or
why Plaintiff is not able to test the foam itself to determine
its thermal properties. Plaintiff concedes the foam used by
Dr. Bretschneider is readily available for purchase at major
retailers. This court finds Plaintiff’s reasons for exclusion
based on Dr. Bretschneider’s methodology to be insufficient.
Defendant has met its burden to show that Dr. Bretschneider’s
methodology was reliable.
3.
Dr. Bretschneider’s Application of Methodology
Plaintiff further argues that Dr. Bretschneider did not
reliably apply his methodology because his protocol was not in
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writing and the technicians were unqualified. (Pl.’s
Bretschneider Br. (Doc. 200) at 30-31.) Defendant responds that
Dr. Bretschneider reliably applied the methodology set forth in
his expert report. (Def.’s Bretschneider Resp. (Doc. 203) at
34.)
Plaintiff points out that the testing procedures called
“foam in and foam out” testing, but the data reflects some of
the technicians first measured temperature with foam out and
then with foam in the filament tower. (Pl.’s Bretschneider Br.
(Doc. 200) at 34.) However, Plaintiff has not offered a reason
as to why this affects the reliability of Dr. Bretschneider’s
application of his methodology. For example, Plaintiff does not
argue that the temperature results would be different if
Dr. Bretschneider first measured the temperature with the foam
out rather than with the foam in. Plaintiff will have the
opportunity at trial to test the credibility of
Dr. Bretschneider’s conclusions, but that is not a matter for
this court to decide. See Gen. Elec. Co. v. Joiner, 522 U.S.
136, 154 (1997) (Stevens, J., concurring in part and dissenting
in part) (“Daubert quite clearly forbids trial judges to assess
the validity or strength of an expert’s scientific conclusions,
which is a matter for the jury.”). Regarding the supervision of
the experiment, Dr. Bretschneider testified at his deposition
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that he used his experience and knowledge to train the
technicians running his experiment. (See Bretschneider Dep.
(Doc. 201-6) at 82:16-83:17.) He also spent several days
observing the actual testing. (Id. at 87:13-17.) This court
finds that Defendant has met its burden to show
Dr. Bretschneider reliably applied his methodology and Plaintiff
has failed to prove otherwise.
4.
Unavailability of Inspection of Experiment
Finally, Plaintiff argues that Defendant should be
sanctioned for destruction of evidence. (Pl.’s Bretschneider Br.
(Doc. 200) at 35.) Defendant responds that all of
Dr. Bretschneider’s sample lightbulbs are preserved and will be
used at trial. (Def.’s Bretschneider Resp. (Doc. 203) at 37.)
Defendant gave Plaintiff the opportunity to inspect the
lightbulbs during discovery. (Id.) Plaintiff essentially
complains that it did not have the opportunity to inspect the
lightbulbs when the foam was inside the filament tower. (Pl.’s
Bretschneider Br. (Doc. 200) at 35.) However, Plaintiff cites no
rule that would have required Defendant to have made available
for inspection Dr. Bretschneider’s experiment at every stage of
the experiment. This court finds Plaintiff’s dissatisfa ction
with the state of the sample lightbulbs insufficient to exclude
Dr. Bretschneider’s testimony.
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In conclusion, this court is satisfied that
Dr. Bretschneider’s testimony comports with Federal Rule of
Evidence 702 and Daubert. Therefore, this court will deny
Plaintiff’s motion to exclude Dr. Bretschneider’s testimony.
III. CONCLUSION
For the reasons set forth above,
IT IS THEREFORE ORDERED that Defendant’s Daubert Motion
Precluding Certain Testimony of William B. Scally, (Doc. 193),
is GRANTED.
IT IS FURTHER ORDERED that Defendant’s Daubert Motion to
Exclude Certain Testimony of Charles McCreary, (Doc. 197), is
DENIED.
IT IS FURTHER ORDERED that Plaintiff’s Motion to Exclude
Certain Testimony of Dr. Eric Bretschneider, (Doc. 199), is
DENIED.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Leave to
File a Surreply, (Doc. 219), is DENIED.
IT IS FURTHER ORDERED that this Memorandum Opinion and
Order is FILED UNDER SEAL and the parties shall file, within ten
(10) days of the filing of this Opinion, a joint report
identifying the information in the Opinion, if any, they contend
should be redacted, along with an explanation of the basis for
their proposed redactions and a draft of this Opinion with those
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proposed redactions. Because information contained herein will
likely be considered confidential information by the parties,
this Opinion shall remain sealed until the parties have had an
opportunity to submit their requested redactions.
This the 24th day of November, 2021.
__________________________________
United States District Judge
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