Kimberly-Clark Worldwide Inc v. First Quality Products Inc et al
Filing
1044
MEMORANDUM (Order to follow as separate docket entry) re. FQ's MOTIONs in Limine 902 and 906 . Signed by Honorable William W. Caldwell on 12/02/13. (ma)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
KIMBERLY-CLARK WORLDWIDE, INC.,
Plaintiff
:
: CIVIL NO. 1:09-CV-1685
v.
:
FIRST QUALITY BABY PRODUCTS, LLC,
FIRST QUALITY PRODUCTS, INC.,
FIRST QUALITY RETAIL SERVICES, LLC,
FIRST QUALITY HYGIENIC, INC.,
Defendants and
Counterclaim Plaintiffs
v.
:
:
:
:
KIMBERLY-CLARK CORPORATION,
KIMBERLY-CLARK WORLDWIDE, INC.,
KIMBERLY-CLARK GLOBAL SALES, LLC,
Counterclaim Defendants
:
:
MEMORANDUM
I.
Introduction
Presently before the court is a motion in limine (Doc. 906) filed by
Defendants First Quality Baby Products, LLC, First Quality Products, Inc., First Quality
Retail Services, LLC, and First Quality Hygienic, Inc. (collectively, “FQ”) on October 11,
2013. In the motion, FQ requests that the court prevent Steven S. Bullock, a purported
economic expert for Plaintiff Kimberly-Clark Worldwide, Inc. (“KC”), from offering
opinions or otherwise testifying in this patent infringement action. Specifically, FQ
contends that because the methodology employed by Mr. Bullock is improper, the court
should exclude his testimony pursuant to Federal Rule of Evidence 702.
KC opposes FQ’s motion. The matter has been fully briefed (Docs. 924,
926, 972, 1021) and is ripe for our review. For the reasons that follow, we will deny FQ’s
motion.
II.
Legal Standard
District courts have a “gatekeeping” function in connection with expert
testimony. ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 290 (3d Cir. 2012). Federal
Rule of Evidence 702, as amended in 2000 to incorporate the standards set forth by the
Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993),
requires district courts to ensure that expert testimony is not only relevant, but reliable.
ZF Meritor, 696 F.3d at 291 (citations omitted).
Rule 702 provides that:
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.
The Third Circuit has explained that Rule 702 “embodies a trilogy of
restrictions on expert testimony: qualification, reliability and fit.” Schneider v. Fried, 320
F.3d 396, 404 (3d Cir. 2003); see also Pineda v. Ford Motor Co., 520 F.3d 237, 244 (3d
Cir. 2008) (“Rule 702 has three major requirements: (1) the proffered witness must be an
expert, i.e., must be qualified; (2) the expert must testify about matters requiring scientific,
technical or specialized knowledge; and (3) the expert’s testimony must assist the trier of
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fact.”) (citation omitted). Qualification refers to the requirement that the witness possess
“specialized expertise,” which should be evaluated “liberally” because “a broad range of
knowledge, skills, and training qualify an expert.” Schneider, 320 F.3d at 404. To
establish reliability, the expert testimony “must be based on the methods and procedures
of science rather than on subjective belief or unsupported speculation; the expert must
have good grounds for his o[r] her belief.” Id.; see also Calhoun v. Yamaha Motor Corp.,
U.S.A., 350 F.3d 316, 321 (3d Cir. 2003) (noting that district courts must ensure that “the
expert’s opinion [is] based on the methods and procedures of science rather than on
subjective belief or unsupported speculation”) (citations and internal quotation marks
omitted). To satisfy the fit requirement, “the expert’s testimony must be relevant for the
purposes of the case and must assist the trier of fact.” Schneider, 320 F.3d at 404.
The burden is on the party proffering expert testimony to demonstrate that it
satisfies the requirements of Rule 702. Mercedes-Benz USA, Inc. v. Coast Auto. Grp.,
Ltd., 362 F. App’x 332, 335 n.2 (3d Cir. 2010) (not precedential) (citation omitted);
Padillas v. Stork-Gamco, Inc., 186 F.3d 412, 418 (3d Cir. 1999) (noting that the burden is
on the proponent of the expert testimony to establish its admissibility by a preponderance
of the evidence) (citations omitted).1
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Neither party has requested a Daubert hearing. Such a hearing is not required
every time an objection is raised under Daubert, and it is within our discretion to hold
one should we determine that it is necessary to resolve the pending motion. Padillas,
186 F.3d at 418. Instantly, we conclude that a Daubert hearing is not necessary as
FQ’s motion is premised on a purely legal question–the propriety of the methodology
employed by Mr. Bullock.
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III.
Background
This litigation concerns patents relating to disposable absorbent products,
such as diapers and incontinence products. The patents-in-suit cover a variety of the
components or features of these products, including the configuration of elastics,
absorbency technology, and graphics.
One of the defenses raised by FQ in this action is that it cannot be liable for
infringement of KC’s patents because the patents are invalid for “obviousness.” As the
court has previously explained (Docs. 833 at 3-4; 862 at 3), “obviousness” is a term of
art. To determine whether a patent is invalid for obviousness, one must examine
“whether the difference between the claimed invention and the prior art are such that the
claimed invention as a whole would have been obvious . . . to a person having ordinary
skill in the art.” 35 U.S.C. § 103.
KC seeks to refute this challenge and establish non-obviousness of its
patents. The Federal Circuit has explained that “in ‘determining the question of
obviousness, inquiry should always be made into whatever objective evidence of
nonobviousness there may be.’” Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317,
1323 (Fed. Cir. 2004) (quoting Vandenberg v. Dairy Equip. Co., 740 F.2d 1560, 1567
(Fed. Cir. 1984)). Objective evidence of non-obviousness includes, inter alia, evidence
regarding the “commercial success” of the claimed invention or products practicing the
claimed invention. Id.; Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387,
1392 (Fed. Cir. 1988). Evidence of commercial success is probative of non-obviousness
because “the law presumes an idea would successfully have been brought to market
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sooner, in response to market forces, had the idea been obvious to persons skilled in the
art.” Merck & Co. v. Teva Pharms. USA, Inc., 395 F.3d 1364, 1376 (Fed. Cir. 2005).
Federal Circuit precedent makes clear, however, “that a nexus must be
established between the merits of the claimed invention and evidence of commercial
success before that evidence may become relevant to the issue of obviousness.” Iron
Grip, 392 F.3d at 1324 (citation and internal quotation marks omitted); see also Merck &
Co., 395 F.3d at 1376 (“Thus, the law deems evidence of (1) commercial success, and
(2) some causal relation or ‘nexus’ between an invention and commercial success of a
product embodying that invention, probative of whether an invention was non-obvious.”).
This background is necessary to address the parties’ present dispute
regarding the admissibility of expert testimony. FQ’s purported economic expert, Dr.
Sumanth Addanki, opines in his expert report that there is no nexus between the claims
of KC’s patents and the commercial success of their products that incorporate the
patented technologies. KC’s purported rebuttal expert, Mr. Bullock, reaches the opposite
conclusion. FQ filed the instant motion in limine (Doc. 906) challenging Mr. Bullock’s
methodology and seeking to exclude his proposed testimony that the commercial
success of KC’s products is due, in part, to the patented technologies.
IV.
Discussion
In its motion in limine, FQ raises two specific challenges to Mr. Bullock’s
proposed testimony regarding commercial success of KC’s products. First, FQ argues
that his testimony fails to establish the requisite “nexus” between commercial success of
the products and the claims of the patents-in-suit. Second, FQ argues that Mr. Bullock
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improperly cites to evidence of the commercial success of FQ’s products, thereby
assuming that these products infringe the patents-in-suit. The Court will address each
argument in turn.
A.
Nexus
In his report, Mr. Bullock opines that “[t]he patented features of [KC]’s
products have been the key driver of commercial success of those products” because
they have “been critical in driving consumer repurchase” of the products incorporating
patented technologies. (Doc. 972-1 at 32). In essence, Bullock asserts that: (1) the
patents-in-suit create or contribute to certain desirable qualities of KC’s products (i.e.,
leakage protection, fit, and appearance); (2) the products meet or exceed consumer
expectations with respect to these qualities; and (3) the products–which are disposable in
nature–are commercially successful because consumers continue to purchase them after
this initial positive experience.
FQ contends that Mr. Bullock’s proposed testimony should be excluded
because he fails to establish the requisite nexus between commercial success and the
claims of the patents-in-suit. Specifically, FQ argues that the most Mr. Bullock’s report
can establish is that KC’s “products have general qualities that make them successful,”
but not that these qualities are the result of practicing the patents at issue in this litigation.
(Doc. 924 at 15). We disagree.
Mr. Bullock’s economic report relies on the analysis of KC’s technical
experts to identify the technologies covered by the patent claims and the improvements
conferred on KC’s products that practice these respective inventions. Thereafter, Mr.
Bullock discusses consumer surveys which demonstrate consumer preference for
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products that contain these improvements over products that lack such features.
Additionally, Mr. Bullock cites to internal documents and deposition testimony supporting
his conclusion that the inclusion of these patented features drives sales of KC’s products.
Such methodology is proper because “testimony concerning the
advantages of a patented feature in multi-featured products,” such as those in the instant
case, “is sufficient to support the inference of a nexus between the patented feature and
the commercial success.” Rambus Inc. v. Hynix Semiconductor, Inc., 254 F.R.D. 597,
603 (N.D. Cal. 2008) (citing Demaco, 851 F.2d at 1393); see also Masimo Corp. v. Philips
Elecs. N. Am. Corp., No. 09-80-LPS-MPT, 2013 U.S. Dist. LEXIS 70745, *46-47 (D. Del.
May 20, 2013) (concluding that “the combined opinions and testimony” of a technical
expert discussing the inventions claimed in the patents and an economic expert
addressing the commercial benefits of these patented features “demonstrate the required
nexus . . . for commercial success”).
Accordingly, the court will not preclude Mr. Bullock from testifying in this
matter for failure to establish a nexus between commercial success and the patents-insuit. FQ remains free, however, to challenge Mr. Bullock’s opinions on cross examination.
See Exelis Inc. v. Cellco P’ship, No. 09-190-LPS, 2012 U.S. Dist. LEXIS 158842, *38-40
(D. Del. Nov. 6, 2012) (denying defendants’ request to exclude expert testimony for
insufficient nexus between the claimed invention and commercial success, and
concluding that cross-examination and presentation of contrary evidence at trial was
appropriate means to challenge opinion); Pfizer Inc. v. Teva Pharms. USA, Inc., 461 F.
Supp. 2d 271, 275 (D.N.J. 2006) (finding that challenge to commercial success expert’s
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methodology went to the weight to be afforded to his testimony, not its admissibility)
(citing Liquid Dynamics Corp. v. Vaughan Co., 449 F.3d 1209, 1221 (Fed. Cir. 2006)).
B.
Commercial Success of FQ’s Products
FQ also seeks to prevent Mr. Bullock from testifying that the commercial
success of FQ’s products stems from the qualities derived from practicing the patents-insuit. FQ argues that such testimony would “put the cart before the horse” by assuming
what is in dispute in this case–that FQ’s products infringe KC’s patents. (Doc. 924 at 16).
The court will decline FQ’s request for a pretrial order precluding Mr.
Bullock from testifying that FQ’s products enjoyed commercial success as a result of the
alleged infringement of KC’s patents. See Gambro Lundia AB v. Baxter Healthcare Corp.,
110 F.3d 1573, 1579 (Fed. Cir. 1997) (noting that “the record contains significant
evidence of the commercial success” of the patented invention including the fact that
“over 14,800 dialysis machines allegedly incorporating the . . . invention were sold since
1987”). Instead, FQ will have the opportunity to cross examine Mr. Bullock regarding the
assumptions underlying his ultimate opinions, including his assumption (based on the
opinions of KC’s technical experts) that FQ’s products infringe KC’s patents.
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V.
Conclusion
For the reasons discussed above, we conclude that FQ’s motion in limine
(Doc. 906) should be denied.2 We will issue an appropriate order.
/s/ William W. Caldwell
William W. Caldwell
United States District Judge
December 2, 2013
2
FQ filed a separate motion in limine (Doc. 902) seeking to exclude any
reference to the commercial success of KC’s products. In the motion, FQ contends
that evidence of commercial success is irrelevant and should be excluded if the court
prohibits Mr. Bullock from testifying at trial. Because we will deny FQ’s request to
prevent Mr. Bullock from testifying, we will deny this separate motion in limine as well.
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