Alifax Holding Spa v. Alcor Scientific Inc. et al

Filing 288

MEMORANDUM AND ORDER granting in part 230 MOTION TO EXCLUDE THE OPINIONS OF EXPERT WITNESS CHRISTOPHER J. BOKHART. So Ordered by Chief Judge William E. Smith on 4/30/2019. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
ALIFAX HOLDING SPA,
)
)
Plaintiff,
)
)
v.
)
C.A. No. 14-440 WES
)
ALCOR SCIENTIFIC INC.; and
)
FRANCESCO A. FRAPPA,
)
)
Defendants.
)
___________________________________)
MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
Before the Court is Defendants’ Motion to Exclude the Opinions
of

Expert

Witness

Christopher

J.

Bokhart

(ECF

No.

230).

Mr. Bokhart has proffered opinions concerning damages for the
Plaintiffs’ claims of patent infringement, copyright infringement,
and trade secret misappropriation.

The Defendants have asked the

Court to exclude Mr. Bokhart’s opinions in their entirety.

The

Court heard extensive argument on this motion over two days; the
motion was granted in part and denied in part in two earlier
rulings.1

1 The Court held Mr. Bokhart could opine concerning patent
infringement damages; his opinion concerning copyright infringement damages has been excluded. See generally Mem. & Order, ECF
No. 277.
2

The Court kept the remainder of the motion under advisement
and bifurcated the trial into a liability phase and a damages
phase.

During trial, the claims narrowed.

The copyright claim

fell away with the exclusion of Mr. Bokhart’s damages testimony;
the patent infringement claim was withdrawn (with the Court entering judgment for the Defendants) after the evidence fell short
of proving the allegations.

Thus, the case has been narrowed to

one alleging trade secret misappropriation and breach of a confidential relationship.
The Court held a lengthy conference with the parties to discuss the scope and admissibility of Mr. Bokhart’s opinions after
the jury returned a verdict finding liability on April 30, 2019.
This order now addresses the last subject of Mr. Bokhart’s opinions: damages for trade secret misappropriation.
For the reasons that follow, the Defendants’ motion is GRANTED
IN PART and Mr. Bokhart’s opinions concerning trade secret misappropriation damages are EXCLUDED in their entirety.
I.

Bokhart’s Trade Secret Damages Opinion
Mr. Bokhart advances two damages theories based on these

claims:

(1) a general opinion that Alifax is entitled to recover

“all earned revenue”2 from the sale of Alcor’s iSED analyzers

2
Plaintiffs contend that the Restatement (Third) of Unfair
Competition places the burden of apportioning revenues on the Defendants and that the Rhode Island Supreme Court would likely adopt
3

(including convoyed sales) from fiscal year 2012 through at least
September 30, 2018, as unjust enrichment damages attributable to
misappropriation of all “trade secrets”; and (2) a narrower opinion
that Alifax is entitled to “head start” damages, i.e., unjust
enrichment specifically arising from any temporal advantage obtained by the misappropriation of one particular trade secret —
“the trade secret related to software and firmware . . . .”3 See
Expert Report of Christopher J. Bokhart (“Bokhart Rpt.”) ¶¶ 18993, ECF No. 237; Suppl. Expert Report of Christopher J. Bokhart
(“Suppl. Rpt.”) ¶ 11, Ex. 8.2A S n.3, ECF No. 237-1.
On April 30, 2019, the jury returned a verdict finding that
the Defendants willfully misappropriated three trade secrets:
(1)

Using a clear, plastic capillary photometer sensor (“CPS”) in an automated ESR
analyzer, but only through February 6,
2014;

(2)

Portions of computer program source code
concerning the conversion of photometric
measurements, including source code containing four specific conversion constants ; and

(3)

Information concerning an anemia factor
set forth in trial exhibits 34 and 19.4

that burden-shifting framework.
issue in a separate order.

The Court intends to rule on this

3

The Court interprets this passage as a reference to trade
secret (2) above.
4

The jury found that only Frappa misappropriated Alifax’s
“anemia factor” trade secret.
4

See Trial Tr. Vol. 10 at 14:21-15:18, 15:25-16:16.

An earlier

formulation of the “source code” trade secret included alleged
code used by Alifax to obtain or acquire photometric measurements.
See, e.g., Pl.’s Second Am. Identification of Misappropriated
Trade Secrets ¶ 5, ECF No. 137-27.

Over Alifax’s objection, the

Court declined to allow Alifax’s “acquisition” theory to be presented to the jury due to a failure of proof at trial. See Charge
Conf. Tr. at 11:9-16:4.

Only “conversion” source code evidence

was presented by Alifax during the liability phase.
II.

Legal Standard
Rule 702 of the Federal Rules of Evidence instructs that an

expert may only provide opinion testimony 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.
See also Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 59293 (1993).

The Court, acting as gatekeeper, may exercise wide

discretion to admit or exclude such testimony consistent with its
obligation to ensure that the jury receives only relevant and
reliable expert evidence.

Morris v. Rhode Island Hosp., C.A. No.

13-304-ML, 2014 WL 3107296, *5 (D.R.I. July 7, 2014) (citing Gen.
Elec. Co. v. Joiner, 522 U.S. 136, 143 (1997)).
5

And “while

methodology remains the central focus of a Daubert inquiry . . .
trial judges may evaluate the data offered to support an expert’s
bottom-line opinions to determine if that data provides adequate
support to mark the expert’s testimony as reliable.”

Ruiz-Troche

v. Pepsi Cola of P.R. Bottling Co., 161 F.3d 77, 81 (1st Cir.
1998); Joiner, 522 U.S. at 146 (1997) (“A court may conclude that
there is simply too great an analytical gap between the data and
the opinion proffered.”).
Mr. Bokhart’s damages calculations need only be proven with
“reasonable certainty.”

See, e.g., Grieco ex rel. Doe v. Napoli-

tano, 813 A.2d 994, 998 (R.I. 2003).

But any damages theory must

be anchored on “sound economic and factual predicates.”

La-

serDynamics, Inc. v. Quanta Comput., Inc., 694 F.3d 51, 67 (Fed.
Cir. 2012) (quoting Riles v. Shell Exploration & Prod. Co., 298
F.3d 1302, 1311 (Fed. Cir. 2002).

This principle applies to dam-

ages for trade secret misappropriation.

See, e.g., Exmark Mfg.

Co. v. Briggs & Stratton Power Prods. Grp., LLC, 879 F.3d 1332,
1348 (Fed. Cir. 2018) (“[A] reasonable royalty award ‘must be based
on the incremental value that the . . . invention adds to the end
product.’” (quoting Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d
1201, 1226 (Fed. Cir. 2014)) (emphasis added)).

6

III. Discussion
A.

Bokhart’s “All Earned Revenue” Opinion

The Court concludes that Mr. Bokhart’s opinion that Alifax is
entitled to all earned revenue from Alcor’s iSED-related sales as
damages for misappropriation rests on an unsound factual basis and
must be excluded.
The first flaw in Mr. Bokhart’s methodology concerns the
predicate facts tying his damages theory to the harm attributable
to the alleged misappropriation.

Citing only a “[d]iscussion with

Bryan Bergeron,” Bokhart Rpt. ¶ 192 n. 296, Plaintiff’s technical
expert, he states:
I understand that Alifax’s trade secrets have
a direct, causal relationship to the ability
to produce an ESR result in 20 seconds. Specifically, the trade secrets enabled Alcor to
learn how to generate a signal when analyzing
a blood sample and how to process that signal
into an ESR value.
Id. at ¶ 192.5

The Court has scoured Dr. Bergeron’s disclosures

and deposition testimony.

He does not opine that any specific

trade secret – or that Alifax’s trade secrets combined – causes
the iSED to produce ESR results in 20 seconds.

Dr. Bergeron has

expressed no opinion whatsoever concerning the plastic CPS or

5 While its meaning is by no means clear, the Court interprets
the second sentence of this paragraph as a reference to the earlier
formulation of trade secret (2) above, i.e., portions of computer
program source code.
7

Alifax’s research about myeloma and anemia.6

And his conclusions

about portions of Alifax’s computer program code are strictly limited to considering whether these materials comprise trade secrets.

See Expert Report of Bryan Bergeron (“Bergeron Rpt.”) ¶ 7,

ECF No. 144-11 (disclosing opinion that programming at issue “concerned information that has value from not being generally known
to or readily ascertainable by other persons using proper means”)
If Dr. Bergeron had other opinions about a competitive advantage obtained by Alcor from any alleged trade secret, they were
not disclosed, and Mr. Bokhart cannot serve as his proxy.

See

Dura Auto. Sys. of Ind., Inc. v. CTS Corp., 285 F.3d 609, 614 (7th
Cir. 2002) (“A scientist, however well credentialed he may be, is
not permitted to be the mouthpiece of a scientist in a different
specialty. That would not be responsible science.”).

Without an

opinion that – at a minimum – Alifax’s proprietary computer code
contributes to the iSED’s 20-second results, Mr. Bokhart’s “all
earned revenue” opinion is nothing more than ipse dixit; it has no
factual foundation.

Such a shortcoming cannot be written off as

merely affecting the weight of the evidence.

See Irvine v. Murad

Skin Research Labs., Inc., 194 F.3d 313, 321 (1st Cir. 1999)
(“[T]he basic premise of the expert’s opinion to justify damages

6 This is undisputed. See Pl.’s Statement of Disputed Facts
¶¶ 98, 107, ECF No. 161-1.
8

. . . is flawed. Absent adequate factual data to support the
expert’s conclusions his testimony [is] unreliable.”); Rothbaum v.
Samsung Telecomms. Am., LLC, 52 F. Supp. 3d 185, 196 (D. Mass.
2014) (excluding opinions because they were “not supported by the
data [the expert] cites, and they do not satisfy Rule 702’s requirement that his testimony [be] based on sufficient facts or
data” (quotation marks omitted)).
This flaw is underscored by Mr. Bokhart’s failure to account
for dramatic shifts in this action’s factual landscape over time.
Mr. Bokhart’s initial report explains that Alifax first identified
nearly a dozen misappropriated trade secrets.
43.

See Bokhart Rpt. ¶

Since he issued that report, the number and nature of those

trade secrets have narrowed significantly: just four trade secrets
were presented to the jury.

See Trial Tr. Vol. 10 at 13:22-14:13.

Nevertheless, Mr. Bokhart neither decreased his damages calculation nor explained why no decrease is warranted.7

Thus, his “all

earned revenue” opinion is, on its face, unmoored to the scope of
the alleged harm and must be excluded.

See Joiner, 522 U.S. at

146.

7
Mr. Bokhart’s damages valuation has only increased over
time due to additional iSED sales. See Suppl. Rpt. ¶ 11.
9

B.

Bokhart’s “Head Start” Opinion

The Court reaches a similar conclusion regarding head start
damages.

In Mr. Bokhart’s opinion, Alifax is entitled to unjust

enrichment damages specifically arising from the temporal advantage Alcor obtained by misappropriating one trade secret “related to software and firmware . . . .” Suppl. Rpt. Ex. 8.2A S
n.3.

This conclusion, in turn, rests on a purported opinion from

Dr. Bergeron that “Alcor’s use of the trade secret related to
software and firmware provided it an advantage of at least one
month of development time.” Suppl. Rpt. Ex. 8.2A S n.3.

Mr.

Bokhart provides no specific citation to Dr. Bergeron’s report for
this conclusion.

See id.

In his initial report, Dr. Bergeron

opines that it would have taken “a skilled engineer . . . at least
one entire month working full time just to program the signal
acquisition features of the instrument.”
phasis added).

Bergeron Rpt. ¶ 44 (em-

In his report, Dr. Bergeron does not opine con-

cerning how long it would take an engineer, or any other person of
skill, to program an instrument to convert photometric measurements to an ESR value.8 Relying on other fact witnesses’ testimony,
Mr. Bokhart extrapolates that Dr. Bergeron’s estimated one-month

8
Dr. Bergeron states that he understands it took Alifax’s
researchers three years to develop a conversion algorithm, but
offers no express opinion about whether that period reflects the
time it would take to develop a method to convert photometric data
into an ESR value. See Bergeron Rpt. ¶ 45.

10

delay would have in fact postponed the iSED’s launch by at least
a full year to coincide with the next clinical chemistry trade
show.

Suppl. Rpt. Ex. 8.2A S n.3.

He concludes, therefore, that

Alcor was unjustly enriched by at least one additional year of
revenue as “head start” damages.

Id.

The Defendants argue that this opinion should be excluded
because (1) it was not disclosed in Mr. Bokhart’s initial report;
and (2) it is speculative.

The Defendants are right to complain

about the minimalist disclosure of Mr. Bokhart’s head start opinion.

His first report does not appear to reference such damages.

So-called “head start” damages appear only in a lengthy footnote
in an exhibit on page 69 of his 151-page supplemental report.9

See

Suppl. Rpt. Ex. 8.2A S n.3.
Under most circumstances, the Court would not consider such
a disclosure adequate or timely under Fed. R. Civ. P. 26.

Exclu-

sion is the presumptive sanction for such a violation. See Lohnes
v. Level 3 Commc’ns, Inc., 272 F.3d 49, 60 (1st Cir. 2001).

The

Court is not, however, stripped of all discretion, particularly if
the Defendants had been put on notice and were not unfairly prejudiced

by

the

inadequate

disclosure.

See

Santiago-Díaz

v.

9 Notably, when asked to direct the Court to where in the
record Mr. Bokhart disclosed this opinion aside from this footnote,
counsel pointed the Court to his deposition testimony rather than
his initial report.
11

Laboratorio Clínico Y De Referencia Del Este, 456 F.3d 272, 276
(1st Cir. 2006).

And here, it appears that the Defendants ques-

tioned Mr. Bokhart about the relationship between his trade-secret
opinions and Dr. Bergeron’s one-month estimate during his December
2017 deposition.

See Bokhart Dep. 190-192, ECF No. 250-1.

The

record thus suggests that Defendants had some awareness of this
theory or related concepts before January 2019.10

Accordingly,

under these peculiar circumstances, the adverse effects of any
surprise do not, in and of themselves, merit total preclusion.
See Macaulay v. Anas, 321 F.3d 45, 51 (1st Cir. 2003) (stating
“[s]urprise and prejudice” are the important factors in a district
court’s decision to preclude untimely expert testimony).
Even if Mr. Bokhart’s opinion was sufficiently (if barely)
disclosed, the Court concludes that, like his “all earned revenues”
opinion, it proceeds from a flawed factual premise that cannot
comport with any basis for the jury’s verdict of misappropriation.
Bokhart’s “head start” analysis is wholly reliant on Dr. Bergeron’s
opinion that Alcor’s “use of [Alifax’s] trade secret related to
software and firmware” provided it with a one-month advantage.
But Dr. Bergeron’s opinion was not general; it was specific.

The

alleged one-month advantage was expressly tied to programming “the

10 The Court was provided only with excerpts of Mr. Bokhart’s
deposition; thus, it has been unable to review his complete testimony.
12

signal acquisition features of the instrument.”
44 (emphasis added).

Bergeron Rpt. ¶

It had nothing whatsoever to do with the

trade secret that the jury found the Defendants misappropriated:
source code concerning the conversion of photometric measurements.
As noted above, there was no evidence presented in the liability
phase of the trial pertaining to “signal acquisition” – all of the
source code evidence related directly to the “conversion algorithm.”

This is a critical difference, and the jury was not given

“signal acquisition” as an element of the trade secret because of
this failure of proof.

Thus, Mr. Bokhart’s head start conclusions

are derived from an opinion related to a trade secret theory the
Court rejected as unsupported by the evidence.
Tr. 11:9-16:4.

See Charge Conf.

Because the remaining theory has no relationship

to a misappropriation found by the jury, it is unreliable and
inadmissible.11

11 The Court recognizes that Dr. Bergeron appeared to drift
from his disclosed opinions by testifying at trial that “[i]t would
definitely take months” to develop a “commercially viable conversion algorithm if you were starting from scratch[.]” Trial Tr.
Vol. 3 at 115:23-116:1. As discussed above, however, this opinion
is not disclosed in Dr. Bergeron’s report. Federal Rule of Civil
Procedure 26(a)(2)(D) establishes the timeline for expert disclosures and Rule 37(c) expressly prohibits a party from using information at trial that was not provided as required by Rule 26(a).
Accordingly, the Court will not permit Mr. Bokhart offer an opinion
based on another expert’s conclusions voiced for the first time in
his trial testimony.

13

IV.

Conclusion
For the aforementioned reasons, Defendants’ Motion to Exclude

the Opinions of Expert Witness Christopher J. Bokhart (ECF No.
230) is GRANTED IN PART.

Mr. Bokhart’s opinions concerning trade

secret misappropriation damages are EXCLUDED in their entirety.
IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: April 30, 2019

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