Alifax Holding Spa v. Alcor Scientific Inc. et al

Filing 357

MEMORANDUM AND ORDER granting in part and denying in part 354 MOTION/Defendants' Request for Case Management Order Permitting Alcor to File Motion for Summary Judgment and Set the Limited Scope of any Second Trial; and, denying 306 MOTION for Exceptional Case Determination Under the Patent Act and For Attorney and Expert Fees. Additional briefing due as described. So Ordered by District Judge William E. Smith on 7/16/2021. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________

)
)
)
Plaintiff,
)
)
v.
)
)
ALCOR SCIENTIFIC INC.; and
)
FRANCESCO A. FRAPPA,
)
)
Defendants.
)
___________________________________)
ALIFAX HOLDING SPA,

C.A. No. WES 14-440

MEMORANDUM AND ORDER
WILLIAM E. SMITH, District Judge.
At

trial,

Alifax’s

claims

were

gradually

whittled

down.

Alifax Holding Spa v. Alcor Sci. Inc., 404 F. Supp. 3d 552, 558
(D.R.I. 2019).

The jury returned a verdict in favor of Alifax,

but the Court granted in part Defendants’ renewed request for
judgment as a matter of law and ruled that retrial was necessary
on the claim that Defendants misappropriated Alifax’s conversion
algorithm.
repeatedly.

Id. at 582.

Subsequent attempts at settlement failed

During a conference in February, the Court instructed

Defendants to file a motion addressing, inter alia, their request
to file a renewed summary judgment motion and the scope of the new
trial.

The Court also invited the parties to submit supplemental

memoranda

regarding

Alcor’s

Motion

for

an

Exceptional

Case

Determination Under the Patent Act and for Attorney and Expert
Fees (“Alcor’s Motion for Patent Legal Fees”), ECF No. 306.
For the reasons that follow, Defendants’ request to file a
renewed motion for summary judgment is DENIED, Defendants’ request
to limit the scope of the new trial is GRANTED IN PART, and Alcor’s
Motion for Patent Legal Fees is DENIED. The parties are instructed
to

submit

further

briefing,

as

explained

below,

regarding

potential damages on the remaining claim. 1
I.

SUMMARY JUDGMENT
In a renewed motion for summary judgment, Alcor would argue

that the four conversion constants are not trade secrets because
they can be derived using simple regression analysis.

See Defs.’

Request for Case Management Order Permitting Alcor to File Mot.
for Summ. J. and Set the Limited Scope of Any Second Trial (“Defs.’
Mot. for CMO”) 2-5, ECF No. 354.

However, the Court already ruled

on this issue in its post-trial decision:
The jury’s finding that the conversion algorithm was a
trade secret was reasonably supported by Alifax’s
evidence. . . . Converting the optical data into a
reliable,
Westergren-correlated
[erythrocyte
sedimentation rate (“ESR”)] value is a critical step in
the process. . . . Duic testified that there were “no
mathematical models in the market” for correlating
optical signal data to Westergren results when Alifax
developed its conversion algorithm. . . . Without a
This decision assumes familiarity with the case.
For
additional background, the reader is referred to the Court’s posttrial decision on Defendants’ renewed request for judgment as a
matter of law. See Alifax Holding Spa v. Alcor Sci. Inc., 404 F.
Supp. 3d 552 (D.R.I. 2019).
1

2

correlation algorithm, Alifax’s instruments could not
generate ESR results.
The algorithm was not publicly
known and not readily accessible to purchasers of Alifax
instruments.
Alifax, 404 F. Supp. 3d at 567 (citations omitted).

Moreover,

Alcor’s arguments regarding the ease of doing regression analysis
via

publicly

available

expert discovery.

tools

would

likely

require

See Defs.’ Mot. for CMO 5.

additional

As stated below,

discovery closed years ago, and no new discovery will be allowed.
Alcor

also

argues

that

the

conversion

economic value in non-Alifax machines.
this

argument

findings:

directly

contradicts

algorithm

had

See id. at 3-4.
the

Court’s

no

Again,

post-trial

“[A]t least one rational interpretation of the evidence

supports the conclusion that Alcor made some use of Alifax’s
algorithm,

indicating

competitive advantage.

that

the

information

confers

some

This is enough evidence (if barely) to

find that Alifax’s conversion algorithm containing four specific
constants had independent economic value from not being generally
known or readily ascertainable.”

Alifax, 404 F. Supp. 3d at 567-

68 (citing R.I. Gen. Laws § 6-41-1).
Alcor’s last argument for summary judgment is that Alifax did
not take sufficient steps to protect its purported trade secret.
See Defs.’ Mot. for CMO 4-5.

Once more, this contention runs

counter to a specific ruling of the Court:

“[The] evidence was

sufficient to support the jury’s conclusion that Alifax’s took
3

reasonable efforts under the circumstances to maintain the secrecy
of its conversion algorithm.”

Alifax, 404 F. Supp. 3d at 568.

Thus, Alcor’s request to file a second motion for summary
judgment is, in fact, a motion for reconsideration of the Court’s
post-trial decision.
decision

As with any interlocutory ruling, that

“‘remain[s]

open

entry of [final] judgment.”

to . . .

reconsideration’

until

the

Nieves-Luciano v. Hernandez-Torres,

397 F.3d 1, 4 (1st Cir. 2005) (quoting Geffon v. Micrion Corp.,
249 F.3d 29, 38 (1st Cir. 2001)).

However, for reasons recounted

here and explained in the post-trial decision, reconsideration is
not warranted.

Therefore, Alcor’s request for permission to file

a renewed motion for summary judgment is denied.
II.

SCOPE OF NEW TRIAL
In their Motion, Defendants raise three issues regarding the

scope of the new trial.
A.

New Evidence

Discovery in this case was extensive.

More than four years

elapsed between the filing of the original Complaint and the final
close of discovery.

See Compl., ECF No. 1 (filed Oct. 7, 2014);

Jan. 11, 2019 Mem. & Order 2, ECF No. 212 (granting motion to
compel the production of source code). The Court has issued dozens
of written decisions regarding discovery disputes and substantive
motions.

See,

e.g.,

Jan.

11,

discovery for limited purposes).

2019

Mem.

&

Order

(reopening

At some point, enough is enough,
4

and that point has long passed.
judicial

efficiency,

permitted.

no

new

For reasons of fairness and

evidence

or

witnesses

will

be

See Fusco v. Gen. Motors Corp., 11 F.3d 259, 267 (1st

Cir. 1993) (“[T]he discovery deadline had long since passed and
the district court had no automatic obligation to reopen the
discovery period.

The matter was one for the informed discretion

of the trial judge, and the breadth of that discretion in managing
pre-trial mechanics and discovery is very great.”); Oriental Fin.
Group, Inc. v. Fed. Ins. Co., 483 F. Supp. 2d 161, 167 (D.P.R.
2007) (barring new discovery where “the exclusion of new evidence
would not result in manifest injustice to either party”).
B.

Signal Acquisition Trade Secret

At trial, Alifax sought to prove two software trade secrets,
both of which were contained within the second count of its Second
Amended Complaint.

See Second Am. Compl. ¶¶ 61-70, ECF No. 68.

The first involved the process by which Alifax’s devices gathered
ESR-related raw data through signal acquisition.
Conference

Tr.

12-15,

ECF

No

345.

The

second

See Charge
involved

the

algorithm that converted that raw data into Westergren-equivalent
values.

See id.; Alifax, 404 F. Supp. 3d at 567-68.

At the charge

conference, the Court noted that all of the pertinent evidence
“concern[ed] the use of the so-called four constants” in the
conversion algorithm, and therefore ruled that the evidence would
not “support a finding by the jury that source code or software
5

used in Alifax’s analyzers were misappropriated to acquire the
photometric measurements.”

Charge Conference Tr. 12; see also id.

at 15-16.
Defendants now argue that this limitation should also apply
to the new trial, thus barring Alifax from advancing a theory of
misappropriation of a signal acquisition trade secret.
Mot. for CMO 9-10.

Defs.’

In response, Alifax contends that a trial on

solely the conversion algorithm, without a signal acquisition
claim, “would inevitably cause confusion and uncertainty for the
jurors, who would wonder why Alifax was not claiming that all its
software was a trade secret.”

Pl.’s Mem. in Opp’n to Defs.’

Request for Case Management Order (“Pl.’s Opp’n to Defs.’ Mot. for
CMO”) 6, ECF No. 355.
A partial retrial is inappropriate “unless it clearly appears
that the issue to be retried is so distinct and separable from the
others that a trial of it alone may be had without injustice.”
Gasoline Prods. Co. v. Champlin Refining Co., 283 U.S. 494, 500
(1931). Based on its extensive involvement in this case, the Court
concludes that the distinction between signal acquisition and
conversion can be readily grasped by a lay jury.

Indeed, the

complexity of this distinction is dwarfed by that of other concepts
involved in Alifax’s theory of liability.

The signal acquisition

claim “ha[s] been properly and conclusively resolved,” and the
remaining issue of the conversion constants is “so distinct and
6

separable from the [signal acquisition claim] that a trial [on the
conversion constants] alone may be had without injustice.” See
Drumgold v. Callahan, 707 F.3d 28, 46 (1st Cir. 2013) (quoting
Gasoline Prods., 283 U.S. at 500); see also Oriental Fin. Group,
483 F. Supp. 2d at 166 (holding that issue resolved at previous
trial

was

“sufficiently

separable

[from

remaining

issues]

to

permit the former to be submitted to a new jury independently from
the

other

issues

without

confusion

or

uncertainty”

(citing

Gasoline Prods., 283 U.S. at 500)).
Therefore, the scope of Alifax’s claim on retrial will be
limited to the conversion algorithm.

Alifax will not be permitted

to pursue its theory that Defendants misappropriated a signal
acquisition trade secret.
C.

Damages Expert

At trial, Alifax sought to introduce expert testimony from
Christopher J. Bokhart on the issue of damages caused by trade
secret misappropriation.
288.

April 30, 2019 Mem. & Order 2, ECF No.

In his expert report, Mr. Bokhart opined that Alifax was

entitled (based on a theory of unjust enrichment) to all of Alcor’s
earned revenue from iSED sales.

Id. at 3-4.

The Court excluded

this theory because it “rest[ed] on an unsound factual basis.”
Id. at 7.

Additionally, Alifax sought to introduce Mr. Bokhart’s

opinion that Alifax was entitled to one year of iSED revenue based
on a “head-start” theory.

Id. at 4.
7

However, the head-start

theory was dependent on Dr. Bryan Bergeron’s statement that the
software would take at least one month to create from scratch
(which Mr. Bokhart expanded to a one-year head start based on trade
show schedules).
never discussed

Id. at 10-11.
the

amount

As the Court noted, Dr. Bergeron

of

time

necessary

to

develop

the

conversion software; rather, he opined that the signal acquisition
software would take a month to produce.

Id. 2

Therefore, the Court

excluded Mr. Bokhart’s head-start testimony as “unreliable and
inadmissible.”

Id. at 13.

As discussed, no new discovery will be allowed on retrial.
Therefore, the Court’s rulings on Defendants’ Motion to Exclude
the Opinions of Expert Witness Christopher J. Bokhart, ECF No.
230, will apply with full force at the second trial.
Defendants

argue

that,

without

Mr.

Bokhart’s

testimony,

Alifax has no evidence that the alleged misappropriation of trade
secrets caused damages.

See Defs.’ Mot. for CMO 10, 13.

Alifax

does not provide a substantive response. See Pl.’s Opp’n to Defs.’
Mot. for CMO 12-13.

Instead, Alifax argues that the Court did not

solicit briefing on this issue and that the matter should be left
until later.

See id.

The Court disagrees.

Within one week of

the issuance of this decision, Alifax shall articulate its theory
The Court’s decision to exclude parts of Mr. Bokhart’s
testimony was issued after the liability phase (during which the
signal acquisition claim was tossed out), but before the damages
phase.
2

8

of damages in a filing of no more than five pages, with citations
to any evidence that supports its theory.

Moreover, if there is

no admissible evidence regarding damages stemming from the alleged
misappropriation of the conversion algorithm, Alifax must explain
why

it

should

not

be

limited

to

seeking

nominal

damages.

Defendants shall file a reply of no more than five pages within
three business days of the filing of Alifax’s brief.
III. PATENT LEGAL FEES
Under 35 U.S.C. § 285, “[t]he court in exceptional [patent]
cases may award reasonable attorney fees to the prevailing party.”
Invoking this provision, Alcor submitted a post-trial request for
the legal fees it incurred defending the patent claims.
Alcor’s Mot. for Patent Legal Fees 1.

See

The Court denied the Motion

as moot, stating that it could not ascertain which party had
prevailed until after the new trial.

Sept. 5, 2019 Text Order.

However, at the February 25, 2021 conference, the Court invited
the parties to submit supplemental briefing on the fee request.
The

Court

has

reconsidered

its

previous

determination.

As

explained below, Alifax’s patent claims were not exceptional, and
Alcor’s Motion for Patent Legal Fees must therefore be denied on
the merits.
“[A]n ‘exceptional’ case is simply one that stands out from
others with respect to the substantive strength of a party’s
litigating position (considering both the governing law and the
9

facts of the case) or the unreasonable manner in which the case
was litigated.”

Octane Fitness, LLC v. ICON Health & Fitness,

Inc., 572 U.S. 545, 554 (2014).

“District courts may determine

whether a case is ‘exceptional’ in the case-by-case exercise of
their discretion, considering the totality of the circumstances.”
Id.

Relevant

objective

factors

include

unreasonableness

(both

“frivolousness,
in

the

factual

motivation,
and

legal

components of the case) and the need in particular circumstances
to advance considerations of compensation and deterrence.”

Id.

(quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994)).
Absent misrepresentation regarding the evidence, a plaintiff’s
success on summary judgment indicates that its patent claims were
not

frivolous

or

unreasonable.

See

Medtronic

Nav.,

Inc.

v.

BrainLAB Medizinische Computersysteme GmbH, 603 F.3d 943, 954
(Fed. Cir. 2010), and cases cited.

The party seeking fees must

prove exceptionality by a preponderance of the evidence.

Octane

Fitness, 572 U.S at 557-58.
Alcor’s basic argument is that Alifax pulled a bait and switch
regarding its theory of patent infringement.
Patent Legal Fees 15-16.

Alcor’s Mot. for

According to Alcor, Alifax represented

to the Court that it would show literal infringement, all the while
pursuing a theory based on the doctrine of equivalents. 3

Id.

Under the doctrine of equivalents, “a product or process
that does not literally infringe upon the express terms of a patent
3

10

Furthermore, Alcor contends, Alifax was estopped from pursuing a
doctrine-of-equivalents claim due to its actions during patent
prosecution.

Id. at 3.

Alifax’s
tenuous.

argument

for

literal

infringement

was

always

However, the Court was well aware of the creativity

inherent in Alifax’s theory. The Court’s summary judgment decision
explains the needle that Alifax was attempting to thread and why
the Court allowed the patent claims to go forward.

Prior to

summary judgment, the Court had construed the limitations in the
two patents to mean “processing the acquired optical density or
absorbance data to obtain the speed of sedimentation, viscosity,
elasticity and density.”

Mar. 26, 2019 Mem. & Order 10, ECF No.

244 (citation and quotations omitted).

And at summary judgment,

the Court recognized that “the iSED does not measure, record, or
report any measurement for the viscosity, elasticity, or density
of blood.”

Id.

“[o]btaining

a

However, the Court rejected Alcor’s argument that
parameter

in

the

context

of

the

patents-in-

suit . . . means obtaining a numerical value for that parameter”
and “that the iSED [therefore] does not ‘obtain’ these parameters.”

claim may nonetheless be found to infringe if there is
‘equivalence’ between the elements of the accused product or
process and the claimed elements of the patented invention.”
Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 21
(1997) (quoting Graver Tank & Mfg. Co. v. Linde Air Products
Co., 339 U.S. 605, 609 (1950)).
11

Id. (citations and quotations omitted).

This was because “[n]one

of the asserted claims, as construed by the Court, include the
limitation that the iSED measures, calculates, records, reports,
or obtains a ‘numerical value’ for the parameters of viscosity,
elasticity, and density of blood.”

Id. at 10-11.

But how could the iSED obtain those parameters if it did not
produce a numerical value for them?
purposes

of

summary

judgment)

Dr.

The Court accepted (for the
Bergeron’s

answer:

the

parameters “are a function of data obtained from the [iSED’s]
optical

density

readings;

thus

by

processing

optical

density

measurement data the iSED obtains the correlated parameters.”
at 11 (citations and quotations omitted).
Alifax’s theory did not pan out.

Id.

At trial, though,

Dr. Bergeron testified, arguably

inconsistently with his previous conclusions, that the iSED did
not obtain viscosity, elasticity, or density, and Alifax decided
to drop the patent claims.

Trial Tr., Vol. 4, at 88:5-18, ECF No.

341; Trial Tr., Vol. 5, at 4-6, ECF No. 342. 4

The parties had trouble agreeing on a method for disposing
of the patent claims, and the Court decided, with the parties’
approval, to reconsider its summary judgment decision and grant
judgment for Defendants on the patent claims. See Trial Tr., Vol.
5, at 76:22-78:7, ECF No. 342. This decision does not cast doubt
on the Court’s original decision to allow the patent claims to
proceed to trial. Rather, the mid-trial reconsideration was based
on Dr. Bergeron’s trial testimony and Alifax’s resulting decision
to abandon those claims. See id.
4

12

Alcor thus argues that there was never a legitimate theory of
literal infringement because the iSED did not actually obtain those
parameters; instead, the iSED merely accomplished an equivalent
task.

Alcor’s Mot. for Patent Legal Fees 8, 15.

But this argument

rehashes arguments that were rejected on summary judgment, where
the Court ruled that Dr. Bergeron’s opinion created a genuine issue
of material fact as to whether the iSED literally infringed on the
patents.

Moreover, Alcor has not shown that Alifax misrepresented

its evidence to the Court.

Rather, the evidence shifted between

summary judgment and trial.

Thus, through its summary judgment

decision, the Court indicated that the patent claims were “suitable
for resolution at trial.”

Medtronic, 603 F.3d at 954.

Based on its extensive involvement – lasting the better part
of a decade – with this litigation, the Court determines that this
case

does

not

“stand[]

out

from

others

with

respect

to

the

substantive strength of a party’s litigating position (considering
both

the

governing

law

and

the

facts

of

the

case)

unreasonable manner in which the case was litigated.”
Fitness, 572 U.S. at 554.

or

the

Octane

Accordingly, the Court withdraws its

previous decision to defer ruling.

See Sept. 5, 2019 Text Order.

Alcor’s Motion for Patent Legal Fees is denied on the merits.
IV.

CONCLUSION
For the reasons contained herein, Defendants’ request to file

a renewed motion for summary judgment is DENIED, Defendants’
13

request to limit the scope of the new trial is GRANTED IN PART,
and Defendant’s Motion for Patent Legal Fees, ECF No. 306, is
DENIED.

IT IS SO ORDERED.

William E. Smith
District Judge
Date: July 16, 2021

14