USCO S.p.A. v. ValuePart, Inc. et al

Filing 78

ORDER granting 56 Plaintiffs Motion to Exclude the Declaration of Roger Kern Regarding Claim Construction for U.S. Patent No. 6,412,267 and Request for Expedited Briefing Schedule. Signed by Judge Jon Phipps McCalla on 4/27/2015. (McCalla, Jon)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
USCO S.P.A.,
Plaintiff,
v.
VALUEPART, INC., ACE TRACK
CO., LTD., and REONE TRACK
CO., LTD.,
Defendants.

)
)
)
)
)
)
)
)
)
)

No. 2:14-cv-02590-JPM-tmp

ORDER GRANTING PLAINTIFF’S MOTION TO EXCLUDE THE DECLARATION OF
ROGER KERN REGARDING CLAIM CONSTRUCTION FOR U.S. PATENT
NO. 6,412,267 AND REQUEST FOR EXPEDITED BRIEFING SCHEDULE

Before the Court is Plaintiff’s Motion to Exclude the
Declaration of Roger Kern Regarding Claim Construction for U.S.
Patent No. 6,412,267 and Request for Expedited Briefing
Schedule, filed March 16, 2015.

(ECF No. 56.)

In the Motion,

Plaintiff USCO S.p.A. (“USCO”) seeks three alternative remedies:
1) exclude the declaration of VPI’s expert, Roger Kern;
2) “strike all improper and untimely affirmative opinions within
the Kern Declaration;” or 3) “if the Court should rule that the
Kern Declaration is admissible, USCO requests leave to allow
Dr. Fleming an opportunity to prepare a rebuttal report to
Mr. Kern’s opinions.”

(ECF No. 56-4 at 3-4.)

For the reasons

stated below, the Court GRANTS Plaintiff’s Motion.
To the extent Plaintiff’s Motion requests expedited
briefing, expedited briefing was granted by the Court in its

Order Granting Consent Motion for Expedited Briefing Schedule.
(ECF No. 61.)
I.

BACKGROUND
This case concerns allegations of infringement of U.S.

Patent No. 6,412,267 (the “’267 patent”) asserted by Plaintiff
USCO against Defendants ValuePart, Inc. (“VPI”), ACE Track Co.,
Ltd. (“ACE Track”), and REONE Track Co., Ltd. (“REONE Track”)
(collectively “the named Defendants”).
A.

Factual Background

“Plaintiff USCO is a joint stock company established under
the laws of Italy with its principal place of business in
Modena, Italy.”

(Compl. ¶ 5, ECF No. 1.)

USCO sells and uses

split master links and lubricated track assemblies that
incorporate split master links, and is the owner of the ’267
patent.

(Id. ¶¶ 2, 5.)

The ’267 patent protects a “method of manufacturing an
openable link of a track.”
PageID 44.)

(’267 patent at 1, ECF No. 1-3 at

USCO alleges that Defendant VPI has infringed and

continues to infringe the ’267 patent by “import[ing],
offer[ing] to sell, sell[ing], or us[ing] products which are
made by the claimed methods of the ’267 Patent within the United
States, the State of Tennessee, and this district, thereby
causing USCO to continue to suffer severe and irreparable harm.”
(Compl. ¶ 21.)
2

Relevant to the instant Motion, the deadline for initial
expert claim construction reports was set as February 23, 2015
by the Court’s Scheduling Order.

(ECF No. 40 at 2.)

USCO

served its initial expert claim construction report authored by
USCO’s expert Dr. Mark A. Fleming on February 23, 2015.
No. 56-4 at 4.)

(ECF

VPI did not serve an expert report or disclose

an expert witness at that time.

(Id.)

On March 9, 2015, VPI

submitted a rebuttal expert claim construction report (the “Kern
Declaration”) and disclosed Mr. Roger Kern as an expert.
at 4-5.)

(Id.

USCO alleges that the Kern Declaration contains

affirmative opinions and is in fact an initial expert report in
the guise of a rebuttal report.
B.

(Id. at 4.)

Procedural Background

On July 30, 2014, Plaintiff USCO filed a Complaint against
the named Defendants for patent infringement.
No. 1.)

(Compl., ECF

On October 1, 2014, Defendant VPI filed its Answer,

Affirmative Defenses, Counterclaims, Cross-Claims and Jury
Demand to USCO S.p.A.’s Complaint.

(ECF No. 19.)

USCO filed an

Answer to Defendant ValuePart, Inc.’s Counterclaims on October
27, 2015.

(ECF No. 30.)

On January 27, 2015, VPI filed an

Answer, Amended Affirmative Defenses, Counterclaims, CrossClaims and Jury Demand to USCO S.p.A.’s Complaint.
49.)

3

(ECF No.

On October 1, 2014, VPI filed a Motion to Transfer Venue.
(ECF No. 21.)

USCO responded in opposition to VPI’s Motion on

October 20, 2014.

(ECF No. 28.)

Response on October 28, 2014.

VPI filed a Reply to USCO’s

(ECF No. 33.)

On November 14,

2014, the Court denied VPI’s Motion to Transfer Venue.

(ECF No.

41.)
On March 16, 2015, USCO filed a Motion to Exclude the
Declaration of Roger Kern Regarding Claim Construction for U.S.
Patent No. 6,412,267.

(ECF No. 56.)

On March 18, 2015, USCO

filed a Notice of Clarification revising certain assertions made
in the Motion to Exclude.

(ECF No. 59.)

On March 18, 2015,

USCO also filed a Consent Motion for Expedited Briefing Schedule
(ECF No. 60), which the Court granted on March 19, 2015 (ECF No.
61).

On March 20, 2015, VPI filed a Response in Opposition to

USCO’s Motion to Exclude.

(ECF No. 62.)

VPI’s Response on March 26, 2015.
II.

USCO filed a Reply to

(ECF No. 67.)

LEGAL STANDARD
Under Federal Rule of Civil Procedure 26(a)(2)(A), “a party

must disclose to the other parties the identity of any witness
it may use at trial to present evidence under Federal Rule of
Evidence 702, 703, or 705.”

A written report must accompany

disclosure of a witness who is “retained or specially employed
to provide expert testimony in the case or one whose duties as
the party’s employee regularly involve giving expert testimony.”
4

Fed. R. Civ. P. 26(a)(2)(B).

In this District, the Local Patent

Rules further require,
Within 14 days after the exchange of Preliminary Claim
Constructions . . . any party planning to use an
expert witness at the Claim Construction Hearing shall
identify that witness and produce a copy of the
expert's curriculum vitae and any expert report or
declaration the party intends to rely upon.
LPR 4.3(a).

“The purpose of this rule is ‘to convey the

substance of the expert’s opinion ... so that the opponent will
be ready to rebut, to cross-examine, and to offer a competing
expert if necessary.’”

Meyer Intellectual Properties Ltd. v.

Bodum, Inc., 690 F.3d 1354, 1374-75 (Fed. Cir. 2012) (quoting
Walsh v. Chez, 583 F.3d 990, 994 (7th Cir.2009)).

The Rules

governing expert disclosure are “fundamental to the fairness of
litigation.”

Cedillo v. Sec’y of Health & Human Servs., 617

F.3d 1328, 1341 (Fed. Cir. 2010).
The Federal Rules of Civil Procedure also contemplate the
submittal of rebuttal expert evidence.

Under

Rule 26(a)(2)(D)(ii), if expert evidence “is intended solely to
contradict or rebut evidence on the same subject matter
identified by another party,” the expert and report to be relied
on must be disclosed “within 30 days after the other party's
disclosure.”

The Local Patent Rules place even stricter

limitations on expert rebuttal evidence in patent cases:
Within 14 days after the disclosure of Initial Expert
Claim Construction Reports, pursuant to LPR 4.3(a),
5

any party planning to use a rebuttal expert witness at
the Claim Construction Hearing shall identify that
witness and produce a copy of the expert’s curriculum
vitae and any expert report or declaration the party
intends to rely upon.
LPR 4.3(b).
Rule 37(c)(1) sets forth the appropriate remedies for
violation of expert disclosure deadlines:
(1) Failure to Disclose or Supplement. If a party
fails to provide information or identify a witness as
required by Rule 26(a) or (e), the party is not
allowed to use that information or witness to supply
evidence on a motion, at a hearing, or at a trial,
unless the failure was substantially justified or is
harmless. In addition to or instead of this sanction,
the court, on motion and after giving an opportunity
to be heard:
. . .
(C) may impose other appropriate sanctions, including
any of the orders listed in Rule 37(b)(2)(A)(i)-(vi).
Fed. R. Civ. P. 37(c)(1)(C).
III. ANALYSIS
USCO’s Motion to Exclude raises the following issues:
1) whether the opinions expressed in the Kern Declaration exceed
the limitations of rebuttal evidence under the Federal Rules of
Civil Procedure and the Local Patent Rules; 2) whether USCO has
suffered prejudice as a result of any affirmative opinions
expressed in the Kern Declaration; and 3) what is the
appropriate remedy.

6

A.

Rebuttal Evidence

It is undisputed that VPI served the Kern Declaration on
USCO as a rebuttal brief on March 9, 2015, two weeks after the
February 23, 2015 deadline for initial expert claim construction
reports.

(See ECF No. 56-4 at 4; ECF No. 40 at 2.)

Consequently, whether VPI has committed a violation turns on
whether the content of the Kern Declaration exceeds the scope of
rebuttal evidence allowed under the Federal Rules of Evidence
and the Local Patent Rules.
Rule 26(a)(2)(D)(ii) defines the expert evidence allowed
after initial expert claim construction reports as evidence
“intended solely to contradict or rebut evidence on the same
subject matter identified by another party.”
USCO argues that “[a]lthough submitted as a ‘rebuttal’
report[,] . . . the Kern Declaration contains affirmative
opinions in support of VPI’s positions for construction of
disputed claim terms and a new and previously undisclosed
contention regarding the qualifications of a person of ordinary
skill in the art.”

(ECF No. 56-4 at 3.)

USCO asserts that the

purpose of the Local Patent Rules is “to provide efficiency and
fairness with set dates for simultaneous or contemporaneous
disclosures from both sides.”

(Id. at 7.)

USCO further asserts

that “VPI made the strategic decision not to put forward any
affirmative expert opinion on the required date under Local
7

Patent Rule 4.3(a),” and then “attempted to circumvent the Local
Patent Rules by labelling untimely affirmative expert opinions
as a rebuttal expert declaration after full knowledge of the
opinions of USCO’s expert witness.”

(Id. at 8.)

USCO cites to

paragraphs 18, 28, 34, 45, 49, 56, and 62 of the Kern
Declaration as examples of affirmative opinions that fall
outside the scope of rebuttal.

(Id. at 13.)

VPI argues that the Kern Declaration is proper rebuttal
evidence because “it ‘contradict[s] and rebut[s] evidence on the
same subject matter’ as Fleming’s opinion.” (ECF No. 62 at 7
(quoting Fed. R. Civ. P. 26(a)(2)(D)(ii)).)

VPI explains that,

initially, it “saw no need for expert opinion” “[b]ecause the
parties’ preliminary proposed constructions had areas of
substantial agreement.”

(Id. at 1.)

VPI further explains that

a rebuttal expert report was necessary only after USCO’s expert,
Dr. Fleming, “deviated materially from USCO’s preliminary
constructions.”

(Id.)

VPI also asserts that the Kern

Declaration “addresses only issues that were previously
addressed by [Dr.] Fleming.”

(Id.)

VPI points out that in each

of Mr. Kern’s opinions, he states Dr. Fleming’s opinion and
explains why he disagrees with that opinion.

(Id. at 7.)

VPI also asserts that even if the Kern Declaration supports
VPI’s proposed constructions, it is still proper rebuttal
evidence.

(Id. at 8.)

VPI contends that district courts in the
8

Sixth Circuit have previously rejected requests to strike
opinions in rebuttal reports that affirmatively support a
party’s position.

(Id. at 8-9 (citing Telepak Networks, Inc. v.

City of Memphis, No. 2:14-CV-02027-SHM, 2014 WL 5795499, at *2
(W.D. Tenn. Nov. 6, 2014); Duff v. Duff, No. CIV.A.04-345-KSF,
2005 WL 6011250, at *1 (E.D. Ky. Nov. 14, 2005)).)
The Court agrees with USCO.

The language of Rule

26(a)(2)(D)(ii) is clear that only expert evidence “intended
solely to contradict or rebut evidence on the same subject
matter” may be proffered after the deadline for initial expert
disclosures.
Although the majority of the Kern Declaration is rebuttal
opinion in response to Dr. Fleming’s expert report, Mr. Kern’s
affirmative proposal of the proper construction of the disputed
terms and Mr. Kern’s proposed interpretation of a person of
ordinary skill in the art as it pertains to the ’267 patent
cannot be considered rebuttal evidence.

VPI is correct that

Mr. Kern begins most sections with a summary of Dr. Fleming’s
opinion and follows with an explanation of how Dr. Fleming’s
opinion is incorrect.

For example, in the section regarding the

disputed term “securing said forging in a cantilevered position
on a work table,” Mr. Kern states that Dr. Fleming “opines that
the term . . . should be construed to mean ‘firmly positioning
said forging on a spark erosion machining work table by only one
9

end so that the other end of said forg[]ing is unsecured to the
work table.’”

(ECF No. 56-1 ¶ 19.)

Mr. Kern goes on to explain

the reasons why Dr. Fleming’s proposed construction is defective
in omitting the limitation that the forging is unsupported.
(Id. ¶¶ 22-24.)

Mr. Kern also explains why Dr. Fleming’s

understanding of the prior art is flawed.

(Id. ¶ 27.)

Many, if

not all, of the statements in these paragraphs fall within the
scope of rebuttal evidence under Rule 26(a)(2)(D)(ii).
Mr. Kern, however, concludes the section by proposing his own
construction of the term “securing said forging in a
cantilevered position on a work table.”

(Id. ¶ 28.)

A proposed

construction of a disputed term is precisely the type of
information to be disclosed in an initial expert report under
LPR 4.3(a).

A proposed construction goes beyond arguments

“intended solely to contradict or rebut evidence on the same
subject matter.”
VPI’s reliance on Telepak Networks and Duff, is misplaced.
Neither case is binding on the Court, and neither case is a
patent case.

Furthermore, the findings in Telepak Networks are

distinguishable from the instant case.

Contrary to VPI’s

assertions, in Telepak Networks, the magistrate judge did not
accept affirmative opinions as properly submitted in a rebuttal
expert report.

Instead, the magistrate judge found “that, on

its face, the report appears to rebut and contradict the
10

opinions of Plaintiff’s expert . . . .”
WL 5795499 at *2.

Telepak Networks, 2014

Accordingly, the district court “decline[d]

to strike the report based on Plaintiff’s arguments” given the
stage of the proceedings and in “in light of the fact that th[e]
case was set for a bench trial.”

Id.

The magistrate judge also

left open the door for the district judge to decide to exclude
the report at a later time.

Id. (“The presiding Judge is in the

best position to assess whether the testimony offered at trial
by this witness constitutes rebuttal testimony and can rule on
any objections raised by Plaintiff at that time.”)
Duff is similarly distinguishable from the instant case.
In Duff, the district court was tasked with interpreting the
meaning of “same subject matter.”
*4-5.

Duff, 2005 WL 6011250 at

The district court adopted the approach of other district

courts to avoid “‘narrowly constru[ing] the phrase ‘same subject
matter’ beyond its plain language.’”

Id. at *5 (quoting TC

Systems Inc. v. Town of Colonie, New York, 213 F.Supp.2d 171,
180 (N.D.N.Y.2002)).

The Duff court ultimately allowed some

expansion on the subjects addressed in the initial expert
report.

Id.

Similar to the Duff court, this Court also allows

limited expansion on the topic of construction of the disputed
terms by Mr. Kern in order to make complete and well-reasoned
rebuttal arguments.

The issue in the Kern Declaration, however,

is that Mr. Kern has gone beyond those limitations by stating
11

his own constructions of the disputed terms, his own standard
for a person of ordinary skill in the art, and entirely new
arguments in support of those proposals.
The need to enforce the Local Patent Rules with regard to
expert disclosures is especially critical in circumstances such
as these, where the party submitting the rebuttal report chose
not to submit an initial expert report for the opposing party’s
review.

An initial expert report establishes that expert’s

positions on the construction of each disputed term and the
level of skill of one in the relevant art.

USCO correctly

argues that an expert free from the limitations of an initial
expert report would enjoy an unfair advantage if allowed to
assert new constructions in a rebuttal report after reviewing
the opposing party’s expert analysis.

Consequently, enforcement

of the Local Patent Rules regarding expert disclosure is
essential to limit the gamesmanship that would otherwise infest
the expert disclosure process in patent cases should disclosure
of new constructions be allowed in rebuttal reports.

See

Computer Acceleration Corp. v. Microsoft Corp., 503 F. Supp. 2d
819, 822 (E.D. Tex. 2007) (“The local patent rules ‘exist to
further the goal of full, timely discovery and provide all
parties with adequate notice and information with which to
litigate their cases, not to create supposed loopholes through
which parties may practice litigation by ambush.’” (quoting IXYS
12

Corp. v. Advanced Power Tech., Inc., 2004 WL 1368860, *3
(N.D.Cal. June 16, 2004))).

Moreover, the purpose of expert

disclosure rules in patent cases — “to convey the substance of
the expert’s opinion” — would be defeated without adherence to
the principal that new constructions of disputed terms and
proposed standards of the level of skill of one in the relevant
art are to be disclosed in the initial expert report.
Intellectual Properties, 690 F.3d at 1374-75.

See Meyer

In simple terms,

the substance of an expert’s opinion with regard to claim
construction is construction of the disputed terms and the
proposed standard of the level of skill of one in the relevant
art.
In circumstances such as these, the proffered rebuttal
evidence must be strictly limited to opinions and arguments that
are necessary to articulate the defects of the opposing party’s
expert’s initial constructions and analysis.

Asserting proposed

constructions for the disputed terms and suggesting the proper
standard to apply to a person having ordinary skill in the art
without having first submitted an initial report establishing
those opinions will almost always exceed the limits established
by Rule 26(a)(2)(D)(ii) and the Local Patent Rules.
Accordingly, the Court finds that Mr. Kern’s proposed claim
constructions and interpretation of one of ordinary skill in the
art violate Rule 26(a)(2)(D)(ii) and the Local Patent Rules.
13

B.

Prejudice

Pursuant to Rule 37(c)(1), the Court is obligated to punish
a party for violations of Rule 26(a), unless the violation was
harmless or substantially justified.

Vance, by & Through

Hammons v. United States, 182 F.3d 920 (6th Cir. 1999) (“After
Rule 37(c)(1)’s passage in 1993, the test is very simple: the
sanction is mandatory unless there is a reasonable explanation
of why Rule 26 was not complied with or the mistake was
harmless.”); see also Bowe v. Consol. Rail Corp., 230 F.3d 1357
(6th Cir. 2000).

USCO argues that it has suffered prejudice

because “VPI’s initial opinions, cloaked as ‘rebuttal,’ have
been inappropriately informed by USCO’s initial expert
disclosure.”

(ECF No. 56-4 at 3.)

USCO contends that VPI, by

waiting until after USCO submitted its initial claim
construction report to submit the Kern Declaration, “insulated
Mr. Kern’s opinions from scrutiny.”

(Id. at 8.)

USCO asserts

that it suffered prejudice because it was not given the
opportunity to rebut the affirmative opinions stated in the Kern
Declaration.

(Id. at 8.)

USCO argues it suffered further

prejudice because VPI unfairly gained an advantage by allowing
its expert to commit to an opinion with knowledge of USCO’s
expert’s opinions regarding the disputed claims and the standard
to be applied to one of ordinary skill in the art.

(Id. at 9.)

USCO asserts that this type of gamesmanship is foreclosed by
14

both the Local Patent Rules and Scheduling Order.

(Id.)

USCO

concludes that the prejudice suffered by USCO cannot be undone
because “VPI’s expert cannot ‘unsee’ Dr. Fleming’s opinions to
form his own initial opinions.”

(Id.)

VPI contends that USCO is not prejudiced by any alleged
affirmative opinion in the Kern Declaration.

VPI asserts that

it has offered to allow Dr. Fleming to respond to the Kern
Declaration.

(ECF No. 62 at 8.)

Moreover, VPI argues, “[a]mple

time remains before claim construction briefing and the mid-June
Markman hearing” for USCO to rebut Mr. Kern’s opinions.

(Id.)

VPI asserts that the instant case is distinguishable from the
cases cited by USCO based on the fact that this case is in the
early stages of claim construction.

(Id. at 9.)

Finally, VPI

argues that USCO would not suffer prejudice because Defendants
ACE Track and REONE Track, have for various reasons not yet
begun to participate in the claim construction process.
10-11.)

(Id. at

VPI asserts that “[i]t is those defendants who perform

the allegedly infringing process, . . . and they have knowledge
of how one skilled in the art would interpret the claims.”

(Id.

at 11.)
The Court agrees with USCO.

In the context of claim

construction, allowing one party’s expert to view the expert
report of another party before submittal of the report asserting
proposed constructions is an unfair advantage.
15

See supra Part

III.A.

The violating party’s expert would be able to craft

claim interpretations and arguments that mitigate the strengths
and emphasize the weaknesses of the other party’s analysis
unfettered by its own initial expert report.

VPI’s arguments

center more on the idea that allowing a rebuttal by USCO’s
expert would resolve any unfair advantage from which VPI has
benefitted.

Although allowing a rebuttal report would assuage

the effects of VPI’s violation, it would not completely resolve
the prejudice suffered as a result of VPI not being subject to
the limitations of its own initial expert report.

Accordingly,

the Court finds that USCO suffered prejudice as a result of
VPI’s violations.
C.

Remedy

Under Rule 37(c)(1) of the Federal Rules of Civil
Procedure, a remedy for a Rule 26(a) violation is either
disallowance of the information or witness, or “other
appropriate sanctions” at the discretion of the Court.

USCO

argues that the proper remedy is to exclude Mr. Kern as an
expert witness because Mr. Kern “cannot ‘unsee’ Dr. Fleming’s
opinions” and the resulting prejudice “cannot be undone.”
No. 56-4 at 8-9.)

(ECF

Alternatively, USCO requests that the Court

“strike all improper and untimely affirmative opinions within
the Kern Declaration.”

(Id. at 3.)

Specifically, USCO requests

that VPI’s “affirmative opinions regarding the qualifications of
16

one of ordinary skill in the art and claim constructions of the
disputed terms should be stricken, and VPI should not be allowed
to rely upon these in support of its case-in-chief during the
Markman hearing.”

(ECF No. 6.)

Finally, USCO argues that if

the Court admits the Kern Declaration, then USCO should be
allowed to submit a rebuttal report to the Kern Declaration.
(ECF No. 56-4 at 3-4.)
VPI urges that the alternative relief sought by USCO — to
allow USCO to file a rebuttal report — is the proper relief.
VPI asserts that it previously offered to allow USCO to submit a
rebuttal report by Dr. Fleming in response to the Kern
Declaration.

(ECF No. 62 at 10.)

VPI argues that a rebuttal

report would resolve any disadvantage to USCO.

(Id.)

Having reviewed the Kern Declaration, the Court finds that
the majority of its content is rebuttal opinion made in response
to Dr. Fleming’s report.

Consequently, total exclusion of

Mr. Kern as a witness in this case would be inappropriate.
Additionally, allowing USCO to file a rebuttal report in
response to the Kern Declaration would not fully compensate for
the prejudice suffered by USCO.

See supra Part III.B.

Accordingly, the Court finds that the proper remedy is to strike
the affirmative portions from the Kern Declaration and allow the
remaining opinions as rebuttal evidence for claim construction.

17

IV.

CONCLUSION
For the foregoing reasons, Plaintiff’s Motion to Exclude

the Declaration of Roger Kern Regarding Claim Construction for
U.S. Patent No. 6,412,267 and Request for Expedited Briefing
Schedule (ECF No. 56) is GRANTED.

Plaintiff shall submit within

three (3) days of this Order, a proposed redline draft of the
Kern Declaration indicating the portions that should be
stricken.

The Court will make any appropriate modifications to

Plaintiff’s draft and file a final version on the CM/ECF system.
Additionally, VPI shall refrain from using and/or relying on the
affirmative opinions removed from the Kern Declaration during
the claim construction hearing.
IT IS SO ORDERED, this 27th day of April, 2015.
/s/ Jon P. McCalla
JON P. McCALLA
U.S. DISTRICT COURT JUDGE

18