Nordock Inc v. Systems Inc

Filing 163

ORDER signed by Judge Rudolph T Randa on 3/13/2013 Denying 129 Motion in Limine; Denying 131 Motion in Limine; Granting 133 Motion in Limine; Denying 135 Motion in Limine; Granting 141 Motion in Limine; Granting 144 Motion in Limine; Granting 148 Motion to Seal Documents 147-2 & 147-3; Granting in part and Denying in part 140 Motion in Limine. (cc: all counsel) (Zik, Linda)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

NORDOCK INC.,
Plaintiff-Counterclaim-Defendant,
v.
Case No. 11-C-118
SYSTEMS INC.,
Defendant-Counterclaimant.

DECISION AND ORDER

This Decision and Order addresses the motions in limine filed by the Plaintiff
and

th e

C o u nterclaim -D e fendant,

N o rdock

Inc.,

(“ N o rd o c k ” )

and

th e

Defendant-Counterclaimant, Systems Inc. (“Systems”), rivals in the loading dock device
industry. Also addressed is Nordock’s motion to seal.
This action involves claims and counterclaims regarding Nordock’s design
patent, United States Design Patent Number D 579,754 (the “‘754 patent”) and Nordock’s
unfair competition claims. Familiarity with the basic facts is presumed, and therefore minimal
factual background is provided. Regional circuit law applies to evidentiary rulings in patent
cases. See Pozen Inc. v. Par Pharm., Inc., 696 F.3d 1151, 1161 (Fed. Cir. 2012).

A motion in limine is a motion “at the outset” or one made “preliminarily.”
Black's Law Dictionary, 803 (8th ed. 2004). Although not explicitly authorized by the Federal
Rules of Evidence, in limine rulings have developed pursuant to the inherent authority of
district courts to manage the course of trials. Luce v. United States, 469 U.S. 38, 41 n.4
(1984). Judges have broad discretion when ruling on motions in limine. See Jenkins v.
Chrysler Motors Corp., 316 F.3d 663, 664 (7th Cir. 2002). Regardless of a court’s initial
ruling on a motion in limine, the court may adjust a motion in limine during the course of a
trial. Farfaras v. Citizens Bank & Trust of Chi., 433 F.3d 558, 565 (7th Cir. 2006) (citing
Luce, 469 U.S. at 41-42). See also, Luce, 469 U.S. at 41-42 (“Indeed even if nothing
unexpected happens at trial, the district judge is free, in the exercise of sound judicial
discretion, to alter a previous in limine ruling.”). In addition, if the in limine procedural
environment makes it too difficult to evaluate an evidentiary issue, it is appropriate to defer
ruling until trial. See Jonasson v. Lutheran Child & Family Servs., 115 F.3d 436, 440 (7th Cir.
1997)(delaying until trial may afford the judge a better opportunity to estimate the evidence’s
impact on the jury).
Motion in Limine to Exclude the Testimony of Norbert Hahn
Nordock requests an order exclude the testimony of Norbert Hahn (“Hahn”)
(ECF No. 129). Citing Rule 403 of the Federal Rules of Evidence, Nordock asserts that
Hahn’s recollection of events that took place over 20 years ago is so unreliable that it should

2

be excluded because it will not assist the jury and presents a substantial danger of confusing
the jury.
Rule 403 provides: “The court may exclude relevant evidence if its probative
value is substantially outweighed by a danger of one or more of the following: unfair
prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly
presenting cumulative evidence.” Rule 403 requires the Court to balance the probative value
of the evidence at issue against any potential harm its admission might cause. United States
v. Taylor, 701 F.3d 1166, 1172 (7th Cir. 2012). Rule 601 of the Federal Rules of Evidence
provides that every person is competent to be a witness.
At trial, Systems will be calling Hahn, who has 38 years in the loading dock
industry, as a fact witness. Although Hahn has been deposed, neither Nordock nor this Court
know the subjects about which Hahn will be called to testify. The pretrial context provides
insufficient context to evaluate the admissibility of Hahn’s testimony. See Jonasson, 115 F.3d
at 440. At this juncture of the proceedings, Nordock’s motion to exclude Hahn’s testimony
is denied.
Motion in Limine to Establish the Priority Date of the ‘754 Design Patent
Nordock seeks an order establishing a December 23, 2002, priority date for the
‘754 design patent. (ECF No. 131.) Systems contends that the priority date is a contested
factual issue that must be determined by the jury.

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Determination of a priority date is purely a question of law if the facts
underlying that determination are undisputed. Bradford Co. v. Conteyor N. Am., Inc., 603 F.3d
1262, 1268 (Fed. Cir. 2010). Because the underlying facts are contested, the Court cannot rule
as a matter of law on the issue. Nordock’s motion to establish a priority date is denied.
Motion in Limine for an Order that the America Invents Act (“AIA”) Does Not Apply
Nordock requests a ruling that the America Invents Act (“AIA”) does not apply
to this case and must not be presented to the jury at trial. (ECF No. 133.) It maintains that,
because the ‘754 Design Patent was filed May 31, 2007, and issued November 4, 2008, the
AIA does not apply to it. Systems contends the motion is premature or irrelevant because
Nordock has not identified any evidence that would be affected by its motion or any issue that
may arise at trial.
Section 35 of the AIA provides:
Except as otherwise provided in this Act, the provisions of this
Act shall take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall apply
to any patent issued on or after that effective date.
Leahy-Smith America Invents Act, 112 Pub. L. No. 112-29, § 35, 125 Stat. 284 (2011). The
AIA was enacted on September 16, 2011, and unless otherwise provided the provisions of AIA
took effect on September 16, 2012. See e.g., Flo Healthcare Solutions, LLC v. Kappos, 697
F.3d 1367, 1370 n.4 (Fed. Cir. 2012).
Whether a particular portion of the AIA governs any of the facts or legal issues
in this action is an issue-by-issue question. However, at this time, there is no indication that
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the AIA will be relevant to any issue at trial. Therefore, the motion is granted, without
prejudice. If Systems believes any portion of the AIA is applicable at trial, it should bring the
matter to the attention of Nordock and the Court.
Motion in Limine to Preclude Systems from Using Asserted
Cost Savings to Attempt to Show Invalidity
Nordock seeks an order precluding Systems from using asserted cost savings to
attempt to show invalidity at trial. (ECF No. 135.) Nordock states the motion is conditioned
on the Court’s denial of Nordock’s motion to compel the production of the Bero report with
post-October 2011 profit information and the production of timely requested financial
information.
On February 19, 2013, the Court granted Nordock’s motion to compel as to the
production of timely requested financial information and denied it to the remainder of the
motion. (See ECF No. 137.) Systems states it has produced all the financial documents upon
which Systems’ damages expert relied and it will be immediately producing the updated
financial data reflecting Systems’ ongoing sales.
Based on the foregoing, Nordock has not presented a basis to exclude Systems’
evidence of cost savings. The motion is denied without prejudice.
Motion in Limine to Exclude “Undated” and “Unpublished” References from Entry
into Evidence as Asserted "Prior Art" References at Trial
Nordock seeks to exclude “undated” and “unpublished” references from entry
into evidence as asserted “prior art” references at trial. (ECF No. 141). Nordock refers to the

5

Crawford Door N.V. (“Crawford”) brochure and Combursa drawings,1 and asserts they should
be excluded as evidence of “prior art” references applicable to the ‘754 Design Patent at trial.
Systems indicates that the evidence is relevant to its defense of the unfair
competition claims and it will be able to establish a proper foundation for the two documents.
However, it does not contend that either document is admissible as prior art.
Because insufficient evidence has been presented regarding the dates of the two
publications, they are not admissible as prior art and Nordock’s motion to exclude “undated”
and “unpublished” references from evidence as asserted “prior art” references is granted. This
ruling does not bar the introduction of the documents as evidence regarding the unfair
competition claims.
Motion in Limine to Preclude Testimony of Systems’ Newly Added Lay Witnesses
Nordock seeks to exclude the testimony of Systems’ newly added lay witnesses.
(ECF No. 144.) Nordock maintains that Systems added eight new lay witnesses for the first
time in its final pretrial report. These witnesses include five European residents, Brian Fulton
(“Fulton”), and two Systems employees. Nordock maintains that Systems failed to timely
disclose these witnesses as required by the Court’s July 21, 2011, Scheduling Order, denying
Nordock the opportunity to depose them.
Systems responds that its final pretrial report was filed prior to the issuance of
the Court’s February 26, 2013, claim construction and summary judgment decision, and in the

1

These documents were discussed at pages 42 through 45 of the Court’s February 26, 2013, Decision and
Order. (See ECF No. 143.)

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wake of those rulings it intends to call only two of those eight witnesses – Mark Lobel
(“Lobel”), and Steve Robbins (“Robbins”). Systems states that both witnesses were disclosed
on October 11, 2011, in response Nordock’s second interrogatory requesting the identification
of persons involved in developing the lip securing mechanism for each of Systems’ accused
dock levelers.
With respect to Lobel and Robbins, Systems did not supplement its Rule
26(b)(1) disclosures and it did not provide any indication as to the expected testimony of either
witnesses as required by Rule 26. Noncompliance with Rule 26(a) generally precludes
testimony of undisclosed witnesses. Systems does not assert that the omission is either
harmless or justified. Systems waited until too long to identify the additional lay witnesses and
has not offered any justification or established that its non-disclosure is harmless.
Nordock has established that the eight lay witnesses were not previously
disclosed as required by Rule 26(b)(1) and, therefore, its motion is granted.
Motion to Seal Profit Data for Systems’ Accused Levelers in Nordock’s Opposition to
Systems' Motion to Strike Nordock Experts, and Financial Data in Exhibit A
Pursuant to General Local Rule 79(d), Nordock filed a motion to seal profit data
for Systems’ accused levelers on page four of its Nordock’s opposition to Systems’ motion to
strike Nordock experts, and financial data in exhibit A thereto.

(ECF No. 148.) Having

reviewed the relevant papers, the Court finds good cause to seal portions of those papers
because they contain the parties’ sensitive financial information not generally available to the
public. See County Materials Corp. v. Allan Block Corp., 502 F.3d 730, 740 (7th Cir. 2007).
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The sealing order will expressly provide that any party and any interested member of the
public may challenge the sealing of those papers. Id.
Systems’ Motions in Limine
By its motions in limine (ECF No. 140), Systems seeks an order barring Nordock
from offering any expert testimony, opinion, or evidence on Nordock’s unfair competition
claims, and specifically as to secondary meaning. Systems also asserts that pursuant to
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), the Court should exclude
both expert reports and any testimony by Prof. Stan V. Smith (“Smith”) regarding Nordock’s
purported damages in this action.
Technical Expert Testimony on Non-Patent Issues
Systems maintains that Nordock failed to identify any technical expert or to
serve an expert report on any non-patent issues and should be barred from offering any expert
evidence regarding non-patent issues. Nordock concedes the motion as to its technical expert,
Steven Carl Visser (“Visser”), not testifying as to secondary meaning. However, it asserts that
Visser should be allowed regarding common elements to design patent and product
configuration trade dress validity and infringement, such as the ornamental functional
dichotomy and the distinctiveness of a design relative to existing and prior art designs.
Under Rule 26(a)(2), a party that intends to rely upon an expert witness’s
testimony is required to furnish by a date set by the district court a report containing, among
other information, “a complete statement of all opinions” the retained expert will provide, “and

8

the basis and reasons for them.” Ciomber v. Coop. Plus, Inc., 527 F.3d 635, 641 (7th Cir.
2008) (citing Fed. R. Civ. P. 26(a)(2)(B)(I), (a)(2)(C)). Failure to comply with Rule 26(a)(2)’s
requirements results in sanction: the offending party is not allowed to introduce the expert
witness’s testimony as “evidence on a motion, at a hearing, or at a trial.” Id. (citing Fed. R.
Civ. P. 37(c)(1)). This sanction is “ ‘automatic and mandatory’ ” unless the offending party
can establish “ ‘that its violation of Rule 26(a)(2) was either justified or harmless.’” Id.
The parties’ combined joint status report and discovery plan states “The parties
agree that initial [e]xpert reports on matters for which the parties bear the burden of proof
will be served by June 20, 2012, that rebuttal expert reports shall be served by July 20, 2012,
and that expert discovery shall be completed by August 20, 2012.” (emphasis added.) (ECF
No. 12.) While there are overlapping elements of trade dress and patent infringement,
Nordock did not disclose any expert on trade dress. Nordock vigorously emphasized that point
at pages two, three, and eleven of its memorandum in support of its motion to strike Brookman
as an expert witness on trade dress and unfair competition. (ECF No. 53.) Nordock does not
assert that the omission is either harmless or justified. Nordock apparently made a tactical
decision and it is too close to trial to change that approach. Therefore, Systems’ motion to
exclude any technical expert evidence on behalf of Nordock on any non-patent issues is
granted.

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Damages Expert Testimony
Systems asserts that Smith’s damages opinion and report must be excluded as
being far-fetched, and based on faulty factual and legal analysis that render it “fatally”
unreliable. Nordock states that Systems’ criticisms of the Smith report on Nordock’s lost
profits are without merit, and notes that Systems’ motion does not directly address Smith’s
damages calculations under 35 U.S.C. § 289, or Smith’s November 5, 2012, supplemental
report.
Rule 702 of the Federal Rules of Evidence governs the admissibility of expert
testimony. Daubert, 509 U.S. at 588. Rule 702 provides as follows:
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.

Regional circuit law governs the decision whether to admit expert testimony in a patent case.
See Micro Chem., Inc. v. Lextron, Inc., 317 F.3d 1387, 1390-91 (Fed. Cir. 2003).

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The Court engages in a three-step analysis for determining whether the expert
testimony is both relevant and reliable: “[T]he witness must be qualified ‘as an expert by
knowledge, skill, experience, training, or education,’ Fed. R. Evid. 702; the expert’s reasoning
or methodology underlying the testimony must be scientifically reliable, Daubert, 509 U.S. at
592-93, . . . ; and the testimony must assist the trier of fact to understand the evidence or to
determine a fact in issue. Fed. R. Evid. 702.” Ervin v. Johnson & Johnson, Inc., 492 F.3d
901, 904 (7th Cir. 2007).
In determining reliability, courts are to consider the following non-exhaustive
list of guideposts: “(1) whether the scientific theory can be or has been tested; (2) whether the
theory has been subjected to peer review and publication; (3) whether the theory has been
generally accepted in the scientific community.” Ervin, 492 F.3d at 904 (citing Daubert, 509
U.S. at 593-94). “The proponent of the expert bears the burden of demonstrating that the
expert’s testimony satisfies the Daubert standard,” by the preponderance of the evidence.
Lewis v. CITGO Petroleum Corp., 561 F.3d 698, 705 (7th Cir. 2009). The weight and
credibility of an expert’s testimony may be challenged through “[v]igorous cross examination,
presentation of contrary evidence, and careful instruction on the burden of proof.” Daubert,
509 U.S. at 596.
Although Smith’s qualifications are not challenged, the Court notes Smith has
a Bachelor’s Degree from Cornell University, and a Master’s Degree and a Ph.D. in
Economics from the University of Chicago. (June 12, 2012, Smith Report, 1.) (ECF No. 86-

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4.)

He has worked as an economic and financial consultant since 1972.

His experience

included authoring the first textbook on economic damages; creating and teaching the first
course in forensic economics nationwide as an adjunct professor at DePaul University in
Chicago; performing economic loss analysis since the early 1980s in several thousand cases
throughout the county, including business valuation, financial analysis, antitrust, contract
losses, class actions, employment discrimination, and intellectual property valuations including
evaluations of reasonable royalty. The Court concludes Smith has specialized training and
experience as an economist to enable him to assist the jury on the issue of damages in this
action.
Next, the Court must consider whether the methodology underlying Smith’s
expert reports of June 20, and November 5, 2012, is reliable. Smith indicates his opinions are
in accordance with the generally accepted standards within the field of economics and are
expressed to a reasonable degree of economic certainty. He also maintains that it is reasonable
for experts in the field of economics to rely on the type of materials that he has in this case.
Thus, the Court concludes that, in general, Smith’s methodology is reliable.
The next question is whether Smith’s reports and testimony will assist the trier
of fact in understanding evidence or in determining a fact in issue. In a patent infringement
action, a plaintiff may recover “damages adequate to compensate for the infringement, but in
no event 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 (2006). The statute

12

authorizes two categories of infringement compensation: lost profits and reasonable royalty
damages. Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009).
Damages for design patent infringement may include lost profits, a reasonable royalty, or
infringer’s profits. See 35 U.S.C. § 289. An expert’s damages theory must be based on
“sound economic and factual predicates.” LaserDynamics, Inc. v. Quanta Computer, Inc., 694
F.3d 51, 67 (Fed. Cir. 2012)(quoting Riles v. Shell Exploration & Prod. Co., 298 F.3d 1302,
1311 (Fed. Cir. 2002)); IP Innovation LLC v. Red Hat, Inc., 705 F. Supp. 2d 687, 689-91 (E.D.
Tex. 2010) (rejecting damage expert’s report because he relied upon irrelevant unreliable
evidence and failed to account for economic realities). In any case involving multi-component
products, patentees may not calculate damages based on sales of the entire product, as opposed
to the smallest salable patent-practicing unit, without showing that the demand for the entire
product is attributable to the patented feature. LaserDynamics, Inc., 694 F.3d at 67-68.
Lost Profits
Systems states that Smith first analyzes the apparent value of gross revenue that
Nordock would have realized if it had sold the same number of Nordock dock levelers as
Systems sold of Systems’ dock levelers and that he did not conduct the requisite “but for”
analysis required when calculating lost profits damages. See Rite-Hite Corp. v. Kelley Co.,
Inc., 56 F.3d 1538, 1555 (Fed. Cir. 1995) (“To recover lost profits damages, the patentee must
show a reasonable probability that, ‘but for’ the infringement, it would have made the sales
that were made by the infringer.”) Nordock can establish this “but for” causation by proving:

13

(1) a demand for the patented product; (2) the absence of acceptable noninfringing substitutes;
(3) the manufacturing and marketing capacity to exploit the demand; and (4) the amount of
profit it would have made absent System’s infringement. See Panduit Corp. v. Stahlin Bros.
Fibre Works, Inc., 575 F.2d 1152, 1156 (6th Cir.1978). The “Panduit test” is a useful, but
non-exclusive way for a patent holder to establish entitlement to lost profits damages. RiteHite, 56 F.3d at 1545.
Smith’s report began by calculating loss sales revenue. Because Systems had
not provided sales revenue data from the infringing models, (see Smith Report, 4), Smith used
the number of dock levelers sold by Systems and the revenue data provided by Nordock for
comparable models. Calculating lost sales revenue was the first step in Smith’s two-part
analysis, the second portion of that section addresses lost profits. The “but for” element of
Smith’s analysis is added at pages four and five of his November 5, 2012, supplemental report.
(ECF No. 147-3.) Smith’s supplemental report also adjusts his lost profits opinion based on
information Systems disclosed in the report of its damages expert, Richard Bero.
Systems states that Smith never addressed the impact of non-infringing
alternatives on his lost profits analysis, and that Smith’s opinion regarding price erosion 2 is so
devoid of actual analysis that it can “barely be believed.” Such concerns are more properly

2

To recover price erosion damages, a patent-holder must show that the infringing conduct affected retail
prices. See Crystal Semiconductor Corp. v. Tritech Microelecs. Int’l, Inc., 246 F.3d 1336, 1357 (Fed. Cir. 2001)
(stating that to recover price erosion damages, a patent-holder must show that “‘but-for infringement, it would have
sold its product at higher prices”). “A patentee’s price erosion theory must account for the nature, or definition, of
the market, similarities between any benchmark market and the market in which price erosion is alleged, and the effect
of the hypothetically increased price on the likely number of sales at that price in that market.” Id.

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viewed as addressing the weight of Smith’s anticipated testimony rather than its admissibility.
The Court’s role is not to determine whether an expert’s testimony is correct, but only whether
it falls “outside the range where experts might reasonably differ.” Daubert, 509 U.S. at 596.
“Vigorous cross examination, presentation of contrary evidence, and careful instruction on the
burden of proof are the traditional and appropriate means of attacking shaky but admissible
evidence.” Id.
Systems also states that Smith’s calculation of additional damages based on “loss
of marginal profit from the sale of accessory items that could have been made by Nordock if
not for Systems’ infringement,” Smith June 20, 2012, Report at 8, and was rejected in
Rite-Hite Corp., 56 F.3d at 1550.
Systems overstates the Rite-Hite holding. In Rite-Hite, 56 F.3d at 1550-51, lost
profits were awarded for the patentee’s lost sales of truck restraints, a device which holds a
vehicle to a loading dock, (even though protected only under an unasserted patent), and lost
profits were denied on “convoyed” sales of a loading dock leveler. King Instruments Corp.
v. Perego, 65 F.3d 941, 951 (Fed. Cir. 1995), states that when a patent holder seeks damages
on an entire machine where its patent covers only a patented component or damages for lost
sales of unpatented goods sold along with a patented device (“convoyed” sales), the patent
holder must satisfy the entire market value rule, requiring that the patent holder prove that the
patent-related feature is the basis for customer demand for the unpatented parts to which it
seeks to extend its damages. Id. In Rite-Hite, the court reaffirmed the viability of the entire

15

market value rule and imposed a further limitation that “convoyed” sales must bear a
functional relationship with the patented goods. Id.
Rite-Hite is likely to preclude Nordock from recovering any losses on lost profits
from truck restraints. It may also preclude claims of lost profits on door seals and shelters.
However, disposition of those issues are dependant on factual issues that will be resolved at
trial. Thus, at this juncture. it would be premature to decide whether Smith may testify as to
loss of marginal profit from the sale of accessories
.

Reasonable Royalties
“‘[A] reasonable royalty analysis requires a court to hypothesize, not to

speculate. . . . [T]he trial court must carefully tie proof of damages to the claimed invention’s
footprint in the market place.’” Laser Dynamics, Inc., 694 F.3d at 67 (quoting ResQNet.com,
Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010)). By statute, reasonable royalty
damages are deemed the minimum amount of infringement damages “adequate to compensate
for the infringement.” Id. (citing 35 U.S.C. § 284). Such damages must be awarded “for the
use made of the invention by the infringer.” Id.
“A ‘reasonable royalty’ derives from a hypothetical negotiation between the
patentee and the infringer when the infringement began.” ResQNet.com, Inc. v. Lansa, Inc.,
594 F.3d 860, 868 (Fed. Cir. 2010). “The hypothetical negotiation tries, as best as possible,
to recreate the ex ante licensing negotiation scenario and to describe the resulting agreement.
In other words, if infringement had not occurred, willing parties would have executed a license

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agreement specifying a certain royalty payment scheme.” Lucent Techs., Inc., 580 F.3d at
1325. (Emphasis added.) To determine a reasonably royalty, courts apply an “unprioritized
and often overlapping,” ResQNet.com, 594 F.3d at 869, list of fifteen relevant factors found
in Georgia-Pacific Corp. v. United States Plywood Corp., 318 F.Supp. 1116, 1120 (S.D.N.Y.
1970). A reasonable royalty should be based upon the amount that a willing licensor and a
willing licensee would have agreed upon during a hypothetical negotiation at the time the
infringement began, if both parties had been reasonably and voluntarily trying to reach an
agreement. 318 F.Supp. at 1120.
Systems states that Smith’s assertion that “my opinion of a reasonable royalty
on sales of dock levelers would be 100 percent of Nordock’s lost sales as calculated above,”
(citing Smith Report, 11), is incredible and should be sufficient to disqualify Smith as an
expert. In so contending, Systems states even using a 25% royalty rate is generally thought
to be unreasonable in view of recent Supreme Court decisions, citing LaserDynamics, 694
F.3d at 69 (quoting Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1318 (Fed. Cir.
2011)). (The use of 25% royalty rate fails to pass muster under Daubert).
Smith cites the Georgia Pacific factors, generally used to evaluate reasonable
royalties, and states he relies on factors four through eight. However, Smith states that “the
patents owned by Nordock provide valuable product differentiation in the market, so Nordock
management would never have been willing to license its patents.” (Smith June 20, 2012,
Report, 11.) (Emphasis added.) A reasonable royalty requires willing parties and a balancing

17

of their interests. Smith’s reliance on the 100% royalty figure does not reflect Nordock being
a willing party or that he engaged in any balancing of the parties’ interests. His opinion as
to the “reasonable royalty” is unreliable and excluded under Daubert and Rule 702. See id.
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY
ORDERED THAT:
Nordock’s motion for an order precluding Hahn’s testimony (ECF No. 129) is
DENIED;
Nordock’s motion for an order establishing the December 23, 2002, priority date
of the ‘754 design patent (ECF No. 131) is DENIED;
Nordock’s motion for a ruling that the America Invents Act does not apply to
this case and must not be presented to the jury at trial (ECF No. 133) is GRANTED;
Nordock’s motion for an order precluding Systems from using asserted cost
savings to attempt to show invalidity at trial (ECF No. 135) is DENIED;
Nordock’s motion to exclude “undated” and “unpublished” references from
entry into evidence as asserted “prior art” references at trial (ECF No. 141) is GRANTED and
this ruling does not bar the introduction of the documents as evidence regarding the unfair
competition claims;
Nordock’s motion to exclude undisclosed lay witness (ECF No. 144) is
GRANTED;

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Nordock’s motion to seal (ECF No. 148) profit data for Systems’ accused
levelers on page four of its Nordock’s opposition to Systems’ motion to strike Nordock
experts, and financial data in exhibit A thereto is GRANTED and any party and any interested
member of the public may challenge the sealing of those papers;
Systems’ motions in limine (ECF No. 140), as to an order barring Nordock from
offering any technical expert testimony, opinion, or evidence on its unfair competition claims
is GRANTED; and as to an order barring Smith’s reports and testimony is GRANTED with
respect to reasonable royalties and DENIED in all other respects.
At trial, if a party believes evidence is being introduced in violation of these
rulings, the party must object at that time.
Dated at Milwaukee, Wisconsin this 13th day of March, 2013.
BY THE COURT

______________________
Hon. Rudolph T. Randa
U.S. District Judge

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