Ultratec, Inc. et al v. Sorenson Communications, Inc. et al

Filing 579

OPINION AND ORDER granting #398 Motion in Limine no. 5; reserving ruling on #458 Motion in limine no. 14; amending ruling on #563 Motion in limine no. 16; denying #572 Defendants' request to prohibit plaintiffs from arguing that Ryan was not enabled; ruling on evidence of Dr. Gregg Vanderheiden. Signed by District Judge Barbara B. Crabb on 10/8/14. (jat)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ULTRATEC, INC. and CAPTEL, INC.,
OPINION AND ORDER
Plaintiffs,
13-cv-346-bbc
v.
SORENSON COMMUNICATIONS, INC.
and CAPTIONCALL, LLC,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This civil action involving claims of patent infringement and counterclaims of
invalidity is scheduled for trial beginning on October 14, 2014. This order addresses the
following motions and requests made by the parties: plaintiffs’ motion in limine no. 14 to
preclude certain testimony from Kelby Brick, dkt. #458; defendants’ motion in limine no.
5 to exclude evidence and argument regarding actions taken by the FCC against Purple
Communications, dkt. #398; defendants’ request for reconsideration of the court’s ruling
on plaintiffs’ motion in limine no. 16 with respect to evidence of the pending inter partes
review proceedings, dkt. #464; defendants’ request to prohibit plaintiffs from arguing that
Ryan was not enabled, dkt. #572; and the parties’ responses to the court’s curative
instruction regarding Dr. Vanderheiden, dkt. ##570 and 575.

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OPINION
A. Plaintiffs’ Motion in Limine No. 14 to Preclude Certain Testimony
from Kelby Brick, dkt. #458
Plaintiffs have asked the court to preclude Kelby Brick from testifying in front of the
jury during either the liability or damages phase of the trial. They also argue a number of
reasons why the court should not consider his report or portions of his testimony in deciding
whether to issue an injunction. Defendants intend to offer Brick’s testimony (1) as an
expert before the court on how an injunction would not be in the best interest of the deaf
and hard-of-hearing and (2) as a fact witness before the jury about his involvement with the
FCC’s declaratory ruling in conjunction with defendants’ affirmative defenses of estoppel,
patent misuse and unclean hands. Because the motion is premature, the court will reserve
ruling on what portions, if any, of Brick’s testimony and report will be considered with
respect to plaintiffs’ request for an injunction.

It will be necessary to have further

information before deciding whether defendants may use Brick as a fact witness before the
jury.
In a footnote in response to the motion and in their comments to the draft jury
instructions, defendants make clear that they are requesting the court to allow them to
submit their affirmative defenses to the jury during the damages phase of trial. Dkt. #499
at 1 n.1; dkt. #577 at 18. From defendants’ brief in support of their motion for partial
summary judgment, however, it appeared that defendants were raising their affirmative
defenses in response to plaintiffs’ claim for injunctive relief, which would make the defenses
a matter for the court to decide. It is unclear from defendants’ submissions what issues they

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believe the jury must resolve during the damages phase of trial. Therefore, I will allow
defendants until noon on Saturday, October 11, 2014 to explain why they believe the jury
should hear evidence of their affirmative defenses during the first phase of the trial.
Plaintiffs will have until noon on Wednesday, October 15, to respond.

B. Defendants’ Motion in Limine No. 5 to Exclude Evidence and Argument regarding
Actions Taken by the FCC Against Purple Communications, dkt. #398
Defendants contend that the jury should not hear any evidence or argument regarding
fines, investigations or other disciplinary action taken by the FCC against Purple
Communications, the former employer of Kelby Brick. They argue that any such evidence
does not bear on Brick’s credibility or any other aspect of the instant case. Plaintiffs agree
that there is no reason for the jury to hear such evidence because Brick’s opinions relate to
the issuance of an injunction, which is a matter for the court to decide.
Defendants’ motion will be granted with respect to the evidence presented to the jury.
Should Brick’s testimony become relevant to the court’s consideration of an injunction,
defendants may renew their objections to this evidence at that time.

C. Defendants’ Request to Reconsider Court’s Ruling on Plaintiffs’ Motion in Limine
No. 16 to Preclude Defendants from Offering Evidence or Argument
to the Jury during the Liability Phase, dkt. #465
In their opposition to this motion, defendants suggested that they intended to
introduce evidence of the inter partes review proceedings during the liability phase only to
show that they lacked the subjective intent to induce infringement.

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Dkt. #496.

Accordingly, in an order entered October 3, 2014, I ruled that this motion was moot in light
of the court’s dismissal of plaintiffs’ claims of induced infringement. Dkt. #563. At the
final pretrial conference on October 3, however, defendants expressed their view that, in
light of the court’s ruling that it would instruct the jury on the presumption of validity and
allow plaintiffs’ counsel to refer to the presumption during argument, evidence as to the
pending inter partes review proceedings is relevant and admissible to rebut the presumption
of validity.
It is unclear whether defendants were merely making a record for appeal or stating
their intent to introduce the inter partes review evidence during the liability phase of trial.
Assuming the latter, I will not allow it. Although defendants’ position is not without merit,
I am persuaded that, because of the different standards, procedures and presumptions
applicable to IPR proceedings, evidence concerning the proceedings is irrelevant and highly
prejudicial to the jury’s determination of the validity of the patents. For this same reason,
defendants may not rely on evidence of the IPR proceedings during the damages phase to
argue that the patents are entitled to diminished value.
That said, defendants are free to refer to the board’s findings and argue their weight
when making any arguments outside the jury’s presence on the objective prong of the
willfulness test. In addition, should the question of subjective willfulness be presented to the
jury, defendants may introduce the board’s decision as evidence showing their good faith
belief in invalidity. The parties agree that in the event this occurs, the jury should be given
a curative instruction regarding the proper weight to be given the IPR evidence. They

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disagree, however, on what the instruction should say. As with other matters concerning
willfulness, the court will take this matter up with the parties only if and when it becomes
necessary.

D. Defendants’ Request to Prohibit Plaintiffs from Arguing that
Ryan was Not Enabled, dkt. #572
At the final pretrial conference on October 3, defendants argued that because
plaintiffs do not have a viable enablement argument remaining with respect to the Ryan
reference, the post-trial anticipation instruction should be revised to eliminate any reference
to enablement. Tr. of Final Hrg., dkt. #568, at 33-36. The court ordered defendants to
submit their arguments in writing, which they have done. They ask the court to “conclude
that, based on the undisputed evidence, no reasonable jury could find that Ryan was not
enabled.” Dkt. #572. Because this is a thinly-veiled motion for summary judgment and not
a proper motion in limine, I conclude that both sides may put in whatever admissible
evidence they have regarding whether Ryan was enabled, subject to the limits discussed in
the court’s previous orders. If defendants believe that the evidence at trial shows as a matter
of law that Ryan was enabled and anticipates the ‘482 patent, defendants will be free to file
a motion under Fed. R. Civ. P. 50 at the appropriate time.

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E. The Parties’ Responses to the Court’s Curative Instruction regarding
Dr. Vanderheiden, dkt. ##570 and 575
On September 29, 2014, I granted in part plaintiffs’ motion in limine no. 13 to
exclude the expert testimony of Vanderheiden because defendants had not disclosed him as
an expert. Dkt. #546. However, I noted in the order that defendants would be permitted
to call Vanderheiden as a fact witness because they said Vanderheiden’s emails and
memorandum show defendants’ state of mind, namely, that they believed noninfringing
alternatives existed for captioned telephone service. I ordered that the parties propose a
curative instruction so that the jury would understand the limited purpose of Vanderheiden’s
testimony.
In response to the court’s proposed curative instruction, plaintiffs now oppose the
introduction of any testimony from Vanderheiden, arguing that defendants have proffered
no evidence that they were aware of his statements or relied on them. Without this
evidence, Vanderheiden’s emails and memorandum have no relevance to defendants’ state
of mind.

I agree that before defendants may submit the Vanderheiden evidence or

testimony, defendants must come forward with evidence that one or more of their employees
with policy-making authority was aware of Vanderheiden’s words during the relevant time
frame.
Plaintiffs also argue that the evidence should be excluded regardless of defendants’
awareness of Vanderheiden’s statements because plaintiffs never adopted any of the
noninfringing alternatives outlined by Vanderheiden. If this is the case, I am not sure why
plaintiffs would want the evidence excluded; if anything, defendants’ awareness of

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noninfringing alternatives and their decision to then adopt infringing uses is stronger
evidence of willfulness.

In any event, defendants’ failure to adopt the noninfringing

alternatives does not negate the fact that Vanderheiden’s email and memorandum may have
influenced defendants’ state of mind.
Finally, plaintiffs argue that the Vanderheiden testimony is relevant only to damages
because the court dismissed defendants’ breach of contract counterclaim.

Because

defendants have argued that their state of mind is relevant only to the question of
willfulness, the Vanderheiden evidence and testimony may be introduced in the damages
phase of trial, but only if defendants first introduce evidence showing that they became
aware of Vanderheiden’s words before allegedly relying on them.
I also note that defendants say they intend to use Vanderheiden’s testimony to fortify
the testimony of their expert witness, Dr. Keith Ugone, that noninfringing alternatives exist
that would decrease the reasonable royalty rate for plaintiffs’ patents. Dfts.’ Resp., dkt.
#569, at 3. As discussed in my previous order, however, the use of the Vanderheiden
evidence for this purpose is prohibited; he is not an expert and his statements cannot be used
to support an expert’s argument no matter when they were made.
In sum, the Vanderheiden evidence will be admitted only for the purpose of showing
defendants’ state of mind with respect to the question of willfulness during the damages
phase of trial and only if defendants first present evidence that they became aware of
Vanderheiden’s words before allegedly relying on them. The instruction will read as follows:
At this point, you will hear testimony from Dr. Gregg C. Vanderheiden. Dr.
Vanderheiden will testify about an email that he sent to the FCC. Dr.

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Vanderheiden has not been designated as an expert for purposes of this case.
This means that he cannot testify as to the truth or accuracy of the contents
of his email or previously expressed opinions. Therefore, although Dr.
Vanderheiden may testify about what he stated in his email, you must
disregard and not rely on those statements when determining any issue in this
case, with one limited exception:
Defendants may introduce Dr.
Vanderheiden’s testimony and his email for the sole purpose of showing their
state of mind regarding plaintiffs’ patents.
If defendants put forth only Vanderheiden’s email and it is admissible as outlined
above, the instruction will read as follows:
Defendants have introduced an email written by Dr. Gregg C. Vanderheiden.
Dr. Vanderheiden has not been designated as an expert for the purposes of
this case. You must therefore disregard Dr. Vanderheiden’s statements in his
email and not rely on them when deciding any issue in this case, with one
limited exception. Defendants may introduce Dr. Vanderheiden’s email for
the sole purpose of showing their state of mind regarding plaintiffs’ patents.

ORDER
IT IS ORDERED that
1. Plaintiffs’ motion in limine no. 14 to preclude certain testimony from Kelby Brick,
dkt. #458, is RESERVED. Defendants shall have until noon on Saturday, October 11,
2014, to explain why they believe the jury should hear evidence of their affirmative defenses
during the damages phase of trial. Plaintiffs shall have until noon on Wednesday, October
15, 2014, to respond.
2. Defendants’ motion in limine no. 5 to exclude evidence and argument regarding
actions taken by the FCC against Purple Communications, dkt. #398, is GRANTED with
respect to the jury trial in this case.

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3. The October 3, 2014 order denying plaintiffs’ motion in limine no. 16 as moot,
dkt. #563, is amended as follows:
a. The motion is DENIED as moot as it relates to plaintiffs’ induced
infringement claims.
b. The motion is GRANTED to the extent that defendants may not
offer evidence or argument related to the inter partes review
proceedings during the liability phase of trial for any reason or during
the damages phase of trial to show that the patents are entitled to
diminished value.
c. The motion is DENIED to the extent that defendants may
introduce the inter partes review board’s decision as evidence of their
good faith belief in invalidity in the event that subjective willfulness is
presented to the jury. If this occurs, the jury will be given a curative
instruction regarding the proper weight to be given this evidence.
4. Defendants’ request to prohibit plaintiffs from arguing that Ryan was not enabled,
dkt. #572, is DENIED.
5. Defendants may introduce evidence of Dr. Gregg Vanderheiden’s emails and
memorandum for the sole purpose of showing defendants’ state of mind with respect to the
question of willfulness during the damages phase of trial, on the condition that defendants
first introduce evidence showing that they became aware of Vanderheiden’s words before
allegedly relying on them.

If a curative instruction is needed, the court will give the

instruction discussed in section E of the opinion.
Entered this 8th day of October, 2014.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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