Oxbo International Corporation v. H&S Manufacturing Company, Inc.

Filing 472

FINAL PRETRIAL CONFERENCE ORDER Signed by District Judge James D. Peterson on 06/07/2017. (ejt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

OXBO INTERNATIONAL CORPORATION,

v.

Plaintiff,

FINAL PRETRIAL
CONFERENCE ORDER

H&S MANUFACTURING COMPANY, INC.,

15-cv-292-jdp

Defendant.
The court held a final pretrial conference on Wednesday, May 31, 2017, before
United States District Judge James D. Peterson. Plaintiff Oxbo International Corporation
appeared by counsel, Shane Brunner, Jeffrey Ward, Thomas Johnson, Stephen Howe, and
Emily Wessels. Defendant H&S Manufacturing Company, Inc., appeared by counsel, Eric
Chadwick, Aaron Davis, and Adam Szymanski.

GENERAL PRETRIAL INSTRUCTIONS
Counsel predicted that the case would take 5-10 days to try. The court will tell the
jury 10. The jury will consist of 8 jurors to be selected from a qualified panel of 14. Each side
will exercise three peremptory challenges against the panel. Trial days will begin at 9:00 a.m.
and will run until 5:30 p.m., with at least an hour for lunch, a short break in the morning,
and another in the afternoon. Counsel may be required to be in court earlier than 9:00 a.m.
to address matters without the presence of the jury. On the first day of trial, counsel are
directed to appear at 8:30 a.m.
Witnesses, with the exception of experts and corporate representatives, will be
sequestered.

The court directed counsel to meet and confer regarding their exhibit lists and
deposition designations, to pare down objections. The court will rule on any meaningful
objections that the parties are unable to resolve themselves. The court is not inclined to
referee a large number of otherwise minor disputes.
The parties must submit electronic versions of their exhibits for the court not later
than 8:30 a.m. on Monday, June 12, 2017. Unless otherwise agreed by the parties, counsel
must disclose any exhibits to be used in opening statements not later than 6:00 p.m. on
Friday, June 9, 2017, and identify the witnesses they anticipate calling not later than 6:00
p.m. on the business day before that witness is expected to testify.
Counsel should keep in mind that opening statements are an overview of the
evidence. Arguments are to be reserved for the end of the trial.
Counsel indicated that they are familiar with the court’s visual presentation system.
Counsel should use the microphones at all times and address all objections to the bench, not
to opposing counsel. If counsel need to consult with one another, they should ask for
permission to do so. Only the lawyer questioning a particular witness may raise objections to
questions put to the witness by the opposing party and argue the objection at any bench
conference.
If counsel call the opposing party’s witness as an adverse witness, counsel for the
opposing party may choose whether to ask only clarifying questions of the witness and call
the witness in its own case or do all its questioning during its opponent’s case, in which case
the party calling the witness will have an opportunity to respond with questioning. If counsel
choose the first option, they are free to call the witness during their case. Counsel have the
same two options as to any adverse witness; they are not bound by their decision on

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questioning any previous witness. Counsel for the witness should inform the court which
approach it will be taking before beginning the examination.

VOIR DIRE AND JURY INSTRUCTIONS
The court and the parties discussed the draft voir dire and introductory instructions as
distributed. Neither party objected to the circulated draft voir dire.
Oxbo asked the court to instruct the jury on the court’s summary judgment holdings
and its claim constructions during introductory instructions; H&S generally opposed. The
parties briefed the issue after the conference. The court will inform the jury that certain
issues have been decided by the court before trial, and it will provide the claim construction
instruction. But the court will not instruct the jury on the specific summary judgment
findings on infringement in the liability phase. The court concludes that such an instruction
will unfairly stack the deck against H&S, and it is not needed to alleviate any juror
confusion. (The issue of commercial success is discussed below.)
The court will consider whether to instruct the jury about the nature of the crosslicense and the reasonable royalty calculation, although the court is not convinced that crossexamination on this issue will not be sufficient (as discussed below). Dkt. 468, at 5-7.
The court will consider the “harvesting in the winter” instruction only if H&S
attempts to take advantage of the timing of those tests. Id. at 7-8.
The court will circulate a draft of the post-trial instructions and a draft of the special
verdict forms in the coming days. Final decisions on the post-trial instructions and verdict
forms will be made at the instruction conference near the end of the liability phase of trial.

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RULINGS ON MOTIONS
A. Oxbo’s objections to H&S witnesses
The court resolved Oxbo’s objections to H&S’s witness list: H&S does not intend to
call either Mark Foley or Bob Snape. Witnesses available to testify for trial may not testify by
deposition. The court’s rulings on the motions in limine will govern the scope of permissible
witness testimony.
B. H&S’s anticipation case against the ’929 patent
H&S concedes that under the court’s claim constructions, it cannot show that the
Beougher reference anticipates claim 44 of the ’929 patent. Accordingly, summary judgment
is granted to Oxbo on that issue.
C. Oxbo’s motion for sanctions
As announced during the final pretrial conference, the court has determined that
(1) H&S lost or destroyed potentially relevant design and development documents;
(2) H&S’s duty to preserve those documents arose not later than August 2010, when H&S
claimed work product privilege and began preparing for litigation; and (3) the loss has
prejudiced Oxbo. H&S’s duty to preserve did not expire in August 2011, when Paul Dow and
Chris Heikenen discussed the potential infringement issue, prompted by an Oxbo
salesperson’s comments. The court already determined that it would not have been
reasonable for H&S to believe that Oxbo would not enforce its patent rights as a result of
that conversation. Dkt. 392, at 12-16.
The evidentiary hearing on the motion for sanctions revealed that documents were
lost as a result of a regular business practice: despite its policy of preserving all documents,
H&S wiped computers when individuals left the company and transferred the computers to

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new users. Thus, H&S destroyed key design and developments documents in 2012 and 2013.
But, critically, Oxbo made no showing that the destruction was the result of any effort to
hide adverse information from Oxbo. Thus, the remedy for H&S’s spoliation is limited to
putting Oxbo in the position in which it would have been, but for the spoliation.
The court will award Oxbo its reasonable fees and costs in bringing the motion. But
crafting the other elements of an appropriate remedy for H&S’s spoliation has proven
difficult. Oxbo asks the court to: preclude H&S from offering testimony or other evidence
regarding the design and development of the Tri-Flex; and preclude H&S from offering
testimony or other evidence that it did not copy the patents-in-suit. This goes too far.
To allow Oxbo to argue and present evidence that H&S copied Oxbo’s product while
precluding H&S from responding would be tantamount to allowing the jury to draw an
adverse inference from the spoliation. An adverse inference instruction—instructing the jury
that it should or even may infer that the missing documents are not favorable to H&S—is a
remedy appropriate only for bad faith spoliation. Oxbo has not argued, much less proven,
that H&S acted in bad faith or to hide certain information from Oxbo. See Faas v. Sears,
Roebuck & Co., 532 F.3d 633, 644 (7th Cir. 2008) (holding that the district court properly
denied the adverse inference when the record showed that Sears did not destroy the
documents to destroy adverse information; Sears shredded the docs as a regular business
practice). “Recent Seventh Circuit precedent on the proper standard for determining whether
a party destroyed or failed to preserve evidence such that the other party is thus entitled to
an adverse inference involves a requirement to show ‘bad faith.’” In re Text Messaging Antitrust
Litig., 46 F. Supp. 3d 788, 797 (N.D. Ill. 2014), aff’d, 782 F.3d 867 (7th Cir. 2015). To force
H&S to sit silently as Oxbo accuses it of copying and willful infringement would allow or

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even encourage the jury to assume that those accusations are unchallenged; it is a sanction
equivalent to, if not worse than, an adverse inference instruction.
The court will instruct the jury as follows:
Most of the documents related to the design and development of
the Tri-Flex merger were lost or deleted from the computer
system at H&S. Because those documents are now unavailable,
you will hear no testimony about the contents of the missing
design and development documents. During the trial, witnesses
may mention that the documents are missing. But you should
not make any assumptions about what is in the missing
documents.
The parties may not introduce evidence or argue about the nature, content, or implications of
those missing documents. Because there is no showing that the spoliation was in bad faith,
the court will not allow the parties to go into the details about the loss of the documents.
Doing so will waste time, risk jury confusion, and encourage the jury to draw an adverse
inference about the contents of the missing documents.
Oxbo may use any surviving design and development documents to prove copying or
willfulness at trial. If Oxbo does so, H&S may use the surviving documents in response. But
H&S may not affirmatively use the design and development documents unless Oxbo opens
the door.
Oxbo also asks that the court sanction H&S for its late document production in
September 2016. But as the court explained during the final pretrial conference and at other
points in this case, the court has already addressed the late production and remediated
Oxbo’s prejudice. The court expanded the summary judgment schedule and allowed Oxbo
additional time and extra rounds of briefing, allowed Oxbo to supplement its expert reports,
and allowed Oxbo to otherwise account for the late-produced documents as it deemed
appropriate. The court made these changes to the summary judgment schedule in

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consultation with the parties, and Oxbo gave the court every indication that it had fully
addressed the late production situation. The court allowed Oxbo to use and rely on lateproduced documents in its summary judgment submissions; the court will not turn around
and prohibit H&S from using those documents at trial. But the court will award Oxbo its
reasonable attorney fees and costs incurred in having to deal with the late production.
The court will have Oxbo submit a formal request for its fees for the sanctions motion
after trial.
D. Oxbo’s commercial success
At the final pretrial conference, Oxbo asked the court to instruct the jury about the
court’s summary judgment decision. The reason Oxbo gave for wanting the instruction was
that Oxbo intends to use H&S’s sales of infringing Tri-Flex mergers as evidence of Oxbo’s
commercial success. There is nothing wrong, in principle, with using the infringing product to
show commercial success. Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d
1120, 1130 (Fed. Cir. 2000) (“Our case law provides that the success of an infringing
product is considered to be evidence of the commercial success of the claimed invention.”).
But evidence of commercial success (or any other secondary consideration) is relevant
only if there is a nexus between the claimed invention and the commercial success. Ormco
Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311-12 (Fed. Cir. 2006). If the success is due to
unclaimed features, or to features that were in the prior art, commercial success is irrelevant.
Id. If commercial success is due to superior marketing or distribution, it is likewise irrelevant.
See, e.g., Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC, 683 F.3d 1356, 1363 (Fed. Cir.
2012). Establishing this nexus is typically the province of an expert. But, according to H&S,
Oxbo’s first disclosure of any factual basis for commercial success was in its damages expert’s

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report. Dkt. 465 (citing Bero report, Dkt. 112). Oxbo’s liability expert, Chaplin, did not
disclose any expert opinion on commercial success or its nexus to the claimed invention.
Oxbo’s responses to H&S’s contention interrogatories did not disclose any intent to assert
commercial success as a secondary consideration in any specific terms.
Accordingly, Oxbo will not be allowed to assert commercial success as a secondary
consideration unless it can demonstrate to the court that it had timely disclosed this theory
to H&S. At this point, commercial success is out.
E. H&S’s motions in limine
1. To sequester witnesses
The motion to sequester witnesses, except for party representatives and experts, is
granted.
2. To preclude Oxbo from using or referencing H&S’s inadvertently produced
privileged documents
The motion is granted, except that Oxbo may use the documents for impeachment
purposes. The court will keep a copy of the documents on the bench and make them
available to Oxbo should it need them.
3. To preclude Oxbo from introducing evidence of pre-suit knowledge, willful
infringement, or copying of the ’739 patent, the ’052 patent, and the ’488
patent
The motion is denied. Oxbo is free to introduce the evidence that it has of H&S’s presuit knowledge, provided Oxbo properly disclosed the evidence during discovery. The fact
that the evidence may be weak is not a reason to take pre-suit knowledge, willful
infringement, and copying off the table at this time. The court will instruct the jury on the
applicable legal standards, and the jury will decide whether Oxbo’s evidentiary showing is

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sufficient. See WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016) (“We do not
interpret Halo as changing the established law that the factual components of the willfulness
question should be resolved by the jury.”). If H&S does not believe that Oxbo’s evidentiary
showing is sufficient to sustain a jury verdict on the issue, H&S may ask the court to direct a
verdict in H&S’s favor at the appropriate time.
To the extent the motion concerns H&S’s lost design and development documents, it
is subject to the court’s ruling on that issue.
4. To preclude arguments regarding infringement under the doctrine of
equivalents
Because the court granted H&S summary judgment of non-infringement under the
doctrine of equivalents, Dkt. 392, the motion is granted.
5. To exclude any mention of inter partes review proceedings
The motion is granted for the most part, with one proviso: the court will instruct the
jury as follows:
The Patent Office considered the patentability of claim(s) ___ of
the ___ patent with respect to [the _____ reference or the
combination of the ___ and ___ references] during a
supplemental proceeding called an inter partes review that was
initiated by H&S. In that proceeding, the Patent Office
determined [the ___ reference or the combination of the ____
and ____ references] did not affect the patentability of the
claim(s).
H&S had an opportunity when it petitioned for IPR to introduce evidence against validity
that was not, and could not have been, introduced during the original examination. Thus, it
would be unfairly prejudicial to Oxbo to allow H&S to argue to the jury that the references
that it presented in the IPR petition had never been evaluated by the Patent Office. All other
references to the IPR proceedings are out.

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Counsel should provide the court with the information necessary to fill-in the blanks
in the special instruction.
6. To limit testimony and argument from Oxbo witnesses and counsel
regarding alleged copying as to the ’929 patent
The motion is denied for the most part. Oxbo disclosed that its expert would offer
opinions on nonobviousness and secondary considerations, and Chapin did so. Oxbo
identified Paul Dow and Jim Glazier as individuals with knowledge of secondary
considerations. Dkt. 357-3, at 6. And Oxbo identified Steve Pesik in its Rule 26(a)
disclosures as having information regarding the “competitive landscape in the windrow
merging apparatus market” and “general industry knowledge.” Dkt. 357-5, at 4. Copying,
Oxbo contends, falls within these categories. And Pesik testified to the company’s position on
that issue. Dkt. 304 (Pesik Dep. 55:23-25, 57:24-58:10). Those properly disclosed witnesses
may testify accordingly. H&S did not serve a contention interrogatory specifically targeting
copying, so the fact that Oxbo’s interrogatory responses were aimed at secondary
considerations generally does not pose a disclosure problem.
7. To prohibit product-to-product comparison as part of infringement analysis
The motion is granted as unopposed. Oxbo may not use product-to-product
comparison to prove infringement.
8. To preclude evidence of H&S’s financial size and overall revenue
The motion is granted and applies equally to Oxbo’s financial size and overall
revenue. As discussed during the final pretrial conference, Oxbo may attempt to show
Heikenen’s bias by asking him about his ownership stake in H&S. But Oxbo may elicit
testimony regarding only the fraction or percentage of Heikenen’s stake, not its dollar value.

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If the parties believe that this information may be relevant during the damages phase,
they should raise the issue with the court then.
9. To exclude evidence of pretrial sanctions, discovery motions, orders, and
evidence
The motion is granted. The evidence is no doubt highly prejudicial to the losing party,
and Oxbo has not demonstrated that any of the court’s prior rulings are relevant, much less
that they are more probative than prejudicial. To the extent the motion concerns H&S’s
destroyed design and development documents, it is subject to the court’s ruling on that issue.
F. Oxbo’s motions in limine
1. To exclude evidence regarding H&S’s patents
The court had a lengthy discussion with the parties about this motion at the final
pretrial conference. In short, the court was not persuaded that H&S’s issued patents bear any
relevance to the issues to be tried. The issued patents are excluded.
H&S made a slightly better case for mentions of potentially patentable features as it
sought and obtained advice of counsel during the Tri-Flex’s development. No advice of
counsel documents, opinion letters, or other relevant documents speak directly about H&S’s
issued patents, but they may contain comments about the potential patentability of features
of H&S’s products. But this information, too, is irrelevant. (The patentability of H&S’s
products might be relevant to a defense to infringement under the doctrine of equivalents,
but that’s not in the case.) H&S is free to offer evidence of its attempts to design around the
Oxbo patents; it does not need its patents to tell its development story or rebut copying
accusations. To allow H&S to introduce its own patents or the patentability of its products
would undoubtedly confuse the jury. The motion is granted.

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If the advice of counsel documents include more than minor comments about
patentability, the advice of counsel documents can be redacted. The court assumes that the
parties will work this out, but they should bring the matter to the court’s attention if
necessary.
2. To exclude Kuhn references
The motion is granted. Shirley is limited to the opinions disclosed in his report, and
he does not offer any analysis of or opinions involving the Kuhn references. Shirley may
testify that the Kuhn references are among the documents he considered, but the references
are otherwise excluded.
3. To exclude evidence regarding the cross-license and related evidence and
expert opinions
The motion is denied. The cross-license is of questionable relevance. On one hand,
Oxbo and Kuhn entered into the cross-license under threat of litigation, and thus it is not a
great measure of the market value of the patents-in-suit. “The propriety of using prior
settlement agreements to prove the amount of a reasonable royalty is questionable.”
LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 77 (Fed. Cir. 2012). “The notion
that license fees that are tainted by the coercive environment of patent litigation are
unsuitable to prove a reasonable royalty is a logical extension of Georgia-Pacific, the premise of
which assumes a voluntary agreement will be reached between a willing licensor and a willing
licensee, with validity and infringement of the patent not being disputed.” Id. On the other
hand, Oxbo has not otherwise licensed the patents-in-suit, so the cross-license is the only
license available to the damages experts. The Federal Circuit has allowed reliance on
settlement agreements under such circumstances. Id. (citing ResQNet.com, Inc. v. Lansa, Inc.,

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594 F.3d 860, 870-72 (Fed. Cir. 2010) (explaining that a settlement license to the patentsin-suit in a running royalty form was “the most reliable license in [the] record” when
compared with other licenses that did not “even mention[ ] the patents-in-suit or show[ ] any
other discernable link to the claimed technology”)). When it comes down to it, the crosslicense is of arguable probative value, and Cordray adequately explains how and why he relies
on it. See Dkt. 318, ¶¶ 77-101. The countervailing reasons for disregarding it are properly
explored on cross-examination.
And Oxbo’s Rule 408 arguments are not persuasive. No one intends to use the crosslicense and the related settlement negotiations to prove liability.
4. To preclude evidence regarding H&S’s equitable defenses
The motion is granted. The court resolved H&S’s equitable defenses on summary
judgment. The court will address the relevance of the “equitable defenses” facts to the parties’
remaining claims when it addresses H&S’s motion to submit to the jury common factual
issues. Dkt. 380.
5. To exclude testimony and argument about prior art combinations not
addressed in H&S’s expert’s report
The motion is granted as unopposed.
6. To preclude H&S and its expert from providing evidence of institution of
inter partes review
The motion is granted as unopposed and consistent with the court’s ruling on H&S’s
motion in limine no. 5.

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7. To preclude H&S’s expert from testifying to his conclusion that the asserted
claims are anticipated or obvious
The motion is denied. According to Oxbo, Shirley applied a “lower standard” of proof
when he formed his obviousness and anticipation opinions (in connection with the IPR), and,
as a result, his ultimate conclusions are so unsound they should be excluded. The fact that
Shirley may have bungled a few questions about the legal standard applicable to validity
challenges does not show that he fundamentally misunderstands the law, or that his opinions
are fundamentally unreliable. Oxbo is free to explore Shirley’s understanding of the standard
of proof issue during cross-examination.
8. To preclude H&S from introducing evidence regarding Oxbo’s terminal
disclaimers
The motion is denied as unnecessary. The parties agree that a terminal disclaimer is
not an admission as to whether any patent claim is patentably distinct from the claims in the
parent. If Shirley opines otherwise, the court will provide a curative instruction. It does not
appear that Shirley’s opinions regarding the ’739 patent and the ’488 patent are predicated
on an incorrect understanding of how terminal disclaimers work, so the court will not exclude
those opinions. Oxbo is free to explore the issue on cross-examination.
9. To preclude H&S from introducing the Krone declaration or presenting a
Krone witness at trial
As discovery came to a close, H&S produced a declaration by Jody McRee of Krone
NA, Inc. Krone manufactures farm equipment. The declaration authenticates three Krone
documents as business records. H&S proposes to have an H&S sales manager, John Seitz,
testify about Krone and other brand rotary rakes and their use as an alternative to triple
mergers, presumably using the Krone document to illustrate his testimony. H&S contends

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that Seitz’s testimony will be relevant to the jury’s consideration of non-infringing
alternatives during the damages phase.
The court will allow Seitz to testify as a lay witness, to the extent he has relevant
knowledge of hay rakes (including those made by Krone). But his testimony about noninfringing alternatives will come close to expert opinion, which he cannot offer because he
has not been disclosed as an expert. H&S has not shown why or how the Krone documents
would be admissible other than as support for an expert opinion about non-infringing
alternatives. The motion is granted: the Krone documents are excluded.
10. To exclude certain references from being used as prior art against Oxbo’s
originally asserted claims
Oxbo asks the court to preclude H&S from arguing that claim 44 of the ’929 patent,
claim 1 of the ’739 patent, claims 1 and 3-11 of the ’488 patent, and claims 1, 4, 6, and 8 of
the ’052 patent are invalid based on CA Honey, van der Lely, Declementi, Lohrentz, US
Honey, Pourchet, or any other undisclosed references, and from arguing that claim 1 of the
’739 patent is invalid over the combination of Dow ’757 in view of Zhavoronkin. The motion
is based on an agreement the parties reached during discovery.
H&S agrees to the foregoing, with one exception. It contends that it properly
disclosed its contention that claim 1 of the ’739 patent is invalid over Dow ’757 in view of
Zhavoronkin, and, as a result, that combination is fair game at trial.
In June 2016, H&S agreed that it would not assert any references that it did not
disclose in its January 8 and March 24, 2016 invalidity contentions against Oxbo’s originally
asserted claims. See Dkt. 376-33 (“H&S has agreed that the only references it may use
against the originally asserted claims is that which was disclosed in its original and

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supplemental invalidity contentions, served January 8, 2016 and March 24, 2016
respectively. To the extent H&S’s expert reports cite additional references, H&S has agreed it
will not use such references against the originally asserted claims in this litigation.”). The
issue here is whether H&S disclosed the Dow/Zhavoronkin combination in either its January
8 or March 24 contentions.
Both disclosures identify the Zhavoronkin reference and the Dow reference. See
Dkt. 376-26, at 13-15 and Dkt. 376-22, at 11. The January disclosure contends that claim 1
of the ’739 patent is invalid over “one or more of the following patents individually or in
combination,” and it includes the Zhavoronkin reference and the Dow reference in the list
that follows. Dkt. 376-26, at 18. The March disclosure identifies specific prior art
combinations—contending that claim 1 of the ’739 patent is invalid over Schnittjer in view
of Zhavoronkin, for example—but it never contends that claim 1 of the ’739 patent is invalid
over Dow in view of Zhavoronkin. Dkt. 376-22, at 13-14.
H&S’s disclosure was not specific enough to put Oxbo on notice of the particular
invalidity ground that H&S was asserting. Accordingly, the motion is granted in full.
11. To exclude reference to John Orr and Orrson Custom Farming
The motion is granted as unopposed.
12. To exclude evidence regarding an alleged hypothetical acceptable noninfringing alternative
This motion identifies two problems for H&S. First, H&S did not identify its
WMCH30 merger as an acceptable non-infringing alternative in response to an Oxbo
contention interrogatory. H&S disclosed “H&S Twin Mergers of all sorts” and “H&S Front
Mount Mergers.” Dkt. 376-1, at 9. Cordray refers to the WMCH30 as a twin merger. But

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according to Oxbo, the WMCH30 is neither a twin merger nor a front mount merger: it is a
continuous face merger. Neither party has adduced evidence that would allow the court to
determine whether “H&S Twin Mergers of all sorts” or “H&S Front Mount Mergers”
includes the WMCH30. So it cannot say whether H&S properly disclosed the WMCH30 as
an acceptable non-infringing alternative.
But even if H&S’s disclosures were adequate, Cordray’s opinions about the
WMCH30 are not well grounded. Cordray opines “that if H&S was precluded from
commercializing its current Tri-Flex triple mergers, it could have continued selling—and
would have improved the design of—an existing twin merger [the WMCH30].” Dkt. 318,
¶ 32. Cordray acknowledges the product’s shortcomings, but he opines that sales figures
undermine Bero’s opinion that the WMCH30 was not commercially successful. Cordray goes
on to opine that “if H&S could not sell its Tri-Flex triple mergers in 2011, it could have and
would have invested its resources into engineering a better WMCH30.” Id. ¶ 33.
Cordray never opines that the existing WMCH30 is an acceptable non-infringing
alternative; he opines that a new-and-improved WMCH30 would qualify as an acceptable
non-infringing alternative. But he does not have the data to back it up. “When an alleged
alternative is not on the market during the accounting period, a trial court may reasonably
infer that it was not available as a noninfringing substitute at that time.” Grain Processing
Corp. v. Am. Maize-Prod. Co., 185 F.3d 1341, 1353 (Fed. Cir. 1999). So H&S bears the
burden of rebutting this inference by demonstrating that a non-infringing substitute was
available during the period of infringement. “[T]he trial court must proceed with caution in
assessing proof of the availability of substitutes not actually sold during the period of
infringement. Acceptable substitutes that the infringer proves were available during the

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accounting period can preclude or limit lost profits; substitutes only theoretically possible will
not.” Id. H&S must prove the availability of a new-and-improved WMCH30 with concrete
evidence, not speculation. H&S should be able to show that it “had all of the necessary
equipment, know-how, and experience” to improve the WMCH30. Id. at 1354. But Cordray
was armed with none of this information. He worked off of Heikenen’s conclusory say so.
Cordray’s opinion regarding an improved WMCH30 is conclusory and unreliable, and the
court will exclude it.
13. To exclude reference to prior Daubert challenges or exclusions
The motion is granted as unopposed.
14. To exclude evidence and argument regarding Oxbo’s motivations for
bringing this lawsuit and any resulting harm to H&S
H&S agrees that, “apart from its equitable defenses,” this evidence is properly
excluded. But the equitable defenses are not an issue for the jury, so the motion is granted in
full.
15. To preclude H&S from asserting that Oxbo is attempting to monopolize the
merger market
The motion is granted as unopposed.
16. To preclude H&S’s expert from introducing opinions based on the nonexistent Shirley report
The motion is granted. H&S agrees that Cordray may not offer any opinions that rely
on the undisclosed December 2016 Shirley report.

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G. H&S’s remaining motions
1. To exclude expert testimony regarding secondary considerations of
nonobviousness
H&S moves to exclude Chaplin’s opinions regarding licensing, copying, and industry
praise, under Daubert. H&S contends that the opinions are not reliable; he does not employ
any principles, methods, or specialized knowledge. Dkt. 114, ¶¶ 718-38. The opinions are
inadmissible ipse dixit.
The court agrees with H&S, in part. Chaplin’s licensing opinion cites the Kuhn crosslicense and then concludes that the “license is evidence that the [patents-in-suit] are
nonobvious because Kuhn recognized the value and validity of the patents.” Id. ¶ 721. The
opinion is conclusory, and the court will exclude it.
As for copying, H&S overlooks Chaplin’s supplemental report, Dkt. 208, which
provides his most detailed copying opinions. Chaplin opines that documents and
photographs reveal that H&S thoroughly analyzed Oxbo’s triple head mergers. Id. ¶¶ 32-35.
Chaplin opines that “H&S’s efforts to study these details of the Oxbo mergers while H&S
was developing the Tri-flex suggest that H&S copied patented and functional features of the
Oxbo mergers . . . .” Id. ¶ 36. Chaplin points to documents that indicate that H&S inspected
an Oxbo merger and took detailed notes about it around the time that it began developing
the Tri-Flex. H&S’s motion does not acknowledge these opinions. The opinions, although
they amount to fairly weak evidence of copying, are not so unreliable that the court will
exclude them.
Finally, as discussed at the final pretrial conference, the court will admit only certain
aspects of Chaplin’s industry praise opinions: those opinions based on the 2004

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“Outstanding Innovations Award.” Dkt. 114, ¶ 727. The other publications and awards that
Chaplin cites either do not qualify as praise or do not have a sufficient nexus to the patented
features.
2. To exclude expert testimony regarding damages
H&S contends that Bero’s and Chaplin’s damages opinions are neither relevant nor
reliable, for three reasons.
First, H&S contends that Bero relies on Chaplin’s unsupported say so to support his
opinion that there are no acceptable non-infringing alternatives, which is a necessary step in
his opinion that Oxbo is entitled to lost profits. Chaplin opines that hay rakes are very
different than mergers and that they are not acceptable non-infringing alternatives because
(1) hay rakes flick soil and stone into windrows, which causes higher ash content and lowerquality forage; (2) hay rakes operate at about half the operational speed of mergers; and
(3) hay rakes have limited flexibility and functionality compared to mergers (cannot operate
in either direction or merge with fewer than all pickup heads). Dkt. 315, at 3-4. Chaplin’s
opinion about hay rakes is not ipse dixit. The fact that H&S may adduce evidence that hay
rakes are “equal or superior to mergers in seven of nine categories” and that H&S’s expert
disagrees with Chaplin on the hay rakes issue goes to weight, not admissibility. Bero’s noninfringing alternatives opinion is adequately supported.
Second, H&S contends that Bero fails to apportion his trough and rub rail royalty to
account for unpatented features. The trough patent does not cover all the features of the TriFlex, so Oxbo cannot claim the entire market value of the Tre-Flex as damages. Bero concedes
as much. But H&S contends that he does not explain how he apportioned the damages to the
patented features. Oxbo responds that H&S misunderstands Bero’s report. Bero identifies

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profits attributable to two (trough, rub rail) of the twelve improvements to Oxbo’s new
generation of mergers. “[I]t is generally required that royalties be based not on the entire
product, but instead on the ‘smallest salable patent-practicing unit.’” LaserDynamics, Inc., 694
F.3d at 67 (quoting Cornell Univ. v. Hewlett-Packard Co., 609 F. Supp. 2d 279, 283, 287-88
(N.D.N.Y. 2009), as amended, No. 01-cv-1974, 2009 WL 1405208 (N.D.N.Y. May 15,
2009)). Bero does not disregard this principle and he has a method to apportion the trough
and rub rail royalty. Dkt. 320, at 63-67. The court will not exclude the opinion.
Finally, H&S contends that Bero’s triple head royalty analysis is fatally flawed for
several reasons. First, H&S contends that he starts with a baseless lost profits opinion. This
notion is rejected for reasons discussed above.
Second, H&S contends that Bero makes an arbitrary and unexplained downward
departure from 75 percent to 60 percent to adjust to Oxbo’s market share. Bero states that
Oxbo’s market share may be as low as 60 percent. The number is the conservative choice; it is
not arbitrary. See Dkt. 320, at 30 (Heikenen estimated Oxbo’s market share to be between 60
and 70 percent); 32 (Oxbo’s market share estimated to be about 60 percent in 2013 and
2014); 40 (“Oxbo’s patented triple mergers accounted for approximately 66% of the market
in 2011, and have accounted for approximately 60% of the market since 2012.”).
Third, H&S contends that Bero’s per-unit royalty is legally erroneous, citing another
district court’s criticism of a Bero opinion using a per-unit royalty. See Sloan Valve Co. v. Zurn
Indus., Inc., 33 F. Supp. 3d 984, 1001 (N.D. Ill. 2014). But a per-unit reasonable royalty is
not per se unreasonable. See, e.g., Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., 807 F.3d
1283, 1304 (Fed. Cir.) (“This court has noted the common (not universal) economic
justifications for using per-unit royalties for measuring the value of use of a technology: doing

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so ties compensation paid to revealed marketplace success, minimizing under- and overpayment risks from lump-sum payments agreed to in advance.”), reh’g en banc denied in part,
805 F.3d 1382 (Fed. Cir. 2015).
Fourth, according to H&S, Bero improperly conflates the three triple head patents, by
performing only one reasonable royalty analysis, even though the hypothetical negotiations
would have occurred at different times. Bero correctly identifies the starting point for each
hypothetical negotiation. Dkt. 320, at 49 n.260, 61 n.309.
The bottom line is that H&S has not identified any persuasive reason to exclude any
aspect of Bero’s report. The motion is denied in its entirety.
3. Motion for judicial notice
The motion is denied as moot.
4. H&S’s motion to submit to the jury the facts related to H&S’s equitable
defenses
The motion is denied. H&S contends that its equitable estoppel facts (the August
2011 phone call between Dow and Heikenen, discussed in the court’s summary judgment
opinion) should go to the jury because they are relevant to both willfulness and H&S’s
equitable defenses. Oxbo opposes the motion because the facts are not relevant to willfulness.
The court has already determined that it was not reasonable for H&S to believe that
Oxbo would not enforce its patent rights after the phone call. As discussed at the final
pretrial conference, H&S has not convinced the court that the phone call is relevant to
willfulness, but presenting it to the jury would risk substantial confusion and waste time. The
motion is denied.

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ORDER
IT IS ORDERED that:
1. Plaintiff Oxbo International Corporation’s motion for sanctions, Dkt. 260, is
GRANTED in part and DENIED in part.
2. Defendant H&S Manufacturing Company, Inc.’s motion in limine no. 1,
Dkt. 346, is GRANTED.
3. Defendant’s motion in limine no. 2, Dkt. 347, is GRANTED.
4. Defendant’s motion in limine no. 3, Dkt. 348, is DENIED.
5. Defendant’s motion in limine no. 4, Dkt. 349, is GRANTED.
6. Defendant’s motion in limine no. 5, Dkt. 350, is GRANTED, subject to the terms
discussed herein.
7. Defendant’s motion in limine no. 6, Dkt. 352, is DENIED, as discussed above.
8. Defendant’s motion in limine no. 7, Dkt. 353, is GRANTED.
9. Defendant’s motion in limine no. 8, Dkt. 354, is GRANTED
10. Defendant’s motion in limine no. 9, Dkt. 355, is GRANTED.
11. Plaintiff’s motions in limine, Dkt. 359, are GRANTED and DENIED as set forth
herein.
12. Defendant’s motion to exclude expert testimony regarding secondary
considerations of nonobviousness, Dkt. 334, is GRANTED in part and DENIED
in part.
13. Defendant’s motion to exclude expert testimony regarding damages, Dkt. 336, is
DENIED.
14. Defendant’s motion for judicial notice, Dkt. 343, is DENIED as moot.

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15. Defendant’s motion to submit to jury, Dkt. 380, is DENIED.
Entered June 7, 2017.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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