A Blog About Intellectual Property Litigation and the District of Delaware


Entries for tag: Daubert

Ack-Shually Damages

Nathan R. Hoeschen, Oct. 24, 2024
DTSA Damages

If law has one guiding principle, it is that words matter. The precise choice of verb or adjective can be the difference between friend and foe, peace and war, victory and defeat.

You've read Faust, you get it.

History's most famous lawyer?
History's most famous lawyer? AI-Generated, displayed with permission

We saw a great example of this principle this week in I-Mab Biopharma, v. Inhibrx, Inc., C.A. No. 22-276-CJB (D. Del. Oct. 17, 2024) (Mem. Order). I-Mab was prought under the DTSA which allows damages to be calculated as either (1) damages for actual loss plus unjust enrichment or (2) a reasonable royalty. 18 U.S.C. § 1836(b)(3)(B).

The defendants—who unsurprisingly preferred a lower damages figure—served an expert damages report that noted that plaintiff's "actual damages" might be "zero." The plaintiff moved to exclude the opinion under Daubert, arguing that their damages theory was based on a reasonable royalty, and thus an opinion that their "actual damages" might be zero was neither here nor there, and was unduly prejudicial.

The defendant countered that the expert had meant that "Dr. Manning is 'not offering an opinion on actual losses, but instead references ‘actual damages’ as reflective of damages I-Mab may be awarded'—in other words, according to Defendants, the zero damages opinion is an opinion that Plaintiff’s reasonable royalty damages may be zero." Id. at 8 (quoting D.I. 364 at 23).

Judge Burke, however, found the expert's choice of words dispositive, and struck the so-called "zero damages opinion"

The Court agrees with Plaintiff that Defendants are ignoring the “actual words” that Dr. Manning used, as he did not opine in the zero damages opinion that Plaintiff’s “reasonable royalty damages” are zero (nor do Defendants point to anywhere else in Dr. Manning’s report where he opined that Plaintiff’s reasonable royalty damages should be zero). Nor do Defendants explain why an opinion that Plaintiff’s “actual damages . . . are zero” should be interpreted to actually mean that Plaintiff’s “reasonable royalty damages are zero.” Moreover, the Court agrees with Plaintiff that Dr. Manning does not seem to provide any facts or analysis in support of the zero damages opinion. Thus, Defendants have not sufficiently explained how, inter alia, Dr. Manning’s zero damages opinion is relevant in light of Plaintiff’s argument to the contrary; therefore it must be excluded.

Id. at 9 (internal citations omitted).

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An Exceptionally Polite Opinion

Nathan R. Hoeschen, June 11, 2024
Daubert

We got an interesting Daubert opinion from judge Burke yesterday. It's actually not in a patent case, but the issue was neat enough that I'm willing to make an exception to our usual rule.

(Eds. note—I really hate that Daubert is always italicized because its a case name, but the pronunciation is not at all French. I see italics and I get all excited to roll some R's or whatever and then I just sound like the midwesterner I am).

The issue: can an expert report be too polite?

They've always struck me as a very polite-looking creature, despite the whole cannibalism thing
They've always struck me as a very polite-looking creature, despite the whole cannibalism thing David Clode, Unsplash

The case involved various disclosures in a business transaction, and the expert in question was an accounting professor opining on whether certain financial disclosures were deficient. Reading through the statements, they do strike me as unusual for an expert report:

“I am uneasy about the fact that there were no disclosures [in the financial statements] about Schratter’s ability to continue to operate as a going concern.”
“I was surprised that the financial statements did not make any mention of a possible impairment of goodwill. . . . Given the financial condition of Schratter in 2014 and its recent financial performance, I would have expected to see some disclosures about an impairment test for goodwill and why no impairment was recorded.”

ECB USA, Inc. v. Savencia, S.A., C.A. No. 19-731-GBW-CJB (D. Del. June 10, 2024) (Mem. Order) (quoting expert report of Ricky Lee Antle).

I mean, you see it right? This sort of language—both personal and measured—is the sort you might expect to hear from your own deeply disappointed accountant, rather than in an expert report. Still, it's tough to say what exactly would be objectionable about it.

The tack defendants chose was to challenge these statements as ...

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Only So Many Hours In A Hearing

Nathan R. Hoeschen, May 30, 2024
Summary Judgment Daubert

The Court has developed many methods for curtailing the tendency of litigants to file and argue implausibly large numbers of SJ and Daubert motions. The first, begun long ago when mankind was yet to know fire and all creatures lived in harmony, was page limits. Later, Judge Connolly pioneered the practice of having parties rank their motions. Still further methods take seed, blossom, and wither, each day.

In you can't tell, I've been spending a lot of time in my garden this month. I just got my first plum! (not these).
In you can't tell, I've been spending a lot of time in my garden this month. I just got my first plum! (not these). Svitlana, Unsplash

This last month Judge Burke debuted a new approach—"requesting that the parties select one motion each to argue at the hearing.

The parties in the case in question each filed SJ and Daubert motions under the usual page limits. After briefing was complete, Judge Burke issued an order requesting the parties select 80 pages of briefing to actually be argued at the hearing:

The Court needs the parties' help to narrow the issues as to which argument will be presented on July 2. By no later than May 20, 2024, the parties shall meet and confer and file a joint letter with the Court advising of their position (it would be ideal if this were a joint position), as to which of (or which portions of) the 5 pending motions the parties wish to present argument on at the July 2 hearing (and which the Court can simply resolve on the papers).  For guidance, the Court can productively prepare for and hear argument on no more than about 80 pages of briefing.  After hearing back from the parties, the Court will then advise on which motions/issues it will hear argument on during the July 2 hearing.

The Nielsen Company (US), LLC v. TVision Insights, Inc., C.A. No.22-57-CJB. D.I. 219 (D. Del. Apr. 29, 2024).

The parties ultimately did submit a joint letter selecting the 80 pages of briefing. Judge Burke then issued a follow-up order requiring further narrowing for the hearing:

[T]he Court has further reflected on the issue, in part having after having recently overseen another similar hearing regarding such motions. As a result, it has become clear to the Court that for a hearing on summary judgment and/or Daubert motions to be most fruitful and focused, it makes best sense to require the parties to each select one motion that they will offer argument on to the Court.  This will allow for a detailed and focused argument regarding what the parties believe to be their most important motion, and will allow the Court to meaningfully prepare for argument.  Therefore, the Court hereby ORDERS that by no later than May 28, 2024, the parties shall submit a joint letter advising the Court of the motion that each respective side selects to be argued at the July 2 hearing.

Id., D.I. 238 (D. Del. May 21, 2024).

I would not be surprised to see used more going forward in cases before Judge Burke. We'll let you know if it enters his form order.

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"A Physicist, a Chemist, and an Economist Find Themselves on a Desert Island with a Single Can of Food . . ."

Andrew E. Russell, Feb. 7, 2024
Apportionment Daubert

Island
AI-Generated, displayed with permission

Visiting Judge Wolson of the Eastern District of Pennsylvania issued a colorful opinion on Monday. It starts with a joke:

Economists love assumptions. One joke recites that a physicist, a chemist, and an economist find themselves on a desert island with a single can of food. The physicist offers to calculate the force needed to use a coconut to open the can. The chemist offers to make a solution that will eat through the can’s top. The economist tells them they are making it too complicated and just to assume a can opener.

Wirtgen America, Inc. v. Caterpillar, Inc., C.A. No. 17-770-JDW, at 1 (D. Del. Feb 5, 2024).

The opinion involves an …

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No, You Can't Do That—Court Rejects Attempt to Offer Expert Testimony Regarding Strength of Own Prior Defenses

Andrew E. Russell, Jan. 17, 2024
Expert Witness Expert Testimony

"What do you mean, attorney argument! This is unbiased expert testimony about how awesome our positions are." Braydon Anderson, Unsplash

Well, this is a new one for me. In Wirtgen America, Inc. v. Caterpillar, Inc., C.A. No. 17-770-JDW-MPT (D. Del. Jan. 16, 2024), the plaintiff had previously brought an action in the ITC against the defendant, and won—achieving an exclusion order that stood up (in part) on appeal.

Now, in a District of Delaware action on the same patents, plaintiff argues willfulness based in part on the previous ITC ruling. Defendant tried to offer an expert who would testify about how great its defenses were at the ITC:

Caterpillar offers Mr. Bartkowski to opine on how …
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Bad Science

Nathan R. Hoeschen, Dec. 19, 2023
Daubert

Dauberts, especially of technical experts, are notoriously difficult. An error needs to be pretty blatant for the Court to find that it's not mere grounds for cross-examination. Moreover, it tends to be hard to find something useful to cite in a Daubert brief because the inquiry is often very fact-specific.

Thankfully we have Judge Bryson's opinion in Prolitec Inc. v. ScentAir Technologies, LLC, C.A. No. 20-984-WCB (D. Del. Dec. 13, 2023) (Mem. Op.), which sets forth a pretty bright line rule on a technical failure that warrants exclusion—failure to use a control in an experiment.

AI-Generated, displayed with permission

The specific experiment at issue was elegant in its awfulness. The claims required that the lid to a device have a "tortuous passage" that assisted in preventing leakage. To test if the accused product's tortuous passage prevented leakage, the plaintiffs' expert filled up the device, turned it on its side and checked for leaks. Finding none, he opined that the passage prevented leakage.

Judge Bryson noted the obvious flaw in this test and excluded the experts opinion:

ScentAir’s third and most telling objection is that Dr. Hultmark did not also test a device similar to the Breeze cartridge but lacking a tortuous passage, in order to determine whether that device would leak when filled 45 percent full of fragrance oil and placed on its side . . . .Given that there was no control for Dr. Hultmark’s test, the fact that the Breeze product did not leak under those conditions does not show that it was the tortuous passage in the Breeze cartridge that was responsible for the absence of leakage. Because Prolitec has failed to provide a satisfactory answer to this flaw in Testing Configuration 1, I find that the evidence regarding that test would not be helpful to the jury, and the evidence will therefore be excluded.

Id. at 28-29.

That's about as straightforward a Daubert ruling as I've ever seen. I'll hope to cite it myself soon (enemies beware!)

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Chief Judge Connolly Denies Daubert Motion Regarding Five Experts, Holding That Party Should Have Filed Five Separate Motions

Andrew E. Russell, Dec. 13, 2023
ETSI Congestion

Five Candles
Steve Johnson, Unsplash

Chief Judge Connolly's scheduling order requires parties to rank their Daubert motions, and gives the Court the discretion to automatically deny all lower-ranked motions if it denies any one motion. In other words, if a party files five Daubert motions, and the Court grants the first-ranked motion but denies the second, the Court can then deny motions three, four, and five:

If the Court decides to deny a motion filed by the party, barring exceptional reasons determined sua sponte by the Court, the Court will not review any further Daubert motions filed by the party.

It has a similar provision for summary judgment motions Thus, it's important that parties split up their motions and rank them. …

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A Really Crummy License

Nathan R. Hoeschen, Sept. 14, 2023
Damages Daubert

Many years ago, before Andrew made me put a picture in EVERY TURTLE-CURSED POST, I wrote a post about the very easiest Daubert motion to win. As a brief refresher, it turned out to be a motion to exclude a damages experts reliance on a jury verdict point as the starting point for a hypothetical negotiation. Both Judge Andrews and Judge Burke were particularly firm on the issue, coming just short of setting a bright-line rule:

A jury verdict does not represent evidence from which a hypothetical negotiation can be reliably determined. A jury verdict represents the considered judgment of twelve (or maybe fewer) random non-experts as to what a hypothetical negotiation would have resulted in for the patent(s) …
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A Very Boring Story

Nathan R. Hoeschen, May 30, 2023
PTO Expert Daubert

One of the hardest parts of being a patent litigator is that all of your stories are boring. With enough hand gestures and elbows to the rib you can sometimes get a polite chuckle from a colleague, but normals? Fuhgedaboutit.

So then I said, O2 MIcro, more like O2 Nano! Hey-O!
So then I said, O2 MIcro, more like O2 Nano! Hey-O! Mark Williams, Unsplash

Because of this, I've always felt a certain kinship with PTO experts. There is a robust body of law in the district about what exactly they can testify to, but my rule of thumb has always been that the more boring the testimony, the more likely it is to be admissible. Judge Williams had an interesting opinion unsealed today dealing with a pair of Daubert motions directed to both parties experts on patent office procedures. Let's see how my little rule holds up.

Expert the first offered rebuttal expert opinion on inventorship:

Mr. Stoll, who has nearly thirty years of experience at the USPTO . . . refutes Dr. Cooper’s conclusions on inventorship through detailed explanations "related to the ins and outs of internal PTO practices and procedures.” Mr. Stoll’s opinions also include an explanation that the request to correct inventorship and signed statements by the named inventors complied with all of the relevant regulations and guidelines of the USPTO and were properly accepted as such, as is evidenced by the USPTO Director’s issuance of the certificates of correction to inventorship.

Natera, Inc. v. ArcherDX, Inc., C.A. No. 20-125-GBW, at 7 (D. Del. May 2, 2023) (Mem. Order) (cleaned up).

"[I]ns and outs of internal PTO practices," "compliance with the relevant guidelines" -- sounds pretty boring to me. This testimony gets in!

Expert the second, on the other hand, put a bit more of a dramatic spin on his testimony relating to

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Don't Waive Your Daubert Motion by Waiting Until the Motion In Limine Stage

Andrew E. Russell, Jan. 30, 2023
FRCP 702 Motion to Strike

Stealth Bomber
Matt Artz, Unsplash

We've talked before about MILs that are really stealth summary judgment motions, but now let's talk about MILs that are stealth Daubert motions and stealth motions to strike!

On Friday, Judge Burke denied a motion in limine to preclude the testimony, holding that it was really a Daubert motion, and the party had waived it by failing to present it by the deadline for Daubert motions:

ORAL ORDER: The Court . . . hereby DENIES [Defendants' Motion in Limine No. 1] for the following reasons: (1) [T]he Scheduling Order in this case provided that "[n]o Daubert motions or motions to strike expert testimony shall be filed unless discussed with the [C]ourt at [the status conference …
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