United States District Court, W.D. Wisconsin
FINAL PRETRIAL CONFERENCE ORDER
D. PETERSON District Judge
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
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.
with the exception of experts and corporate representatives,
will be sequestered.
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
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.
should keep in mind that opening statements are an overview
of the evidence. Arguments are to be reserved for the end of
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.
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 questioning any previous witness. Counsel for the
witness should inform the court which approach it will be
taking before beginning the examination.
DIRE AND JURY INSTRUCTIONS
court and the parties discussed the draft voir dire and
introductory instructions as distributed. Neither party
objected to the circulated draft voir dire.
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
court will consider whether to instruct the jury about the
nature of the cross-license and the reasonable royalty
calculation, although the court is not convinced that
cross-examination on this issue will not be sufficient (as
discussed below). Dkt. 468, at 5-7.
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.
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.
Oxbo's objections to H&S witnesses
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
H&S's anticipation case against the '929
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.
Oxbo's motion for sanctions
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.
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 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.
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.
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. 111. 2014), affd, 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 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.
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
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.
may use any surviving design and development documents to
prove copying or wilfulness 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.
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 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 late-produced 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.
court will have Oxbo submit a formal request for its fees for
the sanctions motion after trial.
Oxbo's commercial success
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
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 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.
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.
H&S's motions in limine
To sequester witnesses
motion to sequester witnesses, except for party
representatives and experts, is granted.
To preclude Oxbo from using or referencing H&S's
inadvertently produced privileged documents
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 ...