United States District Court, W.D. Wisconsin
OPINION AND ORDER
WILLIAM M. CONLEY DISTRICT JUDGE
final pretrial conference, the court directed the parties to
submit supplemental briefing with respect to a number of
motions in limine on which the court previously
reserved, along with other topics. This opinion and order
addresses this additional briefing, as well as other recent
motions filed by the parties.
Reserved MILs / Other Areas of Discussion Prompted by MIL
ABS's Motion to Strike ST's Damages Expert
Malackowski's Testimony ('503 dkt. #934; '446
court's motions in limine opinion, the court
reserved on whether to exclude Malackowski's testimony
based on an allocation of 50% of the value of ABS's
SEXCEL product to the patented invention on the basis that it
was unreliable. (8/14/19 Op. & Order ('503 dkt.
#1008; '446 dkt. #403) 15-16.) During the FPTC, ST
indicated that its expert Vacca provided the necessary
support for the 50% allocation. In turn, the court directed
ST to submit a proffer explaining Vacca's basis for this
percentage, which it did ('503 dkt. #1014; '446 dkt.
#409), and ABS has also filed a responded ('503 dkt.
#1021; '446 dkt. #416).
problem with Malackowski's reliance on Vacca does not
arise out of what Vacca opines, but rather on what he does
not opine, indeed is unqualified to opine. As a technical
expert, Vacca appropriately describes the “very
difficult task” of “distinguishing between sperm
cells on the basis of their chromosome content with a high
degree of confidence and at a suitable rate, ” and
lauds the “enhanced precision provided by the Cytonome
patents” to do both “using relatively less
expensive manufacturing methods and with less complexity due
to the use of channel geometry, as opposed to actively
monitoring and controlling inputs to the system, ”
while at the same time being “generally exerting less
stress on the cells.” (Vacca Rept. (‘746 dkt.
#259) ¶¶ 32, 38.) While this neatly summarizes the
advantages of the Cytonome patented technology, what is
missing is in Vacca's analysis is any
explanation as to the relative value of this improvement over
past technology, whether in terms of percentage improvement
in cell selection by sex, speed or robustness of the sperm
cells, much less what that percent improvement might mean
commercially, whether by increase in demand, price or
reduction in costs. Without this information, Malackowski
would seem to be allocating 50% of the value of ABS's
SEXCEL product to the patented invention out of whole cloth.
Indeed, as ST concedes, Vacca's only opinion allocating
the relative contribution of this new technology to the
overall product is that the “three dimensional focusing
claimed in the Cytonome patents” is “responsible
for a majority of the GSS system's technical
value.” (Id. at ¶ 32.) Whatever this may
or may not mean from a technical perspective (for example,
degree of difficulty, elegance of solution, purity of
product), Malackowski could only be guessing as to how that
might translate as to the relative market value,
since Vacca does not even purport to have that kind of
Malackowski will be precluded from offering any royalty
opinion based on his reliance on Vacca's vague allocation
from a technical standpoint. The reserved portion of this
motion is, therefore, GRANTED.
ABS's Other MILs No. 5: Bar evidence or argument relating
to Cytonome research and development activities involving the
use of microfluidics in sperm sorting ('503 dkt. #944;
'446 dkt. #339).
MIL opinion, the court also reserved on whether reference to
some narrower area of R&D (e.g., Viper SS project) should
be excluded. (8/14/19 Op. & Order ('503 dkt. #1008;
'446 dkt. #403) 29-30.) Specifically, during the FPTC,
the court directed ABS to submit clarification as to the
intended scope of its motion, which it has now done.
('503 dkt. #1013; '446 dkt. #408.) ABS seeks to limit
Sharpe to his deposition testimony on the Viper SS machine,
and more specifically seeks to bar him from testifying that
the Viper SS falls within the scope of the Cytonome patents.
In response, ST reiterates that Sharpe's trial testimony
will be limited strictly to that offered during his
deposition -- namely, that Cytonome is investigating the use
of the Cytonome patented technology in the Viper SS machines.
('503 dkt. #1023; '476 dkt. #418.) On this much, the
parties appear to be in agreement. However, in response, ST
points out that ABS also seeks to prohibit Sharpe from
testifying as to whether “any other Cytonome patent
falls within the scope of any claim in the asserted Cytonome
patents.” (Id. at 2.) As ST points out, the
court previously rejected ABS's request to strike
Sharpe's testimony that the GigaSort technology practices
the Cytonome patents. As such, this motion is DENIED. Sharpe
is free to testify about both the Viper SS and GigaSort
products provided he does so in a manner consistent with his
ABS's Other MILs No. 7: Bar testimony regarding
reasonable royalty figures not disclosed in expert report or
by witnesses who have not served expert reports ('503
dkt. #944; '446 dkt. #339).
MIL order, the court denied ABS's motion to bar testimony
regarding reasonably royalty figures not disclosed in an
expert report or by witnesses who have not served expert
reports. During the FPTC, ABS sought clarification. In
response, the court invited ABS to submit a proffer directing
the court to caselaw limiting a patent plaintiff to damages
disclosed in an expert report and/or foreclosing fact
testimony or attorney argument as to a higher amount that
disclosed by its damages expert. In its submission, ABS
expressly seeks to exclude ST's CEO Juan Moreno's
testimony regarding a total damages award, offering three
bases: (1) Moreno's testimony about a hypothetical
negotiation would not be based on personal knowledge and is,
therefore, inadmissible; (2) Moreno's testimony would be
contrary to his deposition testimony in which he disavowed
any knowledge of what the Cytonome patents are worth; and (3)
Moreno would likely “speculate widely” about the
value of these patents given his deposition testimony about
the value of an XY patent. ('503 dkt. #1012; '446
dkt. #407.) As specifically requested by the court, ABS also
points to some district court cases in support of its first
basis, excluding fact witness testimony about what would
happen in the hypothetical negotiation unless based on
personal knowledge. See AVM Techs., LLC v. Intel
Corp., 927 F.Supp.2d 139, 146 (D. Del. 2013);
Info-Hold, Inc. v. Muzak, LLC, No. 11-cv-283, 2013
WL 4482442, at *5 (S.D. Ohio Aug. 20, 2013), reversed in
part on other grounds by 783 F.3d 1365 (Fed. Cir. 2015);
NetAirus Techs., LLC v. Apple Inc., No. 10-cv-03257,
slip op. at *7-8 (C.D. Cal. Nov. 8, 2013).
responded with its own cases, in which courts have allowed
testimony by owners or corporate executives regarding their
state of mind during a hypothetical negotiation and what a
reasonable royalty rate would have been. ('503 dkt.
#1024; '446 dkt. #419.) See Carnegie Mellon Univ. v.
Marvell Tech. Grp., Ltd., Civil Action No. 09-290, 2013
WL 176970, at *2 (W.D. Pa. Apr. 24, 2013); Seitz v.
Envirotech Sys. Worldwide Inc., No. CIV. A. H-02-4782,
2008 WL 656513, at *5 (S.D. Tex. Mar. 6, 2008).
light of this apparent split in the caselaw, and without the
benefit of Federal Circuit guidance on this question, the
admissibility of Moreno's testimony about what he would
have sought as a reasonable royalty during the hypothetical
negotiation appears to be a close call. Fortunately, the
court need not reach this issue because Moreno expressly
disavowed having an opinion at his deposition as to the value
of the Cytonome patents. (Moreno Dep. (‘746 dkt. #148)
204 (“Q. So you have no opinion, no view, as to what