LEONARD P. STARK, District Judge.
Pending before the Court are the parties' Daubert motions. (D.I. 166, 168, 170) Plaintiff Roche Diagnostic Corp. ("Roche" or "Plaintiff") moves to exclude certain opinions of Drs. Quentin Mimms and James Wilbur. (D.I. 170) Defendant Meso Scale Diagnostics, LLC ("Meso" or "Defendant") moves to exclude certain opinions from Drs. Richard Crooks and Rene Befurt. (D.I. 166, 168)
Having considered the parties' briefing (D.I. 167, 169, 171, 186, 189, 192, 202-04) and related materials, and having heard oral argument on July 23 ("Tr."), IT IS HEREBY ORDERED that Roche's motion (D.I. 170) is GRANTED IN PART and DENIED IN PART, Meso's motion to exclude certain opinions of Dr. Crooks (D.I. 166) is GRANTED, and Meso's motion to exclude certain opinions of Dr. Befurt (D.I. 168) is DENIED.
The Court agrees with Roche that Meso cannot rely on Roche's valuation of BioVeris to prove damages because the disputes in this litigation involve just 10 of the more than 100 patents involved in Roche's acquisition of BioVeris.
Meso fails to cite any case that supports its view of the BioVeris valuation or recognizes an exception in these circumstances to the requirement that patent damages must be apportioned and awarded on only the patented features.
"The burden of proving damages falls on the patentee." Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009). Given the legal requirement of apportionment, and the lack of any cases supporting Meso's view, the Court concludes that Meso cannot rely on Roche's valuation of the entire BioVeris company (including all intellectual property). Therefore, Dr. Mimms' analysis is not based on a reliable, legally-supported methodology that fits the facts of the case and must be precluded.
"[T]he correct determination of the hypothetical negotiation date is essential for properly assessing damages." LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 75 (Fed. Cir. 2012) (internal quotation marks omitted). "The key element in setting a reasonable royalty ... is the necessity for return to the date when the infringement began," Wang Labs., Inc. v. Toshiba Corp., 993 F.2d 858, 870 (Fed. Cir. 1993) (internal quotation marks omitted), in order to "ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agreement" at that time, Prism Techs. LLC v. Sprint Spectrum L.P., 849 F.3d 1360, 1376 (Fed. Cir. 2017) (internal quotation marks omitted).
The Court agrees with Roche that the appropriate hypothetical negotiation date here is 2003-04, when Roche first made an out-of-field sale, constituting the date of first alleged infringement. (D.I. 171 at 40-41) (citing D.I. 175 Ex. 36) (showing out-of-field sales at least as early as Feb. 7, 2004) Meso's proposed date of June 2007 — when Roche allegedly first actively induced infringement (D.I. 192 at 35) — is not the date of first infringement; it is not, therefore, a date which can be used for a reliable, legally proper hypothetical negotiation analysis.
Neither the Book of Wisdom (which, in certain circumstances, permits a damages analysis to take into account value that accrued at a date subsequent to the date of hypothetical negotiation, see, e.g., Comcast IP Holdings I LLC v. Sprint Commc'n. Co., L.P., 850 F.3d 1302, 1314 (Fed. Cir. 2017)), nor Dr. Mimms' declaration that his valuation opinion would be the same regardless of whether the hypothetical negotiation were in 2003 or 2007, render Dr. Mimms' analysis legally acceptable. As Meso acknowledges, the parties' relationship changed in a highly material, substantial way between 2003 — when Meso was not the only party with rights that Roche wished to acquire — and 2007, when Meso exclusively held such rights and could (at least in theory) have "held out" for a premium pay out. Given these undisputed facts, Dr. Mimms' analysis, with a hypothetical negotiation date of 2003 and an unsupported assumption that there was no relevant change in circumstances through 2007, does not "fit" the facts of the case or result from a sufficiently reliable methodology. His opinion will be precluded.
Dr. Wilbur is a General Manager at Meso with extensive experience in ECL; he is also a named inventor on many patents. (D.I. 174 Ex. 64 at A2027-28) Meso seeks to have him testify that Roche's ECL technology cannot be practiced without the asserted Patents, and that the asserted Patents cover all pertinent Roche products. (D.I. 192 at 41)
Meso offers Dr. Wilbur as an expert pursuant to Federal Rule of Civil Procedure 26(a)(2)(C), which relates to witnesses who are not required to provide a report. Roche contends, however, that Dr. Wilbur's opinions are not based on his own knowledge and experience, which is required by Rule 26(a)(2)(C). (D.I. 171 at 40-42) (citing D.I. 174 Ex. 71 at A-2281-82) The Court agrees — as even Dr. Wilbur himself has admitted that he did not determine which patents are core but, instead, received that information from others. (D.I. 174 Ex. 73 at 72-74) Nor does Dr. Wilbur claim to have any relevant legal experience to render him competent to opine on ultimate issues of infringement. (D.I. 174 Ex. 64 at A2027-28)
Therefore, Dr. Wilbur's opinions as to which patents are core and whether Roche infringes those patents by practicing its ECL technology are not based on sufficient facts or data using reliable principles and methods. These opinions will be precluded.
Roche argues that Dr. Wilbur's testimony as to the meaning of "kit" is contrary to the Court's claim construction. (D.I. 171 at 46-47) (opining that "kit," which has been construed as "a set of materials
Dr. Wilbur will also be permitted to offer his opinion on Roche's inability to design around Meso's patent rights. Although Dr. Wilbur did not perform a claim or technology-specific analysis, and he lacks knowledge of Roche's capabilities (D.I. 171 at 47-48), these arguable deficiencies go to the weight to be given to his testimony, not its admissibility. Dr. Wilbur's opinion is appropriately based on his personal experience, specifically his observation of the development of ruthenium labels at IGEN. This portion of Roche's motion will be denied.
Roche intends to offer Dr. Crooks to testify that he agrees with Dr. Leventis that TPA does not extend the electric potential of an electrode. (D.I. 167 at 5-6) Putting aside the parties' dispute over the depth of Dr. Crooks' review of fellow expert Dr. Leventis' work (compare id. at 8-9 with D.I. 186 at 5-11), the Court will exclude Dr. Crooks' testimony because it serves no purpose beyond improperly attempting to bolster the opinions of another expert, i.e., Dr. Leventis.
While Roche raises numerous, legitimate concerns about Dr. Befurt's analysis — including but not limited to his use of a non-probability survey panel (D.I. 169 at 12),