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Philippi-Hagenbuch, Inc. v. Western Technology Services International, Inc.

United States District Court, C.D. Illinois

April 8, 2015

PHILIPPI-HAGENBUCH, INC., and LEROY HAGENBUCH, Plaintiffs,
v.
WESTERN TECHNOLOGY SERVICES INTERNATIONAL, INC., and WOTCO, INC., Defendants.

ORDER

JAMES E. SHADID, Chief District Judge.

This case was before the Court on April 1, 2015, for a Daubert Hearing on two pending Daubert motions, as well as two other motions concerning expert testimony. Rule 702 of the Federal Rules of Evidence governs the admissibility of expert testimony.

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of this case.

The Court's role in determining the admissibility of expert testimony is that of a gatekeeper. General Electric Co. v. Joiner, 522 U.S. 136, 118 S.Ct. 512, 517 (1997); Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). In performing this role, the Court must determine whether the expert testimony in question meets two essential requirements: (1) it must be based on scientific, technical, or other specialized knowledge and (2) it must assist the trier of fact in understanding the evidence or determining a fact in issue. Daubert, 509 U.S. at 592; Fed.R.Evid. 702. In other words, the opinion must be reliable and relevant. Daubert, 509 U.S. at 597.

Daubert provides a list of four factors to be considered in determining the soundness of the expert's methodology:

(1) whether the proffered conclusion lends itself to verification by the scientific method through testing; (2) whether it has been subjected to peer review; (3) whether it has been evaluated in light of the potential rate of error of the scientific technique; and (4) whether it is consistent with the generally accepted method for gathering the relevant scientific evidence.

Cummins v. Lyle Industries, 93 F.3d 362, 368 (7th Cir. 1996), citing Daubert, 509 U.S. at 594-95. However, these factors are non-exclusive and do not constitute a definitive checklist. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999). The key concern is that the expert "employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field." Id ., at 152. Ultimately, the trial judge is vested with considerable discretion in deciding whether particular expert testimony is reliable. Ammons v. Aramark Unif. Servs., Inc., 368 F.3d 809, 816 (7th Cir. 2004).

1. Defendants' Motion to Exclude Certain Opinions of Plaintiffs' Technical

Expert Frederick Smith [210]

Defendants do not challenge Smith's qualifications as a technical expert. Rather, they argue that his opinions should be excluded primarily because there is no evidence to support them. The particular opinions challenged are:

• There are no acceptable, non-infringing alternatives to designing a truck body using the Load Profiling Patents.
• Truck bodies designed using the Load Profiling Patents are better than other truck bodies.
• Westech is using multiple angles of repose in its payload models (e.g., that a single angle on a form represents multiple angles that were measured from the front, rear, and sides of actual payload, but all happen to be identical.)
• Smith's interpretation of claim terms attempts to contradict or rewrite the actual language of the claims.
• Defendants copied the alleged inventions of the Load Profiling and Water Tank Patents.
• Smith cannot give opinions on non-technical advertising issues.
• Smith cannot give opinions concerning legal and evidentiary issues.

The first two opinions are implicated in Smith's testimony offered to establish the basis for Plaintiffs' claim for lost-profit damages. The parties agree that establishing lost-profit damages must satisfy the Panduit factors as discussed in Rite Hite Corp. v. Kelley Co, Inc., 56 F.3d 1538, 1545 (Fed. Cir. 1995).

To recover lost profits damages, the patentee must show a reasonable probability that, "but for" the infringement, it would have made the sales that were made by the infringer. Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F. 1152 (6th Cir. 1978), articulated a four-factor test that has since been accepted as a useful, but non-exclusive, way for a patentee to prove entitlement to lost profits damages. The Panduit test requires that a patentee establish: (1) demand for the patented product; (2) absence of acceptable non-infringing substitutes; (3) manufacturing and marketing capability to exploit the demand; and (4) the amount of profit it would have made. A showing under Panduit permits a court to reasonably infer that the lost profits claimed were in fact caused by the infringing sales, thus establishing a patentee's prima facie case with respect to "but for" causation. A patentee need not negate every possibility that the purchaser might not have purchased a product other than its own, absent the infringement. The patentee need only show that there was a reasonable probability that the sales would have been made "but for" the infringement. When the patentee ...

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