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Robertson Transformer Co. v. General Electric Co.

United States District Court, N.D. Illinois, Eastern Division

August 19, 2016

Robertson Transformer Co. d/b/a/ Robertson Worldwide, Plaintiff,
General Electric Company, et al. Defendants.



         Before me are the parties’ motions in limine, which I resolve as set forth below.

         A. Plaintiff’s motions

         1. Motion to exclude argument, documents, and testimony concerning equitable defenses the court rejected as a matter of law.

         This motion is denied in part as moot and is otherwise denied. All agree that it would be improper to introduce argument or evidence directed solely to issues resolved on summary judgment. It is plain, however, that much of the evidence defendants cited in support of their equitable defenses is also relevant to other issues that must be tried to a jury, including willfulness. See WBIP, LLC v. Kohler Co., ___ F.3d ___, 2016 WL 3902668, at *15 (Fed. Cir. Jul. 19, 2016) (“[w]e do not interpret Halo as changing the established law that the factual components of the willfulness question should be resolved by the jury.... Willfulness of behavior is a classical jury question of intent. When trial is had to a jury, the issue should be decided by the jury.”).[1] Although I determined at summary judgment that defendants’ evidence was legally insufficient to establish their equitable defenses of laches, equitable estoppel, and waiver, my previous decisions did not resolve the question of defendants’ subjective intent. Elsewhere in this decision I address the evidence that the parties may present on that issue.

         2. Motion to exclude arguments, documents, and testimony concerning any implied license defense.

         This motion is granted. Although I agree that this motion essentially seeks summary judgment motion in plaintiff’s favor on defendant’s sixth affirmative defense of “license and exhaustion, ” and would better have been presented under Rule 56, I agree with plaintiff that my grant of summary judgment in its favor on defendants’ equitable defenses eviscerates their “license and exhaustion” affirmative defense. Defendants insist that equitable estoppel and the implied license defense are not coterminous, and that the latter does not require a formal finding of the former, citing Wang Laboratories, Inc. v. Mitsubishi Electronics America, Inc., 103 F.3d 1571 (Fed. Cir. 1997), and Winbond Elecs. Corp. v. Int’l Trade Comm’n, 262 F.3d 1363 (Fed. Cir. 2001). Specifically, defendants focus on the doctrine of “implied license by legal estoppel, ” which, in their view, requires the consideration of elements I have not previously addressed. I disagree.

         In Wang, the Federal Circuit explained: “The primary difference between the estoppel analysis in implied license cases and the analysis in equitable estoppel cases is that implied license looks for an affirmative grant of consent or permission to make, use, or sell: i.e., a license.” Wang, 103 F.3d at 1582. While the court acknowledged that “no formal granting of a license is necessary, ” Id. at 1580, the doctrine explicitly requires an “affirmative grant of consent or commission.” At summary judgment, I concluded that defendants’ evidence “cannot reasonably be construed as permission to sell the accused products to plaintiff’s competitors, ” since it did not establish that any of plaintiff’s employees with responsibility for enforcing plaintiff’s patent rights was aware that defendants were likely infringing the asserted patents. See DN 332, 378. While there may indeed be circumstances, as the Federal Circuit acknowledged in Wang and Winbond, in which an implied license defense would succeed where an equitable estoppel defense fails, defendant does not explain how that can be the case where the patentee was not aware of the infringing activity.

         Defendants acknowledge that my summary judgment decisions on their affirmative defenses were based largely on the conclusion that plaintiff was unaware of defendants’ infringement. Nevertheless, defendants insist that plaintiff’s lack of awareness “is not determinative of Defendants’ Sixth Affirmative Defense.” But this argument merely reverts back to the observation that no “formal” license is necessary, and the cases they cite-Wang, Winbond, and De Forest Radio Telephone & Telegraph Co. v. U.S., 273 U.S. 236 (1927), do not support the proposition that a patentee can be deemed by its actions to have affirmatively granted a license without knowledge of the putative licensee’s likely infringement. Indeed, defendants acknowledge that a patentee’s language or conduct must be of the kind “from which [the infringer] may properly infer that the owner consents to his use of the patent.” De Forest, 273 at 241. Defendants do not explain, nor does the evidence they cite suggest, why any inference that plaintiff consented to the infringement was proper.

         For these reasons, plaintiff’s motion in limine is granted to the extent it seeks to prevent defendants from introducing documents and testimony for the purpose of arguing that they are not liable for infringement on the ground that Super X had an implied license covering the accused devices, or that exhaustion principles bar enforcement of the patent against the Customer Defendants. I note, however, that plaintiff’s motion does not identify specifically the evidence and testimony it seeks to bar, while defendants argue that “virtually all of the documents and testimony related to this defense will overlap with other issues before the jury, including secondary consideration, damages, and willfulness.” This motion in limine is granted without prejudice to defendants’ ability to present appropriate evidence on those issues.

         3. Motion to exclude invalidity arguments, documents, and testimony going beyond what is disclosed in defendants’ expert report.

         This motion is granted in part, denied in part as moot, and otherwise denied. The portion of the motion directed to Mr. Hesterman’s proposed testimony is denied as moot in light of defendants’ representation that they “do not intend for Mr. Hesterman to offer testimony on invalidity beyond the scope of his invalidity expert report in its case in chief.” To the extent this representation does not entirely moot plaintiff’s motion as it relates to Mr. Hesterman’s proposed testimony, the motion is denied because it does not indicate the specific opinions or testimony it seeks to preclude, and because plaintiff’s speculation that defendants might seek to use “passing references” to prior art “as a hook to elicit testimony” regarding the state of the art does not support the broad order it seeks. Counsel is advised, however, that strict compliance with Fed.R.Civ.P. 26(a)(2)(B) is expected, and that I will sustain objections to expert testimony on the ground that it exceeds the scope of the expert’s report unless counsel can identify the specific portion or portions of the report that articulate the “basis and reasons for” the opinions elicited.

         Plaintiff’s motion is granted as it pertains to Mr. Bezdon’s proposed testimony about the ‘180 Patent, which is identified as prior art to the asserted patents. There is no dispute that because Mr. Bezdon was not disclosed as an expert, he may testify only as a fact witness. I agree with plaintiff that any fact testimony Mr. Bezdon might offer with respect to the ‘180 patent is either irrelevant to the validity inquiry or falls within the realm of expert testimony.[2]

         4. Motion to exclude evidence from collateral litigation.

         This motion is granted in part. Plaintiff argues that defendants should be barred from tendering evidence produced or obtained during discovery in the parties’ related contract dispute because those materials-which were produced in this case in a “supplemental production” after discovery had closed-are irrelevant, tardy, or both. Although I generally agree that defendants should be precluded from presenting evidence developed only after the close of discovery in this case, the universe of evidence plaintiff seeks to bar includes documents that were “previously produced by Super X, Robertson or third parties (Ronald Bezdon or UL) in this case.” Mot. at 2 (quoting from transmittal letter accompanying defendants’ supplemental production, emphasis added). Documents falling into that category will not be subject to exclusion, and witnesses who will testify at trial may be asked about them. In addition, evidence developed in the contract case, such as Mr. Wisbey’s January 2016 deposition testimony, may be used to impeach a witness’s trial testimony.

         With respect to documents that were produced only after discovery in this case had closed, and that are not offered solely for impeachment, plaintiff’s motion is granted, except to the extent defendants can establish, that any specific document they wish to use at trial was subject to production in this case. Defendants’ submission in this regard must be made in writing at least forty-eight hours in advance of defendants’ proposed use of the evidence, and plaintiff will be entitled to respond, in writing, within twenty-four hours thereafter. Any relevance objections plaintiff has to specific evidence their motion encompasses should likewise be raised in its submission.

         5. Motion to preclude defendants’ damages expert Bruce Abramson from testifying at trial.

         This motion is granted. To begin, there is no merit to defendants’ argument that plaintiff has waived its objection to Dr. Abramson’s testimony.[3] Under Fed.R.Evid. 702, I may allow a witness to testify as an expert only if “(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles or methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.” This rule, along with Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), require me to determine “whether the expert is qualified in the relevant field and whether the methodology underlying the expert’s conclusions is reliable.” Higgins v. Koch Development Corp., 794 F.3d 697, 704 (7th Cir. 2015) (citation omitted). I have closely reviewed Dr. Abramson’s qualifications, his expert report, and the cases cited by both sides, and I conclude, for the reasons explained below, that Dr. Abramson’s proposed testimony falls short on several of these fronts.

         As to Dr. Abramson’s qualifications, there is merit to plaintiff’s argument that Dr. Abramson “does not do what he is qualified to do and is not qualified to do what he does.” It is plain from Dr. Abramson’s report that he purports to offer an “economic analysis” both to rebut the opinions of plaintiff’s damages expert, Mr. Carter, and to support his own alternative damages calculations. See, e.g., Abramson Rep., DN 530 at ¶ 6 (opining that Mr. Carter “has provided no reasonable economic basis for a ...

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