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Personalweb Technologies LLC v. International Business Machines Corp.

United States District Court, N.D. California, San Jose Division

July 25, 2017


          FIRST ORDER RE: MOTIONS IN LIMINE RE: DKT. NOS. 255, 270, 271, 275, 278, 280, 281, 282, 283, 284, 288, 317

          EDWARD J. DAVILA United States District Judge.

         Presently before the Court are certain motions in limine and other pre-trial motions filed by both parties. Dkt. Nos. 255, 269, 270, 271, 275, 278, 279, 280, 281, 282, 283, 284, 285, 288, 313, 317. The Court finds certain of these matters suitable for decision without oral argument. Thus, having considered the parties' moving and responding papers, the Court rules as follows as to Plaintiffs' motions:

         1. Plaintiffs' second motion to exclude any argument, testimony or evidence to Personal Web's standing to sue (Dkt. No. 270) is GRANTED IN PART and DENIED IN PART. Defendants may not mention “prudential standing, ” attempt to re-litigate the prudential standing issue, or make any argument or reference to the Court's Motion to Dismiss order (Dkt. No. 245) or the reasoning contained. Defendants may, however, introduce evidence and argument relating to facts underlying the prudential standing issue, including the parties' licensing history and its impact on Defendants' subjective belief as to whether it was infringing the '420 patent.

         Under Federal Rule of Evidence 401, evidence is relevant if: “(a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.” Under Federal Rule of Evidence 403, relevant evidence can be excluded “if its probative value is substantially outweighed by a danger of . . . unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” The Court finds that, because it has already been resolved, the issue of prudential standing is not relevant to the issues that remain to be tried. For this same reason, the Court's ruling and reasoning in its Motion to Dismiss order (Dkt. No. 245) are also not relevant. Moreover, even if this evidence was relevant, the probative value of such evidence would be outweighed by its potential to cause undue delay and to waste time. Prudential standing has already been litigated, so it would be a waste of time for the jury to hear evidence or argument which seeks to re-litigate this issue.

         Nevertheless, the Court finds that the history of licensing and IBM's subjective belief, in light of this history, as to whether it was infringing the '420 patent are relevant to the issue of willfulness. Such evidence regarding IBM's state of mind will assist the fact finder in determining whether its infringement was “egregious.” See Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1923, 1933, 195 L.Ed.2d 278 (2016) (“Awards of enhanced damages . . . are . . . designed . . . for egregious infringement behavior. . . . [C]ulpability is generally measured against the knowledge of the actor at the time of the challenged conduct.”). The Court also does not find that its probative value is substantially outweighed by the danger of unfair prejudice or confusing the issues.

         2. Plaintiffs' third motion to preclude any argument, evidence, or testimony of non- accused features of the Tivoli Storage Manager (“TSM”) product as evidence that the TSM residing on a computer does not infringe (Dkt. No. 271) is DENIED.

         The Court finds that such evidence, including evidence relating to the server-side deduplication feature, is relevant to issues of infringement. Plaintiffs' arguments go to the weight of this evidence, which is the proper subject of cross examination. Further, the Court does not find that the probative value is substantially outweighed by the danger of misleading the jury or confusing the issues. It is evident from the briefing that the parties know how to distinguish server-side deduplication from client-side deduplication, and these clarifications can be drawn out through cross-examination.

         3. Plaintiffs' motion to exclude portions of the rebuttal expert report and proposed testimony of Dr. James Kearl (Dkt. No. 275) is DENIED.

         Federal Rule of Evidence 702 permits an expert to testify 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 and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case. Read together, Rule 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), broadly require that an expert not only be qualified, but also that the expert's testimony be reliable and relevant.

         When faced with a challenge to an expert, “[t]he trial judge must perform a gatekeeping function to ensure that the expert's proffered testimony” meets this standard. United States v. Redlightning, 624 F.3d 1090, 1111 (9th Cir. 2010). The role is a flexible one, such that the judge is afforded “considerable leeway in deciding in a particular case how to go about determining whether particular expert testimony is reliable.” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152 (1999).

         Plaintiffs do not challenge Dr. Kearl's expertise or argue that his testimony is unhelpful to the jury. Instead, Plaintiffs argue Dr. Kearl's testimony should be limited or excluded because (1) he used forward citation analysis to apportion the value of the '420 patent; and (2) he relied on the Fair survey to discount the value of the '420 patent. Dkt. No. 275 at 8-14. Specifically, Plaintiffs complain that use of the Fair survey was improper because (a) Dr. Kearl discounted based on whether client-side deduplication is enabled; (b) Dr. Kearl did not account for use by IBM; and (c) Dr. Kearl failed to link the survey period to the damages period. Id. at 10-14.

         Plaintiffs' first argument questions whether Dr. Kearl's methodology was reliable. Plaintiffs do not dispute that forward citation analysis is itself an accepted and reliable methodology for apportioning the value of a particular patent in a portfolio; instead, they take issue with its application here. See Dkt. No. 275 at 8-10; Dkt. No. 324-3 at 1-4. According to Plaintiffs, when a portfolio involves related patents that share the same specification and drawings, the citations to the related patents should be summed, and the total should be attributed to each patent in ranking them against others in the portfolio. Dkt. No. 275 at 8-9. This is because, Plaintiffs argue, patents are cited for their disclosure, so a citation need only refer to one patent in a bundle of related patents. Id. Because Dr. Kearl does not do this, Plaintiffs contend, his opinion is unreliable. Id. at 8-10. The Court finds that Plaintiff's complaint goes to the weight and credibility of Dr. Kearl's opinion, not its reliability. Specifically, Plaintiffs hone in on a factual assumption-that the patents in the portfolios relied on by Dr. Kearl are sufficiently distinct (despite their shared specification and drawings) that a citation to one does not suffice as a citation to all. Whether this assumption was accurate in light of the particular patents in those portfolios is something that Plaintiffs can explore on cross-examination.

         Plaintiffs' second argument faults Dr. Kearl for relying on the survey and report prepared by Ms. Fair. As an initial matter, Dr. Kearl's reliance on this survey evidence does not make his opinion unreliable because experts in his field would reasonably rely on that type of data in forming an opinion. Fed.R.Evid. 703. With respect to the specific complaints that Plaintiffs raise, the Court finds that each raise issues for cross-examination that go to the weight, not the admissibility of Dr. Kearl's opinion. First, the extent of use of client-side deduplication is at least relevant to the Georgia-Pacific factor regarding “the nature of the patented invention, its character in the commercial embodiment owned and produced by the licensor, and the benefits to those who use it.” Second, it was appropriate for Dr. Kearl, as a rebuttal expert, to not explicitly account for use by IBM because Dr. Akemann, Plaintiffs' expert, did not opine on use by IBM. Third, Ms. Fair provided reasons in her report for why she believed it was more accurate to select a survey period that was different from the damages period, and Dr. Kearl was entitled to rely on this expert assessment. Thus, none of these bases render Dr. Kearl's opinion unreliable.

         4. Plaintiffs' motion to strike Mr. Jacob Drew from IBM's witness ...

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