Delaware District Court Takes Step to Manage More Than 60-Defendant Patent Litigation
In Commissariat A L'Energie Atomique v. Dell Computer Corp., et al., C. A. Nos. 03-484-KAJ, 03-857-KAJ, 03-931-KAJ, 03-1036-KAJ, 04-099-KAJ (D. Del. May 13, 2004), Judge Jordan addressed the thorny issue of how to weigh the parties' rights, and practical concerns, in the context of numerous motions to consolidate cases and motions to stay as to certain parties, in five cases brought by the same plaintiff ("CEA") against more than sixty defendants.
In these cases, CEA alleges that the defendants are infringing a patent which related to certain liquid crystal display ("LCD") technology. Although the separate lawsuits were not filed in an organized fashion, the defendants in those actions, collectively, would be grouped into the following categories:LCD module manufacturers, original equipment manufactures and distributors, and retailers. Plaintiff sought to consolidate its cases against all defendants for purposes of all pretrial and trial activity; defendants took the position that the litigation could be consolidated as to the manufacturers, without prejudice to the manufacturers' individual rights to seek to move to sever for purposes of trial, but that the litigation should be stayed as to all other defendants.
After reciting the standards for motions to consolidate and to stay, both of which involve discretionary rulings for the District Court, Judge Jordan adopted defendants' position. Citing the Annotated Manual for Complex Litigation, § 33.63 (3d ed. 2003), the Court stated that it is common practice to stay all pending patent litigation except the first suit between the patent owner and a manufacturer or higher level supplier. The Court held that "[b]ecause the manufacturers are intimately involved in the design, operation, and use of the accused LCD panels, they are in the best position to contest the validity and infringement of CEA's asserted patents." Op. at 7. In so ruling, the Court rejected CEA's argument that a stay would cause a delay that was sufficiently prejudicial to outweigh the efficiencies in the litigation that would result from the stay.
This practical approach will eliminate the burdens and costs of litigation that would have needlessly been placed on retailers and distributors of products that include the accused LCD modules, which makes perfect sense because the manufacturers – and not the OEM/distributors and retailers – are the entities with knowledge of the technical issues that will be addressed in the litigation. The Delaware District Court, which is very experienced in patent cases, put that experience to good use here to place almost 60 defendants "on the sidelines" – where they should have been all along.
Preclusion of Expert Testimony
In another significant decision, in Izumi Products Company v. Koninklijke Philips Electronics N.V., et al., C.A. No. 01-156-SLR (D. Del. Apr. 27, 2004), Chief Judge Sue L. Robinson granted a defense motion to preclude the plaintiff's expert's opinion on infringement under the doctrine of equivalents. The Opinion is notable not only for its rarity, i.e., the decision to preclude an expert, but also for the detail with which Chief Judge Robinson sets forth the standards for the admissibility of expert testimony and the analysis required of a court acting as "gatekeeper." See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993) ("Daubert").
In the litigation, plaintiff Izumi Products Company sued defendants Koninklijke Philips Electronics N.V., Philips Electronics North America Corporation N.V., and Philips Domestic Appliance and Personal Care B.V. for willful infringement of a patent relating to electric razors. Defendants denied the allegations, asserted numerous defenses, and counterclaimed for a declaratory judgment of noninfringement, invalidity and unenforceability.
As part of its case, Plaintiff intended to call Dr. Charles E. Benedict to testify concerning his opinion that "Philips's accused grooved inner cutter performs substantially the same function as Izumi's recessed inner cutter by creating turbulence in the facial grease residue, thereby reducing or preventing the buildup of fat, skin, hair and other debris on the rear surface of the inner cutter blade." Opinion at p.18. Philips moved to exclude on the grounds that "(1) Dr. Benedict is not qualified as an expert in the field of razor design; (2) his testimony is both unreliable and unsupported; and (3) his testimony would not assist the trier of fact."Id.
Chief Judge Robinson's evaluation of the motion to preclude began with a consideration of Federal Rule of Evidence 702 and the seminal decision in Daubert. From there, the Opinion discussed relevant decisions from the Third Circuit, which Chief Judge Robinson used to frame her analysis. In this regard, Chief Judge Robinson found that "the Third Circuit has construed Rule 702 as embodying 'three distinct substantive restrictions on the admission of expert testimony: qualifications, reliability, and fit.'" Opinion at p. 15 (citing Elcock v. Kmart Corp., 233 F.3d 734, 741 (3d Cir. 2000).
Citing Waldorf v. Shuta, 142 F.3d 601, 625 (3d Cir. 1998), Chief Judge Robinson set forth the following standard on qualifying an expert:
Rule 702 requires the witness to have "specialized knowledge" regarding the area of testimony. The basis of this specialized knowledge "can be practical experience as well as academic training and credentials. "We have interpreted the specialized knowledge requirement liberally, and have stated that this policy of liberal admissibility of expert testimony "extends to the substantive as well as the formal qualification of experts." However, "at a minimum, a proffered expert witness . . . must possess skill or knowledge greater than the average layman.
Opinion at p. 15. Though Dr, Benedict's opinion was ultimately precluded, Chief Judge Robinson found him to be qualified based upon his academic training (a Ph.D. in mechanical engineering) and work experience (over 35 years as an elctro-mechanical design engineer). Id. at p. 18.
On the issue of reliability, Chief Judge Robinson relied heavily on In re Paoli Railroad Yard PCB Litigation, 35 F.3d 717 (3d Cir. 1994). See Opinion at pp. 15-16. In that case, the Third Circuit found that to be reliable an expert's opinion must be based on the methods and procedures of science or good grounds. Opinion at p. 15 (citing In re Paoli, 35 F.3d at 742 (quoting Daubert)). The Third Circuit also adopted a list of factors (later held to be non-exclusive by Kumho Tire Co., Ltd. V. Carmichael, 526 U.S. 137 (1999)) to consider when making a reliability determination. The factors are as follows:
"(1) whether a method consists of a testable hypothesis; (2) whether the method has been subjected to peer review; (3) the known or potential rate of error; (4) the technique's operation; (5) whether the method is generally accepted; ((6) the relationship between the technique to methods which have been established to be reliable; (7) the qualifications of the expert witness testifying based on the methodology; and (8) the non-judicial uses to which the method has been put."
Opinion at p. 16 (citing In re Paoli, 35 F.3d at 742 n.8). In exercising the "considerable leeway" afforded her under Kumho, Chief Judge Robinson found Dr. Benedict's theory to be unreliable based upon the fact that Dr. Benedict failed to test any of the 116 accused razors, to cite to any literature, and to review and/or consider the grooved inner cutters on 114 of the 116 accused infringing razors while formulating his theory. Opinion at pp. 19-20.In other words, Dr. Benedict's theory was revealed to be nothing more than his subjective belief. Id. at 19.
Finally, with regard to fit, Chief Judge Robinson wrote that an "expert's testimony must be relevant for the purposes of the case and must assist the trier of fact." Opinion at p. 16. Borrowing from Daubert and Oddi v. Ford Motor Co., 234 F.3d 136 (3d Cir. 2000), Chief Judge Robinson stated that there must be "'a valid scientific connection to the pertinent inquiry'" (Opinion at pp. 16-17 (citing Daubert, 509 U.S. at 591-92)) and that "[t]his standard . . . is not intended to be a high one or to be applied in a manner that requires the plaintiffs' 'to prove their case twice – they do not have to demonstrate to the judge by a preponderance of the evidence that the assessments of their experts are correct, they only have to demonstrate by a preponderance of the evidence that their opinions are reliable.'" Opinion at p. 17 (citing Oddi, 234 F.3d at 145). Despite the somewhat relaxed standard, Dr. Benedict's "turbulence" theory was found to have no valid scientific connection to the function of the grooved/recessed inner cutter. As such, Chief Judge Robinson reasoned that the introduction of Dr. Benedict's opinion could potentially confuse the jury, and, therefore, merited preclusion.
Chief Judge Robinson's Opinion is noteworthy not just for setting forth the standard for exclusion, but for its demonstration that although an expert's qualifications and opinions need not be judged by the strictest test, they are nonetheless subject to preclusion in Delaware under the "gatekeeper" function of Daubert.
Mr. Horwitz is a partner and Mr. Moore is an associate in Potter Anderson & Corroon LLP's patent litigation practice area. This article reflects the views of the authors and may not reflect the views of Potter Anderson & Corroon LLP or its clients.