United States District Court, D. Delaware
HONORABLE LEONARD P. STARK JUDGE.
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)
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.
Roche's motion (D.I. 170) is granted to the extent it is
directed to Dr. Mimms' opinions on apportionment.
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. (D.I. 171 at 32-36) Meso contends the
Roche valuation is an appropriate basis from which to
calculate damages because the 10 asserted patents are core
(or essential) to the ECL technology to which Roche sought to
acquire full rights. (D.I. 192 at 27-28) In essence, Meso
argues apportionment is not required because ownership of
rights in any of the 10 essential patents would have
permitted BioVeris (or any party with exclusionary rights in
the essential patents) to engage in a "hold-up" of
Roche. (D.I. 192 at 28-29)
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. Even accepting
that a reasonable faultfinder could find that Roche may have
been willing to pay a premium to acquire the patents subject
to Meso's exclusive license, that premium can be
accounted for using the appropriate, required
apportionment/reasonable royalty analysis.
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.
Roche's motion is granted to the extent it is directed at
the date of the hypothetical negotiation.
correct determination of the hypothetical negotiation date is
essential for properly assessing damages." Laser
Dynamics, 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
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.
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.
Roche's motion is granted to the extent it is directed to
Dr. Wilbur's opinions on core patents and infringement.
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 at 2027-28) 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)
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. ...