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Advanced Fiber Technologies Trust v. J&L Fiber Services

May 11, 2010



Plaintiff Advanced Fiber Technologies Trust ("Plaintiff" or "AFT"), a trust organized under the laws of Canada with a principal place of business in Quebec, Canada, brought this action for patent infringement arising under 35 U.S.C. § 271, et seq. against Defendant J&L Fiber Services, Inc. ("Defendant" or "J&L"), a Wisconsin corporation, on November 9, 2007. Compl. (Dkt. No. 1). Jurisdiction is premised on 28 U.S.C. § 1331 and 28 U.S.C. § 1338(a).

AFT's Complaint, filed on November 9, 2007, alleges that J&L has and continues to infringe upon a screen plate and cylinder patent and its allegedly valid reissue owned by AFT. On February 22, 2008, J&L filed its Answer and counterclaim, denying infringement and asserting the invalidity of the reissued patent. Dkt. No. 12. Presently before the Court are AFT's Motions to strike various expert reports and prevent these experts from testifying at trial (Dkt. Nos. 47-49) and Motion to strike newly raised invalidity defenses and arguments (Dkt. No. 72).


The instant infringement action involves two patents owned by AFT directed to screen plates and screen cylinders for use in the pulp and paper industry for screening screening impurities from pulp in the manufacture of paper products. Pl.'s Statement of Material Facts in Supp. of its Mot. for Summ. J. (Dkt. No. 33-11) ("SOMF") ¶¶ 10-11.*fn1 The screen plate and cylinder, originally described in U.S. Patent No. 5,200,072 ("'072 patent"), issued on April 6, 1993 based upon an application filed August 16, 1990, was purchased by AFT from a predecessor in interest, CAE ScreenPlates, Inc.; the '072 patent was subsequently reissued by AFT under U.S. Patent No. RE 39,940 ("'940 patent") on September 18, 2007.*fn2 Id. ¶¶ 9,17.

J&L has had knowledge of claims that it was infringing on the '072 patent as early as February 2000, when it was informed of such by CAE ScreenPlates, Inc. Subsequently, AFT filed several additional notices of infringement with J&L, culminating with the instant Complaint (Dkt. No. 1) on November 9, 2007, which alleges that J&L's V-Max screen cylinder infringes on the '072 patent and '940 reissue (collectively, "the '940 patent") owned by AFT. Id. ¶ 13. In its Answer and Counterclaim (Dkt. No. 12), filed February 22, 2008, J&L denies any infringement and asserts that, at any rate, the '940 reissue was invalid. In or around April 2008, AFT served its first set of interrogatories on J&L seeking the legal and factual basis for J&L's claims of non-infringement and invalidity, to which J&L responded with preliminary claim charts. See Mesiti Decl. (Dkt. No. 33-12) ¶ 6-7; see also Dkt. No. 60 at 3-4. On March 13, 2009, AFT filed a Motion for Summary Judgment on the Issue of Infringement (Dkt. No. 33); on April 24, 2009 J&L filed its response Memorandum (Dkt. No. 39) supplemented by numerous exhibits, including expert reports and deposition testimony. Discovery closed August 1, 2009. On September 30, 2009, J&L filed a Motion for the Construction of Claim Terms (Dkt. No. 45). On October 1, 2009, J&L filed its own Motion for Summary Judgment (Dkt. No. 50), accompanied by a Memorandum of law (Dkt. No. 50-40) containing, inter alia, invalidity defenses that AFT alleges were not previously raised during the discovery period and which run contrary to the responses J&L gave to its interrogatories. On the same day, AFT filed a Motion for Summary Judgment on the Issue of Validity. Dkt. No. 51.

As in any patent dispute, the role of experts in the instant action is expected to be significant. This is true both in terms of establishing the basis of the parties' claims and, should the matter reach trial, in assisting the jury reach factual conclusions. Three of the Motions presently before the Court (Dkt. Nos. 47-49) seek to strike expert reports submitted on behalf of J&L and prevent these experts from testifying at trial. The remaining Motion (Dkt. No. 72), seeks to strike certain arguments made in support of J&L's Motion for Summary Judgment (Dkt. No. 50) for J&L's alleged failure to comply with discovery rules.


A. Standard for Admitting Expert Testimony

Where "scientific, technical, or other specialized knowledge will assist the trier of fact . . . a witness qualified as an expert by knowledge, skill, experience, training, or education" may offer an opinion, if the proposed testimony "is based upon sufficient facts or data, . . . is the product of reliable principles and methods, and [] the witness has applied the principles and methods reliably to the facts of the case." FED. R. EVID. 702. The Court has a "gatekeeping responsibility" to "ensur[e] that an expert's testimony both rests on a reliable foundation and is relevant to the task at hand." Daubert v. Merrell-Dow Pharm., Inc., 509 U.S. 579, 597 (1993). In assuming this role, the Court applies a "presumption of admissibility." See Borawick v. Shay, 68 F.3d 597, 610 (2d Cir. 1995); Lappe v. American Honda Motor Co., Inc., 857 F. Supp. 222, 226 (N.D.N.Y. 1994).

The Court determines whether an "expert's opinion [has] a reliable basis in the knowledge and experience of his discipline." Daubert, 509 U.S. at 592. There is no definitive checklist of factors that the Court may consider in this decision. Id. at 593. Instead, a variety of factors inform the determination, including the "personal knowledge or experience" of the expert. Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 150 (1999). While the Daubert test is a flexible one, the Court must ensure an expert's analysis is reliable at every step, that the reasoning and conclusions are based on "good grounds," and that it will assist the trier of fact. Amorgianos v. Nat'l R.R. Passenger Corp., 303 F. 3d 256, 267 (2d Cir. 2002). "'Any step that renders the analysis unreliable under the Daubert factors renders the expert's testimony inadmissible.'" Id. (citation omitted).

Finally, otherwise reliable and relevant expert testimony may still be inadmissible if it was not properly and timely disclosed pursuant to Federal Rule of Civil Procedure 26.*fn3 Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1373-74 (Fed. Cir. 2008); see also FED. R. CIV. P. 37(c)(1) ("If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless."). An expert's report fails to meet the requirements of Rule 26(a) if it does not disclose the basis and reasoning underlying that opinion. Innogenetics, 512 F.3d at 1373-74. Evidence should also be excluded if its "probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury." FED. R. EVID. 403.

B. Disputed Expert Reports and Proposed Testimony

1. Peter Seifert

On May 1, 2009, J&L offered a report by Peter Seifert as expert opinion supporting its contention that the '940 Patent is invalid. Fuierer, Decl. (Dkt. No. 47-5) ("Seifert Invalidity Report"). Specifically, J&L asked Seifert, "to consider whether certain prior art anticipated and/or rendered obvious the invention claimed" in the '940 Patent.*fn4 Id.; Mem. in Supp. of Pl.'s Mot. to Strike Expert Report and Preclude Testimony Regarding Invalidity by Peter Seifert (Dkt. No. 49-1) ("Pl.'s Seifert Mem."). Seifert also provides deposition testimony on the issue of infringement pursuant to Federal Rule of Civil Procedure 30(b)(6).

Seifert's report concludes that "independent claims 1, 10, and 18 and all of the associated dependent claims, with the exception of claim 21 . . . are invalid as either anticipated, obvious, or both." Seifert Invalidity Report (Dkt. No. 47-5) at 6. Seifert lists eighteen prior art patents and other documents that he "reviewed, examined, or relied upon" in forming his opinion, highlighting six of these as "main references." Id. at 6-7.

Plaintiff seeks to strike Seifert's report and deposition testimony and preclude him from testifying at trial. Mot. to Strike the Seifert Report and Preclude him from Testifying at Trial (Dkt. No. 49) ("Pl.'s Seifert Mot."). Plaintiff asserts that Seifert's report and testimony are inadmissible under Federal Rules of Civil Procedure 26 and 37 and Federal Rule of Evidence 702. Plaintiff's Motion (Dkt. No. 49) rests not on an objection to Seifert's qualifications*fn5 or the relevancy of his opinion, but on his alleged failure to provide an adequate basis for his conclusions regarding the obviousness of the '940 patent; the lack of discussion in his report of anticipation by inherency, which he now proposes to testify about at trial; and the inconsistency of his report with his later deposition testimony and other admissions by Defendant. Pl.'s Seifert Mem. (Dkt. No. 49-1). For the reasons that follow, the Court denies Plaintiff's Motion (Dkt. No. 49).

a. Obviousness

35 U.S.C. § 103 prohibits the issuance of patents where "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." While "the ultimate question of patent validity is one of law," validity ultimately rests on factual inquiries as to (1) the scope and content of prior art; (2) differences between that prior art and the claimed invention; (3) the level of ordinary skill in the pertinent art; and (4) any other indicia of obviousness or non-obviousness. Graham v. John Deere Co. of Kansas City, 381 U.S. 1 (1966); KSR Int'l Co v. Teleflex, Inc., 550 U.S. 398 (2007).

Any challenge to a patent's validity "on obviousness grounds cannot be sustained by mere conclusory statements; instead, there must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness." In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006) (citations omitted). Where an expert's reasoning is not made explicit as to "how or why a person ordinarily skilled in the art would have found the claims of the [challenged] patent obvious in light of some combination of . . . references . . . [s]uch vague testimony would not [be] helpful to a lay jury." Innogenetics, 512 F.3d at 1373. Similarly, where an expert opines that an invention is invalid because it would be obvious to one skilled in the art to combine elements of prior art references, but fails to offer evidence of a motivation to make such combination, a court does not abuse its discretion by finding the testimony inadmissible. Id.; see also KSR, 550 U.S. at 418 (expert reports cannot rest on conclusory statements and should make explicit why it would be obvious to one of ordinary skill in the art to combine elements from multiple patents).

An expert need not elaborate extensively as to why it would be obvious for one of ordinary skill in the art to combine elements from various sources, as such combination may simply result from "common sense." KSR, 550 U.S. at 418. Courts, however, must guard against conflating "common sense" and what appears obvious in hindsight, and thus must "resist the temptation to read into prior art the teachings of the invention in issue." Graham, 383 U.S. at 36 (citing Monroe Auto Equipment Co. v. Heckethorn Mfg. & Supply Co., 332 F.2d 406, 412 (1964). Thus, "'some kind of motivation must be shown from some source, so that the jury can understand why a person of ordinary skill would have thought of either combining two or more references or modifying one to achieve the patented method.'" Innogenetics, 512 F.3d at 1374 (quoting Innogenetics, NV. v. Abbot Labs., No. 05-C-0575-C, slip op. at 13 (W.D. Wis. Jan. 3, 2007). Where expert testimony fails to present a "motivation to combine," and this is the only basis for its exclusion, and the explanation of that motivation explanation is supplied by another source, the testimony should be admitted. Id. Even then, however, a party asserting a patent's obviousness must show that one skilled in the art "would have perceived a reasonable expectation of success in making the invention via that combination." Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1165 (Fed. Cir. 2006).

Seifert reaches his conclusion that all but claim 21 of the '940 patent's claims are invalid by referencing 18 prior art patents and other documents and comparing the claims of the '940 patent with six of these. Seifert Invalidity Report (Dkt. No. 47-5) at 6-7. The "comparisons" consist of Mr. Seifert's naming one of the six sources and stating that, in his opinion, each element of each of the independent claims and their relevant dependent claims are found in or disclosed by the prior art reference; that these claims are obvious combinations of prior art patents and documents; and that because "the differences between the prior art references reviewed and the claimed invention are so insubstantial, that many other combinations of references would also render these claims obvious . . . the claim represents nothing more than prior art elements combined by known methods to achieve predictable results." Id. at 13-16. Seifert notes that his analysis is set forth in the claim charts attached to his report. These ...

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