April 2018
Intellectual Property & Technology Law Journal
By Mark J. Feldstein, Ph.D.; Shana K. Cyr, Ph.D.; Kelly S. Horn
Patent litigation often turns on a battle of expert testimony for infringement, validity, and damages. Given the criticality of expert testimony, having it excluded or limited can be devastating. This three-part series of articles addresses the application of the Federal Rules of Evidence to opinions and expert testimony, including their strategic offensive and defensive uses in litigation.
This first article addresses the competing considerations between offering a witness’s opinions as lay testimony under Rule 701 or expert testimony under Rule 702. Although early disclosure is not required for Rule 701 witnesses or their testimony, their opinions must be based on personal knowledge and not scientific, technical, or other specialized knowledge. In patent cases, where scientific and technical issues are central, the line between personal knowledge and specialized knowledge may be disputed, creating a risk of exclusion. Rule 702 allows more leeway in the witness’s testimony, including opinions on an ultimate issue pursuant to Rule 704, but Rule 702 witnesses and their expected testimony must be disclosed in advance, and their opinions must satisfy three levels of reliability.
The second article, which will appear in the next issue of the Intellectual Property & Technology Law Journal, addresses Rule 703, which relates to the types of underlying information experts may use to form opinions and the extent to which the information may be considered by a jury, and Rule 705, which permits experts to provide opinions without first explaining the facts upon which they are based. These rules are critical in patent cases because, for example, they allow experts to rely on information that might be otherwise inadmissible, and they dictate the way expert testimony may be presented.
The third article, which will appear in a subsequent issue of the Intellectual Property & Technology Law Journal, examines court-appointed experts under Rule 706. Although the use of court-appointed experts is relatively uncommon, they have been used across all areas of patent litigation, including claim construction, infringement, validity, and damages. Given the potential impact of a court-appointed neutral expert, parties should understand when and how such experts have been, or could be, used in patent cases.
Litigants present their cases largely through witness testimony. Witnesses with personal knowledge of a fact at issue may provide lay testimony under Federal Rules of Evidence 602 and 701, while witnesses with scientific or technical knowledge may provide expert testimony under Rule 702.
Due to the nature of the subject matter in patent cases, witnesses’ relevant knowledge often includes percipient facts as well as scientific or technical information, and litigants must strategically decide how to best present their testimony. Offering a witness having percipient knowledge of technical information as a fact witness risks exclusion of any opinion testimony as improperly calling for scientific or technical knowledge within the purview of Rule 702. But, if offered as an expert witness, the expected testimony must be disclosed early in the case and must meet certain standards of reliability or risk being excluded. Understanding how the rules and related case law apply to fact and expert witnesses is critical to strategically navigating the challenging waters of presenting testimony in patent cases.
Fact Witnesses Are Limited to Personal Knowledge and Non-Scientific Opinions but Have Some Leeway in Patent Litigation
Fact witnesses can testify from personal knowledge under Rule 602. They can also provide opinion testimony under Rule 701, so long as it is "helpful to clearly understanding the witness’s testimony or to determining a fact in issue” and not “based on scientific, technical, or other specialized knowledge within the scope of Rule 702."1
Fact witnesses who are likely to have discoverable information must be identified by name and, if known, address and telephone number under Federal Rule of Civil Procedure 26(a)(1)(A)(i). These initial disclosures are required early in the case.2 The more extensive disclosure requirements of Federal Rule of Civil Procedure 26(a)(2), however, do not apply to fact witnesses testifying only under Rules 602 and 701.
Courts in patent cases have reached varying conclusions when applying the no "scientific, technical, or other specialized knowledge" limitation of Rule 701 to lay opinion testimony. On the one hand, fact witnesses have been allowed leeway when addressing the inherently technical subject matter of patent litigations. But such leeway has limits and cannot be taken for granted.
Inventors have generally been allowed to provide lay opinion testimony about the patented invention, including its structure and function, even where the invention is quite complicated and the inventor has sufficient scientific or technical knowledge to qualify as an expert.3 Such testimony is allowable because it is based on the inventor’s personal knowledge.4 "An inventor is a competent witness to explain the invention and what was intended to be conveyed by the specification and covered by the claims. The testimony of the inventor may also provide background information, including explanation of the problems that existed at the time the invention was made and the inventor’s solution to these problems."5
Lay testimony about the structure of the allegedly infringing product has also generally been allowed when based on personal knowledge. For example, the U.S. District Court for the Northern District of California allowed lay opinion testimony by an engineer who helped develop the accused product based on his personal knowledge of the product,6 and testimony by a consultant, based on his personal inspection, about how the accused product compared to the alleged infringer’s prior product.7 Similarly, the U.S. District Court for the Western District of Wisconsin allowed lay opinion testimony about which equipment and avionics systems were found on defendant’s aircraft, because it was based on the witness’s personal, first-hand observations made while installing the equipment and systems,8 as well as testimony by four chipmakers about what chipsets and defaults were found in defendant’s products based on their personal knowledge.9
When the testimony involves not the structure of the accused product but rather its function, courts have reached different conclusions, with more finding the testimony improper lay opinions under Rule 701. For example, the U.S. District Court for the Western District of Wisconsin, in one case, disregarded inventor testimony about how the functions of the invention related to an accused product10 and, in another, about how an accused product functioned to transmit information.11 In both instances, the court reasoned that the testimony constituted expert testimony and that the witnesses were not disclosed as experts under Federal Rule of Civil Procedure 26(a)(2).12 "[I]t should come as no surprise that testimony about how equipment works generally requires a foundation of specialized knowledge to produce explanations or interpretations that an untrained layman could not reach from perceiving the same equipment in use."13 The U.S. District Court for the Southern District of Florida has similarly excluded inventor testimony about an accused product, reasoning that an inventor’s particularized knowledge and experience about his invention did not indicate he also had particularized knowledge and experience about the structure and workings of the accused product.14 On the other hand, the U.S. District Court for the Northern District of Indiana allowed lay opinion testimony about the function of an accused wheelchair lift, because it was based on the witness’s "extensive personal experience in the wheelchair lift field" and personal examination of the accused device.15
Lay opinion testimony has generally not been allowed on how the accused product compares to the patent or whether the patent is infringed. For example, the U.S. District Court for the Northern District of California excluded portions of a declaration by an engineer, who had helped develop the accused product, about how the patent compared to the accused product, reasoning that the testimony exceeded the scope of lay testimony.16 "While … courts regularly allow lay witnesses … to testify with regard to their personal knowledge of a particular invention or piece of prior art, the mandate of Rule 701 is clear. Lay opinion testimony is not to provide specialized explanations or interpretations that an untrained layman could not make if perceiving the same acts or events."17 The U.S. District Court for the Northern District of Illinois similarly excluded lay opinion testimony on whether the accused device infringed the patent.18 Although the U.S. District Court of the District of Delaware allowed lay opinion testimony on the "relationship" between the accused product and the patent claim, it likewise excluded lay testimony on whether the accused product infringed the claim.19
Lay opinion testimony on how the claims should be construed or whether the patent is valid has been generally disallowed. The U.S. District Court for the District of Missouri excluded inventor testimony on claim construction and interpretation of the patent application, reasoning that the testimony called for expert opinion.20 Lay opinion testimony on patent validity has also been excluded under Rule 701, including by the U.S. District Court for the Northern District of Illinois21 and the U.S. District Court for the Eastern District of Virginia.22 The U.S. District Court or the Central District of California similarly excluded lay opinion testimony on "any issues regarding invalidity, which includes the level of skill in the art, the scope and content of the prior art, and any secondary considerations."23 And the U.S. District Court for the District of Massachusetts struck portions of an inventor’s testimony that provided opinions on obviousness, reasoning that the opinions were based on the inventor’s highly technical and specialized knowledge of telecommunications, not his prior experience, and that the inventor had not been disclosed as an expert.24
The rules of evidence and civil procedure do not specify when a court must decide whether to allow testimony, or potential testimony, under Rule 701. This adds another layer of uncertainty, and reinforces the need for advanced strategic planning of how to offer each witness’s testimony. Some courts have sought to resolve such disputes pretrial, requiring written offers of proof in advance of trial. For example, the U.S. District Court for the District of New Hampshire required a party to file detailed written proffers of its fact witnesses’ testimony before trial so the court could decide whether to allow the testimony.25 The U.S. District Court for the Northern District of California has similarly required an offer of proof before trial that the testimony by the party’s employees would fall within the scope of Rule 701.26
Other courts have deferred their decisions on whether to allow certain testimony until trial. For example, the U.S. District Court for the Northern District of Illinois determined that it would wait until trial to rule on whether a witness who was not timely disclosed as an expert could, nonetheless, provide lay opinion testimony under Rule 701.27 The court reasoned that the extent to which the witness would offer lay opinion testimony not based on scientific, technological, or other specialized knowledge remained unclear pre-trial.28
Expert Witnesses Have Wide Latitude on Technical-Based Opinions, Even on the Ultimate Issue, So Long as Reliable
Witnesses qualified as experts "by knowledge, skill, experience, training, or education" can provide opinion testimony under Rule 702 if it "will help the trier of fact to understand the evidence or to determine a fact in issue," "is based on sufficient facts or data," and "is the product of reliable principles and methods," and if the witness "reliably applied the principles and methods to the facts of the case."29
Under Federal Rule of Civil Procedure 26(a)(2), the identity of expert witnesses who may provide testimony at trial must be disclosed in advance. In addition, if an expert witness is "retained or specially employed to provide expert testimony in the case" or a party employee whose "duties … regularly involve giving expert testimony," the expert must prepare and provide a written report.30 The report must contain "a complete statement of all opinions the witness will express and the basis and reasons for them"; "the facts or data considered by the witness in forming them"; "any exhibits that will be used to summarize or support them"; "the witness’s qualifications, including a list of all publications authored in the previous 10 years"; "a list of all other cases in which, during the previous 4 years, the witness testified as an expert at trial or by deposition"; and "a statement of compensation to be paid for the study and testimony in the case."31 If an expert witness is not required to provide a written report, the disclosure must state the subject matter of the expert’s expected testimony and a summary of the facts and opinions to which the expert is expected to testify.32
Deciding whether to admit Rule 702 expert testimony requires the court to consider the three levels of reliability set forth by the Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc.,33 and in parts (b), (c), and (d) of Rule 702. First, under Rule 702(b), expert testimony must be based on sufficient facts or data. For example, the U.S. District Court for the Western District of Wisconsin rejected expert testimony on anticipation as conclusory even though the expert provided a claim-by-claim analysis of the prior art.34 The court reasoned that the expert’s testimony was conclusory because it merely pointed to portions of the prior art reference relating to digital beam formers without pointing to portions relating to analog beamformers, which was also required by the claims.35 The court similarly disregarded the expert’s testimony on written description, writing that "plaintiffs must do more than state the legal standard and then declare that it has been satisfied."36
Second, under Rule 702(c), expert testimony must be based on reliable methods. For example, the U.S. District Court for the Eastern District of Pennsylvania permitted objected-to expert testimony, reasoning that the challenges went to the sufficiency of the evidence, not whether the expert’s methods were reliable.37 "An expert’s opinion is reliable under Rule 702 if it is based on ‘good grounds,’ that is, if it is based on the methods and procedures of science."38 "The grounds for the expert’s opinion merely have to be good, they do not have to be perfect."39
Third, under Rule 702(d), expert testimony must involve reliable application of the methods to the facts of the case. For example, the U.S. District Court for the Northern District of Texas permitted expert testimony about an apportionment methodology for damages.40 The court reasoned that the expert’s methodology was based on reliable principles and sufficiently tied to the facts of the case, and that peer review or publication of the methodology was not required.41
Even where there are issues of credibility, expert testimony has been admitted so long as it meets these standards for reliability. For example, the U.S. District Court for the Northern District of Alabama permitted expert testimony over objections as to the witness’s credibility, reasoning that the party offering the witness demonstrated that the expert was qualified to testify, the methodology he used was sufficiently reliable, and his testimony may assist the jury.42
Expert witnesses are also generally free under Rule 704 to offer testimony on ultimate issues in the case. There are, however, exceptions that litigants should consider when developing their case strategies. At one end, courts allow testimony on ultimate issues involving pure facts, like whether a claim element is present in the accused product. At the other end, courts do not allow testimony on ultimate issues that are purely legal conclusions.
In the middle are legal conclusions supported by testimony related to factual findings, which have generally been allowed.43 For example, testimony that a claimed invention would have been obvious is ultimately a legal conclusion, but nevertheless allowable if supported by sufficient testimony on the factual predicates.44 Unsurprisingly, many disputes under Rule 704 battle in this middle zone and the outcome may turn not on the testimony in isolation but on its context.45 For example, while experts often testify on claim construction,46 the Federal Circuit has held that expert testimony on the meaning of a claim term was improper testimony on an ultimate issue.47 The testimony as issue did not address the factual question of "how one skilled in the art would interpret the term … when viewed in light of the claims, specification and prosecution history."48
As patent litigants develop their case strategies, they should consider how to best present testimony by witnesses who have both personal and scientific or technical knowledge. Although presenting the testimony under Rule 701 advantageously avoids certain disclosure and reliability requirements, it risks having any opinion testimony excluded as improperly based on scientific or technical knowledge. Rule 702 allows more leeway in the testimony, including certain opinions on ultimate issues, but requires disclosure of the witness and their expected testimony and satisfaction of three levels of reliability. Litigants should also consider whether a single witness should present testimony under both Rule 701 and Rule 702.
Because of the uncertainty in how and when a court will decide whether to allow opinion testimony in patent cases, parties should not only strategically decide how to best present their witnesses’ testimony but should also start early to develop back-up plans for getting critical information into evidence. If there is a chance that critical information may not come in through lay testimony because it could be found to improperly call for scientific or technical knowledge, the party should consider offering the information through expert testimony. To do so, the party must satisfy the early disclosure requirements and ensure that the testimony satisfies the reliability requirements. If testimony is critical but there is a chance it may not satisfy the reliability requirements for expert testimony, the party should consider offering it through lay testimony. To do so, the party must choose a witness with personal knowledge of the matter, and the testimony must not be based on scientific or technical knowledge within the purview of Rule 702.
Endnotes
1 Fed. R. Evid. 701(b), (c).
2 Fed. R. Civ. P. 26(a)(1)(C).
3 See, e.g., Verizon Servs. Corp. v. Cox Fibernet Va., Inc., 602 F.3d 1325, 1339-40 (Fed. Cir. 2010) ("[T]he district court properly allowed testimony from the witnesses about the patents they invented based on their personal knowledge, and properly excluded these same witnesses from providing expert testimony on invalidity for which they had not previously provided expert reports or been qualified as an expert. The district court did not abuse its discretion in limiting inventor testimony to factual testimony that did not require expert opinion."); Supernus Pharm., Inc. v. TWi Pharm., Inc., No. 15-369 (RMB/JS), 2017 WL 4182809, at *20 n.12 (D.N.J. Sept. 21, 2017)("[The inventor] properly testified as to matters which, while technical and specialized, are squarely within his particularized firsthand knowledge and experience as a pharmaceutical scientist employed by [the party] and as an inventor on the Patents-in-Suit."); Braun Corp. v. Maxon Lift Corp., 282 F. Supp. 2d 931, 934 (N.D. Ind. 2003) (admitting inventor opinion testimony about the structure and function of the patented wheelchair lift because it was based on his personal perception), aff’d, 97 F. App’x 335 (Fed. Cir. 2004).
4 Sitrick v. Dreamworks, LLC, No. CV 03-4265-SVW (AJWx), 2006 WL 6116641, at *22 (C.D. Cal. July 20, 2006) ("[The inventor’s] testimony regarding Wordfit, which he invented, can be properly considered factual testimony and is admissible on that basis without [his] being a designated expert: [the inventor] obviously has sufficiently first-hand, personal knowledge to state facts regarding WordFit."), aff’d, 516 F.3d 993 (Fed. Cir. 2008).
5 Voice Techs. Grp., Inc. v. VMC Sys., Inc., 164 F.3d 605, 615 (Fed. Cir. 1999).
6 Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc., No. C 03-1431 SBA, 2006 WL 1330002, at *3 (N.D. Cal. May 15, 2006) (also allowing lay testimony on the way the accused product operates, but not allowing lay opinion testimony on how the accused product compared to the patent or on whether certain components of hemodialysis and heart lung machines were well known in the industry if not based on his personal observations).
7 Interwoven, Inc. v. Vertical Comput. Sys., No. CV 10-04645 RS, 2013 WL 3786633, at *8 (N.D. Cal. July 18, 2013).
8 WNS Holdings, LLC v. United Parcel Serv., Inc., No. 08-cv-275-bbc, 2009 WL 2136961, at *3 (W.D. Wis. July 14, 2009) ("Kuehl’s testimony about what equipment and avionic systems are found on defendant’s aircraft is admissible lay testimony under Rules 602 and 701 and will not be disregarded."), aff’d, 368 F. App’x 144 (Fed. Cir. 2010).
9 Fukitsu Ltd. v. Netgear, Inc., No. 0-CV-710-BBC, 2009 WL 2341810, at *4 (W.D. Wis. July 29, 2009) (not allowing, however, lay testimony about how the chipsets function and how those functions relate to the standards at issue in the case).
10 Baratto v. Brushstrokes Fine Art, Inc., 701 F. Supp. 2d 1068, 1074 (W.D. Wis. 2010) ("[The inventor’s] averments relating to how the invention is supposed to function and how those functions relate to any of the accused products in this case clearly constitute expert testimony. It would be impossible for an untrained layman to speak to these matters.").
11 WNS Holdings, 2009 WL 2136961, at *3.
12 Baratto, 701 F. Supp. 2d at 1074 ("[The inventor] has not been named or qualified as an expert witness under Fed. R. Civ. P. 26(a)(2). Therefore, to the extent that [he] provides expert testimony, that testimony violates the court’s preliminary pretrial conference order and Fed. R. Evid. 702 and Fed. R. Civ. P. 37…."); WNS Holdings, 2009 WL 2136961, at *3 ("[T]he portions of [the witness’s] testimony explaining how equipment found on defendant’s aircraft works is expert testimony and cannot be used to support defendant’s proposed findings of fact because defendant never disclosed [him] as an expert.").
13 WNS Holdings, 2009 WL 2136961, at *3.
14 Air Turbine Tech., Inc. v. Atlas Copco AB, 410 F.3d 701, 713-14 (Fed. Cir. 2005).
15 Braun, 282 F. Supp. 2d at 934.
16 Fresenius, 2006 WL 1330002, at *3.
17 Id.
18 Civix-DDI, LLC v. Hotels.com, L.P., No. 05 C 6869, 2012 WL 6591684, at *4 (N.D. Ill. Dec. 18, 2012) ("[The witness] may not provide any opinion testimony on the ultimate questions of invalidity and infringement.").
19 Magnetar Techs. Corp. v. Six Flags Theme Parks, Inc., No. 07-127-LPS-MPT, 2014 WL 530241, at *10 (D. Del. Feb. 7, 2014).
20 Pandrol USA, LP v. Airbos Ry. Prods., Inc., 424 F.3d 1161, 1167 (Fed. Cir. 2005) ("[The witness’s] declaration contains expert opinion because he opines on claim construction and interpretation of the original application. Thus, without an expert report proffered for the record at any time, the district court correctly excluded this testimony on the basis of Fed. R. Civ. P. 26(a)(2).").
21 Civix-DDI, 2012 WL 6591684, at *4 ("[The witness] may not provide any opinion testimony on the ultimate questions of invalidity and infringement.").
22 Verizon Servs., 602 F.3d at 1339-40.
23 Munchkin, Inc. v. Luv N’ Care, Ltd., No. 2:13-cv-07228-ODW(AGRx), 2015 WL 774046, at *3 (C.D. Cal. Feb. 24, 2015) (allowing, however, lay testimony based on the witness’s personal observations and knowledge as a result of his employment at the company).
24 Freedom Wireless, Inc. v. Boston Commc’ns Grp., Inc., 369 F. Supp. 2d 155, 157 (D. Mass. 2005) ("Applying his specialized knowledge to the aforementioned topics, [the witness] was then able to conjecture an opinion with respect to their triviality or obviousness. This type of abstract opinion, which is several degrees removed from [his] actual experience, is the classic type of expert testimony contemplated by Rule 702. As a lay witness, [he] simply was not competent to testify as such.").
25 Insight Tech. Inc. v. Surefire, LLC, No. 04-CV-74-JD, 2009 WL 3242555, at *2 (D.N.H. Oct. 8, 2009) ("[T]he motion to preclude expert testimony from [the other party’s] fact witnesses…is granted to the extent that fact witnesses will not be permitted to testify to matters within the scope of expert opinion testimony. The admissibility or inadmissibility of specific fact witnesses’ testimony will be determined as to each witness before he testifies at trial. [The party] shall file detailed written proffers of the testimony of any fact witness it plans to call at trial…whose testimony is expected to be directed to technical or specialized topics such as prior art, patents, other devices, and obviousness.").
26 Informatica Corp. v. Bus. Objects Data Integration, Inc., No. C 02-03378 EDL, 2007 WL 607792, at *3 (N.D. Cal. Feb. 23, 2007) ("The Court advises the parties that lay witnesses will not be permitted to testify to issues that would normally be the subject of expert opinion, such as prior art in this advanced technological field or the availability of non-infringing alternatives, without first making an offer of proof.").
27 Liquid Dynamics Corp. v. Vaughan Co., No. 01 C 6934, 2004 WL 2260626, at *2 (N.D. Ill. Oct. 1, 2004)("With proper foundation evidencing personal knowledge, [the witness’s] testimony regarding prior art systems is not clearly inadmissible for all purposes. The extent to which [he] may offer lay opinion testimony not based on scientific, technological or other specialized knowledge, however, is unclear. The court must reserve ruling on the admissibility of [his] lay opinion testimony until trial. The parties will not refer to [his] opinions in opening statements, through questioning witnesses, or otherwise in the jury’s presence without prior court authorization.").
28 Id.
29 Fed. R. Evid. 702.
30 Fed. R. Civ. P. 26(a)(2)(B).
31 Id.
32 Fed. R. Civ. P. 26(a)(2)(C).
33 509 U.S. 579 (1993).
34 Gen. Elec. Co. v. Sonosite, Inc., 641 F. Supp. 2d 793, 812 (W.D. Wis. 2009).
35 Id.
36 Id. at 819.
37 Cardionet, LLC v. Scottcare Corp., No. 12-2516, 2017 WL 4742476, at *6 (E.D. Pa. Oct. 19, 2017)("[The other party] has not stated any basis upon which [the expert’s] testimony may be excluded pursuant to Rule 702 because [it] has not asserted any challenge to the methods or principles used by [the expert] in reaching his conclusions.").
38 In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 744 (3d Cir. 1994) (“The evidentiary requirement of reliability is lower than the merits standard of correctness…. A judge will often think that an expert has good grounds to hold the opinion that he or she does even though the judge thinks that the opinion is incorrect.").
39 Id.
40 Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283, 1298 (Fed. Cir. 2015) ("That [the expert’s] methodology was not peer-reviewed or published does not necessitate its exclusion. We recognize that the fact-based nature of [his] damages testimony made it impractical, if not impossible, to subject the methods to peer review and publication.").
41 Id.
42 Abbott Point of Care, Inc. v. Epocal, Inc., No. CV-08-S-543-NE, 2012 WL 12897958, at *9, 11 (N.D. Ala. Jan. 18, 2012) ("If [the other party] believes that [the expert] incorrectly used certain terminology, it will have the opportunity to so convince the jury through cross-examination of [the expert] at trial. There is no reason, however, to exclude [the expert’s] testimony on these topics from the jury’s consideration.").
43 Icon Health & Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1041 (Fed. Cir. 2017).
44 Id.
45 Id.
46 Phillips v. AWH Corp., 415 F.3d 1303, 1318 (Fed.Cir. 2005) (en banc).
47 Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570 (Fed. Cir. 1995).
48 Id. at 157778.
Originally printed in Intellectual Property & Technology Law Journal in April 2018. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm’s clients.
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