Patent Expert WitnessThe jury awarded the plaintiff $4M in a trade secret lawsuit based on the trial court’s decisions on both parties’ expert witness reports and testimony.  The parties used expert witnesses in medical device for this case.

Plaintiff sued a medical company for, inter alia, trade secret misappropriation and to be named as inventor on patents for a medical device. The jury found Defendant liable for misappropriation of trade secrets—based primarily on Plaintiff’s assertion that Defendant’s products were based on his ideas from a set of drawings.

In addressing the inventorship issue, a Circuit Judge at the District Court for the Eastern District of Texas examined the evidence presented at the jury portion of the trial, and also allowed the parties to submit additional materials in response to the question.

Hearsay

Plaintiff objected to the admission of Defendant’s expert’s pretrial reports as hearsay. The judge held that expert reports, such as those prepared prior to trial, were hearsay and inadmissible. These expert reports were out-of-court statements by witnesses offered for their truth, and as a result, fell squarely within the definition of hearsay in Federal Rule of Evidence 801(c). The judge went on to explain that although expert witnesses are allowed to rely on hearsay to form their opinions, “their testimony is not a vehicle by which evidence that is otherwise inadmissible may be introduced.” In this case, however, Defendant’s expert incorporated his pretrial reports by reference as part of his declaration. Therefore, for purposes of the inventorship question, the judge treated Defendant’s expert’s reports as part of his declaration. This, he held, would overcome the hearsay problem stemming from the fact that the reports were witness statements made out of court.

Scope

Plaintiff also objected to Defendant’s expert’s opinion that various limitations of the patent were not found in Plaintiff’s drawings, as well as Defendant’s expert’s final conclusion that the drawings did not support Plaintiff’s inventorship claim. He argued that Defendant’s expert failed to include his analysis and conclusion in his pretrial expert reports—and that these parts of his declaration go beyond the scope of his pretrial reports. As such, it should be excluded.

The judge said that even though Defendant’s expert’s declaration contained a more detailed explanation of his reasons for asserting that the drawings did not prove Plaintiff’s inventorship of the patent, the court didn’t exclude portions of his declaration. The judge held that this material consisted almost entirely of quotations from and descriptions of the patent in question. Furthermore, he stated that the declaration was apparent based on a comparison of the patent with Plaintiff’s drawings. Defendant’s expert’s opinion that Plaintiff’s drawings failed to establish that he be named as an inventor of the patent was contained in Defendant’s expert’s pretrial report. As a result, it would not be excluded.

Legal Opinions

Next, Plaintiff argued that Defendant’s expert’s declaration contained a legal opinion. , Legal conclusions and opinions were not a proper subject of expert testimony. The Judge wrote that, although Federal Rule of Evidence 704 provides that an expert’s opinion “is not objectionable just because it embraces an ultimate issue,” the Fifth Circuit has distinguished between ultimate issues to be decided by the trier of fact, to which an expert may testify, and questions of law—which are off limits. This distinction is sometimes subtle, the judge explained; however, it wasn’t necessary for the judge here “to tease apart the permissible and impermissible opinions” from the experts because the inventorship issue wasn’t being tried to a jury. Consequently, the judge said he was free to ignore legal opinions by the expert witnesses that were not in line with issue of correction of inventorship under federal law. The judge decided not to strike any of Defendant’s expert’s declaration (or Plaintiff’s expert) on this ground, and chose instead to disregard legal conclusions by those witnesses in ruling on the inventorship claims.

Plaintiff next claimed that Defendant’s expert mischaracterized his expert’s testimony, but such a disagreement isn’t grounds for excluding the expert’s statements. To the extent that it matters, the judge said he could decide for himself whether the expert’s interpretation of Plaintiff’s expert’s testimony was accurate.

New Opinion by Expert

One of the Defendant objections was that Plaintiff’s expert’s statement that “Defendant recognized that Plaintiff significantly contributed to the claimed inventions of the Defendant patents” was a new opinion from the expert and not reflected in his pretrial reports. The judge held that this testimony fell far short of being equivalent to Plaintiff’s expert’s broad statement in his declaration that Defendant “recognized that Plaintiff significantly contributed to the claimed inventions of the Defendant patents.” As such, the judge said he would disregard Plaintiff’s expert’s opinion on that point, but the factual assertions in his declaration regarding the evidence were not objectionable and would be considered.

The judge concluded that, while the jury’s verdict indicated that it found that Plaintiff’s drawings at least motivated the Defendant engineers to design an operative device, “the path from the drawings to the specific, operable designs disclosed in the patents was a lengthy one.” The drawings didn’t demonstrate conception of the inventions claimed in the patents. Accordingly, the judge held that Plaintiff did not meet his burden of showing clear and convincing evidence, that he was entitled to be named a co-inventor of the disputed patents.


 

By Kurt Mattson J.D., LL.M.

Kurt R. Mattson is the former Director of Library Services and Continuing Education at Lionel Sawyer & Collins. He currently serves as Vice President Research Operations & Quality at Bula Pharmacy Law Intelligence in Phoenix, AZ. Prior to this, he served in numerous sales, marketing, and editorial positions with BNA and other legal publishers. He spent a substantial portion of his career working for West Publishing (now Thomson Reuters) holding supervisory roles in product development, corporate training, and legal research. He has also served as a consultant for several legal research and marketing companies.

Mattson received his J.D. from William Mitchell College of Law and his Masters of Law (LL.M.) from the National Law Center at George Washington University. In addition to his duties at Lionel Sawyer & Collins, Mattson is the editor of the BSA/AML Update for A.S. Pratt and co-author of A.S. Pratt’s Mortgage Procedure Guide to Federal and State Compliance. He is also a frequent contributor to other business and legal publications. His article on employment discrimination, “Demise of Disparate Impact on the Rehnquist Court,” was published in the University of North Dakota Law Review.