JULY/AUGUST 2013 DEVOTED TO INT ELLECTUAL P ROPERTY LIT IGATION & ENFORCEMENT. Edited by the Law Firm of Grimes & Battersby.

Transcription

1 JULY/AUGUST 2013 VOLUME 19 NUMBER 4 DEVOTED TO INT ELLECTUAL P ROPERTY LIT IGATION & ENFORCEMENT Edited by the Law Firm of Grimes & Battersby Litigator

2 Effective Selection and Retention of Testifying Experts for Patent Infringement Litigation Bindu Donovan Bindu Donovan is a partner at Sidley Austin LLP in New York, NY. Ms. Donovan would like to thank Michael Wawszczak, an associate at Sidley Austin s Chicago office, for his assistance in preparation of this article. Expert testimony plays a critical role in patent infringement litigation involving complex technology, often constituting the most important evidence of liability or damages. Expert witnesses are individuals who, because of their knowledge, skill, experience, training, or education, are qualified to offer opinion-based testimony to aid the judge or jury in understanding the scientific and technological subject matter on which the case is based. Because expert testimony can be the difference between winning or losing a patent case, careful selection of a properly qualified, competent, and credible expert witness is essential. This article provides practice tips for successfully finding and retaining experts in patent infringement litigation. Expert Witnesses Play a Vital Role in Patent Cases The primary role of expert witnesses in patent cases is to educate lay judges and juries who are not knowledgeable about the technology underlying the case. The United States Court of Appeals for the Federal Circuit (Federal Circuit) has recognized that, although there is no per se rule as to the necessity of expert testimony in patent cases, expert testimony regarding matters beyond the comprehension of laypersons is sometimes essential typically, expert testimony will be necessary in cases involving complex technology. 1 Two broad categories of expert witnesses are used in patent cases: (1) testifying experts and nontestifying experts. Testifying experts, typically scientists, engineers and economists who testify at trial, are disclosed to the opposing party during discovery and subject to deposition and cross-examination at trial. In contrast, nontestifying experts play a consulting role, assisting the attorneys in developing their case. The most common subject matter areas for which testifying experts are used in patent cases are: (1) to provide tutorials explaining the technology to the judge or jury; (2) to establish infringement or noninfringement; (3) to prove or rebut arguments that the patent is invalid; (4) to explain the practices of the US Patent and Trademark Office in prosecuting patents; and (5) to calculate the amount of patent damages. In addition, during the claim construction phase, technical experts may present testimony, by written declaration or in court, to explain how the invention works, the meaning of technical terms as they would be understood by a person of ordinary skill in the art, and the state of the art. 2 Expert testimony concerning infringement may encompass how the claims read on the accused products, the results of testing done to prove infringement or noninfringement, and proof of active inducement or contributory infringement. Expert testimony relating to validity issues may cover such diverse topics as anticipation, inherency, the scope and content of the prior art, the differences between the prior art and the claimed invention, how a person of ordinary skill in the art would understand the teachings of the prior art, whether a person of ordinary skill would be motivated to combine the prior art, the level of ordinary skill in the art, secondary considerations of nonobviousness such as long felt need, unexpected results, failure of others, and commercial success, and nexus between the claimed invention and commercial success. Technical experts also may testify concerning enablement and written description issues. Economic experts typically opine on the determination of lost profits or reasonable royalty damages, including, for example, evidence of lost sales or price erosion, actual lost profit calculations, competition with the infringer in the relevant market, the patent owner s capacity for making and selling the infringing products, the existence of noninfringing substitutes, the entire market value rule, and application of the Georgia Pacific factors for determining reasonable royalty damages. JULY/AUGUST 2013 IP Litigator 1

3 Although they play a behind-the-scenes role, nontestifying experts are no less valuable in patent cases than their testifying counterparts. Because they do not testify, the work of nontestifying experts is afforded attorney work product protection and is shielded from disclosure to the other party. Accordingly, nontestifying experts can educate the attorneys concerning the pertinent technology, analyze and assess different theories of the case, assist in the preparation of infringement and invalidity contentions, design and explain tests and experiments, provide potential topics for interrogatories and document requests, and help attorneys prepare for depositions. The Federal Rules of Evidence and the Federal Civil Procedure Rules Govern the Use of Experts In the case of testifying experts, the Federal Rules of Evidence provide the legal framework for admissibility of expert testimony at trial, while the Federal Rules of Civil Procedure set forth the procedures for disclosure of such testimony to the other parties during discovery. Federal Rule of Evidence 702 The primary rule that governs admissibility at trial of expert testimony is Federal Rule of Evidence 702 (Rule 702). Pursuant to Rule 702, a witness who is qualified as an expert by knowledge, skill, experience, training or education, is allowed to provide opinion testimony at trial if: (a) the testimony will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case. Rule 702 imposes on the trial court the responsibility of serving as a gatekeeper to ensure that any proffered expert testimony is both relevant and reliable. 3 Following the Daubert decision, Rule 702 was amended to provide some general standards that the trial court must use to assess the reliability and helpfulness of proffered expert testimony. 4 The test under Daubert is not the correctness of the expert s conclusions but the soundness of his methodology. 5 As explained in the Advisory Committee notes, expert testimony under Rule 702 can be either fact or opinion testimony. Thus, an expert may give a dissertation or exposition of scientific or other principles relevant to the case, leaving the trier of fact to apply them to the facts. Alternatively, it is permissible for the expert to testify in the form of opinions, that is, take the further step of suggesting the inference which should be drawn from applying the specialized knowledge to the facts. 6 Federal Rules of Evidence 703, 704, and 705 Under Federal Rule of Evidence 703, an expert may base an opinion on facts or data in the case that the expert has been made aware of or personally observed. 7 Under this rule, expert testimony based on otherwise inadmissible hearsay may be admitted [i]f experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject. However, where the underlying facts or data are otherwise inadmissible, they may be disclosed to the jury only if the court finds that the probative value of the information in assisting the jury to evaluate the expert s opinion substantially outweighs any prejudicial effect. Under Federal Rule of Evidence 704, an otherwise admissible expert opinion or inference is not objectionable bec ause it embraces an ultimate issue to be decided. Indeed, in patent cases, it is common for expert testimony to embrace the ultimate questions of validity and infringement. Under Federal Rule of Evidence 705, an expert may state an opinion, and give the reasons for it, without first testifying to the underlying facts or data. But the expert may be required to disclose those facts or data on cross-examination. Federal Rule of Civil Procedure 26 Because of the emphasis on effective cross- examination, it is essential for the opposing party to know beforehand what the expert s testimony will be. Federal Rule of Civil Procedure 26 (Rule 26) sets forth the procedures for disclosure of expert testimony to the other parties during discovery. Pursuant to Rule 26(a)(2)(A), a party must disclose to the other parties the identity of any expert witness that may be used to present evidence at trial under Federal Rules of Evidence 702, 703, or In addition, pursuant to Rule 26(a)(2)(B), all testifying experts are required to provide a written report, prepared and signed by them, that contains: 9 1. a complete statement of all opinions the witness will express at trial and the basis and reasons for them; 2. all facts or data considered by the witness in forming his opinions; 3. any exhibits that will be used to summarize or support the opinions; 4. the witness s qualifications, including a list of all publications authored in the past 10 years; 2 IP Litigator JULY/AUGUST 2013

4 5. a list of all other cases in which the witness testified as an expert at trial or by deposition in the past four years; and 6. a statement of the compensation to be paid to the witness for their study and testimony in the case. Failure to submit a written expert report in compliance with Rule 26(a)(2)(B) can result in exclusion of expert testimony. 10 In 2010, the Federal Rules of Civil Procedure were amended to provide work product protection for draft expert reports and communications between counsel and testifying experts. 11 The only unprotected communications between counsel and experts required to be disclosed are those relating to: (a) compensation; (b) facts or data provided by counsel and considered by the expert; and (c) assumptions provided by counsel and relied on by the expert. Pursuant to Rule 26(a)(2)(D), expert disclosures must be made pursuant to the Court s Scheduling Order. Absent such schedule, the disclosures must be made (i) at least 90 days before the date set for trial or for the case to be ready for trial; or (ii) if the evidence is solely to contradict or rebut expert subject matter identified by another party, within 30 days after the other party s disclosure. Pursuant to Rule 26(a)(2)(E), the parties must supplement expert disclosures when required to do so under Rule 26(e). 12 Rule 26(b)(4)(A) provides that [a] party may depose any person who has been identified as an expert whose opinions may be presented at trial. Producing an expert witness for deposition is not optional. The Notes of the Advisory Committee on the 1993 Amendments explain that paragraph 4(A) is revised to provide that experts who are expected to be witnesses will be subject to deposition prior to trial, conforming the norm stated in the rule to the actual practice followed in most courts, in which depositions of experts have become standard. 13 Failure to Carefully Select and Investigate a Testifying Expert Can Be Fatal A recent decision, Allergan, Inc. v. Barr Laboratories., Inc., 14 by the US District Court for the District of Delaware (Judge Sue L. Robinson) dramatically illustrates the importance of careful selection and investigation of testifying experts. Plaintiff Allergan, Inc. sued Barr Laboratories, Inc. for infringement of United States Patent Nos. 5,688,819 (the 819 patent) and 6,403,649 (the 649 patent) after Barr filed an Abbreviated New Drug Application (ANDA) for approval to market a generic version of Allergan s Lumigan (bimatoprost ophthalmic solution) for treatment of intraocular pressure in people with glaucoma or ocular hypertension. Allergan subsequently amended its complaint to join defendants Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries Ltd. Allergan also subsequently brought suit for infringement of the 819 and 649 patents against Sandoz, Inc. after receiving a paragraph IV notification that Sandoz, Inc. had filed an ANDA with the FDA for a generic version of Lumigan. The Sandoz case was consolidated with the action against Barr and Teva for purposes of trial. 15 Defendants asserted that the 649 and 819 patents were invalid based on inherent anticipation and obviousness. 16 After a bench trial on the issues of infringement and validity, the district court found that Allergan had met its burden to prove that defendants ANDA product infringed the asserted claims, but defendants had not met their burden of proving invalidity by clear and convincing evidence. 17 With regard to invalidity based on obviousness, the district court found that defendants evidence, presented through the testimony of synthetic chemist Dr. Ashim Kumar Mitra, was entitled to no weight and therefore defendants had failed to establish a prima facie case of obviousness. 18 In particular, the court found that Mitra s credibility was eviscerated on cross- examination when Allergan s counsel established that: (1) Mitra had incorrectly drawn the bimatoprost molecule during his deposition and utilized slides in his trial presentation that incorrectly represented the molecule; (2) Mitra had directly contradicted his trial opinions in a declaration submitted in a prior litigation, stating that the primary reference ( Stjernschantz ) he relied on for obviousness was invalid, its teachings so flawed that a skilled reader is left in doubts about the usefulness of it, and its data so deficient that a person of ordinary skill would have been in doubt whether [the compounds tested] had any effects at all; and (3) Mitra s credibility was undermined on cross-examination in several additional respects, including because Mitra s own publications which, also contrary to his trial testimony, stated that the claimed invention bimatoprost outperformed other compounds by interacting with another receptor. 19 Finding that Mitra s credibility was flawed on a fundamental level, the court concluded: [t]he court simply can assign no weight to Mitra s testimony regarding Stjernschantz s controlling import in view of Mitra s prior opinion and publications. Because they are entirely not credible, the court need not further dissect Mitra s opinions nor render judgment regarding the additional flaws in his reasoning asserted by Allergan. 20 Having excluded the testimony of defendants expert, the district court declined to independently review the JULY/AUGUST 2013 IP Litigator 3

5 prior art references without expert guidance. 21 The district court also found defendants inherent anticipation evidence insufficient to prove invalidity by clear and convincing evidence. Even if that had not been the case, the court stated that because defendants expert lacked credibility, defendants would not have been able to meet their burden of proof based on this testimony in any event. 22 The court also rejected defendants attempts to present new obviousness theories after trial, finding them waived. 23 On Appeal, defendants argued that the district court s adverse credibility determination did not excuse the court from its obligation to independently review the submitted prior art references. 24 Nevertheless, the Federal Circuit affirmed the district court s finding of nonobviousness. The Federal Circuit found that the district court s assessment of Mitra s testimony as flawed was a fair assessment of the testimony of Dr. Mitra, whose prevarication and inconsistency were repeatedly demonstrated on cross examination. 25 In addition, because the case was not one in which the technology was simple or the factual inquiries underlying obviousness undisputed, the Federal Circuit further held that the district court did not err in requiring expert testimony concerning obviousness. 26 Allergan v. Barr illustrates the substantial risks associated with failure to properly select and investigate a testifying expert. Patent litigation is an adversarial process, with each party selecting its own experts to offer testimony supporting its case. Once an expert meets the threshold for admissibility established by Rule 702, the expert may testify and the judge or jury decides how much weight to give the testimony and which side s expert to believe. As exemplified in Allergan, the main vehicle for controlling an expert s testimony is through vigorous crossexamination. 27 This is accomplished by attacking the credibility of the witness, including by exposing inconsistencies between the witness s proffered testimony and his prior testimony and publications. Careful selection and a thorough investigation of the witness s qualifications and prior testimony and publications are therefore essential. Practice Tips for the Selection and Retention of Testifying Experts Consider What Your Expert s Role Will Be At the outset, it is important to consider why the expert is needed and what the expert s role at trial will be. Answering these questions will direct the type of qualifications and experience that the expert must have. Basic considerations when selecting an expert include the expert s education and experience, familiarity with the particular subject matter at issue in the case, prior consulting experience, knowledge of the patent litigation process, the number of times the expert has been deposed and testified at trial. Other considerations may include the expert s age, geographic location, and availability. The relative importance of each of these considerations will vary depending on the expert s role. For example, if the expert will play the lead role at trial in supporting a party s claims or defenses, it will be important to select a highly credentialed expert who has an established reputation in the field and who has prior experience testifying at trial. On the other hand, if the expert will have a narrower role, or will only provide a written declaration in support of a party s claim construction, it may be acceptable to use someone with a less established reputation, and prior testifying experience may be less critical. Determine If There Are Any Conflicts Ethical conflicts can lead to disqualification of the expert or the law firm. Therefore, before retaining an expert, it is important to inquire whether he is currently or has previously served as an expert for the opposing party. Begin Working with Experts Early Cost considerations permitting, it always is beneficial to retain and begin working with expert witnesses early in the case. Beginning the expert search early will provide a broader pool of witnesses from which to choose from before they have been retained by the opposing party, and allow you enough time to find the most suitable expert. Early retention also ensures that the expert is able to assist the attorneys from the beginning in understanding the background technology, developing case strategy, and focusing fact discovery. Early retention also ensures that the expert will have sufficient time to study the materials and do a thorough analysis of the issues that will be the subject of his expert report. Involve the Client The client is usually a valuable resource for identifying suitable experts. In-house technical experts or inventors generally are knowledgeable about the leading researchers in the field of the invention and may have established relationships with them. The client may have worked successfully with particular experts in prior litigation. However, care must be taken to ensure that the selected expert does not appear as biased or a hired gun for the client. Consider Academic Sources, Retired Industry Personnel, Expert Search Firms Outside of the client s network, there are a number of other resources for finding a suitable expert. The majority of scientific experts come from recognized academic institutions where they hold teaching or research 4 IP Litigator JULY/AUGUST 2013

6 positions. These experts generally have an extensive publication record in the subject matter area for which they are rendering an opinion. Such well credentialed experts may be found by researching the faculty at leading institutions, and by reviewing publications and conference presentations in the field of interest. Retired academics or retired industry personnel who are self-employed also may be engaged as experts. Another source of experts, particularly in the damages area, are expert consulting firms that employ individuals whose primary job is to provide expert testimony. Expert search firms are available that can help locate an expert based on specific criteria. Experts may be cited in legal opinions from other patent cases. Do an Initial Screening Interview Prior to retaining an expert, it is important to ensure that the expert s views are in general agreement with the key positions that you will take in your case. This should be accomplished during a preliminary screening interview that, in addition to evaluating the expert s qualifications and experience, also explores the expert s views on key issues. As part of the preliminary screening it may be beneficial to send the expert a limited number of nonconfidential documents, such as the patent-in-suit or information about the accused products. The expert should be retained only after he has confirmed agreement with the key positions in the case. Meet Your Expert in Person A testifying expert must appear confident, trustworthy, and credible on the stand, such that the judge or jury will believe his testimony. An in-person meeting is essential in order to evaluate first-hand the expert s demeanor and communication skills. The expert should be professional, sincere, and respond to questions in a convincing way. At the same time, however, the expert should not be too willing to adopt your desired positions, but rather should be able to independently and critically analyze the issues. Thoroughly Investigate the Expert s Background Prior to retaining an expert, perform a thorough check of the expert s prior testimony, including a review of publicly available expert reports, deposition, or trial testimony. In addition, check whether a court has ever excluded the expert s prior testimony, and the grounds for such exclusion. It is essential to evaluate whether the expert has published statements that contradict or are inconsistent with his proposed opinions. The most relevant publications on the expert s CV should be identified with the expert s assistance and reviewed carefully prior to the expert s deposition or trial testimony to ensure there are no surprises. It also is good practice to obtain references, ideally names of other counsel who have worked with the expert. These individuals should be contacted to determine the expert s performance in past cases. Conclusion Choosing the right expert can be the difference between winning and losing a patent case. Therefore, careful selection of experts is essential. Proper investigation of the expert s prior opinions and testimony will limit the opposing party s ability to undermine the expert s credibility at trail. 1. Centricut, LLC v. ESAB Group, Inc., 390 F. 3d 1361, (Fed. Cir. 2004) (requiring expert testimony to establish infringement). See also Proveris Scientific Corp. v. Innovasystems, Inc., 536 F.3d 1256, 1267 (Fed. Cir. 2008) (holding that expert testimony was required to establish invalidity where the subject matter is sufficiently complex to fall beyond the grasp of an ordinary layperson ). 2. See Phillips v. AWH Corp., 415 F.3d 1303, 1318 (Fed. Cir. 2005). 3. See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589 (1993) (holding that under the Rules [of Evidence] the trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable. The primary locus of this obligation is Rule 702 ); Kumho Tire Co., LTD. v. Carmichael, 119 S. Ct. 1167, 1169 (1999) (extending the trial court s gatekeeper function to all expert testimony based on technical or other specialized knowledge, not just testimony based in science ). 4. See Fed. R. Evid. 702, Committee Notes on Rules (2000 Amendment). 5. Daubert, 509 U.S. at 595 ( The focus, of course, must be solely on principles and methodology, not on the conclusions that they generate ). 6. See Fed. R. Evid. 702, Notes of Advisory Committee on Proposed Rules (2000). 7. See Fed. R. Evid See Fed. R. Civ. P. 26(a)(2)(A). 9. See Fed. R. Civ. P. 26(a)(2)(B). 10. See, e.g., Proveris, 536 F.3d at (affirming district court s exclusion of proffered expert testimony concerning Defendant s affirmative defense of invalidity because expert failed to submit a written expert report in compliance with Rule 26(a)(2)(B), and district court s grant of judgment as a matter of law in favor of Plaintiff on the issue). 11. See Fed. R. Civ. P. 26(b)(4)(B) through 26(b)(4)(C). 12. See Fed. R. Civ. P. 26(a)(2)(E). 13. Fed. R. Civ. P. 26(b)(4)(A), Advisory Committee Notes (1993 Amendment to Subdivision (b)). 14. Allergan, Inc. v. Barr Labs., Inc., 808 F. Supp. 2d 715, 717 (D. Del. 2011), aff d Appeal Nos , , 2013 U.S. App. LEXIS 2122, at *1 (Fed. Cir. January 28, 2013) (unpublished). 15. See Allergan, 808 F. Supp. 2d at Id. at Id. at Id. at Id. at , Id. at Id. at 736 n Id. at 732, n Id. at Allergan, U.S. App. LEXIS 2122, at * Id. at * Id. at * See also Daubert, 509 U.S. at 596 ( [v]igorous cross- examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence ). JULY/AUGUST 2013 IP Litigator 5

7 Copyright 2013 CCH Incorporated. All Rights Reserved. Reprinted from IP Litigator, July/August 2013, Volume 19, Number 4, pages 26 30, with permission from Aspen Publishers, Wolters Kluwer Law & Business, New York, NY, ,