New England Biz Law Update
The testimony of an expert in a patent infringement case should have been excluded because he provided no evidentiary basis for his opinion that allegedly infringed claims were invalid as “obvious,” a U.S. District Court judge in Boston has ruled.
In instructing the jurors on the obviousness defense, the judge had told them they were free to make their own judgment as to the expert’s credibility. The jury ultimately found that the claims in question were infringed but that they were also invalid for obviousness.
But Judge William G. Young, in response to a post-trial motion to set aside the verdict, found that his prior instruction, while in compliance with the Federal Rules of Evidence, violated Federal Circuit precedent regarding expert testimony in patent cases.
“Notwithstanding Rules 704 and 705 [which permit an expert to give an opinion without first testifying to supporting facts or data], Federal Circuit case law render legally inadequate the opinions of qualified experts on the ultimate issues of anticipation, obviousness, and doctrine of equivalents unless the bases therefore are spelled out on the record,” Young wrote, ordering a new trial on the issue of infringement and obviousness of the relevant claims.
Young also announced that, whenever expert testimony is proffered on such issues in future patent cases, the court will on its own motion rule on the testimony’s adequacy, even if the opposing party fails to object.
“While the proactive judicial screening of such expert opinions in patent cases will no doubt make them more difficult to try, the ultimate result will exclude junk opinions … and thereby enhance the centrality and importance of the jury’s fact-finding function,” he wrote.
The 31-page decision is NewRiver, Inc. v. Newkirk Products, Inc.
Addressing a disconnect
Plaintiff’s counsel Michael A. Albert of Wolf, Greenfield & Sacks in Boston acknowledged that it is unusual for judges to set aside jury verdicts, but he contended it was appropriate in NewRiver.
“Judge Young, in particular, always talks about the central role of the jury in our justice system, but I think he [set aside the verdict] here because it was clear that [the defendant] had not put in evidence sufficient to invalidate three claims of the patent,” Albert said.
He also noted that the decision addresses a degree of “disconnect” between the rules of evidence and the rules of patents.
“There are other types of cases in which experts are allowed to do what the experts did here. It may not be the most convincing testimony, but they’re allowed to testify,” he said. “But in patent cases they can’t because of the presumption of validity that comes with having a patent authorized by the U.S. Patent Office.”
More broadly, Albert said, NewRiver establishes a “very high burden” for defendants to meet when seeking to challenge the validity of a patent while reinforcing the value of patents and the right of inventors to protect their inventions.
“Patent law is written into the U.S. Constitution,” he said. “It was considered [even back in 1787] and all the more so today to be essential to our economy, which is based so heavily nowadays on technological innovation.”
Defense counsel Robert E. Heslin of Heslin, Rothenberg, Farley & Mesiti in Albany, N.Y., could not be reached for comment prior to deadline.
Expert testimony
On Sept. 19, 2000, the predecessor of plaintiff NewRiver, Inc., received a patent for an electronic system that could provide access to compliance information from securities database sources such as the Securities and Exchange Commission’s EDGAR database.
The system was designed to extract such information as mutual fund prospectuses, annual and semi-annual reports, and certain sales and marketing information, and to provide access to users through a subsystem to a computer-readable file.
According to the plaintiff, it entered into a contract with defendant Newkirk, Inc., to obtain and deliver certain securities information. The plaintiff also claimed that, after the contract terminated, the defendant began selling products and services to third parties that generated filings from the EDGAR database in a manner that violated the plaintiff’s patent.
Ultimately, the plaintiff sued the defendant in U.S. District Court, alleging both breach of contract and infringement of claims 9, 10 and 11 of the plaintiff’s patent.
The case proceeded to a jury trial in the spring of this year, in which the defendant asserted that it had not infringed on the plaintiff’s patent and, even if it had, claims 9 through 11 were invalid as obvious, based on prior art, to anyone skilled in the field.
In support of the obviousness claim, the defendant called Dr. Boleslaw Szymanski as its expert witness. For each of the three claims, 9 through 11, Szymanski read the claim into evidence and concluded that, in his opinion, the claim would have been obvious to a person of ordinary skill in the art.
However, Szymanski did not identify any specific art that rendered the claims obvious, did not point out where any of the claims’ limitations were disclosed in the prior art, or show how the prior art references would, in combination, make the claim obvious to a person of ordinary skill in the art at the relevant time.
Nonetheless, based on Rules 704 and 705, which do not require a qualified expert to provide an evidentiary basis for his opinion, Young allowed the jury to consider Szymanski’s testimony on the issue of validity.
The jury, apparently in reliance on the testimony, found that the defendant did commit patent infringement with respect to claims 9 through 11 but that the claims were indeed invalid as obvious.
The plaintiff subsequently filed a motion to set aside the verdict, arguing that there was no basis for the jury to find the claims invalid.
Faulty instruction
Addressing the plaintiff’s motion, Young found that Szymanski’s testimony fit Rules 704 and 705 “as the hand fits the glove” in that he was a qualified expert who, while providing no basis for his opinion, was not required to do so. Additionally, the judge noted, the plaintiff had not objected to the expert’s testimony on the obviousness issue.
However, Young pointed out, the Federal Circuit’s 2004 decision in Koito Manufacturing Co., Ltd. v. Turn-Key-Tech, LLC makes clear that, on the issues of anticipation, obviousness and doctrine of equivalents (all bases for invalidity of a patent), the unsupported opinion of even a qualified expert like Szymanski does not constitute “substantial evidence” sufficient to support a jury verdict on such issues.
And while the U.S. Supreme Court held in its landmark 1993 Daubert v. Merrell Dow Pharmaceuticals decision that lower federal courts cannot create additional hurdles to admissibility of scientific evidence beyond those found in the rules of evidence, “this is exactly what Federal Circuit jurisprudence does, at least on the issues of anticipation, obviousness, and doctrine of equivalents,” Young said. “Federal Circuit case law renders legally inadequate the opinions of qualified experts on [such issues] unless the bases therefor are spelled out on the record.”
Though the approaches of the Federal Circuit and the rules of evidence appear irreconcilable, “it is not open to a district court to choose one in disregard of the other,” Young wrote. “Both requirements necessarily must be followed.”
Thus, Young found he had erred by allowing the jury to make a finding on the issue of obviousness. Accordingly, he ordered a new trial on the issues of infringement and obviousness of claims 9 through 11.
Meanwhile, he announced that, in all future patent infringement cases, he would, sua sponte, rule on the adequacy of any expert testimony on issues of obviousness, anticipation, written description or doctrine of equivalents, even if the opposing party does not object to the testimony.
