Comcast Cable Commc'ns, LLC v. Sprint Commc'ns Co.

218 F.Supp.3d 375

COMCAST CABLE COMMUNICATIONS, LLC, TV Works, LLC, and Comcast Mo Group, Inc., Plaintiffs,

v.SPRINT COMMUNICATIONS COMPANY, LP, Sprint Spectrum, LP, and Nextel Operations, Inc., Defendants.

Sprint Communications Company, LP, and Sprint Spectrum, LP, Counterclaim–Plaintiffs,

v.Comcast Cable Communications, LLC, Comcast IP Phone, LLC, Comcast Business Communications, LLC, and Comcast Cable Communications Management, LLC, Counterclaim–Defendants.

CIVIL ACTION NO. 12–859

United States District Court, E.D. Pennsylvania.

Signed November 21, 2016

Alex H. Hu, Anna M. Ison, Anthony I. Fenwick, David J. Lisson, Gareth E. Dewalt, Matthew B. Lehr, Shiwoong Kim, Davis Polk & Wardwell LLP, Menlo Park, CA, Charles C. Carson, Jason F. Hoffman, Michael E. Anderson, Baker & Hostetler LLP, Washington, DC, Edward Fu, Davis Polk & Wardwell LLP, Long Island City, NY, Rebecca Santoro Melley, William T. Hangley, Michele D. Hangley, Andrew M. Erdlen, Hangley Aronchick Segal Pudlin & Schiller, Daniel J. Goettle, Jeffrey W. Lesovitz, Stephanie Papastephanou, Dale M. Heist, Baker & Hostetler LLP, John Frank Murphy, Woodcock Washburn LLP, Philadelphia, PA, Willy Chang, Baker & Hostetler LLP, New York, NY, David Spencer Bloch, Winston & Strawn LLP, San Francisco, CA, for Plaintiffs.

Brian C. Riopelle, David E. Finkelson, Justin R. Lowery, Kristen M. Calleja, McGuireWoods LLP, Richmond, VA, George J. Barry, III, Meghan M. Rachford, McGuireWoods LLP, Atlanta, GA, Patrick A. Darno, McGuireWoods LLP, Tysons Corner, VA, Peter E. Strand, Ryan D. Dykal, Aaron E. Hankel, B. Trent Webb, Bart A. Starr, Jesse J. Camacho, Jordan T. Bergsten, Lauren E. Douville, Mary Jane Peal, Ryan J. Schletzbaum, Shook Hardy & Bacon LLP, Kansas City, MO, Andrew S. Gallinaro, Conrad O'Brien, Colleen Healy Simpson, John G. Harkins, Jr., Harkins Cunningham LLP, Erin P. Loucks, Shook Hardy & Bacon LLP, Philadelphia, PA, David W. Morehan, Matthew C. Broaddus, Robert H. Reckers, Shook Hardy & Bacon LLP, Houston, TX, for Defendants.

MEMORANDUM

DuBois, District Judge

I. INTRODUCTION

This case involves claims of patent infringement between Comcast Cable Communications, LLC, and related entities (collectively "Comcast"), and Sprint Communications Company, L.P., and related entities (collectively "Sprint"). After withdrawal of several claims of infringement, what remained in the case were Comcast's claim for infringement of its U.S. Patent Number 6,885,870 ("the '870 patent") against Sprint and Sprint's counterclaims for infringement of its U.S. Patents Numbers 6,754,907 and 6,757,907 ("the '907 patents") against Comcast. The Court granted summary judgment in favor of Comcast as to Sprint's counterclaims by Memorandum and Order dated August 24, 2016. See Comcast Cable Commc'ns, LLC v. Sprint Commc'ns Co., LP , No. CV 12–859, 203 F.Supp.3d 499, 2016 WL 4478756 (E.D. Pa. Aug. 25, 2016). That Memorandum and Order also construed certain claim terms and resolved certain Daubert motions, but the Court deferred ruling on Comcast's Motion to Exclude the Expert Testimony of Alan Cox and Sprint's Motion to Exclude the Expert Testimony of Michele Riley. Those motions are addressed in this Memorandum.

In its Motion to Exclude, Comcast argues that the opinions of Sprint's expert on damages for infringement of the '870 patent, Dr. Alan Cox, must be excluded. Sprint, in its Motion to Exclude, seeks to exclude the opinions of Michele Riley, Comcast's expert on damages for infringement of the '870 patent. For the reasons that follow, both Motions are denied.

II. PROCEDURAL BACKGROUND

On February 17, 2012, Comcast filed a Complaint against Sprint alleging infringement of four of its patents, including U.S. Patent Number 6,885,870 ("the '870 patent").¹ Sprint filed an Answer and Counterclaims on May 14, 2012,² alleging infringement of seven of its patents, including the '907 patents.³ The Court has jurisdiction over this case under 28 U.S.C. § 1331 and 28 U.S.C. § 1338.

On June 6, 2012, Comcast filed a First Amended Complaint asserting claims for infringement of the '870 patent and three other patents.⁴ Sprint filed an Amended Answer and Counterclaims on June 25, 2012, asserting infringement of the same seven patents. Both parties withdrew their claims with respect to several patents prior to claim construction.⁵

In January and February 2014, the Court conducted five days of Markman hearings, which included technology tutorials and oral argument on the five patents remaining in the case at that time. On August 15, 2014, the Court issued a Memorandum and Order construing the claim terms in dispute. See Comcast Cable Commc'ns, LLC, et al. v. Sprint Commc'ns Co., LP, et al. (Comcast v. Sprint I ), 38 F.Supp.3d 589 (E.D. Pa. 2014). Subsequently, Comcast withdrew all claims except those alleging infringement of the '870 patent and Sprint withdrew all claims except those alleging infringement of the '907 patents.

On August 5, 2015, following the completion of almost all discovery, the parties filed a Joint Motion to Stay in light of ongoing global settlement negotiations between Comcast and Sprint involving this case and litigation in other courts over claims for infringement of unrelated patents. The Court granted the Motion by Order dated August 13, 2015, and stayed the case for six months. Following the parties' report of the failure of the global settlement negotiations, the Court, by Order dated February 12, 2016, returned the case to the active docket and set a briefing schedule for motions for summary judgment, Daubert motions, and supplemental claim construction on the additional disputed terms in the '870 patent.

Pursuant to the Order dated February 12, 2016, the parties filed Motions for Summary Judgment, Daubert Motions, and Supplemental Briefs on Claim Construction of the disputed terms of the '870 patent. Supplemental Markman hearings and oral argument on the pending Motions for Summary Judgment and Daubert Motions were held on June 22, 23, 24, and 29, 2016. In its Memorandum and Order of August 24, 2016, the Court decided all of the pending motions, excepting only the two Daubert motions at issue—Comcast's Motion to Exclude Testimony of Alan Cox and Sprint's Motion to Exclude the Expert Testimony of Michele Riley. For the reasons stated below, those Motions are denied.

III. DAMAGES EXPERTS REGARDING COMCAST'S '870 PATENT

The '870 patent, titled "Transferring of a Message," claims a method "for inquiring about information relating to a [wireless] terminal of a cellular network from the cellular network, from a messaging server external to the cellular network." '870 patent, at 2:45–48. The patent covers both text messaging ("short message service" or "SMS") and multimedia messaging ("multimedia messaging service" or "MMS") systems. The patent application was filed on February 22, 2001, and was issued on April 26, 2005. The inventor is Outi Aho, who assigned the patent to Nokia Mobile Phones, Ltd. ("Nokia"). On June 30, 2010, Comcast and Nokia entered into a Patent Purchase Agreement (hereinafter "Nokia–Comcast Agreement") wherein Comcast purchased 36 patents, including the '870 patent.

A. Applicable Law

1. Federal Rule of Evidence 702 and Daubert Issues⁶

Federal Rule of Evidence 702 provides that:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

"Faced with a proffer of expert scientific testimony ... the trial judge must determine ... whether the expert is proposing to testify to (1) scientific knowledge that (2) will assist the trier of fact to understand or determine a fact in issue." Daubert , 509 U.S. at 592, 113 S.Ct. 2786. This gatekeeping function extends beyond scientific testimony to testimony based on "technical" and "other specialized" knowledge. Kumho Tire Co., Ltd. v. Carmichael , 526 U.S. 137, 141, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). To determine the admissibility of expert testimony, the United States Court of Appeals for the Federal Circuit applies the law of the regional circuit. Trading Techs. Int'l, Inc. v. eSpeed, Inc. , 595 F.3d 1340, 1360 (Fed. Cir. 2010).

" Rule 702 embodies three distinct substantive restrictions on the admission of expert testimony: qualifications, reliability, and fit."

Elcock v. Kmart Corp. , 233 F.3d 734, 741 (3d Cir. 2000) (citing In re Paoli R.R. Yard PCB Litig. , 35 F.3d 717, 741 (3d Cir. 1994) ); see also Daubert , 509 U.S. at 590, 113 S.Ct. 2786 ("the requirement that an expert's testimony pertain to 'scientific knowledge' establishes a standard of evidentiary reliability"). The party offering the expert opinion must prove each of these requirements by a preponderance of the evidence. In re TMI Litig. , 193 F.3d 613, 663 (3d Cir. 1999). Rule 702 has "a liberal policy of admissibility." Pineda v. Ford Motor Co. , 520 F.3d 237, 243 (3d Cir. 2008) (quoting Kannankeril v. Terminix Int'l, Inc. , 128 F.3d 802, 806 (3d Cir. 1997) ). As such, the "rejection of expert testimony is the exception and not the rule." Fed. R. Evid. 702 advisory committee's note.

The parties' motions challenge only the reliability of the expert opinions in question. The reliability requirement "means that the expert's opinion must be based on the 'methods and procedures of science' rather than on 'subjective belief or unsupported speculation'; the expert must have 'good grounds' for his or her belief." In re Paoli , 35 F.3d at 742 (quoting Daubert , 509 U.S. at 590, 113 S.Ct. 2786 ). The test of reliability is "flexible" and "the law grants a district court the same broad latitude when it decides how to...