Fuma Int'l v. R.J. Reynolds Vapor Co.

FUMA INTERNATIONAL LLC, Plaintiff, v. R.J. REYNOLDS VAPOR COMPANY, Defendant.

Nos. 1:19-CV-260, 1:19-CV-660

United States District Court, M.D. North Carolina

October 15, 2021

MEMORANDUM OPINION AND ORDER

CATHERINE C. EAGLES, DISTRICT JUDGE.

The plaintiff, Fuma International LLC, has sued the defendant R.J. Reynolds Vapor Company, for infringing two electronic cigarette patents. RJR has filed two Daubert motions to exclude the testimony of Fuma's expert, Dr. Glenn Vallee. One is directed at his testimony on copying and willful infringement and the other is directed at his testimony on secondary considerations of nonobviousness. The motions will be granted to the extent Dr. Vallee bases his opinions on non-technical analysis within the capacity of the jury, and otherwise will be denied.

I. Overview

Fuma accuses two of RJR's vaping products, the VUSE Ciro and the VUSE Solo, ^[1]of willful infringement of two patents issued to Fuma: U.S. Patent Nos. 9, 532, 604 ('604 patent), see Doc. 76-2, and 10, 334, 881 ('881 patent). See Doc. 76-3. Both patents apply to each accused product. The Court previously construed various disputed terms in each of the patents. Doc. 95.

At summary judgment, the Court found no disputed questions of material fact as to several infringement issues and determined that the Ciro infringes the '604 and '881 patents and that the Solo infringes the '881 patent. Doc. 139. The matter is set for trial to determine, among other things, whether the patents-in-suit are valid and whether RJR's infringement was willful.

RJR has filed two Daubert motions to exclude certain testimony by Dr. Vallee, a professor of mechanical engineering proffered as an expert witness by Fuma on the issues of willful infringement, Doc. 156, and patent validity. Doc. 163.^[2] Dr. Vallee has a professional background in quality assurance, mechanical engineering, and consumer product design and development, including mechanical and electromechanical products. Doc. 120-4 at ¶¶ 4-6. He has experience with the design of a “wide variety of products containing threaded connections, heating elements, and liquid/air fluid flow.” Id. at ¶ 5.

Expert testimony is admissible if it “rests on a reliable foundation and is relevant[.]” Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 597 (1993). Whether expert evidence is reliable is primarily a question of the validity of the expert's methodology, not the conclusions reached. In re Lipitor (Atorvastatin Calcium) Mktg., Sales Pracs. & Prods. Liab. Litig., 892 F.3d 624, 631 (4th Cir. 2018); Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283, 1295-96 (Fed. Cir. 2015).

II. Dr. Vallee's Testimony on Copying and Willful Infringement

If RJR willfully infringed the patents-in-suit as Fuma alleges, Doc. 1 at ¶¶ 176-78, Fuma may receive increased damages. 35 U.S.C. § 284; Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1923, 1930 (2016) (“This Court . . . described § 284 . . . as providing that ‘punitive or increased damages' could be recovered ‘in a case of willful or bad-faith infringement.'”). On the question of willful infringement, Dr. Vallee is expected to testify that RJR copied Fuma's e-cigarette design, that RJR rejected other e-cigarette designs that do not resemble its Solo and Ciro products, and that RJR's conduct fell below industry standards of behavior. See Doc. 157-1 at ¶¶ 15, 92-122; Doc. 157-2 at ¶¶ 90-114. RJR seeks to exclude this testimony as unreliable under Federal Rule of Evidence 702 and Daubert. Doc. 156.

Willful infringement is a question of fact. Polara Eng'g Inc. v. Campbell Co., 894 F.3d 1339, 1353 (Fed. Cir. 2018). To establish willfulness, the patentee must show the accused infringer had the subjective intent to infringe at the time of the challenged conduct. Halo Elecs., Inc., 136 S.Ct. at 1933. The Federal Circuit has defined subjective willfulness as “proof that the [accused infringer] acted despite a risk of infringement that was ‘either known or so obvious that it should have been known to [it].'” Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350, 1371 (Fed. Cir. 2017) (quoting WesternGeco LLC v. ION Geophysical Corp., 837 F.3d 1358, 1362 (Fed. Cir. 2016), rev'd on other grounds, 138 S.Ct. 2129 (2018)). In assessing the accused infringer's willfulness, the factfinder looks to the totality of the circumstances. See Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1342-43 (Fed. Cir. 2004) (en banc).

A. Copying

Evidence that an alleged infringer intentionally copied the ideas or design of a patent holder is relevant to willfulness. See C R Bard Inc. v. AngioDynamics, Inc., 979 F.3d 1372, 1380 (Fed. Cir. 2020) (noting that evidence of intentional copying “support[s] a jury verdict of willfulness”); Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367, 1379 (Fed. Cir. 2020) (stating that a factfinder can “properly consider” intentional copying to determine willfulness). Dr. Vallee opines that RJR copied Fuma's claimed invention and provides reasons for his opinion. Doc. 120-4 at ¶¶ 95-117. RJR says this opinion is inadmissible because it lacks the technical analysis required under Federal Rule of Evidence 702. Doc. 157 at 12-17.

RJR is correct that some of the reasons Dr. Vallee proffers to support his conclusion of copying do not involve technical analysis. For example, he summarizes evidence about RJR's search for new e-cigarette designs, internal communications between RJR employees lauding Fuma's e-cigarette design, and internal RJR documents in which RJR employees discuss the importance of replicating existing technologies during the e-cigarette design process. Doc. 120-4 at ¶¶ 95-96, 99, 104, 108, 110, 113. None of this evidence involves technical considerations and a jury does not need an expert's help to evaluate it.

But Dr. Vallee's opinion is also based on technical analysis on several different points. He discusses technical design similarities between Fuma's patented e-cigarette design and RJR's Solo and Ciro products, such as a transverse heating element and central airflow passageway. Doc. 120-4 at ¶¶ 102-03; Doc. 157-2 at ¶¶ 104-06. His testimony that RJR rejected alternative designs different from Fuma's patented technology when developing the Solo and Ciro necessarily involves a technical analysis of those alternative designs. Doc. 120-4 at ¶¶ 111-12. He also uses a technical analysis to explain his opinion that RJR's argument that Fuma's e-cigarette design was different than its own is not valid, and that RJR's portrayal of Fuma's e-cigarette design could not electrically function. Doc. 157-2 at ¶¶ 108-09.

At bottom, Dr. Vallee's opinion that RJR copied Fuma's design is grounded in a technical analysis and will help the jury determine whether RJR intended to copy Fuma's claimed invention when designing the Solo and Ciro e-cigarettes. It is relevant to the question of willfulness and reliable because it is grounded in Dr. Vallee's expertise as a mechanical engineer and consumer product designer. Doc. 120-4 at ¶¶ 4-6. But to the extent that Dr. Vallee analyzes or summarizes non-technical circumstantial evidence to conclude that RJR copied Fuma's claimed inventions, his testimony will not be helpful to the jury and will be excluded. See Persinger v. Norfolk & W. Ry. Co., 920 F.2d 1185, 1188 (4th Cir. 1990) (“Rule 702 excludes expert testimony on matters within the common knowledge of jurors.”); Kumho Tire Co. v. Carmichael, 526 U.S. 137, 148-49 (1999) (explaining that an expert's reliability stems from testimony rooted in her expertise).

B. Intent, Motive, or State of Mind

Expert testimony about an alleged infringer's intent, motive, or state of mind is inadmissible. See In re Rezulin Prods. Liab. Litig., 309 F.Supp.2d 531, 545-47 (S.D.N.Y. 2004). First, intent is a question for the trier of fact that does not require expert testimony. See BorgWarner, Inc. v. Honeywell Int'l, Inc., 750 F.Supp.2d 596, 611 (W.D. N.C. 2010). Second, expert testimony concerning state of mind, intent, or purpose is unreliable because it is not grounded in analytically sound principles or methods. See DePaepe v. General Motors Corp., 141 F.3d 715, 720 (7th Cir. 1998). And the parties agree that no expert can provide testimony concerning the ultimate issue of intent or RJR's motives and state of mind. Doc. 157 at 17-20; Doc. 181 at 13-14. Dr. Vallee also notes throughout his report that he has not been asked to opine on the ultimate issue of willfulness. See, e.g., Doc. 120-4 at ¶¶ 15, 39, 93.

Despite this, Dr. Vallee's report contains at least two explicit opinions about intent. See, e.g., id. at ¶ 122 (asserting a particular failure by RJR “tends at least to show an intent to hide RJR's knowledge of and copying of the Fuma patented e-cigarette”); id. at ¶ 95 (asserting that RJR “intentionally copied the Fuma patented design”). His report also contains other opinions about RJR and its employees' intent and motives, even if those exact words are not used. Id. at ¶ 121 (stating his conclusion about “the reason the Fuma patented design was . . . copied by RJR”). Th is will not be allowed at trial.

But Dr. Vallee is not prohibited from providing opinions about technical aspects of RJR's alleged infringement that could support a finding of specific intent to infringe. As already noted, Dr Vallee may testify about the technical design similarities that support his opinion that RJR copied FUMA's design, id. at ¶¶ 102-03, 116, about the dissimilar technology in alternative designs that RJR rejected when developing the Solo and Ciro, id. at ¶¶ 111-12, and about the absence of concept sketches or other documents created by RJR that show it independently developed the Solo and Ciro. Id. at ¶ 114.

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