Quintel Tech. Ltd. v. Huawei Techs. United States, Inc.

QUINTEL TECHNOLOGY LTD., v. HUAWEI TECHNOLOGIES USA, INC., FUTUREWEI TECHNOLOGIES INC.,HUAWEI TECHNOLOGIES CO., LTD., ZHENGXIANG MA

Civil Action No. 4:15-CV-307

United States District Court EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

January 30, 2018

Judge Mazzant

MEMORANDUM OPINION AND ORDER

Pending before the Court is Defendants' Motion to Exclude Expert Testimony of Michael Jensen and Professor Stephen Magee (Dkt. #195). After reviewing the relevant pleadings and motion, the Court finds the motion to should be granted in part.

BACKGROUND

Plaintiff Quintel Technology Ltd. ("Quintel") "designs, develops, and delivers advanced high-efficiency, high-performance antenna solutions for mobile operators to improve their delivery of wireless network services" and "has developed cutting-edge, proprietary antenna technology to better serve wireless network operators and users." (Dkt. #20 at ¶¶ 2, 10). Collectively, Huawei Technologies USA, Inc., FutureWei Technologies, Inc., Huawei Technologies Co., Ltd. (collectively "Huawei"), and Zhengxiang Ma (together with Huawei, "Defendants") are "telecommunications equipment maker[s] and, among other things, manufacture[] base stations for wireless networks." (Dkt. #20 at ¶ 11).

Around July of 2008, David Barker, the chief technology officer and an employee of Quintel, "conceived a concept to improve reception between an antenna providing cellular telephone and/or data services, and a mobile receiving telephone and/or data services from the antenna" (the "Per User Tilt Concept") (Dkt. #20 at ¶¶ 12-13). "In 2009, because of potential synergies in their respective business models, Quintel and [Defendants] explored whether they might partner together to service mobile operators in the wireless network industry." (Dkt. #20 at ¶ 14).

According to Plaintiff, after the parties entered into a non-disclosure agreement ("NDA"), Plaintiff began to share confidential and proprietary information and trade secrets, including its proprietary antenna technology, with Defendants (Dkt. #20 at ¶¶ 20, 30-45). In particular, Plaintiff showed Defendants how the "Per User Tilt Concept" works and provided some additional confidential and proprietary information regarding Plaintiff's antenna technology, including information about Plaintiff's patents—all information Plaintiff contends was protected under the NDA.

Plaintiff alleges the parties "ultimately could not agree on final terms to any business or partnering relationship" and that "despite its professed interest, [Defendants] never intended to enter into a partnering relationship with Quintel." (Dkt. #20 at ¶¶ 44-46). FutureWei filed a nonprovisional patent application with the United States Patent and Trademark Office ("USPTO"), claiming the benefit of its provisional patent application "seeking protection of an invention based on the Quintel confidential and proprietary antenna technology that Quintel had shared under the terms of the . . .NDA." (Dkt. #20 at ¶ 50). On November 18, 2014, the USPTO issued FutureWei Patent No. US 8,891,647 B2 ("the '647 patent"), titled "System and Method for User Specific Antenna Down Tilt in Wireless Cellular Networks." (Dkt. #20 at ¶ 52). According to Plaintiff, the '647 patent includes claims for user specific antenna down tilt, which Plaintiff alleges is a characteristic of the Per User Tilt Concept. Specifically, Plaintiff alleges the '647 patent includesone or more claims to which David Barker made an inventive contribution, but the '647 patent failed to name David Barker as a joint inventor (Dkt. #20 at ¶ 52).

As a result, on May 15, 2015, Plaintiff filed suit against Defendants. In its First Amended Complaint, filed December 1, 2015, Plaintiff asserts the following claims against Defendants: (1) breach of contract; (2) misappropriation of trade secrets; (3) unfair competition by misappropriation; (4) common law fraud and fraud in the inducement; (5) promissory estoppel; (6) unjust enrichment; (7) accounting; and (8) correction of patent inventorship—35 U.S.C. § 256 (Dkt. #20 at ¶¶ 55-117).¹

On December 22, 2017, Defendants filed their Motion to Exclude Expert Testimony of Michael Jenson ("Jensen") and Stephen Magee ("Magee") (Dkt. #195). On January 2, 2018, Plaintiff filed its response (Dkt. #211). At the pretrial conference, held on January 4, 2018, the Court allowed the parties to file supplemental briefing regarding the admissibility of Jensen's anticipated testimony. As a result, on January 12, 2018, Defendants filed their reply (Dkt. #234), and on Janaury 19, 2018, Plaintiff filed its sur-reply (Dkt. #245).

LEGAL STANDARD

Federal Rule of Evidence 702 provides for the admission of expert testimony that assists the trier of fact to understand the evidence or to determine a fact in issue. FED. R. EVID. 702. In Daubert v. Merrell Dow Pharmaceuticals, Inc., the Supreme Court instructed courts to function as gatekeepers, and determine whether expert testimony should be presented to the jury. 509 U.S. 579, 590-93 (1993). Courts act as gatekeepers of expert testimony "to make certain that an expert,whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field." Kuhmo Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999).

The party offering the expert's testimony has the burden to prove that: (1) the expert is qualified; (2) the testimony is relevant to an issue in the case; and (3) the testimony is reliable. Daubert, 509 U.S. at 590-91. A proffered expert witness is qualified to testify by virtue of his or her "knowledge, skill, experience, training, or education." FED. R. EVID. 702. Moreover, to be admissible, expert testimony must be "not only relevant but reliable." Daubert, 509 U.S. at 589. "This gate-keeping obligation applies to all types of expert testimony, not just scientific testimony." Pipitone v. Biomatrix, Inc., 288 F.3d 239, 244 (5th Cir. 2002) (citing Kuhmo, 526 U.S. at 147).

In deciding whether to admit or exclude expert testimony, the Court should consider numerous factors. Daubert, 509 U.S. at 594. In Daubert, the Supreme Court offered the following, non-exclusive list of factors that courts may use when evaluating the reliability of expert testimony: (1) whether the expert's theory or technique can be or has been tested; (2) whether the theory or technique has been subjected to peer review and publication; (3) the known or potential rate of error of the challenged method; and (4) whether the theory or technique is generally accepted in the relevant scientific community. Id. at 593-94; Pipitone, 288 F.3d at 244. When evaluating Daubert challenges, courts focus "on [the experts'] principles and methodology, not on the conclusions that [the experts] generate." Daubert, 509 U.S. at 595.

The Daubert factors are not "a definitive checklist or test." Id. at 593. As the Supreme Court has emphasized, the Daubert framework is "a flexible one." Id. at 594. The test for determining reliability can adapt to the particular circumstances underlying the testimony at issue.Kuhmo, 526 U.S. at 152. Accordingly, the decision to allow or exclude experts from testifying under Daubert is committed to the sound discretion of the district court. St. Martin v. Mobil Expl. & Producing U.S., Inc., 224 F.3d 402, 405 (5th Cir. 2000) (citations omitted).

ANALYSIS

Defendants argue exclusion of Jensen's testimony is proper because his opinions concern matters outside his purported expertise. Specifically, Defendants claim that Jensen cannot testify as to (1) Huawei's thoughts and beliefs; (2) Plaintiff's co-inventorship claim; (3) Plaintiff's claim that its alleged trade secrets were not known and valuable; (4) Plaintiff's alleged trade secrets; and (5) any alleged misappropriation.

Regarding Magee, Defendants contend exclusion is necessary because (1) Magee's four damages theories are based on unreliable data, use unreliable methodology, or are unreliably applied to the facts of this case, and (2) Magee's purported opinions are not his own. In the alternative, Defendants aver that if Magee is permitted to testify, his testimony should be limited to no more than one of his four damage theories.

The Court first addresses the admissibility of Jensen's testimony followed by Magee's.

I. Jensen

As explained above, Defendants claim that Jensen's opinions as they relate to five different categories should be excluded because such opinions are outside Jensen's purported expertise. The Court addresses each argument separately.

a. Huawei's Thoughts and Beliefs

Defendants contend that Jensen's opinions as they relate to Defendants' "thoughts and beliefs via interpretation of various documents" are inadmissible because"[i]t is for the jury to interpret [such] underlying documents." (Dkt. #195 at pp. 18-19). Conversely, Plaintiff arguesthat Jensen's reports "constitute his understanding and interpretation of highly technical documents and information well within his filed of expertise on matters relevant to Quintel's claims. [Jensen] is not purporting to read Huawei's 'mind.'" (Dkt. #211 at p. 18) (emphasis in original).

"[A] trial court may strike expert testimony that evaluates a party's state of mind, as that evaluation is within the province of the jury." Fisher v. Halliburton, No. H-05-1731, 2009 WL 5216949, at *2 (S.D. Tex. Dec. 21, 2009) (citing Marlin v. Moody Nat'l Bank, N.A., 248 F. App'x 534, 541 (5th Cir. 2007)). "'An expert's credentials do not place him in a better position than the [trier of fact] to draw conclusions about a defendant's state of mind.'" Id. (alterations in original) (quoting Marlin, 248 F. App'x at 541). As such, Jensen's opinions as they relate to Defendants' state of mind or intent are inadmissible. See id.; accord Retractable Tech. Inc. v. Abbot Lab., Inc., No. 5:05-CV-157, 2010 WL 11531436, at *4-*7 (E.D. Tex. June 18, 2010) (excluding an expert's testimony as it...