Transamerica Life Ins. v. Lincoln Nat. Life Ins.

597 F.Supp.2d 897

TRANSAMERICA LIFE INSURANCE COMPANY, Western Reserve Life Assurance Co. of Ohio, and Transamerica Financial Life Insurance Company, Plaintiffs, v. LINCOLN NATIONAL LIFE INSURANCE COMPANY, Defendant.

No. C 06-110-MWB.

United States District Court, N.D. Iowa, Cedar Rapids Division.

January 8, 2009.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

James R. Myers, Ropes & Gray, LLP, Washington, DC, John K. Felter, Ropes & Gray, LLP, Boston, MA, for Plaintiffs.

Carrie Marie Raver, Dale Randall Brown, Gray C. Furst, Barnes and Thomburg LLP, Fort Wayne, IN, Denny M. Dennis, Todd A. Strother, Bradshaw Fowler Proctor Fairgrave, Des Moines, IA, for Defendant.

MEMORANDUM OPINION AND ORDER REGARDING MOTIONS IN LIMINE CONCERNING CERTAIN EVIDENCE AND ARGUMENTS

MARK W. BENNETT, District Judge.

                                          TABLE OF CONTENTS
   I. INTRODUCTION........................................................... 901
  II. LEGAL ANALYSIS ........................................................ 903
   A. Applicable Rules Of Evidence .......................................... 903
      1. Rule 104 ........................................................... 903
      2. Other rules of evidence ............................................ 903
   B. Evidence Of The PTO's Reexamination Of The '201 Patent ................ 904
      1. The evidence in question ........................................... 904
      2. Arguments of the parties ........................................... 904
      3. Analysis ........................................................... 905
   C. Evidence Of "Commentary" From The Court's Claim Construction
        Order ..................................................................... 908
      1. The evidence in question ........................................... 908
      2. Arguments of the parties ........................................... 908
      3. Analysis ........................................................... 909
         a. The role of the court's claim constructions in a jury trial ..... 909
         b. The admissibility of contrary constructions, rejected
            constructions, and the court's "commentary" ........................... 910
   D. Deposition Testimony Of Frank Alan Camp ............................... 915
      1. The evidence in question ........................................... 915
      2. Arguments of the parties ........................................... 916
      3. Analysis ........................................................... 917
   E. Evidence Of Inadequacies Of The PTO Or Certain Patents ................ 918
      1. The evidence in question ........................................... 918
      2. Arguments of the parties ........................................... 918
      3. Analysis ........................................................... 920
   F. Evidence Of Erroneous Infringement And Damages Theories ............... 921
      1. The evidence in question ........................................... 921
      2. Arguments of the parties ........................................... 922
      3. Analysis ........................................................... 924
III. CONCLUSION ............................................................. 926

The parties in this patent litigation have filed numerous motions in limine. The court addressed the motions concerning experts in a separate ruling. Therefore, this ruling addresses only the six motions concerning evidence and arguments not involving expert opinions.

I. INTRODUCTION

This litigation involves United States Patent No. 7,089,201 B1 (the '201 patent), which is entitled "METHOD AND APPARATUS FOR PROVIDING RETIREMENT INCOME BENEFITS." The '201 patent is assigned to Lincoln National Life Insurance Company (Lincoln). On August 8, 2006, Transamerica Life Insurance Company, Western Reserve Life Assurance Co. of Ohio, and Transamerica Financial Life Insurance Company collectively as "Transamerica," filed a Complaint For Declaratory Judgment (docket no. 1) initiating this action. In its Complaint, Transamerica asserts, in essence, that it is not infringing the '201 patent by selling various annuity product contracts. In contrast, in an Answer To Plaintiffs' Complaint And Patent Infringement Counterclaim (docket no. 14), filed December 29, 2006, Lincoln seeks declarations that the '201 patent is not invalid and that Transamerica is infringing it. Lincoln also seeks damages for infringement, injunctive relief from such infringement, and reasonable attorney fees for litigating this matter.

Trial in this matter was set to begin on December 1, 2008, but the trial was subsequently continued to February 2, 2009, to accommodate the court's schedule, and new deadlines were established for pretrial motions. Specifically, pursuant to the October 31, 2008, Order Resetting Trial, Final Pretrial Conference, Setting Deadlines And Restating Requirements for Final Pretrial Order (Order Resetting Trial) (docket no. 118), the court set a deadline of November 18, 2008, for all motions in limine, with responses due December 5, 2008, and replies due December 10, 2008, although replies were expressly "not encouraged." Order Resetting Trial, § XI.¹ In compliance with the deadlines in the Order Resetting Trial, the parties filed the following motions now before the Court: Lincoln's Motion In Limine No. 2 To Preclude Evidence Of The Pending Reexamination Of The '201 Patent At Trial (docket no. 131); Transamerica's Motion In Limine To Exclude Any Reference To The Commentary In The Court's Claim Construction Order Or The Parties' Rejected Claim Construction Positions (docket no. 132); Transamerica's Motion In Limine To Exclude The Deposition Testimony of Frank Alan Camp (docket no. 133); Lincoln's Motion In Limine No. 4 To Exclude Evidence And Arguments Relating To (1) Alleged Inadequacies Of The PTO, (2) Business Method Patents, Or (3) Tax Planning Patents (docket no. 135); Transamerica's Motion In Limine To Exclude All Evidence Relating And Any Reference to Infringement Theories That Are Erroneous As A Matter of Law (docket no. 143); and Transamerica's Motion In Limine To Exclude All Evidence Relating And Any Reference To Damages Theories That Are Erroneous as a Matter of Law (docket no. 147).

Oral arguments have been requested on some or all of these motions. However, the court's crowded schedule has not permitted the timely scheduling of such oral arguments, and the court finds that all of the motions have been extensively briefed, so that it is unlikely that the oral arguments will enhance the court's understanding of the issues presented. Therefore, the motions are deemed fully submitted on the written submissions.

The court will consider each of these motions in turn in its legal analysis. However, the court will first summarize the standards applicable generally to motions to exclude evidence.

II. LEGAL ANALYSIS

A. Applicable Rules Of Evidence

1. Rule 104

As a preliminary matter, the court notes that Rule 104 of the Federal Rules of Evidence provides, generally, that "[p]reliminary questions concerning ... the admissibility of evidence shall be determined by the court...." FED.R.EVID. 104. Such preliminary questions may depend upon such things as whether the factual conditions or legal standards for the admission of certain evidence have been met. See id., Advisory Committee Notes, 1972 Proposed Rule. This rule, like the other rules of evidence, must be "construed to secure fairness in administration, elimination of unjustifiable expense and delay, and promotion of growth and development of the law of evidence to the end that truth may be ascertained and proceedings justly determined." FED.R.EVID. 102. Unless otherwise indicated, the court concludes that preliminary determination of the admissibility of the evidence put at issue in the parties' Motions In Limine will likely serve the ends of a fair and expeditious presentation of issues to the jury.

2. Other rules of evidence

Most of the parties' requests to exclude evidence are based on relevance and potential prejudice pursuant to Rules 401, 402, and 403. Therefore, the court will summarize the standards for admissibility or exclusion of evidence under these rules.

Rule 401 of the Federal Rules of Evidence defines relevant evidence as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Rule 402 provides that relevant evidence is generally admissible, but irrelevant evidence is not.

Rule 403 provides for exclusion of even relevant evidence on various grounds, as follows:

Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.

FED.R.EVID. 403. As the Eighth Circuit Court of Appeals has recently explained,

Under Rule 403, district courts have broad discretion to assess unfair prejudice, and are reversed only for an abuse of discretion. United States v. Henderson, 416 F.3d 686, 693 (8th Cir. 2005), cert. denied, 546 U.S. 1175, 126 S.Ct. 1343, 164 L.Ed.2d 57 (2006). Rule 403 "does not offer protection against evidence that is merely prejudicial in the sense of being detrimental to a party's case. The rule protects against evidence that is unfairly prejudicial, that is, if it tends to suggest decision on an improper basis." Wade v. Haynes, 663 F.2d 778, 783 (8th Cir.1981), aff'd sub nom. Smith v. Wade, 461 U.S. 30, 103 S.Ct. 1625, 75 L.Ed.2d 632 (1983).

United States v. Myers, 503 F.3d 676, 681 (8th Cir.2007); United States v. Farrington, 499 F.3d 854, 858-59 (8th Cir.2007). The Advisory Committee Notes to Rule 403...