Willis Elec. Co. v. Polygroup Holdings Ltd.

649 F.Supp.3d 780

WILLIS ELECTRIC CO., LTD., Plaintiff, v. POLYGROUP MACAU LIMITED (BVI), Polytree (H.K) Co. Ltd., and Polygroup Trading Limited, Defendants.

Case No. 15-cv-3443 (WMW/DTS)

United States District Court, D. Minnesota

Signed January 5, 2023

Austin Brooks Miller, Robins Kaplan LLP, Minneapolis, MN, Brenda L. Joly, Emily E. Niles, Patrick M. Arenz, Ronald J. Schutz, Robins Kaplan LLP, Minneapolis, MN, Douglas J. Christensen, Christensen, Fonder, Dardi & Herbert PLLC, Maple Grove, MN, for Plaintiff.

Christopher J. Forstner, Pro Hac Vice, Dabney Jefferson Carr, IV, Pro Hac Vice, Laura Anne Kuykendall, Pro Hac Vice, Robert Armistead Angle, Troutman Pepper Hamilton Sanders, LLP, Richmond, VA, Douglas D. Salyers, Lindsay Mitchell Henner, Pro Hac Vice, Troutman Pepper Hamilton Sanders LLP, Atlanta, GA, Puja Patel Lea, Pro Hac Vice, Troutman Hamilton Pepper Sanders LLP, Atlanta, GA, Elisabeth Muirhead, Thomas J. Leach, III, Rachel Zimmerman Scobie, Paige S. Stradley, Merchant & Gould P.C., Minneapolis, MN, Eric Szweda, Pro Hac Vice, Polygroup Holdings Limited, Hong Kong, China, John T. Winemiller, Pro Hac Vice, Merchant & Gould, P.C., Knoxville, TN, for Defendants.

ORDER

Wilhelmina M. Wright, United States District Judge

In this patent-infringement action, Plaintiff alleges that certain products sold by Defendants infringe claims in five United States patents owned by Plaintiff. This matter is now before the Court on the parties' cross-motions to exclude expert testimony and for summary judgment. (Dkts. 648, 657, 666, 675 and 689.) For the reasons addressed below, the Court grants in part and denies in part the parties' motions.

BACKGROUND

Plaintiff Willis Electric Co., Ltd. (Willis Electric) and Defendants Polygroup Macau Limited (BVI), Polytree (H.K) Co. Ltd. and Polygroup Trading Limited (collectively, Polygroup) are competitors in the field of artificial holiday trees. Manufacturers in this field compete based on price, product quality and product innovation. Willis Electric began manufacturing holiday lights in 1993 and expanded its business to include pre-lit artificial holiday trees in 2008.

In 2009, Jason Loomis, an expert in the field of decorative lighting, designed an artificial holiday tree for GKI/Bethlehem Lighting Company. Loomis's design had multiple trunk segments that included internal trunk wiring to provide electrical power to light strings attached to the branches. Loomis filed a non-provisional patent application on July 14, 2010, which issued as United States Patent No. 8,053,042 (Loomis Patent) on November 8, 2011. The Loomis Patent describes trunk segments that mechanically and electrically connect using a conventional plug and socket connector. In mid-2010, GKI/Bethlehem produced and sold trees embodying the technology described in the Loomis Patent (GKI Tree).

Willis Electric alleges that, until 2010, its pre-lit holiday trees were "typical of the industry," as they were "big, bulky, complex, and difficult to assemble." But in 2010, Willis Electric began selling a "One Plug Tree." The One Plug Tree design involves "coaxially coupling" tree trunk portions. Willis Electric filed patent applications pertaining to the One Plug Tree and other related pre-lit artificial holiday tree designs. Subsequently, Polygroup began selling an alleged "knockoff design" and applied for its own patents.

Willis Electric commenced this patent-infringement lawsuit against Polygroup in August 2015 and filed a first amended complaint in December 2015. The first amended complaint alleges that Polygroup has infringed five of Willis Electric's United States patents pertaining to pre-lit artificial holiday trees.¹ Four of the asserted patents pertain to Willis Electric's One Plug Tree design: United States Patent No. 8,454,186 (the '186 Patent); United States Patent No. 8,454,187 (the '187 Patent); United States Patent No. 8,936,379 (the '379 Patent); and United States Patent No. 8,974,072 (the '072 Patent) (collectively, the One Plug Tree Patents). A fifth asserted patent, United States Patent No. 9,066,617 (the '617 Patent), pertains to Willis Electric's multi-positional locking artificial tree trunk design.

The Court stayed these proceedings in November 2016 pending inter partes review (IPR) proceedings before the Patent Trial and Appeal Board (PTAB). In those proceedings, Polygroup filed more than a dozen IPR petitions challenging the validity of the One Plug Tree Patents. In several of its IPR petitions, Polygroup referenced the Loomis Patent. And Polygroup retained Loomis as a consultant and technical expert in the IPR proceedings.

After the conclusion of IPR proceedings, Willis Electric filed the now-operative second amended complaint in May 2019. The second amended complaint alleges that Polygroup has infringed and continues to infringe the One Plug Tree Patents and the '617 Patent.² In a December 2021 Order, the Court construed 10 disputed terms in the asserted patent claims: five terms that appear in the One Tree Plug Patents and five terms that appear in the '617 Patent.

The parties now cross-move to exclude expert testimony and for summary judgment. The Court addresses each motion in turn.

ANALYSIS

I. Cross-Motions to Exclude Expert Testimony

The parties cross-move for the exclusion of expert testimony. The admissibility of expert testimony is an issue of law for the district court to decide and is governed by Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Rule 702 provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the facts of the case.

Fed. R. Evid. 702. "An expert may base an opinion on facts or data in the case that the expert has been made aware of or personally observed." Fed. R. Evid. 703. "If experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject, they need not be admissible for the opinion to be admitted." Id.

"The proponent of expert testimony must prove its admissibility by a preponderance of the evidence." Lauzon v. Senco Prods., Inc., 270 F.3d 681, 686 (8th Cir. 2001). "Rule 702 reflects an attempt to liberalize the rules governing the admission of expert testimony" and favors admissibility over exclusion. Id. (internal quotation marks omitted). Determinations as to the admissibility of expert testimony are within a district court's discretion. See Arkwright Mut. Ins. Co. v. Gwinner Oil, Inc., 125 F.3d 1176, 1182 (8th Cir. 1997).

A district court must ensure that testimony admitted under Rule 702 "is not only relevant, but reliable." Daubert, 509 U.S. at 589, 113 S.Ct. 2786. When making this reliability determination, a court may evaluate whether the expert's method has been tested or subjected to peer review and publication, the method's known or potential rate of error and the method's general acceptance. Presley v. Lakewood Eng'g & Mfg. Co., 553 F.3d 638, 643 (8th Cir. 2009) (citing Daubert, 509 U.S. at 593-94, 113 S.Ct. 2786). These factors are not exhaustive, and a court must evaluate the reliability of expert testimony based on the facts of the case. Id. A court also may consider "whether the expertise was developed for litigation or naturally flowed from the expert's research; whether the proposed expert ruled out other alternative explanations; and whether the proposed expert sufficiently connected the proposed testimony with the facts of the case." Sappington v. Skyjack, Inc., 512 F.3d 440, 449 (8th Cir. 2008) (internal quotation marks omitted). When weighing these factors, a district court must function as a gatekeeper to separate "expert opinion evidence based on 'good grounds' from subjective speculation that masquerades as scientific knowledge." Glastetter v. Novartis Pharms. Corp., 252 F.3d 986, 989 (8th Cir. 2001).

Expert testimony is not admissible if it is "speculative, unsupported by sufficient facts, or contrary to the facts of the case," Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 748, 757 (8th Cir. 2006), such that it is "so fundamentally unsupported that it can offer no assistance to the jury," Minn. Supply Co. v. Raymond Corp., 472 F.3d 524, 544 (8th Cir. 2006) (internal quotation marks omitted). But disputes about the factual basis of an expert's testimony ordinarily implicate the credibility—not the admissibility—of the testimony. See Sappington, 512 F.3d at 450; Minn. Supply Co., 472 F.3d at 544. The Court addresses, in turn, each challenged expert witness.

A. Julie L. Davis

Willis Electric moves to exclude the opinions and testimony of Polygroup's damages expert, Julie L. Davis. Polygroup intends to offer Davis to rebut the opinions of Willis Electric's damages expert and to opine about the damages, if any, suffered by Willis Electric if Willis Electric prevails on its patent-infringement claims. In particular, Davis opines that Willis Electric cannot prove that it is entitled to lost profits and that Willis Electric's total damages based on a reasonable royalty, hypothetically negotiated in 2013 and continuing until 2019, should be no more than $1,062,370.

If patent infringement is proved, "the court shall award the [patentee] damages adequate to compensate for the infringement." 35 U.S.C. § 284. The phrase "damages adequate to compensate" in Section 284 "includes any foreseeable lost profits the patent owner can prove." Grain Processing Corp. v. Am. Maize-Prods. Co., 185 F.3d 1341, 1349 (Fed. Cir. 1999). If a patentee cannot prove lost profits,...