Case 3:18-cv-00347-CAB-MDD Document 311-8 Filed 02/26/21 PageID.30277 Page 1 of 21
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`EXHIBIT 32
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`TO DECLARATION OF CHRISTIANA GARRETT
`IN SUPPORT OF NUVASIVE, INC.’S
`REPLY IN SUPPORT OF
`MOTION FOR PARTIAL SUMMARY JUDGMENT
`AND MOTION TO EXCLUDE EXPERT OPINIONS
`(IMPLANT PATENTS)
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`Case 3:18-cv-00347-CAB-MDD Document 311-8 Filed 02/26/21 PageID.30278 Page 2 of 21
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`SAN DIEGO DIVISION
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`NUVASIVE, INC.,
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` Plaintiff,
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`v.
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`ALPHATEC HOLDINGS, INC. and
`ALPHATEC SPINE, INC.,
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` Defendants.
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`CASE NO. 18-cv-00347-CAB-MDD
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`UPDATED SUPPLEMENTAL REBUTTAL EXPERT REPORT
`OF KEITH R. UGONE, PH.D.
`
`February 4, 2021
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`HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY
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`EXHIBIT 32
`Page 72
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`Case 3:18-cv-00347-CAB-MDD Document 311-8 Filed 02/26/21 PageID.30279 Page 3 of 21
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`UPDATED SUPPLEMENTAL REBUTTAL EXPERT REPORT
`OF KEITH R. UGONE, PH.D.
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`
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`February 4, 2021
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`OVERVIEW OF ASSIGNMENT ................................................................................... 1 
`I. 
`CLAIM 16 AND CLAIM 18 OF THE ’334 PATENT ................................................... 3 
`II. 
`III.  MR. INGLISH’S CHANGED DEFINITION OF FUNCTIONAL UNIT ORDERS . 4 
`IV. 
`IDENTIFICATION OF DIVERTED SURGEONS ....................................................... 7 
`A.  No Evidence NuVasive Would Have Made All Of Alphatec’s Alleged “Diverted
`Sales” In The Absence Of Alphatec’s Alleged Infringement ....................................... 9 
`B.  Mr. Inglish’s Diverted Surgeon-Customer Criteria Is Arbitrary ................................ 10 
`C.  Mr. Inglish’s Diverted Surgeon-Customer Criteria Fails To Account For Other
`Factors ......................................................................................................................... 14 
`D.  Conclusion: Mr. Inglish’s Diverted Surgeons Approach Is Unreliable ...................... 17 
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`Case 3:18-cv-00347-CAB-MDD Document 311-8 Filed 02/26/21 PageID.30280 Page 4 of 21
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`
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`I.
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`1.
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`UPDATED SUPPLEMENTAL REBUTTAL EXPERT REPORT
`OF KEITH R. UGONE, PH.D.
`
`OVERVIEW OF ASSIGNMENT
`
`February 4, 2021
`
`
`I have been retained as an economics and damages expert for Alphatec Holdings, Inc. and
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`Alphatec Spine, Inc. (“Alphatec” or “Defendants”) in the matter of NuVasive, Inc. v.
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`Alphatec Holdings, Inc. and Alphatec Spine, Inc.1 On December 18, 2020, I submitted a
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`supplemental rebuttal expert report (the “Ugone Supplemental Rebuttal Report”) in which
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`I, among other things, (a) independently assessed the claimed royalty damages owned by
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`Alphatec should the Access Patents, Implant Patents, and/or a combination of Implant and
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`Access Patents be found to be valid, enforceable, and infringed and (b) evaluated
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`NuVasive’s claimed damages as presented in the report submitted by Mr. Inglish on
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`November 20, 2020 (the “Inglish Supplemental Damages Report”).2
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`2.
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`On January 11, 2021, Mr. Inglish issued an update to his supplemental report (the “Updated
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`Inglish Supplemental Damages Report”) in which he updated and/or corrected certain of
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`his calculations and schedules. These updates and corrections accounted for the “claim-
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`specific size requirements under the ’334 Patent, correction of a formulaic error on
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`Schedule 6C, presentation of damages for multiple patents in Schedules 25 and 26” and
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`provided “other clarification.”3 Specifically, Mr. Inglish:
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`a. separately calculated damages for Claim 16 and Claim 18 of the ’334 Patent;
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`b. changed the definition of a “functional unit” order;
`
`
`1 Amended Complaint for Patent Infringement dated September 13, 2018 (“Amended Complaint”).
`2 Supplemental Rebuttal Expert Report of Keith R. Ugone, Ph.D. dated December 18, 2020 (“Ugone Supplemental
`Rebuttal Report”).
`3 Updated Supplemental Expert Report of Blake Inglish dated January 11, 2021 (“Inglish Updated Supplemental
`Report”), p. 1.
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`Case 3:18-cv-00347-CAB-MDD Document 311-8 Filed 02/26/21 PageID.30281 Page 5 of 21
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`Updated Supplemental Rebuttal Expert Report of Keith R. Ugone, Ph.D.
`February 4, 2021
`_____________________________________________________________________________________________
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`c. specified the criteria he utilized to determine whether a surgeon-customer was
`“diverted” by Alphatec; and
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`d. corrected his calculations of incremental profits and incremental costs related to
`“Mixed Orders.”4
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`3.
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`I have been requested by counsel for Alphatec to (a) respond to the updates and corrections
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`in the Inglish Updated Supplemental Damages Report and (b) provide any associated
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`updates (or corrections) to my calculations (and associated exhibits and tables) as reflected
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`in the two sets of exhibits to my report that are detailed below.
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`4.
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`As a result of Mr. Inglish’s changed definition of functional unit orders,5 I have prepared
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`(a) Set 1 of Exhibits (and associated updated tables from the Ugone Supplemental Rebuttal
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`Report) and (b) Set 2 of Exhibits (and associated updated tables from the Ugone
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`Supplemental Rebuttal Report).
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`a. Set 1 Of Exhibits. Set 1 of Exhibits utilize Mr. Inglish’s original definition of a
`functional unit order (i.e., an intradiscal shim is included in functional unit orders).6
`
`b. Set 2 Of Exhibits. Set 2 of Exhibits utilize Mr. Inglish’s changed definition of a
`functional unit order (i.e., no longer requiring the inclusion of an intradiscal shim in
`the order).7
`
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`4 In the Updated Inglish Supplemental Damages Report, Mr. Inglish updated his “Mixed” Order incremental profits
`calculation to “reflect a weighted-average calculation rather than simple-average calculation.” As a result, the
`damages figures Mr. Inglish presented in his Updated Schedule 1 changed relative to Schedule 1 of the Inglish
`Supplemental Damages Report. (See Updated Inglish Supplemental Damages Report, pp. 1, 2, Updated Schedule 1,
`and Updated Schedule 6C. See also Inglish Supplemental Damages Report, Schedule 1 and Schedule 6C.)
`5 As discussed in Section III, Mr. Inglish stated that he changed “‘Functional unit combinations include orders with
`one or more units of each of the following: [A1 or A2], B, C, D, F, and G’ to ‘Functional unit combinations include
`orders with one or more units of each of the following: [A1 or A2], B, D, F, and G.’” (Inglish Updated Supplemental
`Damages Report, p. 2 and Updated Schedule 4, Note 12.)
`6 Mr. Inglish’s original definition of functional unit orders are orders containing one or more units of the following
`components: [A1 or A2], B, C, D, F, and G (i.e., (a) PEEK implant and/or porous titanium implant [A1 or A2], (b)
`light cable [B], (c) intradiscal shim [C], (d) dilator set [D], (e) NM clip [F], and (f) NM probe [G]).
`7 Mr. Inglish’s changed definition of functional unit orders are orders containing one or more units of the following
`components: [A1 or A2], B, D, F, and G (i.e., (a) PEEK implant and/or porous titanium implant [A1 or A2], (b) light
`cable [B], (c) dilator set [D], (d) NM clip [F], and (e) NM probe [G]).
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`Updated Supplemental Rebuttal Expert Report of Keith R. Ugone, Ph.D.
`February 4, 2021
`_____________________________________________________________________________________________
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`5.
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`Both the exhibits and tables (in Set 1 of Exhibits and Set 2 of Exhibits) are the same as in
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`6.
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`II.
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`7.
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`the Ugone Supplemental Report, with the following two primary changes:
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`a. updated damages calculations for the ’334 Patent separating the calculation of damages
`for (i) implants that allegedly infringe Claim 16 of the ’334 Patent and (ii) implants that
`allegedly infringe Claim 18 of the ’334 Patent; and
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`b. using the updated Inglish damages figures from the Updated Inglish Supplemental
`Damages Report (resulting from his corrected “Mixed” order incremental profits
`calculation), in instances where Mr. Inglish damages figures are referenced.
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`In Set 1 of Exhibits and Set 2 of Exhibits, I have included an exhibit catalog and table
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`catalog that details the changes to each specific exhibit and table.
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`My opinions and the bases for my opinions are contained in the remainder of this report.
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`CLAIM 16 AND CLAIM 18 OF THE ’334 PATENT
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`In his updated supplemental report, Mr. Inglish updated his claimed damages calculations
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`to “reflect revised ’334 patent damages for Claim 16 and Claim 18 separately.”8 It is my
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`understanding that PEEK implants allegedly infringe (a) Claim 16 of the ’334 Patent and
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`(b) Claim 18 of the ’334 Patent based upon the following specifications.
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`a. Claim 16 Of The ’334 Patent. It is my understanding that PEEK implants that allegedly
`infringe Claim 16 (which depends upon Claim 1) of the ’334 Patent have the following
`specifications: (a) the implant length is greater than 40mm and (b) the implant length
`is at least 2.5 times greater than the implant width.9
`
`b. Claim 18 Of The ’334 Patent. It is my understanding that PEEK implants that allegedly
`infringe Claim 18 (which depends upon Claim 1) of the ’334 Patent have the following
`specifications: (a) the implant length is greater than 40mm, (b) the implant length is at
`least 2.5 times greater than the implant width, and (c) the implant has a maximum width
`of 18mm.10
`
`
`8 Inglish Updated Supplemental Report, p. 1.
`9 Rebuttal Report of Barton L. Sachs, M.D., M.B.A., F.A.C.P.E., F.A.C.H.E. dated December 18, 2020 (“Sachs
`Rebuttal Report (12/18/20)”), pp. 128, 130 – 131. See also U.S. Patent No. 8,187,334 B2.
`10 Sachs Rebuttal Report (12/18/20), pp. 128, 130 – 131. See also U.S. Patent No. 8,187,334 B2.
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`Updated Supplemental Rebuttal Expert Report of Keith R. Ugone, Ph.D.
`February 4, 2021
`_____________________________________________________________________________________________
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`8.
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`The updated exhibits and tables associated with this report present NuVasive’s claimed
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`damages owed by Alphatec separately for implants that allegedly infringe Claim 16 and
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`Claim 18 of the ’334 Patent.11 Additionally, I perform and present illustrative adjustments
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`to Mr. Inglish’s claimed lost profits-related damages (to correct for certain errors and/or
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`unsupported assumptions made by Mr. Inglish within his own framework) separately for
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`Claim 16 and Claim 18 of the ’334 Patent.
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`III. MR. INGLISH’S CHANGED DEFINITION OF FUNCTIONAL UNIT ORDERS
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`9.
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`In the Inglish Supplemental Damages Report, Mr. Inglish identified Alphatec’s functional
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`unit orders as orders “with one or more units of each of the following: [A1 or A2], B, C,
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`D, F, and G” (i.e., (a) PEEK implant and/or porous titanium implant [A1 or A2], (b) light
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`cable [B], (c) intradiscal shim [C], (d) dilator set [D], (e) NM clip [F], and (f) NM probe
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`[G]).12, 13 However, as discussed in the Ugone Supplemental Rebuttal Report, Mr. Inglish
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`(contrary to his definition) identified certain orders as functional unit orders that did not
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`contain an intradiscal shim (component [C]). In the Ugone Supplemental Rebuttal Report,
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`I provided illustrative adjustments to Mr. Inglish’s claimed lost profits damages to adjust
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`11 In the Ugone Supplemental Rebuttal Report, I (a) calculated NuVasive’s claimed damages owed by Alphatec and
`(b) for clarification purposes here, performed illustrative adjustments to Mr. Inglish’s claimed lost profits-related
`damages accounting for only Claim 18 of the ’334 Patent.
`12 Inglish Supplemental Damages Report, Schedule 4, Note 12. In addition, in his November 8, 2019 report, for all
`orders that Mr. Inglish identified as a functional unit order, the orders included an intradiscal shim (component [C].)
`(Expert Report of Blake Inglish dated November 8, 2019, Schedule 16.)
`13 As detailed in the Ugone Supplemental Rebuttal Report, Mr. Inglish relied on Plaintiff’s counsel’s identification of
`Alphatec’s LIF Platform components that “when used together, constitute infringement” of each of the Patents-in-Suit
`to identify Alphatec’s functional unit orders that allegedly constitute infringement of each of the Patents-in-Suit. Mr.
`Inglish then calculated the total implant units associated with Alphatec’s allegedly infringing functional unit orders
`by each patent (“Claimed Implant Units – Functional Unit Orders”).
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`Updated Supplemental Rebuttal Expert Report of Keith R. Ugone, Ph.D.
`February 4, 2021
`_____________________________________________________________________________________________
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`the implant units associated with Alphatec’s allegedly infringing functional unit orders (as
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`defined by Mr. Inglish in the Inglish Supplemental Damages Report).14
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`10.
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`Subsequent to the identification of Mr. Inglish’s discrepancy in implementing his definition
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`of functional unit orders (and associated illustrative adjustments performed in the Ugone
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`Supplemental Rebuttal Report), in his updated supplemental report, Mr. Inglish altered the
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`definition of a functional unit order. Specifically, Mr. Inglish stated that he changed
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`“‘Functional unit combinations include orders with one or more units of each of the
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`following: [A1 or A2], B, C, D, F, and G’ to ‘Functional unit combinations include orders
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`with one or more units of each of the following: [A1 or A2], B, D, F, and G.’” 15 In other
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`words, Mr. Inglish changed his definition of a functional unit order by excluding an
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`intradiscal shim (component [C]).
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`11.
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`In his updated supplemental report, Mr. Inglish did not provide any explanation as to why
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`he decided to change his definition of a functional unit order. In his deposition, Mr. Inglish
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`testified that he “felt like it was appropriate to include all the product combinations that
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`were substantially similar to NuVasive’s functional unit, and some of those happened to
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`not have shims at this point, which [he] believe[s] may be, in part, because we have
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`incomplete sales data.” 16 Mr. Inglish further testified that he “asked the economic
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`14 Ugone Supplemental Rebuttal Report, Section IX.D.1 and Section IX.D.2.
`15 Inglish Updated Supplemental Damages Report, p. 2 and Updated Schedule 4, Note 12.
`16 Deposition of Blake Inglish taken January 18, 2021 (“Inglish Deposition”), p. 218. Mr. Inglish testified that there
`are times when “hospitals will buy disposables in advance so they have them on hand to use in upcoming lateral
`procedures.” Mr. Inglish further testified that he “became very concerned” regarding the data “because there was
`limitation on what was produced as far as the sales data that it might not be complete as to the disposable sales.”
`(Inglish Deposition, p. 215.) It is my understanding that ATEC_LLIF000971397 was produced subsequent to the
`Inglish Supplemental Report. The ATEC_LLIF000971397 sales data contains 88 intradiscal shim sales from July
`2019 through November 2020. During the July 2019 through September 2020 time period, Alphatec made 245 sales
`of “functional unit orders” (as newly defined by Mr. Inglish) without an intradiscal shim. I have performed an analysis
`to cross-check the hospitals that purchased the 245 sales of the newly defined “functional unit orders” without an
`intradiscal shim and the hospitals that purchased intradiscal shims (as reported in ATEC_LLIF000971397). Only 18
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`Updated Supplemental Rebuttal Expert Report of Keith R. Ugone, Ph.D.
`February 4, 2021
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`question… assuming hypothetically that there wasn’t a shim sold in each of these
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`procedures, but for the alleged infringement from an economic perspective, what would
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`that surgeon have purchased from NuVasive[?].” From “an economic perspective” Mr.
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`Inglish determined that “even if NuVasive, for example, included a shim in that kit, there’s
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`no economic basis to suggest that but for the alleged infringement, that surgeon would not
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`have purchased the full functional unit from NuVasive.”17 In other words, it appears Mr.
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`Inglish is opining “from an economic perspective” that a functional unit does not need to
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`include an intradiscal shim component.
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`12.
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`However, Mr. Inglish’s “economic perspective” of what components are included in a
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`functional unit order directly contradicts Mr. Inglish’s statements in his supplemental
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`damages report (and his other deposition testimony18) that he is “relying on the technical
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`and clinical opinions of Dr. Youssef and other information in this case regarding what
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`constitutes a functional unit” and he has “no independent expert opinions on this subject.”19
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`Additionally, contrary to Mr. Inglish’s opinion, Dr. Youssef opined that a functional unit
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`order includes an intradiscal shim (component [C]).
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`Based on my experience, surgeons base their usage/adoption decisions for
`lateral procedures at the platform-level versus the component-level. This is
`primarily based on the fact that lateral platforms such as NuVasive’s MAS
`platform include integrated components such as a neuromonitoring system,
`access system (including MaXcess retractor), neuromonitoring disposables,
`MaXcess disposables [including the MaXcess 4 Shim, Intradiscal
`
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`(out of the 88) intradiscal shims were sold to the same hospitals that purchased the newly defined functional unit
`orders without an intradiscal shim (out of 245 functional unit order sales). Thus, Alphatec’s sales data suggests that
`hospitals do not buy disposables in advance so they have them on hand to use in upcoming lateral procedures, contrary
`to Mr. Inglish’s testimony.
`17 Inglish Deposition, p. 217.
`18 Mr. Inglish testified that he does not have his “own independent opinion on what constitutes functional unit.”
`(Inglish Deposition, p. 34.)
`19 Inglish Supplemental Damages Report, p. 141 footnote 291.
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`Updated Supplemental Rebuttal Expert Report of Keith R. Ugone, Ph.D.
`February 4, 2021
`_____________________________________________________________________________________________
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`Locking20], and implants, each of which have been specifically designed to
`operate collectively as a functional unit in order to achieve a safe and
`reproducible, minimally invasive, and successful lateral spinal fusion. The
`three main components necessary for performance of an XLIF procedure –
`(1) access tools; (2) implants; and (3) neuromonitoring – collectively
`function in such a way that allows surgeons to achieve safe and
`reproducible, minimally invasive, and clinically successful interbody
`fusions.”21
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`13. Mr. Inglish failed to explain the discrepancies between (a) Dr. Youssef’s opinion that a
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`functional unit order includes an intradiscal shim and (b) Mr. Inglish’s changed definition
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`of a functional unit order (that does not contain an intradiscal shim). As a result of Mr.
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`Inglish’s changed definition of functional unit orders, I have prepared (a) Set 1 of Exhibits
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`(using Mr. Inglish’s original definition of a functional unit order) and (b) Set 2 of Exhibits
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`(using Mr. Inglish’s changed definition of a functional unit order).
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`14.
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`As demonstrated in Set 1, Exhibit 17, as a result of Mr. Inglish’s change in his stated
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`definition of a functional unit order (i.e., excluding the requirement of the functional unit
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`order containing component [C]), Mr. Inglish’s claimed lost profits-related damages
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`figures increase. Specifically, Mr. Inglish’s claimed lost profits-related damages figures
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`IV.
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`15.
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`increase by $222,933 – $1.343 million.22
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`IDENTIFICATION OF DIVERTED SURGEONS
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`As a part of the analysis conducted in the Inglish Supplemental Damages Report, Mr.
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`Inglish identified surgeon-customers that he determined to have been “diverted” by
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`20 Youssef Damages Report (11/8/19), p. 2.
`21 Youssef Damages Report (11/8/19), p. 14. (Bracketed text added for clarification.) (Emphasis Added.)
`22 The difference in damages are calculated for the Access Patents (excluding the ’270 Patent) in the following two
`scenarios: (i) Diverted Surgeons and Interbody Market Share Approach, Implant + Disposables Incremental Profit,
`LLIF Market and (ii) Interbody Unit Market Share Only Approach, Implant + Disposables Incremental Profit, MIS
`Market. (See Set 1, Exhibit 17.)
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`Updated Supplemental Rebuttal Expert Report of Keith R. Ugone, Ph.D.
`February 4, 2021
`_____________________________________________________________________________________________
`
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`Alphatec.23, 24 However, in his supplemental report (and associated exhibits) Mr. Inglish
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`did not specify the criteria he used to determine if a surgeon-customer had been “diverted”
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`by Alphatec in the Inglish Supplemental Damages Report.25 Additionally, Mr. Inglish later
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`produced excel files which included his claimed “diverted” surgeon analysis. However,
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`Mr. Inglish’s produced files did not contain any formulas detailing the criteria he used to
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`determine if a surgeon-customer had been “diverted” by Alphatec.
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`16.
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`In his updated supplemental report, Mr. Inglish specified the criteria he utilized to
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`determine whether a surgeon-customer was “diverted” by Alphatec. Specifically, Mr.
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`Inglish determined that a surgeon-customer was not “diverted” by Alphatec if the surgeon-
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`customer met at least one of the following criteria (collectively the “diverted surgeon-
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`customer criteria”):
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`a. surgeon-customer did not purchase a functional unit from Alphatec;
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`b. surgeon-customer purchased less than five implant units from NuVasive;
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`c. surgeon-customer purchased their first Alphatec implant in the same quarter or a prior
`quarter as their first NuVasive implant; and/or
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`d. surgeon-customer had a gap year before their first Alphatec implant purchase after
`ceasing NuVasive implant purchases.26
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`Thus, if a surgeon-customer did not meet any of the aforementioned criteria (i.e., none of
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`the above criteria is met), Mr. Inglish identified this surgeon-customer as “diverted.”27
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`23 Inglish Supplemental Damages Report, Schedule 5.
`24 Under Mr. Inglish’s methodology, lost profits were calculated on 100% of Alphatec implant units associated with
`functional unit orders for surgeon-customers that Mr. Inglish identified as having been “diverted” by Alphatec. (See
`Ugone Supplemental Rebuttal Report, Appendix B.)
`25 Mr. Inglish only explained one exclusion (i.e., he did not consider Christopher Blanchard to be “diverted” by
`Alphatec because he had a poor relationship with his NuVasive sales representative). (Inglish Supplemental Damages
`Report, Schedule 5, Note 7.)
`26 Updated Inglish Supplemental Damages Report, p. 2.
`27 See Updated Inglish Supplemental Damages Report, Updated Schedule 5, Note 7.
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`Updated Supplemental Rebuttal Expert Report of Keith R. Ugone, Ph.D.
`February 4, 2021
`_____________________________________________________________________________________________
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`17.
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`Despite Mr. Inglish specifying the criteria he utilized to determine if a surgeon-customer
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`had been “diverted” by Alphatec in his updated supplemental report, Mr. Inglish’s diverted
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`surgeon-customer criteria (and diverted surgeon analysis) is arbitrary and unsupported.
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`Specifically, (a) there is no evidence NuVasive would have made all of Alphatec’s alleged
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`“diverted sales” in the absence of Alphatec’s alleged infringement (as discussed in the
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`Ugone Supplemental Rebuttal Report), (b) Mr. Inglish’s diverted surgeon-customer criteria
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`is arbitrary, and (c) Mr. Inglish’s diverted surgeon-customer criteria fails to account for
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`other factors (even under Mr. Inglish’s flawed framework).
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`A. No Evidence NuVasive Would Have Made All Of Alphatec’s Alleged “Diverted
`Sales” In The Absence Of Alphatec’s Alleged Infringement
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`18. Mr. Inglish’s criteria and determination of surgeons he claims were “diverted” by Alphatec
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`implicitly assumes that the reason surgeons purchased Alphatec’s Accused Products (over
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`NuVasive’s products) is due to Alphatec’s alleged infringement of the Patents-in-Suit. In
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`other words, Mr. Inglish assumes that in the absence of Alphatec’s alleged infringement,
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`NuVasive would have made all of Alphatec’s alleged “diverted sales.”28 However, as
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`discussed in the Ugone Supplemental Rebuttal Report, the following evidence in this
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`matter indicates that Mr. Inglish’s assumption is inappropriate and unsupported (and that
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`generally lost profits would not be an appropriate damages remedy): (a) Alphatec had
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`acceptable non-infringing alternatives to the Access Patents and Implant Patents; (b)
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`Alphatec’s sales of the Battalion Lateral System are attributable to factors unrelated to the
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`Patents-in-Suit; and (c) there is a lack of evidence that NuVasive would have made
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`Alphatec’s sales absent the alleged infringement (e.g., the presence of numerous other
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`28 Ugone Supplemental Rebuttal Report, Section IX.C.1.
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`competitors in the market that offer acceptable non-infringing alternatives to NuVasive’s
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`MAS Platform/XLIF procedure).29
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`B. Mr. Inglish’s Diverted Surgeon-Customer Criteria Is Arbitrary
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`19.
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`Other than providing the arbitrarily determined criteria cited above, Mr. Inglish failed to
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`provide any additional information regarding how he determined his diverted surgeon-
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`customer criteria that have an economic or claimed damages-related basis. Mr. Inglish
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`failed to provide any documentary evidence or deposition testimony in support of his
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`criteria.
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`20. Mr. Inglish’s diverted surgeon-customer criteria is arbitrary as evidenced by (a) Mr.
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`Inglish’s deposition testimony and (b) analyses of surgeon-customers Mr. Inglish identified
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`as “diverted.”
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`a. Mr. Inglish’s Deposition Testimony Regarding The Functional Unit Purchase
`Criterion. Mr. Inglish’s deposition testimony regarding the functional unit purchase
`criterion demonstrates the arbitrary nature of this criterion. Specifically, Mr. Inglish
`admits that if a particular surgeon customer did not purchase a functional unit from
`NuVasive regularly over time, Mr. Inglish would have to “rethink the sales that [he]
`would attribute to that particular surgeon.”
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`Q. But if you were to learn that a particular surgeon did not purchase a
`functional unit from NuVasive regularly over time, how would that
`impact your analysis?
`A. I would just need to know more details about it before I could
`comment… if you know if it was undisputed that this surgeon only
`used a NuVasive implant and no other disposables from NuVasive
`in [a] procedure, then I think that would cause me to go back and
`rethink the sales that I would attribute to that particular surgeon.30
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`b. Mr. Inglish’s Deposition Testimony Regarding The Purchase Of Less Than Five
`NuVasive Units Criterion. In regards to the purchase of less than five NuVasive units
`criterion, Mr. Inglish provides contradictory reasoning for his decision to select less
`than five implants as a criterion (over an alternative number of units). Specifically, Mr.
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`29 Ugone Supplemental Rebuttal Report, Sections IX.A, IX.B, and IX.C.
`30 Inglish Deposition, pp. 123 – 124. (Bracketed text added for clarification.)
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`February 4, 2021
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`Inglish testified that he chose less than five implants because he “felt like from a time
`and effort standpoint it would be easier to focus on larger surgeons” but on the contrary
`justified using less than five implants “because having six [implants] shows that [there]
`is some evidence that [the surgeon] find[s] XLIF to be acceptable.”
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`
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`Q. What is the basis for that [less than five NuVasive units] exclusion?
`A. It’s just more a function of I just want to focus on the bigger, I guess,
`surgeons. It’s not that I necessarily think they weren’t diverted. I
`just felt like from a time and effort standpoint, it would be easier to
`just focus on larger surgeons.
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`Q. But is there a reason why you landed on five and not seven or 10?
`A. Just kind of laying the cost/benefit of going through the exercise.31
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`…
`Q. What’s the difference between six and five?
`A. The difference is unlike the folks that aren’t included in this, he has
`shown at least some level of – you’re saying the difference between
`six and five? I could have included five as well. Basically what I’m
`looking for here is anyone that has shown XLIF to be acceptable,
`and I think having six shows that [there] is some evidence that Dr.
`McMains found XLIF to be acceptable. And based off that and the
`fact that they already had an existing relationship with NuVasive, to
`me, when I look at all the – all the evidence of the case on is it more
`likely than an XLIF [sic] – is it more likely that an accused product
`sale by Alphatec would have gone to NuVasive versus anyone else
`in the market, I think when you can demonstrate that a surgeon has
`accepted the product, even if it’s only six units, has bought the
`product, has used the product, and has had an established
`relationship with NuVasive, I think that weighs in favor of
`concluding that the most likely place those sales would have gone
`would have been NuVasive versus anyone else in the market.32
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`c. Mr. Inglish’s Deposition Testimony Regarding The Gap Year Criterion. Mr. Inglish’s
`deposition testimony regarding the gap year criterion demonstrates the arbitrary nature
`of this criterion. Specifically, Mr. Inglish incorrectly testified that using a year (over
`six months) is “conservative,” that using a smaller gap would result in lost profits
`increasing. However, contrary to Mr. Inglish’s deposition testimony, utilizing a smaller
`gap (of, for example, six months) would result in fewer diverted surgeons and thus Mr.
`Inglish’s claimed lost profits would decrease. In his diverted surgeons approach, Mr.
`Inglish calculated lost profits on 100% of implant units associated with “diverted”
`surgeon-customers. Thus, if Mr. Inglish used a smaller gap for this criterion, fewer
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`31 Inglish Deposition, p. 123 – 124.
`32 Inglish Deposition, pp. 144 – 145.
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