Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 1 of 21 PageID #: 6557
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
` C.A. No. 20-925-JFB-SRF
`
`JURY TRIAL DEMANDED
`
` REDACTED - PUBLIC VERSION
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`HOLOGIC, INC., a Delaware corporation; and
`CYTYC SURGICAL PRODUCTS, LLC, a
`Massachusetts limited liability company,
`Plaintiffs,
`
`v.
`
`MINERVA SURGICAL, INC., a Delaware
`corporation.
`
`DEFENDANT MINERVA’S OPENING BRIEF IN SUPPORT OF ITS
`DAUBERT MOTION TO EXCLUDE CERTAIN EXPERT OPINIONS OF:
`(1) KARL R. LEINSING AND (2) CHRISTOPHER C. BARRY
`
`Ian R. Liston (#5507)
`Jennifer A. Ward (#6476)
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`222 Delaware Avenue, Suite 800
`Wilmington, DE 19801
`(302) 304-7600
`iliston@wsgr.com
`jward@wsgr.com
`
`Counsel for Defendant Minerva Surgical, Inc.
`
`Of Counsel:
`
`Vera M. Elson
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`650 Page Mill Road
`Palo Alto, CA 94304
`(650) 493-9300
`velson@wsgr.com
`
`Edward G. Poplawski
`Olivia M. Kim
`Erik J. Carlson
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`633 West Fifth Street, 15th Floor
`Los Angeles, CA 90071
`(323) 210-2900
`epoplawski@wsgr.com
`okim@wsgr.com
`ecarlson@wsgr.com
`Dated: March 22, 2021
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 2 of 21 PageID #: 6558
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`II.
`
`IV.
`
`DAUBERT LEGAL STANDARD ...................................................................................... 1
`MR. LEINSING’S OPINIONS SEEKING TO IMPROPERLY BROADEN THE
`LITERAL SCOPE OF THE CLAIMS, OR THE COURT’S CONSTRUCTION
`OF “PIVOT POINT,” SHOULD BE EXCLUDED ........................................................... 1
`A.
`Mr. Leinsing’s Opinions Should Be Excluded Because No Party May
`Contradict the Court's Construction to a Jury ......................................................... 1
`Mr. Leinsing’s Post-Markman Opinions Contending That the Literal
`Scope of the Asserted Claims Should Be Understood to Cover a Lateral of
`Sliding Movement Should Be Excluded ................................................................. 2
`III. MR. BARRY’S REASONABLE ROYALTY DAMAGES OPINION SHOULD
`BE EXCLUDED AS UNRELIABLE ................................................................................. 6
`A.
`Mr. Barry Improperly Relies on a Jury Verdict and a Court Order That
`Occurred After the Hypothetical Negotiation Date for His Reasonable
`Royalty Calculation ................................................................................................ 6
`Mr. Barry Inflated His Reasonable Royalty Damages Calculation By
`Improperly Including Lost Profits .......................................................................... 8
`Mr. Barry’s “Benchmark” For Reasonable Royalty is Based on
`Incomparable Products.......................................................................................... 10
`CONCLUSION ................................................................................................................. 13
`
`B.
`
`B.
`
`C.
`
`i
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 3 of 21 PageID #: 6559
`
`TABLE OF AUTHORITIES
`
`CASES
`
` PAGE(S)
`
`Acceleration Bay LLC v. Activision Blizzard, Inc.,
`324 F. Supp. 3d 470 (D. Del. 2018) .....................................................................................8
`
`Applied Med. Res. Corp. v. U.S. Surgical Corp.,
`435 F.3d 1356 (Fed. Cir. 2006)............................................................................................7
`
`AVM Techs., LLC v. Intel Corp.,
`No. 15-33-RGA, 2017 U.S. Dist. LEXIS 63665 (D. Del. Apr. 27, 2017) .........................10
`
`BIC Leisure Prods. v. Windsurfing Int’l, Inc.,
`1 F.3d 1214 (Fed. Cir. 1993)................................................................................................8
`
`Cordis Corp. v. Bos. Scientific Corp.,
`561 F.3d 1319 (Fed. Cir. 2009)............................................................................................5
`
`Cordis Corp. v. Boston Sci. Corp.,
`658 F.3d 1347 (Fed. Cir. 2011)............................................................................................5
`
`Daubert v. Merrell Dow Pharms., Inc.,
`509 U.S. 579 (1993) .........................................................................................................1, 2
`
`EMC Corp. v. Pure Storage, Inc.,
`No. 13-1985-RGA, 2016 WL 775742 (D. Del. Feb. 25, 2016) ...........................................5
`
`Exergen Corp. v. Wal-Mart Stores, Inc.,
`575 F.3d 1312 (Fed. Cir. 2009)............................................................................................2
`
`Finjan, Inc. v. Sophos, Inc.,
`No. 14-cv-01197-WHO, 2016 U.S. Dist. LEXIS 107831 (N.D. Cal. Aug.
`15, 2016) ............................................................................................................................10
`
`Georgia-Pacific Corp. v. United States Plywood Corp.,
`318 F. Supp. 1116 (S.D.N.Y. 1970).....................................................................................9
`
`LP Matthews LLC v. Bath & Body Works, Inc.,
`458 F. Supp. 2d 198 (D. Del. 2006) .....................................................................................5
`
`M2M Solutions, LLC v. Enfora, Inc.,
`167 F. Supp. 3d 665 (D. Del. 2016) ...................................................................................13
`
`Markman v. Westview Instruments, Inc.,
`517 U.S. 370 (1996) .............................................................................................................1
`
`ii
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 4 of 21 PageID #: 6560
`
`MiiCS & Partners, Inc. v. Funai Elec. Co.,
`No. 14-804-RGA, 2017 U.S. Dist. LEXIS 201511 (D. Del. Dec. 7, 2017) .......................10
`
`Panduit Corp. v. Stahlin Bros. Fibre Works, Inc.,
`575 F.2d 1152 (6th Cir. 1978) .........................................................................................8, 9
`
`Personalized User Model, L.L.P. v. Google, Inc.,
`No. 09–525–LPS, 2014 WL 807736 ...................................................................................2
`
`Sprint Communs. Co. L.P. v. Cox Communs. Inc.,
`302 F. Supp. 3d 597 (D. Del. 2017) .............................................................................1, 5, 8
`
`Sprint Communs. Co. v. Charter Communs., Inc.,
`No. 17-1734-RGA, 2021 U.S. Dist. LEXIS 49067 (D. Del. Mar. 16, 2021) ..................7, 8
`
`Sprint Communs. Co. v. Time Warner Cable, Inc.,
`760 F. App’x 977 (Fed. Cir. 2019) ......................................................................................7
`
`Sundance, Inc. v. DeMonte Fabricating Ltd.,
`550 F.3d 1356 (Fed. Cir. 2008)............................................................................................1
`
`Utah Med. Prods., Inc. v. Graphic Controls Corp.,
`350 F.3d 1376 (Fed. Cir. 2003)..........................................................................................13
`
`Zimmer Surgical, Inc. v. Stryker Corp.,
`365 F. Supp. 3d 466 (D. Del. 2019) ...................................................................................13
`
`RULES
`
`FED. R. EVID. 403 .............................................................................................................................1
`
`FED. R. EVID. 702 ..........................................................................................................................1
`
`iii
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 5 of 21 PageID #: 6561
`
`TABLE OF ABBREVIATIONS
`
`’348 or ’348 patent:
`
`U.S. Patent No. 9,095,348 (asserted patent)
`
`Mr. Barry:
`
`First Action:
`
`Hologic:
`
`Mr. Leinsing:
`
`Minerva:
`
`NovaSure:
`
`Christopher C. Barry (Hologic’s damages expert)
`
`Hologic, Inc. et al. v. Minerva Surgical, Inc., Civ. No. 15-1031
`(D. Del.)
`
`Plaintiffs Hologic, Inc. and Cytyc Surgical Products, LLC
`
`Karl R. Leinsing (Hologic’s technical expert)
`
`Defendant Minerva Surgical, Inc.
`
`Hologic’s NovaSure Endometrial Ablation System
`
`iv
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 6 of 21 PageID #: 6562
`
`I.
`
`DAUBERT LEGAL STANDARD1
`
`The Federal Rules of Evidence and decades of precedent require the Court to act as a
`
`“gatekeeper” to protect against the misuse of experts by excluding unreliable testimony and
`
`unproven methods. FED. R. EVID. 702; Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579,
`
`597 (1993). Expert testimony is admissible only 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. To fulfill its critical gatekeeper role, the
`
`Court “must exclude expert testimony that is not reliable and not specialized, and which invades
`
`the province of the jury to find facts and that of the court to make ultimate legal conclusions.”
`
`Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d 1356, 1364 (Fed. Cir. 2008).
`
`II.
`
`MR. LEINSING’S OPINIONS SEEKING TO IMPROPERLY BROADEN THE
`LITERAL SCOPE OF THE CLAIMS, OR THE COURT’S CONSTRUCTION OF
`“PIVOT POINT,” SHOULD BE EXCLUDED
`
`A.
`
`Mr. Leinsing’s Opinions Should Be Excluded Because No Party May
`Contradict the Court's Construction to a Jury
`
`Certain opinions of Hologic’s technical expert, Karl R. Leinsing, should be excluded
`
`because—four years after the Court’s Markman Hearing on the ’348 patent—he attempts to
`
`improperly broaden the literal scope of the “handle” element of the claims, and/or the Court’s
`
`construction of “pivot point,” to cover grips that slide. FED. R. EVID. 403, 702; Sprint Communs.
`
`Co. L.P. v. Cox Communs. Inc., 302 F. Supp. 3d 597, 620 (D. Del. 2017).
`
`Claim construction is a legal question exclusively within the province of the court.
`
`Markman v. Westview Instruments, Inc., 517 U.S. 370, 372 (1996). “No party may contradict the
`
`1 Unless stated otherwise, all emphasis in quotes is added.
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 7 of 21 PageID #: 6563
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`court's construction to a jury.” Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1321
`
`(Fed. Cir. 2009). “As expert testimony inconsistent with the Court's claim construction is
`
`unreliable and unhelpful to the finder of fact,” it should be excluded under the Daubert standard.
`
`Personalized User Model, L.L.P. v. Google, Inc., No. 09–525–LPS, 2014 WL 807736, at *l (D.
`
`Del. Feb. 27, 2014).
`
`A key term at issue in this case is the term “pivotally attached to one another at a pivot
`
`point” that appears in the “handle” element of Claim 1 of the ’348 patent below:
`
`a handle coupled to the proximal portion of the elongate member, wherein
`the handle comprises a frame, a proximal grip and a distal grip pivotally
`attached to one another at a pivot point and operably coupled to the
`applicator head so that when the proximal grip and the distal grip are moved
`closer together, the applicator head transitions from the contracted state to
`the expanded state;
`
`Ex.2 19 (’348 patent) at 19:22-29. In the First Action, the parties stipulated to a construction of
`
`“pivot point” (Ex. 21, First Action D.I. 155 at 3) and the Court adopted that construction in this
`
`case (D.I. 20 at ¶ 9). The Court’s construction of “pivot point” is set forth below:
`
`Claim Term
`“pivot point”
`
`Court’s Construction
`“a point of attachment between two members
`about which the members hinge or rotate”
`
`B.
`
`Mr. Leinsing’s Post-Markman Opinions Contending That the Literal Scope
`of the Asserted Claims Should Be Understood to Cover a Lateral of Sliding
`Movement Should Be Excluded
`
`In his expert reports, Mr. Leinsing attempts to redefine the Court’s construction of “pivot
`
`point.” Specifically, Mr. Leinsing attempts to improperly broaden the scope of the Court’s
`
`construction of “pivot point” to encompass grips that can slide. Mr. Leinsing opines that “a
`
`POSITA reading the claims and the specification would understand that the grips could slide . . .
`
`.” Ex. 9 (Leinsing Reply Report) at ¶ 33; see also id. at ¶ 29 (“there is no disclosure or
`
`2 All exhibits are attached to Declaration of Erik J. Carlson filed concurrently herewith.
`
`2
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 8 of 21 PageID #: 6564
`
`requirement that this “pivot pin” must be fixed and be machined with such low tolerance as to
`
`provide no lateral movement.”); Ex. 7 (03/05/21 Leinsing Dep. Tr.) at 152:11-19 (“Q. Doesn’t
`
`the claim tell us that ‘a proximal grip and a distal grip pivotally attach to one another at a pivot
`
`point’? A. Yes, and it’s pivotally attached at a point where it’s pivoting, and it doesn’t say in
`
`the claim that it has to be fixed. That pivot point can move where there can be some sliding
`
`component in there. There’s no -- the claim is not as narrow to exclude some sliding motion.”),
`
`152:21-24 (“Q. So in your opinion, a pivot point can include sliding motion? A. It doesn’t say
`
`that the pivot point is fixed. It can allow for some slide motion.”).
`
`His purpose is clear.
`
`, and Mr.
`
`Leinsing has failed to identify a structure in Minerva’s handle that qualifies as the claimed “pivot
`
`point.” See Minerva’s concurrently-filed Brief in Support of its Motion for Partial Summary
`
`Judgment of No Literal Infringement at § IV.B. Consequently, Mr. Leinsing improperly
`
`attempts to expand the Court’s construction of “pivot point” (originally stipulated to by the
`
`parties in the First Action) to cover grips that not only “hinge or rotate,” but that also move
`
`laterally or slide together
`
`. Ex. 9 (Leinsing Reply Report) at ¶¶
`
`29, 33; Ex. 7 (03/05/21 Leinsing Dep. Tr.) at 152:14-19, 152:21-24.
`
`Mr. Leinsing then improperly applies his expanded definition in certain portions of his
`
`literal infringement analysis to Minerva’s accused device. Ex. 6 (Leinsing Opening Report) at ¶
`
`100 (“
`
`(Leinsing Reply Report) at ¶ 25 (“
`
`”); Ex. 7 (03/05/21 Leinsing Dep. Tr.) at 146:24-147:3 (“
`
`”), ¶ 33 (“
`
`”); Ex. 9
`
`”), ¶ 29 (“
`
`”), ¶ 34 (“
`
`
`
`
`
`
`
`
`
`3
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 9 of 21 PageID #: 6565
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`
`
` . . . .”).
`
`Mr. Leinsing’s opinions at the expert discovery and summary judgment stage seem more
`
`in the nature of a claim construction brief. They are an unwarranted expansion of the Court’s
`
`construction, which makes no reference to sliding—either alone or in combination with the
`
`stipulated “hing[ing] or rotat[ing].” Instead, the claim only refers to “pivotally attached to one
`
`another at a pivot point,” while the construction of “pivot point” is construed to mean “a point of
`
`attachment between two members about which the members hinge or rotate.” Neither the
`
`handle element of the asserted claims, nor the construction of how the grips are attached to one
`
`another, make any reference or otherwise encompass a sliding motion. Unable to identify any
`
`structure in the accused device that qualifies as the claimed “pivot point,” Hologic’s expert
`
`attempts to re-define the Court’s construction to cover either sliding, or a combination of
`
`pivoting and sliding (Mr. Leinsing’s “compound movement” theory). Ex. 9 (Leinsing Reply
`
`Report) at ¶¶ 29, 33; Ex. 7 (03/05/21 Leinsing Dep. Tr.) at 152:14-19, 152:21-24. Mr. Leinsing
`
`then relies on his unilaterally broadened construction to conclude that Minerva’s device
`
`infringes. Ex. 6 (Leinsing Opening Report) at ¶ 100; Ex. 9 (Leinsing Reply Report) at ¶¶ 25, 29,
`
`33, 34; Ex. 7 (03/05/21 Leinsing Dep. Tr.) at 146:24-147:3.
`
`In the guise of applying his broadened definition of “pivot point,” Mr. Leinsing strays
`
`into matters of claim construction. Ex. 9 (Leinsing Reply Report) at ¶ 33 (“a POSITA reading
`
`the claims and the specification would understand that the grips could slide . . . .”), ¶ 29 (“there
`
`is no disclosure or requirement that this ‘pivot pin’ must be fixed and be machined with such
`
`low tolerance as to provide no lateral movement.”). While an expert may apply the proper
`
`construction in his analysis, expert testimony cannot amount to claim construction. See, e.g.,
`
`4
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 10 of 21 PageID #: 6566
`
`Cordis Corp. v. Bos. Scientific Corp., 561 F.3d 1319, 1337 (Fed. Cir. 2009) (“The district court
`
`thus properly excluded Boston Scientific's claim construction argument before the jury.”); EMC
`
`Corp. v. Pure Storage, Inc., No. 13-1985-RGA, 2016 WL 775742, at *3-4 (D. Del. Feb. 25,
`
`2016). Nor may an expert base opinions on an “incorrect understanding of the claim
`
`construction,” because when an expert does so, the Court “must disregard the testimony.”
`
`Cordis Corp. v. Boston Sci. Corp., 658 F.3d 1347, 1357 (Fed. Cir. 2011); see also Sprint
`
`Communs. Co., 302 F. Supp. 3d at 620 (expert opinions contrary to the court’s claim
`
`construction are “unhelpful to the court, and . . . likely to confuse the jury.”); LP Matthews LLC
`
`v. Bath & Body Works, Inc., 458 F. Supp. 2d 198, 210 (D. Del. 2006) (“to the extent that the
`
`court’s claim construction and related decisions are inconsistent with the opinions expressed in
`
`their respective expert reports, such opinions will not be admitted at trial.”).
`
` Thus, Minerva respectfully requests the following relief: Mr. Leinsing’s opinions that
`
`attempt to improperly expand the literal scope of the claim by suggesting that either the claims or
`
`the Court’s construction of “pivot point” cover grips that slide as well as rotate, should be
`
`excluded. See, e.g., Ex. 9 (Leinsing Reply Report) at ¶¶ 25, 29, 33, 34 (his references to
`
`
`
` etc.). To the extent Mr.
`
`Leinsing relies on his improper expansion of the claims to find infringement by Minerva’s
`
`accused device, those opinions should be excluded as well. In particular, Minerva moves to
`
`exclude these opinions as reflected in paragraph 100 of his Opening Report (Ex. 6), and
`
`paragraphs 25 and 29–34 of his Reply Report (Ex. 9), as well as any such opinions expressed at
`
`his deposition or any opinions to the same effect.
`
`5
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 11 of 21 PageID #: 6567
`
`III. MR. BARRY’S REASONABLE ROYALTY DAMAGES OPINION SHOULD BE
`EXCLUDED AS UNRELIABLE
`
`The reasonable royalty opinion of Hologic’s damages expert, Christopher C. Barry,
`
`should be excluded for three separate reasons. First, Mr. Barry’s reasonable royalty opinion
`
`should be excluded as unreliable because he relies on a jury verdict and a Court order that
`
`occurred after the hypothetical negotiation date. Second, Mr. Barry’s use of 16.1% royalty rate
`
`is unreliable because it overcompensates Hologic by improperly including lost profits within his
`
`reasonable royalty calculation. Third, Mr. Barry’s reasonable royalty calculation stems from a
`
`“benchmark” that is unsubstantiated using incomparable products, providing nothing more than
`
`ipse dixit.
`
`A.
`
`Mr. Barry Improperly Relies on a Jury Verdict and a Court Order That
`Occurred After the Hypothetical Negotiation Date for His Reasonable
`Royalty Calculation
`
`Mr. Barry’s reasonable royalty opinion should be excluded as unreliable because he relies
`
`on a jury verdict and a Court order that occurred after his hypothetical negotiation date.
`
`For his reasonable royalty opinions, Mr. Barry used June of 2018 as a hypothetical
`
`negotiation date.3 Ex. 1 (Barry Opening Report) at ¶ 52. As a starting point of the reasonable
`
`royalty analysis—which Mr. Barry called “benchmarks”—Mr. Barry used the jury verdict that
`
`came out in July of 2018 from the First Action.4 Id. at ¶¶ 55, 110; see also First Action, D.I. 499
`
`(07/24/18 Jury Verdict (“July 2018 Jury Verdict”)). In concluding that a 16.1% reasonable
`
`royalty rate should be applied, Mr. Barry heavily relied on the “damages rate” of 16.1% that Mr.
`
`3 Because
` (see, e.g., Ex. 22 (Minerva’s Rule
`26(a)(2)(C) Disclosure) at 1-2), July 2017 should be the hypothetical negotiation date in this case.
`Regardless, even under Mr. Barry’s June 2018 hypothetical date—date on which Mr. Barry’s
`analysis is based—Mr. Barry’s reasonable royalty calculation is unreliable for the reasons discussed
`herein.
`4 For his other “benchmark,” Mr. Barry used gross profit premium calculated from comparing
`incomparable products, discussed below in § III.C. See Ex. 1 (Barry Opening Report) at ¶ 54.
`
`6
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 12 of 21 PageID #: 6568
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`Barry calculated from the July 2018 Jury Verdict. Ex. 1 (Barry Opening Report) at ¶ 55. Mr.
`
`Barry also relied on the Court’s May 2, 2019 Order from the First Action, which Mr. Barry
`
`opines is “consistent with the jury verdict” from the First Action. Ex. 2 (Barry Reply Report) at
`
`¶ 34; see also First Action, D.I. 616 (05/02/19 Memorandum and Order (“May 2019 Order”)) at
`
`20 (awarding 16.1% running royalty). But both the July 2018 Jury Verdict and the May 2019
`
`Order came out after Mr. Barry’s hypothetical negotiation date of June 2018.
`
`In a similar situation, Judge Andrews recently granted a motion to exclude plaintiff
`
`expert’s reasonable royalty calculation because “[t]he prior . . . jury verdicts are not relevant
`
`when they occurred after the date of the hypothetical negotiation . . .” Sprint Communs. Co. v.
`
`Charter Communs., Inc., No. 17-1734-RGA, 2021 U.S. Dist. LEXIS 49067, at *27 (D. Del. Mar.
`
`16, 2021). In analyzing prior Federal Circuit decisions that “permitted evidence of prior verdicts
`
`to be used to inform a reasonable royalty determinations,” Judge Andrews found that in those
`
`cases, “the prior verdict was admissible as it occurred before the date of the hypothetical
`
`negotiation.” Id. at *25 (analyzing Applied Med. Res. Corp. v. U.S. Surgical Corp., 435 F.3d
`
`1356 (Fed. Cir. 2006) and Sprint Communs. Co. v. Time Warner Cable, Inc., 760 F. App’x 977
`
`(Fed. Cir. 2019)). For the jury verdicts that occurred after the date of the hypothetical
`
`negotiation, Judge Andrews noted that the parties “would not have been aware of the verdicts . . .
`
`at the time of their respective hypothetical negotiations.” Id. at *25-26. Accordingly, Judge
`
`Andrews found that because the jury verdicts “are irrelevant to the hypothetical negotiations at
`
`hand, they should not have been considered in [plaintiff expert’s] reasonable royalty calculation.
`
`The jury verdicts . . . are excluded as irrelevant from [plaintiff expert’s] opinions for all
`
`Defendants whose dates of a hypothetical negotiation preceded the respective dates of the prior
`
`jury verdicts . . .” Id. at *27.
`
`7
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 13 of 21 PageID #: 6569
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`Judge Andrews further held that:
`
`The jury verdicts . . . will also be excluded for all Defendants as they are not
`evidence from which a hypothetical negotiation can be reliably determined. As
`this Court has held, “A jury verdict does not represent evidence from which a
`hypothetical negotiation can be reliably determined. A jury verdict represents
`the considered judgment of twelve (or maybe fewer) random non-experts as to
`what a hypothetical negotiation would have resulted in for the patent(s) at issue.
`It is, at best, an informed lay opinion.” An informed lay opinion is not a reliable
`basis for determining the reasonable royalty rate that a hypothetical negotiation
`would reach.
`
`Id. at *27-28 (quoting Acceleration Bay LLC v. Activision Blizzard, Inc., 324 F. Supp. 3d 470,
`
`489 (D. Del. 2018)).
`
`Here, Mr. Barry relies on the 2018 Jury Verdict and the May 2019 Order in calculating
`
`his reasonable royalty. Under the same reasoning set forth by Judge Andrews in Sprint
`
`Communs. Co., the July 2018 Jury Verdict and the May 2019 Order are both irrelevant to the
`
`hypothetical negotiation in this case because they occurred after Mr. Barry’s June 2018
`
`hypothetical negotiation date. Thus, Mr. Barry’s reasonable royalty calculation based on his
`
`reliance on these two events that occurred after the hypothetical negotiation date should be
`
`excluded as unreliable.
`
`B.
`
`Mr. Barry Inflated His Reasonable Royalty Damages Calculation By
`Improperly Including Lost Profits
`
`Mr. Barry’s reasonable royalty calculation should be excluded for a separate reason: Mr.
`
`Barry improperly included lost profits in his reasonable royalty calculation.
`
`Mr. Barry opined that Hologic is entitled to lost profits, and “[i]n addition, Hologic is
`
`entitled to a reasonable royalty on Minerva’s remaining infringing sales, i.e., those not already
`
`compensated via lost profits.” Ex. 1 (Barry Opening Report) at ¶ 19; see also id. at ¶ 18. As
`
`recognized by Mr. Barry, lost profits and reasonable royalty damages are separate and distinct,
`
`requiring different analysis and legal requirements. For lost profits, Mr. Barry used the four
`
`8
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`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 14 of 21 PageID #: 6570
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`Panduit factors for his analysis. Id. at ¶¶ 22-43; see also Panduit Corp. v. Stahlin Bros. Fibre
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`Works, Inc., 575 F.2d 1152, 1156 (6th Cir. 1978); BIC Leisure Prods. v. Windsurfing Int’l, Inc.,
`
`1 F.3d 1214, 1217-18 (Fed. Cir. 1993). For reasonable royalty, Mr. Barry used the hypothetical
`
`negotiations methodology and analyzed the Georgia-Pacific factors. Ex. 1 (Barry Opening
`
`Report) at ¶¶ 51-127; see also Georgia-Pacific Corp. v. United States Plywood Corp., 318 F.
`
`Supp. 1116 (S.D.N.Y. 1970). Mr. Barry calculated lost profits
`
`
`
`, and reasonable royalty was applied to the remaining accused sales. Ex. 1
`
`(Barry Opening Report) at ¶¶ 46-47, 126.
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`But for reasonable royalty, Mr. Barry concluded that a rate of 16.1% should be applied,
`
`predominantly relying on the 2018 Jury Verdict from the First Action. See, e.g., Ex. 1 (Barry
`
`Opening Report) at ¶ 55. But as Mr. Barry admitted, the 16.1% rate includes both the lost profits
`
`and reasonable royalty damages awarded by the jury in the First Action. Ex. 3 (02/25/21 Barry
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`Dep. Tr.) at 54:19-22 (“Q. So the 16.1 percent rate includes both the lost profits and reasonable
`
`royalty awarded by the jury; is that right? A. Yes.”); see also id. at 54:4-18. Indeed, the jury in
`
`the First Action determined that a reasonable royalty rate of 8% should be applied. First Action,
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`D.I. 499 (July 2018 Jury Verdict) at 1. Consequently, in using the 16.1% rate, Mr. Barry’s
`
`reasonable royalty calculation was inflated to include lost profits, resulting in double-dipping of
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`lost profits in his damages calculation. In other words, in addition to the lost profits opinion
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`using the Panduit factors, Mr. Barry improperly awards Hologic additional lost profits within his
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`reasonable royalty calculation without any proper analysis, including any analysis of the Panduit
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`factors. This additional inclusion of lost profits, in the guise of a reasonable royalty, is legally
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`improper and unsubstantiated.
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`9
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`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 15 of 21 PageID #: 6571
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`Accordingly, Mr. Barry’s reasonable royalty damages calculation should be excluded as
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`unreliable because it overcompensates Hologic by improperly including lost profits within his
`
`reasonable royalty calculation.5 See, e.g., AVM Techs., LLC v. Intel Corp., No. 15-33-RGA,
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`2017 U.S. Dist. LEXIS 63665, at *13 (D. Del. Apr. 27, 2017) (excluding damages expert
`
`testimony as unreliable because the calculation yields damages that may be “much larger than
`
`the actual economic benefit Defendant enjoys” and relies on unfounded assumptions); MiiCS &
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`Partners, Inc. v. Funai Elec. Co., No. 14-804-RGA, 2017 U.S. Dist. LEXIS 201511, at *16 (D.
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`Del. Dec. 7, 2017) (excluding expert’s damages calculation because
`
`it
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`improperly
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`“overcompensates Plaintiffs and does not appropriately reflect the inventions’ footprints in the
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`marketplace” or “concentrate on compensation for the economic harm caused by infringement”)
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`(internal quotation marks omitted); Finjan, Inc. v. Sophos, Inc., No. 14-cv-01197-WHO, 2016
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`U.S. Dist. LEXIS 107831, at *9 (N.D. Cal. Aug. 15, 2016) (excluding damages calculation
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`methodology as unreliable because the expert improperly inflated the royalty base by “counting
`
`the revenue attributable to certain features multiple times”).
`
`C.
`
`Mr. Barry’s “Benchmark” For Reasonable Royalty
`Incomparable Products
`
`is Based on
`
`Mr. Barry’s reasonable royalty calculation should be excluded for another separate
`
`reason: Mr. Barry relied on a “benchmark” using incomparable products in calculating the
`
`reasonable royalty damages.
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`Mr. Barry started his reasonable royalty analysis as follows: “Parties to a hypothetical
`
`negotiation will consider relevant financial benchmarks to determine the range of royalty rates
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`5 To be clear, all of Mr. Barry’s reasonable royalty calculations should be excluded, including his
`alternative theory of damages. In the alternative, Mr. Barry uses the same 16.1% rate to calculate
`damages applying only reasonable royalty in the event that Hologic if found not to be entitled to lost
`profits. See Ex. 1 (Barry Opening Report) at ¶ 127. This is improper for the same reason: Mr. Barry
`unreliably includes lost profits in his reasonable royalty calculation.
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`10
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`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 16 of 21 PageID #: 6572
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`that would be discussed.” Ex. 1 (Barry Opening Report) at ¶ 54. For one of his benchmarks,
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`Mr. Barry concluded as follows: “
`
`
`
`
`
`difference between the gross margin
`
`” 6
`
`Id. In doing so, Mr. Barry calculated that the
`
`
`
`—
`
`which was used as his benchmark. Id. at ¶ 55. Mr. Barry attributed all of this “gross profit
`
`premium” to the ’348 patent. Id. at 54.
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`But the other products in Hologic’s GYN Surgical division are wholly different and not
`
`comparable to NovaSure. Mr. Barry testified that other products
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`(02/25/21 Barry Dep. Tr.) at 44:14-45:8. Mr. Barry admitted that:
`
`
`
`
`
`Id. at 46:24-47:2 (“
`
`”);
`
`at 45:19-46:3 (“
`
`
`
`. Ex. 3
`
`.
`
`
`
`
`
`Id.
`
`
`
`
`
`
`
`
`
`6 For his other “benchmark,” Mr. Barry used the jury verdict from the First Action (damages rate of
`16.1%), discussed above in §§ III.A and III.B. See Ex. 1 (Barry Opening Report) at ¶ 55.
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`11
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`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 17 of 21 PageID #: 6573
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`”);
`
`. Id. at 47:3-7 (“
`
`at 46:12-17 (“
`
`
`
`
`
`
`
`”);
`
`. Id.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`. Id. at 49:25-50:5 (“
`
`”); and
`
`”).
`
`Yet, despite all the differences between NovaSure and the other products, Mr. Barry
`
`concluded that the “gross premium profit”
`
`
`
` is all attributable to the ’348 patent. Ex. 1 (Barry Opening Report)
`
`at ¶ 54. The only thing Mr. Barry relies on for this conclusion is that “[b]ased on my discussion
`
`with Mr. Leinsing, the NovaSure system embodies each asserted claim of the ’348 Patent.” Id.
`
`This is not enough. Mr. Barry failed to consider or analyze, for example, (1) the technological
`
`differences between NovaSure and the other products; (2) the differences in the purpose and the
`
`use of the different products; (2) the different markets and competitions for each product; (3) the
`
`12
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`Case 1:20-cv-00925-JFB-SRF Document 116 Filed 03/30/21 Page 18 of 21 PageID #: 6574
`
`different costs for each product; and (4) how all the differences between the products in the GYN
`
`Surgical division (e.g., technological, use, market, competition, and costs) impact gross profits of
`
`each product.
`
`Accordingly, because Mr. Barry’s “benchmark” using the “gross premium profit” is
`
`nothing more than unsubstantiated opinion using incomparable products, Mr. Barry’s reasonable
`
`royalty damages opinion, which stems from this improper “benchmark,” should be excluded.
`
`See, e.g., Utah Med. Prods., Inc. v. Graphic Controls Corp., 350 F.3d 1376, 1385 (Fed. Cir.
`
`2003) (affirming exclusion of expert testimony “asserted to support a reasonable royalty”
`
`because it was not shown that the “license agreements used in [the] expert’s analysis were in any
`
`way comparable to the [patent-in-suit]”); M2M Solutions, LLC v. Enfora, Inc., 167 F. Supp. 3d
`
`665, 677 (D. Del. 2016) (excluding “ambiguous conclusions of technological comparability” and
`
`“unsubstantiated conclusions about economic comparability, lacking in analysis” as “p