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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF WISCONSIN
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`OXBO INTERNATIONAL CORPORATION,
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`Plaintiff,
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`v.
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`H&S MANUFACTURING COMPANY, INC.,
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`Defendant.
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`FINAL PRETRIAL
`CONFERENCE ORDER
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`15-cv-292-jdp
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`The court held a final pretrial conference on Wednesday, May 31, 2017, before
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`United States District Judge James D. Peterson. Plaintiff Oxbo International Corporation
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`appeared by counsel, Shane Brunner, Jeffrey Ward, Thomas Johnson, Stephen Howe, and
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`Emily Wessels. Defendant H&S Manufacturing Company, Inc., appeared by counsel, Eric
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`Chadwick, Aaron Davis, and Adam Szymanski.
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`GENERAL PRETRIAL INSTRUCTIONS
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`Counsel predicted that the case would take 5-10 days to try. The court will tell the
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`jury 10. The jury will consist of 8 jurors to be selected from a qualified panel of 14. Each side
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`will exercise three peremptory challenges against the panel. Trial days will begin at 9:00 a.m.
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`and will run until 5:30 p.m., with at least an hour for lunch, a short break in the morning,
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`and another in the afternoon. Counsel may be required to be in court earlier than 9:00 a.m.
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`to address matters without the presence of the jury. On the first day of trial, counsel are
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`directed to appear at 8:30 a.m.
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`Witnesses, with the exception of experts and corporate representatives, will be
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`sequestered.
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`Page 1 of 24
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`The court directed counsel to meet and confer regarding their exhibit lists and
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`deposition designations, to pare down objections. The court will rule on any meaningful
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`objections that the parties are unable to resolve themselves. The court is not inclined to
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`referee a large number of otherwise minor disputes.
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`The parties must submit electronic versions of their exhibits for the court not later
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`than 8:30 a.m. on Monday, June 12, 2017. Unless otherwise agreed by the parties, counsel
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`must disclose any exhibits to be used in opening statements not later than 6:00 p.m. on
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`Friday, June 9, 2017, and identify the witnesses they anticipate calling not later than 6:00
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`p.m. on the business day before that witness is expected to testify.
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`Counsel should keep in mind that opening statements are an overview of the
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`evidence. Arguments are to be reserved for the end of the trial.
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`Counsel indicated that they are familiar with the court’s visual presentation system.
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`Counsel should use the microphones at all times and address all objections to the bench, not
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`to opposing counsel. If counsel need to consult with one another, they should ask for
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`permission to do so. Only the lawyer questioning a particular witness may raise objections to
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`questions put to the witness by the opposing party and argue the objection at any bench
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`conference.
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`If counsel call the opposing party’s witness as an adverse witness, counsel for the
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`opposing party may choose whether to ask only clarifying questions of the witness and call
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`the witness in its own case or do all its questioning during its opponent’s case, in which case
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`the party calling the witness will have an opportunity to respond with questioning. If counsel
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`choose the first option, they are free to call the witness during their case. Counsel have the
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`same two options as to any adverse witness; they are not bound by their decision on
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`questioning any previous witness. Counsel for the witness should inform the court which
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`approach it will be taking before beginning the examination.
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`VOIR DIRE AND JURY INSTRUCTIONS
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`The court and the parties discussed the draft voir dire and introductory instructions as
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`distributed. Neither party objected to the circulated draft voir dire.
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`Oxbo asked the court to instruct the jury on the court’s summary judgment holdings
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`and its claim constructions during introductory instructions; H&S generally opposed. The
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`parties briefed the issue after the conference. The court will inform the jury that certain
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`issues have been decided by the court before trial, and it will provide the claim construction
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`instruction. But the court will not instruct the jury on the specific summary judgment
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`findings on infringement in the liability phase. The court concludes that such an instruction
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`will unfairly stack the deck against H&S, and it is not needed to alleviate any juror
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`confusion. (The issue of commercial success is discussed below.)
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`The court will consider whether to instruct the jury about the nature of the cross-
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`license and the reasonable royalty calculation, although the court is not convinced that cross-
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`examination on this issue will not be sufficient (as discussed below). Dkt. 468, at 5-7.
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`The court will consider the “harvesting in the winter” instruction only if H&S
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`attempts to take advantage of the timing of those tests. Id. at 7-8.
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`The court will circulate a draft of the post-trial instructions and a draft of the special
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`verdict forms in the coming days. Final decisions on the post-trial instructions and verdict
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`forms will be made at the instruction conference near the end of the liability phase of trial.
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`RULINGS ON MOTIONS
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`A. Oxbo’s objections to H&S witnesses
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`The court resolved Oxbo’s objections to H&S’s witness list: H&S does not intend to
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`call either Mark Foley or Bob Snape. Witnesses available to testify for trial may not testify by
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`deposition. The court’s rulings on the motions in limine will govern the scope of permissible
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`witness testimony.
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`B. H&S’s anticipation case against the ’929 patent
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`H&S concedes that under the court’s claim constructions, it cannot show that the
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`Beougher reference anticipates claim 44 of the ’929 patent. Accordingly, summary judgment
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`is granted to Oxbo on that issue.
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`C. Oxbo’s motion for sanctions
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`As announced during the final pretrial conference, the court has determined that
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`(1) H&S lost or destroyed potentially relevant design and development documents;
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`(2) H&S’s duty to preserve those documents arose not later than August 2010, when H&S
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`claimed work product privilege and began preparing for litigation; and (3) the loss has
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`prejudiced Oxbo. H&S’s duty to preserve did not expire in August 2011, when Paul Dow and
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`Chris Heikenen discussed the potential infringement issue, prompted by an Oxbo
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`salesperson’s comments. The court already determined that it would not have been
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`reasonable for H&S to believe that Oxbo would not enforce its patent rights as a result of
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`that conversation. Dkt. 392, at 12-16.
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`The evidentiary hearing on the motion for sanctions revealed that documents were
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`lost as a result of a regular business practice: despite its policy of preserving all documents,
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`H&S wiped computers when individuals left the company and transferred the computers to
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`new users. Thus, H&S destroyed key design and developments documents in 2012 and 2013.
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`But, critically, Oxbo made no showing that the destruction was the result of any effort to
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`hide adverse information from Oxbo. Thus, the remedy for H&S’s spoliation is limited to
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`putting Oxbo in the position in which it would have been, but for the spoliation.
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`The court will award Oxbo its reasonable fees and costs in bringing the motion. But
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`crafting the other elements of an appropriate remedy for H&S’s spoliation has proven
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`difficult. Oxbo asks the court to: preclude H&S from offering testimony or other evidence
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`regarding the design and development of the Tri-Flex; and preclude H&S from offering
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`testimony or other evidence that it did not copy the patents-in-suit. This goes too far.
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`To allow Oxbo to argue and present evidence that H&S copied Oxbo’s product while
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`precluding H&S from responding would be tantamount to allowing the jury to draw an
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`adverse inference from the spoliation. An adverse inference instruction—instructing the jury
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`that it should or even may infer that the missing documents are not favorable to H&S—is a
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`remedy appropriate only for bad faith spoliation. Oxbo has not argued, much less proven,
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`that H&S acted in bad faith or to hide certain information from Oxbo. See Faas v. Sears,
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`Roebuck & Co., 532 F.3d 633, 644 (7th Cir. 2008) (holding that the district court properly
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`denied the adverse inference when the record showed that Sears did not destroy the
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`documents to destroy adverse information; Sears shredded the docs as a regular business
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`practice). “Recent Seventh Circuit precedent on the proper standard for determining whether
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`a party destroyed or failed to preserve evidence such that the other party is thus entitled to
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`an adverse inference involves a requirement to show ‘bad faith.’” In re Text Messaging Antitrust
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`Litig., 46 F. Supp. 3d 788, 797 (N.D. Ill. 2014), aff’d, 782 F.3d 867 (7th Cir. 2015). To force
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`H&S to sit silently as Oxbo accuses it of copying and willful infringement would allow or
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`even encourage the jury to assume that those accusations are unchallenged; it is a sanction
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`equivalent to, if not worse than, an adverse inference instruction.
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`The court will instruct the jury as follows:
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`Most of the documents related to the design and development of
`the Tri-Flex merger were lost or deleted from the computer
`system at H&S. Because those documents are now unavailable,
`you will hear no testimony about the contents of the missing
`design and development documents. During the trial, witnesses
`may mention that the documents are missing. But you should
`not make any assumptions about what is in the missing
`documents.
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`The parties may not introduce evidence or argue about the nature, content, or implications of
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`those missing documents. Because there is no showing that the spoliation was in bad faith,
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`the court will not allow the parties to go into the details about the loss of the documents.
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`Doing so will waste time, risk jury confusion, and encourage the jury to draw an adverse
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`inference about the contents of the missing documents.
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`Oxbo may use any surviving design and development documents to prove copying or
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`willfulness at trial. If Oxbo does so, H&S may use the surviving documents in response. But
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`H&S may not affirmatively use the design and development documents unless Oxbo opens
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`the door.
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`Oxbo also asks that the court sanction H&S for its late document production in
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`September 2016. But as the court explained during the final pretrial conference and at other
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`points in this case, the court has already addressed the late production and remediated
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`Oxbo’s prejudice. The court expanded the summary judgment schedule and allowed Oxbo
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`additional time and extra rounds of briefing, allowed Oxbo to supplement its expert reports,
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`and allowed Oxbo to otherwise account for the late-produced documents as it deemed
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`appropriate. The court made these changes to the summary judgment schedule in
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`consultation with the parties, and Oxbo gave the court every indication that it had fully
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`addressed the late production situation. The court allowed Oxbo to use and rely on late-
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`produced documents in its summary judgment submissions; the court will not turn around
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`and prohibit H&S from using those documents at trial. But the court will award Oxbo its
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`reasonable attorney fees and costs incurred in having to deal with the late production.
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`The court will have Oxbo submit a formal request for its fees for the sanctions motion
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`after trial.
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`D. Oxbo’s commercial success
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`At the final pretrial conference, Oxbo asked the court to instruct the jury about the
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`court’s summary judgment decision. The reason Oxbo gave for wanting the instruction was
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`that Oxbo intends to use H&S’s sales of infringing Tri-Flex mergers as evidence of Oxbo’s
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`commercial success. There is nothing wrong, in principle, with using the infringing product to
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`show commercial success. Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d
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`1120, 1130 (Fed. Cir. 2000) (“Our case law provides that the success of an infringing
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`product is considered to be evidence of the commercial success of the claimed invention.”).
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`But evidence of commercial success (or any other secondary consideration) is relevant
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`only if there is a nexus between the claimed invention and the commercial success. Ormco
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`Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311-12 (Fed. Cir. 2006). If the success is due to
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`unclaimed features, or to features that were in the prior art, commercial success is irrelevant.
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`Id. If commercial success is due to superior marketing or distribution, it is likewise irrelevant.
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`See, e.g., Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC, 683 F.3d 1356, 1363 (Fed. Cir.
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`2012). Establishing this nexus is typically the province of an expert. But, according to H&S,
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`Oxbo’s first disclosure of any factual basis for commercial success was in its damages expert’s
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`report. Dkt. 465 (citing Bero report, Dkt. 112). Oxbo’s liability expert, Chaplin, did not
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`disclose any expert opinion on commercial success or its nexus to the claimed invention.
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`Oxbo’s responses to H&S’s contention interrogatories did not disclose any intent to assert
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`commercial success as a secondary consideration in any specific terms.
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`Accordingly, Oxbo will not be allowed to assert commercial success as a secondary
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`consideration unless it can demonstrate to the court that it had timely disclosed this theory
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`to H&S. At this point, commercial success is out.
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`E. H&S’s motions in limine
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`1. To sequester witnesses
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`The motion to sequester witnesses, except for party representatives and experts, is
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`granted.
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`2. To preclude Oxbo from using or referencing H&S’s inadvertently produced
`privileged documents
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`The motion is granted, except that Oxbo may use the documents for impeachment
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`purposes. The court will keep a copy of the documents on the bench and make them
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`available to Oxbo should it need them.
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`3. To preclude Oxbo from introducing evidence of pre-suit knowledge, willful
`infringement, or copying of the ’739 patent, the ’052 patent, and the ’488
`patent
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`The motion is denied. Oxbo is free to introduce the evidence that it has of H&S’s pre-
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`suit knowledge, provided Oxbo properly disclosed the evidence during discovery. The fact
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`that the evidence may be weak is not a reason to take pre-suit knowledge, willful
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`infringement, and copying off the table at this time. The court will instruct the jury on the
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`applicable legal standards, and the jury will decide whether Oxbo’s evidentiary showing is
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`Page 8 of 24
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`sufficient. See WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016) (“We do not
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`interpret Halo as changing the established law that the factual components of the willfulness
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`question should be resolved by the jury.”). If H&S does not believe that Oxbo’s evidentiary
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`showing is sufficient to sustain a jury verdict on the issue, H&S may ask the court to direct a
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`verdict in H&S’s favor at the appropriate time.
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`To the extent the motion concerns H&S’s lost design and development documents, it
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`is subject to the court’s ruling on that issue.
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`4. To preclude arguments regarding infringement under the doctrine of
`equivalents
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`Because the court granted H&S summary judgment of non-infringement under the
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`doctrine of equivalents, Dkt. 392, the motion is granted.
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`5. To exclude any mention of inter partes review proceedings
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`The motion is granted for the most part, with one proviso: the court will instruct the
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`jury as follows:
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`The Patent Office considered the patentability of claim(s) ___ of
`the ___ patent with respect to [the _____ reference or the
`combination of the ___ and ___ references] during a
`supplemental proceeding called an inter partes review that was
`initiated by H&S. In that proceeding, the Patent Office
`determined [the ___ reference or the combination of the ____
`and ____ references] did not affect the patentability of the
`claim(s).
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`H&S had an opportunity when it petitioned for IPR to introduce evidence against validity
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`that was not, and could not have been, introduced during the original examination. Thus, it
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`would be unfairly prejudicial to Oxbo to allow H&S to argue to the jury that the references
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`that it presented in the IPR petition had never been evaluated by the Patent Office. All other
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`references to the IPR proceedings are out.
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`Counsel should provide the court with the information necessary to fill-in the blanks
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`in the special instruction.
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`6. To limit testimony and argument from Oxbo witnesses and counsel
`regarding alleged copying as to the ’929 patent
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`The motion is denied for the most part. Oxbo disclosed that its expert would offer
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`opinions on nonobviousness and secondary considerations, and Chapin did so. Oxbo
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`identified Paul Dow and Jim Glazier as individuals with knowledge of secondary
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`considerations. Dkt. 357-3, at 6. And Oxbo identified Steve Pesik in its Rule 26(a)
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`disclosures as having information regarding the “competitive landscape in the windrow
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`merging apparatus market” and “general industry knowledge.” Dkt. 357-5, at 4. Copying,
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`Oxbo contends, falls within these categories. And Pesik testified to the company’s position on
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`that issue. Dkt. 304 (Pesik Dep. 55:23-25, 57:24-58:10). Those properly disclosed witnesses
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`may testify accordingly. H&S did not serve a contention interrogatory specifically targeting
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`copying, so the fact that Oxbo’s interrogatory responses were aimed at secondary
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`considerations generally does not pose a disclosure problem.
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`7. To prohibit product-to-product comparison as part of infringement analysis
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`The motion is granted as unopposed. Oxbo may not use product-to-product
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`comparison to prove infringement.
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`8. To preclude evidence of H&S’s financial size and overall revenue
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`The motion is granted and applies equally to Oxbo’s financial size and overall
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`revenue. As discussed during the final pretrial conference, Oxbo may attempt to show
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`Heikenen’s bias by asking him about his ownership stake in H&S. But Oxbo may elicit
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`testimony regarding only the fraction or percentage of Heikenen’s stake, not its dollar value.
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`Page 10 of 24
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`If the parties believe that this information may be relevant during the damages phase,
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`they should raise the issue with the court then.
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`9. To exclude evidence of pretrial sanctions, discovery motions, orders, and
`evidence
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`The motion is granted. The evidence is no doubt highly prejudicial to the losing party,
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`and Oxbo has not demonstrated that any of the court’s prior rulings are relevant, much less
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`that they are more probative than prejudicial. To the extent the motion concerns H&S’s
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`destroyed design and development documents, it is subject to the court’s ruling on that issue.
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`F. Oxbo’s motions in limine
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`1. To exclude evidence regarding H&S’s patents
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`The court had a lengthy discussion with the parties about this motion at the final
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`pretrial conference. In short, the court was not persuaded that H&S’s issued patents bear any
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`relevance to the issues to be tried. The issued patents are excluded.
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`H&S made a slightly better case for mentions of potentially patentable features as it
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`sought and obtained advice of counsel during the Tri-Flex’s development. No advice of
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`counsel documents, opinion letters, or other relevant documents speak directly about H&S’s
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`issued patents, but they may contain comments about the potential patentability of features
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`of H&S’s products. But this information, too, is irrelevant. (The patentability of H&S’s
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`products might be relevant to a defense to infringement under the doctrine of equivalents,
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`but that’s not in the case.) H&S is free to offer evidence of its attempts to design around the
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`Oxbo patents; it does not need its patents to tell its development story or rebut copying
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`accusations. To allow H&S to introduce its own patents or the patentability of its products
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`would undoubtedly confuse the jury. The motion is granted.
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`Page 11 of 24
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`If the advice of counsel documents include more than minor comments about
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`patentability, the advice of counsel documents can be redacted. The court assumes that the
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`parties will work this out, but they should bring the matter to the court’s attention if
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`necessary.
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`2. To exclude Kuhn references
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`The motion is granted. Shirley is limited to the opinions disclosed in his report, and
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`he does not offer any analysis of or opinions involving the Kuhn references. Shirley may
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`testify that the Kuhn references are among the documents he considered, but the references
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`are otherwise excluded.
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`3. To exclude evidence regarding the cross-license and related evidence and
`expert opinions
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`The motion is denied. The cross-license is of questionable relevance. On one hand,
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`Oxbo and Kuhn entered into the cross-license under threat of litigation, and thus it is not a
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`great measure of the market value of the patents-in-suit. “The propriety of using prior
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`settlement agreements to prove the amount of a reasonable royalty is questionable.”
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`LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 77 (Fed. Cir. 2012). “The notion
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`that license fees that are tainted by the coercive environment of patent litigation are
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`unsuitable to prove a reasonable royalty is a logical extension of Georgia-Pacific, the premise of
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`which assumes a voluntary agreement will be reached between a willing licensor and a willing
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`licensee, with validity and infringement of the patent not being disputed.” Id. On the other
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`hand, Oxbo has not otherwise licensed the patents-in-suit, so the cross-license is the only
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`license available to the damages experts. The Federal Circuit has allowed reliance on
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`settlement agreements under such circumstances. Id. (citing ResQNet.com, Inc. v. Lansa, Inc.,
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`Page 12 of 24
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`594 F.3d 860, 870-72 (Fed. Cir. 2010) (explaining that a settlement license to the patents-
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`in-suit in a running royalty form was “the most reliable license in [the] record” when
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`compared with other licenses that did not “even mention[ ] the patents-in-suit or show[ ] any
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`other discernable link to the claimed technology”)). When it comes down to it, the cross-
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`license is of arguable probative value, and Cordray adequately explains how and why he relies
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`on it. See Dkt. 318, ¶¶ 77-101. The countervailing reasons for disregarding it are properly
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`explored on cross-examination.
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`And Oxbo’s Rule 408 arguments are not persuasive. No one intends to use the cross-
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`license and the related settlement negotiations to prove liability.
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`4. To preclude evidence regarding H&S’s equitable defenses
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`The motion is granted. The court resolved H&S’s equitable defenses on summary
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`judgment. The court will address the relevance of the “equitable defenses” facts to the parties’
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`remaining claims when it addresses H&S’s motion to submit to the jury common factual
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`issues. Dkt. 380.
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`5. To exclude testimony and argument about prior art combinations not
`addressed in H&S’s expert’s report
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`The motion is granted as unopposed.
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`6. To preclude H&S and its expert from providing evidence of institution of
`inter partes review
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`The motion is granted as unopposed and consistent with the court’s ruling on H&S’s
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`motion in limine no. 5.
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`Page 13 of 24
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`7. To preclude H&S’s expert from testifying to his conclusion that the asserted
`claims are anticipated or obvious
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`The motion is denied. According to Oxbo, Shirley applied a “lower standard” of proof
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`when he formed his obviousness and anticipation opinions (in connection with the IPR), and,
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`as a result, his ultimate conclusions are so unsound they should be excluded. The fact that
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`Shirley may have bungled a few questions about the legal standard applicable to validity
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`challenges does not show that he fundamentally misunderstands the law, or that his opinions
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`are fundamentally unreliable. Oxbo is free to explore Shirley’s understanding of the standard
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`of proof issue during cross-examination.
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`8. To preclude H&S from introducing evidence regarding Oxbo’s terminal
`disclaimers
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`The motion is denied as unnecessary. The parties agree that a terminal disclaimer is
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`not an admission as to whether any patent claim is patentably distinct from the claims in the
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`parent. If Shirley opines otherwise, the court will provide a curative instruction. It does not
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`appear that Shirley’s opinions regarding the ’739 patent and the ’488 patent are predicated
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`on an incorrect understanding of how terminal disclaimers work, so the court will not exclude
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`those opinions. Oxbo is free to explore the issue on cross-examination.
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`9. To preclude H&S from introducing the Krone declaration or presenting a
`Krone witness at trial
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`As discovery came to a close, H&S produced a declaration by Jody McRee of Krone
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`NA, Inc. Krone manufactures farm equipment. The declaration authenticates three Krone
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`documents as business records. H&S proposes to have an H&S sales manager, John Seitz,
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`testify about Krone and other brand rotary rakes and their use as an alternative to triple
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`mergers, presumably using the Krone document to illustrate his testimony. H&S contends
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`Page 14 of 24
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`that Seitz’s testimony will be relevant to the jury’s consideration of non-infringing
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`alternatives during the damages phase.
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`The court will allow Seitz to testify as a lay witness, to the extent he has relevant
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`knowledge of hay rakes (including those made by Krone). But his testimony about non-
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`infringing alternatives will come close to expert opinion, which he cannot offer because he
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`has not been disclosed as an expert. H&S has not shown why or how the Krone documents
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`would be admissible other than as support for an expert opinion about non-infringing
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`alternatives. The motion is granted: the Krone documents are excluded.
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`10. To exclude certain references from being used as prior art against Oxbo’s
`originally asserted claims
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`Oxbo asks the court to preclude H&S from arguing that claim 44 of the ’929 patent,
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`claim 1 of the ’739 patent, claims 1 and 3-11 of the ’488 patent, and claims 1, 4, 6, and 8 of
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`the ’052 patent are invalid based on CA Honey, van der Lely, Declementi, Lohrentz, US
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`Honey, Pourchet, or any other undisclosed references, and from arguing that claim 1 of the
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`’739 patent is invalid over the combination of Dow ’757 in view of Zhavoronkin. The motion
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`is based on an agreement the parties reached during discovery.
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`H&S agrees to the foregoing, with one exception. It contends that it properly
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`disclosed its contention that claim 1 of the ’739 patent is invalid over Dow ’757 in view of
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`Zhavoronkin, and, as a result, that combination is fair game at trial.
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`In June 2016, H&S agreed that it would not assert any references that it did not
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`disclose in its January 8 and March 24, 2016 invalidity contentions against Oxbo’s originally
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`asserted claims. See Dkt. 376-33 (“H&S has agreed that the only references it may use
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`against the originally asserted claims is that which was disclosed in its original and
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`Page 15 of 24
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`Case: 3:15-cv-00292-jdp Document #: 472 Filed: 06/07/17 Page 16 of 24
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`supplemental invalidity contentions, served January 8, 2016 and March 24, 2016
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`respectively. To the extent H&S’s expert reports cite additional references, H&S has agreed it
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`will not use such references against the originally asserted claims in this litigation.”). The
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`issue here is whether H&S disclosed the Dow/Zhavoronkin combination in either its January
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`8 or March 24 contentions.
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`Both disclosures identify the Zhavoronkin reference and the Dow reference. See
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`Dkt. 376-26, at 13-15 and Dkt. 376-22, at 11. The January disclosure contends that claim 1
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`of the ’739 patent is invalid over “one or more of the following patents individually or in
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`combination,” and it includes the Zhavoronkin reference and the Dow reference in the list
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`that follows. Dkt. 376-26, at 18. The March disclosure identifies specific prior art
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`combinations—contending that claim 1 of the ’739 patent is invalid over Schnittjer in view
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`of Zhavoronkin, for example—but it never contends that claim 1 of the ’739 patent is invalid
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`over Dow in view of Zhavoronkin. Dkt. 376-22, at 13-14.
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`H&S’s disclosure was not specific enough to put Oxbo on notice of the particular
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`invalidity ground that H&S was asserting. Accordingly, the motion is granted in full.
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`11. To exclude reference to John Orr and Orrson Custom Farming
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`The motion is granted as unopposed.
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`12. To exclude evidence regarding an alleged hypothetical acceptable non-
`infringing alternative
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`This motion identifies two problems for H&S. First, H&S did not identify its
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`WMCH30 merger as an acceptable non-infringing alternative in response to an Oxbo
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`contention interrogatory. H&S disclosed “H&S Twin Mergers of all sorts” and “H&S Front
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`Mount Mergers.” Dkt. 376-1, at 9. Cordray refers to the WMCH30 as a twin merger. But
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`Page 16 of 24
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`Case: 3:15-cv-00292-jdp Document #: 472 Filed: 06/07/17 Page 17 of 24
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`according to Oxbo, the WMCH30 is neither a twin merger nor a front mount merger: it is a
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`continuous face merger. Neither party has adduced evidence that would allow the court to
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`determine whether “H&S Twin Mergers of all sorts” or “H&S Front Mount Mergers”
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`includes the WMCH30. So it cannot say whether H&S properly disclosed the WMCH30 as
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`an acceptable non-infringing alternative.
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`But even if H&S’s disclosures were adequate, Cordray’s opinions about the
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`WMCH30 are not well grounded. Cordray opines “that if H&S was precluded from
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`commercializing its current Tri-Flex triple mergers, it could have continued selling—and
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`would have improved the design of—an existing twin merger [the WMCH30].” Dkt. 318,
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`¶ 32. Cordray acknowledges the product’s shortcomings, but he opines that sales figures
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`undermine Bero’s opinion that the WMCH30 was not commercially successful. Cordray goes
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`on to opine that “if H&S could not sell its Tri-Flex triple mergers in 2011, it could have and
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`would have invested its resources into engineering a better WMCH30.” Id. ¶ 33.
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`Cordray never opines that the existing WMCH30 is an acceptable non-infringing
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`alternative; he opines that a new-and-improved WMCH30 would qualify as an acceptable
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`non-infringing alternative. But he does not have the data to back it up. “When an alleged
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`alternative is not on the market during the accounting period, a trial court may reasonably
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`infer that it was not available as a noninfringing substitute at that time.” Grain Processing
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`Corp. v. Am. Maize-Prod. Co., 185 F.3d 1341, 1353 (Fed. Cir. 1999). So H&S bears the
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`burden of rebutting this inference by demonstrating that a non-infringing substitute was
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`available during the period of infringement. “[T]he trial court must proceed with caution in
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`assessing proof of the availability of substitutes not actually sold during the period of
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`infringement. Acceptable substitutes that the infringer proves were available during the
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`Page 17 of 24
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`Case: 3:15-cv-00292-jdp Document #: 472 Filed: 06/07/17 Page 18 of 24
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`accounting period can preclude or limit lost profits; substitutes only theoretically possible will
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`not.” Id. H&S must prove the availability of a new-and-improved WMCH30 with concrete
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`evidence, not speculation. H&S should be able to show that it “had all of the necessary
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`equipment, know-how, and experience” to improve the WMCH30. Id. at 1354. But Cordray
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`was armed with none of this information. He worked