Pulse Medical Instruments, Inc. v. Drug Impairment Detection Services, LLC

858 F. Supp. 2d 505, 2012 U.S. Dist. LEXIS 32467, 2012 WL 845550
CourtDistrict Court, D. Maryland
DecidedMarch 12, 2012
DocketCivil Action No. DKC 07-1388
StatusPublished
Cited by10 cases

This text of 858 F. Supp. 2d 505 (Pulse Medical Instruments, Inc. v. Drug Impairment Detection Services, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pulse Medical Instruments, Inc. v. Drug Impairment Detection Services, LLC, 858 F. Supp. 2d 505, 2012 U.S. Dist. LEXIS 32467, 2012 WL 845550 (D. Md. 2012).

Opinion

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for review in this patent infringement case are two motions: Plaintiffs motion to exclude the expert testimony of David J. Harkavy (ECF No. 116),1 and Defendant’s motion to exclude the expert testimony of Carlos Valeiras (ECF No. 118). The issues have been fully briefed, and the court now rules, no hearing deemed necessary. Local Rule 105.6. For the following reasons, both motions to exclude will be denied.

I. Background

The facts of this case have already been set forth in ECF No. 87 and ECF No. 110,2 and will be only briefly summarized here. Plaintiff Pulse Medical Instruments, Inc. (“PMI”) was organized in 1988 to develop and commercialize technology for measuring human eye responses to screen subjects for drug, alcohol, and sleep deprivation-related impairments. On June 6, 1995, PMI became the exclusive holder of U.S. Patent 5,422,690 (“the '690 Patent”), known as a Fitness Impairment Tester. The '690 Patent has been used in a variety of safety related industries, such as in coal mining to screen workers operating heavy equipment and in the criminal justice system to screen subjects for drug and alcohol use.

On or about June 18, 2004, PMI and Defendant Drug Impairment Detection Services, Inc. (“DIDS”) entered into an agreement whereby PMI agreed to custom build drug impairment detection systems known as “FIT 2000 Screeners” (“Screeners”). In return, DIDS agreed to distribute these Screeners under the name “PassPoint.” DIDS retained ownership of the Screeners and leased them to its customers, with charges made on a pay-for-service basis. DIDS was required to pay PMI a fixed purchase price for each Screener, plus a 10% royalty for service fees that DIDS charged to its customers. DIDS purchased its last Screener from PMI in October 2004.

In December 2005, DIDS began distributing its own substance abuse screener under the modified name “PassPoint.net.” On January 27, 2006, PMI sent a letter to DIDS terminating their agreement. On May 25, 2007, PMI filed a complaint against DIDS for patent infringement, al[508]*508leging that PMI’s '690 Patent was infringed by DIDS’s PassPoint.net product line. (ECF No. 1). DIDS filed an answer and counterclaims on October 15, 2008. (ECF No. 8).

After resolution of various motions, the parties began discovery. PMI served the report of its damages expert, Carlos Valeiras, on DIDS on June 20, 2008. Pursuant to the parties’ assented-to schedule, on May 2, 2011, DIDS served the responding report of their damages expert, David J. Harkavy, on PMI. On August 1, 2011, PMI filed the pending motion to exclude the testimony of Mr. Harkavy. (ECF No. 116). DIDS opposed PMI’s motion on August 15, 2011. (ECF No. 119). PMI replied on August 31, 2011. (ECF No. 122). Also on August 1, 2011, DIDS filed its own motion to exclude the testimony of Mr. Valeiras. (ECF No. 118). PMI filed opposition papers on August 17, 2011. (ECF No. 120). On August 31, 2011, DIDS replied. (ECF No. 121).

II. Standard of Review

Under Federal Rule of Evidence 702, the district court has “a special obligation ... to ‘ensure that any and all scientific testimony ... is not only relevant, but reliable.’ ” Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999) (quoting Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)). Rule 702 provides,

[i]f scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

The United States Court of Appeals for the Fourth Circuit explained Rule 702 as follows:

The first prong of this inquiry necessitates an examination of whether the reasoning or methodology underlying the expert’s proffered opinion is reliable— that is, whether it is supported by adequate validation to render it trustworthy. See [Daubert, 509 U.S.] at 590 n. 9, 113 S.Ct. 2786. The second prong of the inquiry requires an analysis of whether the opinion is relevant to the facts at issue. See id. at 591-92, 113 S.Ct. 2786.

Westberry v. Gislaved Gummi AB, 178 F.3d 257, 261 (4th Cir.1999); see also Buchanan v. Consol. Stores Corp., 217 F.R.D. 178, 196 (D.Md.2003).

To be considered reliable, an expert opinion “must be based on scientific, technical, or other specialized knowledge and not on belief or speculation, and inferences must be derived using scientific or other valid methods.” Oglesby v. Gen. Motors Corp., 190 F.3d 244, 250 (4th Cir.1999) (citing Daubert, 509 U.S. at 592-93, 113 S.Ct. 2786). The district court enjoys “broad latitude” in determining the reliability and admissibility of expert testimony, and its determination receives considerable deference. Kumho Tire Co., 526 U.S. at 142, 119 S.Ct. 1167 (citing Gen. Elec. Co. v. Joiner, 522 U.S. 136, 143, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997)); see also Oglesby, 190 F.3d at 250.

III. Analysis

A. PMI’s Motion to Exclude Mr. Harkavy’s Testimony

1. Mr. Harkavy’s Testimony Regarding His Reasonable Royalty Analysis

PMI advances two primary arguments for excluding the portions of Mr. Harka[509]*509vy’s report that address his estimation of damages suffered by PMI. First, PMI argues that Mr. Harkavy improperly “usurps the role of the Court in instructing the trier of fact” by discussing the case of Georgia-Pacific Corp. v. United States Plywood Corp., 318 F.Supp. 1116 (S.D.N.Y.1970). (ECF No. 116, at 7). Second, PMI argues that Mr. Harkavy is not an expert in negotiations and should be barred from opining on the “hypothetical negotiations” that Georgia-Pacific advocates for use in determining a reasonable royalty rate for patent damages purposes. (Id. at 7-10). DIDS disagrees on both fronts, pointing to Mr. Harkavy’s extensive education and experience related to damages issues in response.

PMI’s first argument has no merit. Georgia-Pacific is a seminal case in patent law because of its articulation of fifteen factors that a court may consider when determining a reasonable royalty rate for estimating patent damages. See Ga.—Pac. Corp., 318 F.Supp. at 1120.3 The United States Court of Appeals for the Federal Circuit has repeatedly endorsed the analysis of these factors as a reliable [510]*510method of estimating patent damages. E. g., Micro Chem., Inc. v. Lextron, Inc.,

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