Quintara Biosciences, Inc. v. Ruifeng Biztech Inc.

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8

10 QUINTARA BIOSCIENCES, INC., 11 Plaintiff, No. C 20-04808 WHA

12 v.

13 RUIFENG BIZTECH INC., et al., ORDER RE DEFENDANTS' MOTION TO EXCLUDE TESTIMONY OF 14 Defendants. TOMO KIMURA

15 16 17 In this trade-secret dispute, the parties’ business partnership imploded, resulting in an 18 alleged midnight lockout and illicit takeover of plaintiff Quintara Biosciences, Inc.’s lab 19 equipment and data. Defendants continue the barrage of motions in this dispute, and request 20 exclusion of Quintara’s CFO and non-retained expert witness on damages, Tomo Kimura. 21 Rule 26 governs the disclosure of expert witnesses and identifies two types of expert who 22 may present opinions at trial, retained and non-retained. A retained expert “is one retained or 23 specially employed to provide expert testimony in the case or one whose duties as the party's 24 employee regularly involve giving expert testimony.” Those who qualify as retained experts 25 must provide a detailed written report of their opinions. As amended in 2010, Rule 26 requires 26 a non-retained witness disclosure to simply provide “(i) the subject matter on which the 27 witness is expected to present evidence . . . and (ii) a summary of the facts and opinions to 1 is the treating physician, the percipient witness who testifies on opinions formed during the 2 course of rendered treatment. See In re Glumetza Antitrust Litig., No. C 19-05822 WHA, 3 2021 WL 1817092 at *11 (N.D. Cal. May 6, 2021). 4 This order starts with the straight-forward proposition that the plain language of Rule 26 5 does not mandate CFO Kimura to provide a written report. There is no dispute that his duties 6 at Quintara do not regularly involve giving expert testimony. A non-retained expert such as a 7 CFO could permissibly testify on damages because they may have opinions based upon their 8 experience a jury would find helpful. We will revisit this at the end of the order in a limited 9 way. 10 CFO Kimura is not qualified to opine on a reasonably royalty. On May 14, 2021, 11 Quintara timely disclosed CFO Kimura as a non-retained damages expert who would opine on: 12 lost profits, unjust enrichment, a reasonably royalty, and injunctive relief (Wiseman Decl. Exh. 13 2 at 1). But CFO Kimura has never calculated a reasonable royalty (Kimura Tr. 164, Wiseman 14 Decl. Exh. 3). And in his deposition, CFO Kimura explained that he developed his 15 understanding of a reasonably royalty from “just some article from Google, yeah. It’s a – what 16 does it mean for the damages royalty rate. You know, how to establish. It’s just a couple 17 people publish on the Google, yeah” (id. at 10–11). Granting all leeway to CFO Kimura, the 18 deposition transcript also suggests he referenced TWM Manufacturing Co. v. Dura, 789 F.2d 19 895 (Fed. Cir. 1986) as a source for his understanding of a reasonable royalty (ibid.). 20 Nevertheless, this order finds CFO Kimura plainly lacks any specialized knowledge on 21 reasonable royalties, and thus will not permit him to testify on the subject at trial. See FRE 22 702. 23 CFO Kimura may testify, within reason — and anchored to his actual job description — 24 regarding the lost profit for each sale made by defendant for customers present in the trade 25 secret databases (as proven at trial). However, Rule 26(a)(2)(C) allows the district judge to 26 order a non-retained expert to provide a written report. In this case, this order finds that such a 27 written report will promote the efficient use of time at trial. 1 All documents relevant to the calculation of lost profits shall be provided to CFO Kimura 2 so he can perform a proper analysis and compose the requisite report. Any privacy objection is 3 OVERRULED. There is no trade secret value to the mere fact that defendant Ruifeng Biztech 4 Inc. sold certain goods to certain customers at certain prices given that they were previously 5 customers of Quintara. Quintara and its counsel shall only use these documents for the sole 6 purpose of preparing CFO Kimura’s report and not for any competitive purpose. The 7 attorney’s eyes only designation is OVERRULED with respect to these invoices. To be clear, 8 the report shall not address reasonably royalties and is limited to lost profits and, to the extent 9 his expertise permits, unjust enrichment and injunctive relief. This order crafts these 10 limitations without prejudice to specific objections to specific testimony at trial. 11 Accordingly: 12 1. Defendants must provide all relevant documents by SEPTEMBER 9, 2021. 5 13 2. CFO Kimura’s report is due by SEPTEMBER 30, 2021. 14 3. Defendants’ deposition of CFO Kimura must occur by OCTOBER 14, 2021. 3 15 4. Any opposing/rebuttal expert report is due by NOVEMBER 1, 2021. 16 5. The deposition of the opposing/rebuttal expert (if any) must occur by NOVEMBER 15, 2021. 18 In order to give counsel time to carry out these obligations, trial in this matter is postponed 19 from September 27, 2021 to DECEMBER 6, 2021, with the final pretrial conference now 20 scheduled for DECEMBER 1, 2021. 21 22 IT IS SO ORDERED. 23 24 Dated: August 26, 2021 Ls PC me 26 ~ WILLIAM ALSUP 27 UNITED STATES DISTRICT JUDGE 28