SAS Institute, Inc. v. World Programming Ltd.

125 F. Supp. 3d 579, 98 Fed. R. Serv. 178, 2015 U.S. Dist. LEXIS 106091, 2015 WL 4757397
CourtDistrict Court, E.D. North Carolina
DecidedAugust 12, 2015
DocketNo. 5:10-CV-25-FL
StatusPublished
Cited by5 cases

This text of 125 F. Supp. 3d 579 (SAS Institute, Inc. v. World Programming Ltd.) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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SAS Institute, Inc. v. World Programming Ltd., 125 F. Supp. 3d 579, 98 Fed. R. Serv. 178, 2015 U.S. Dist. LEXIS 106091, 2015 WL 4757397 (E.D.N.C. 2015).

Opinion

ORDER

LOUISE W. FLANAGAN, District Judge.

This matter comes before the court on defendant’s motion to exclude plaintiffs expert Dr. James A. Storer (“Storer”), (DE 329), pursuant to Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). The issues raised have been briefed fully, and the parties have presented witness testimony and argument at hearing held July 23 and 24, 2015. In this posture, the issues raised are ripe for ruling. Defendant’s -motion also, sounds in part as one under Federal Rule of Evidence 403. For the reasons that follow, defendant’s broad based Daubert motion to exclude Storer’s [583]*583testimony is denied.1 However, with regard to Rule 403 considerations, where defendant. challenges certain portions of Storer’s opinion, the motion is granted to the extent the court will exclude Storer’s opinion that the SAS system is npt “an interpreter or compiler” but, rather, is a “system” of interpreters and compilers.

BACKGROUND

This ease has a complex procedural history and lengthy factual background. The court récounts the following facts and procedure pertinent to the issues now under consideration.

Plaintiff develops and markets a group of software products designed to perform data analysis, management, and presentation, collectively known as the SAS system, Users of the SAS system may write various programs, also known as procedures or “PROCs” using a system of inputs known as the “SAS language.” Plaintiff bundles and markets a select group of the products comprising the SAS system as a less expensive and functionally limited SAS Learning Edition, (“SAS LE”), aimed at users who are interested in learning the SAS language.

Defendant develops a competing software product, the World Programming System (“WPS”). Defendant intended to develop WPS to mimic ¡the SAS system’s functionality, aspiring to achieve a uniform correspondence of outputs for any given-set of inputs in the SAS language ,(“input/output correspondence”). In the course of WPS’s development, defendant purchased several copies of SAS LE for the purpose of comparing WPS’s output against the SAS system’s. When installing SAS LE, defendant’s employees were required to agree to the terms of the SAS LE license agreement, which contained a number of terms and conditions, including explicit terms limiting use of SAS LE to “nonproduction purposes only” and prohibiting “reverse engineering” of SAS LE. This court previously has' determined that defendant breached the SAS LE license agreement by using the software for “production purposes” and “reverse engineering” SAS LE.

To assist in the calculation of damages owed- to plaintiff as a result of defendant’s breach of the SAS LE license agreement, as well as damages on other claims which remain pending for trial,2 the- parties employed experts who developed opinions bearing on whether WPS could have been developed to its current state but for defendant’s impermissible use of SAS ■ LE, and if so, how much delay defendant would have experienced' in its production process as a result. Stated another way, the parties attempted to qualify, and quantify, the benefit provided to defendant’s development of WPS by SAS LE.

Defendant argues that Storer’s testimony is both irrelevant and -unreliable. With respect to the relevancy of Storer’s testimony, defendant contends he is not quali[584]*584fled to offer an opinion in this case and that, even if he is, his testimony will be unhelpful to the jury because his opinions are not grounded in his relevant expertise. Regarding the reliability of Storer’s proposed testimony, defendant argues that his opinions are not grounded in reliable methodology or data. At hearing, Storer testified and responded to questions posited by counsel for the parties, as well as by the court.

COURT’S DISCUSSION

A. Standard of Review

The admission of expert testimony is governed by Rule 702 of the Federal Rules of Evidence. The proponent of the expert testimony bears the burden of establishing its admissibility by a preponderance of proof. Cooper v. Smith & Nephew, Inc., 259 F.3d 194, 199 (4th Cir.2001). A district court is granted broad latitude in making its determination on the admissibility of proposed expert testimony. United States v. Gastiaburo, 16 F.3d 582, 589 (4th Cir.1994) (“The trial judge has broad discretion under Rule 702.”). Review by the advisory committee shows that the rejection of expert testimony is the exception rather than the rule. Fed.R.Evid.702 advisory committee’s note (2000).

Rule 702 provides that expert testimony is appropriate when it “will assist the trier of fact to understand the evidence or to determine a fact in issue.” Fed.R.Evid. 702. Rule 702 further provides that a witness qualified as an expert may be permitted to testify where “(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.” Id. Courts have distilled the requirements of Rule 702 into two crucial inquiries: whether the proposed expert’s testimony is relevant and whether it is reliable. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999); Daubert, 509 U.S. at 589, 113 S.Ct. 2786; United States v. Forrest, 429 F.3d 73, 80 (4th Cir.2005). The trial court must carry out the special gate-keeping obligation of ensuring that expert testimony meets both, requirements. Kumho Tire, 526 U.S. at 147, 119 S.Ct. 1167; United States v. Moreland, 437 F.3d 424, 431 (4th Cir.2006), overruling on other grounds recognized by United States v. Diosdado-Star, 630 F.3d 359 (4th Cir.2011).

In order to be considered relevant, the proposed expert testimony must appear to be helpful to the trier of fact. See Daubert, 509 U.S. at 591-92, 113 S.Ct. 2786. “Testimony from an expert is presumed to be helpful unless it concerns matters within the everyday knowledge and experience of a lay juror.” Kopf v. Skyrm, 993 F.2d 374, 377 (4th Cir.1993).

“ ‘[T]he test of reliability is flexible’ and ‘the law grants a district court the same broad latitude when it decides how to determine reliability as it enjoys in respect to its ultimate reliability determination.’ ” United States v.

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125 F. Supp. 3d 579, 98 Fed. R. Serv. 178, 2015 U.S. Dist. LEXIS 106091, 2015 WL 4757397, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sas-institute-inc-v-world-programming-ltd-nced-2015.