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Inc v. Alcatel-Lucent USA, Inc.

United States District Court, E.D. Texas, Tyler Division

September 21, 2017

NETWORK-1 TECHNOLOGIES, INC.
v.
ALCATEL-LUCENT USA, INC., ET AL.

          ORDER

          K. NICOLE MITCHELL UNITED STATES MAGISTRATE JUDGE

         Before the Court is Network-1 Technologies, Inc.'s Motion to Exclude Certain Opinions of Hewlett-Packard Company's (“HP”) Expert, Dr. M. Ray Perryman. Doc. No. 810.[1] The Court held a hearing on this Motion on June 19, 2017 (“Hearing on the Motion”). The Motion is GRANTED-IN-PART.

         BACKGROUND

         Network-1 filed the above-captioned suit on September 15, 2011, alleging infringement of U.S. Patent No. 6, 218, 930 (“the ‘930 Patent”). Defendant Hewlett-Packard Company (“HP”) retained M. Ray Perryman (“Perryman”) to generally opine regarding “F/RAND licensing and the F/RAND licensing commitment” to the IEEE of Network-1 Security Solutions, Inc. (“Network-1). Doc. No. 810, Ex. 1 at 3.

         APPLICABLE LAW

         Daubert Motion

         Under Federal Rule of Evidence 702, a witness who is qualified as an expert by knowledge, skill, experience, training or education may testify in the form of an opinion or otherwise 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.

         The trial judge has a gate-keeping role to ensure that expert testimony is relevant and reliable. Daubert v. Merrill Dow Pharm., Inc., 509 U.S. 579 (1993). Indeed, “[t]he proponent [of the expert testimony] need not prove to the judge that the expert's testimony is correct, but she must prove by a preponderance of the evidence that the testimony is reliable.” Moore v. Ashland Chemical, Inc., 151 F.3d 269, 276 (5th. Cir. 1998). “The reliability prong [of Daubert] mandates that expert opinion ‘be grounded in the methods and procedures of science and . . . be more than unsupported speculation or subjective belief.'” Johnson v. Arkema, Inc., 685 F.3d 452, 259 (5th Cir. 2012) (quoting Curtis v. M & S Petroleum, Inc., 174 F.3d 61, 668 (5th Cir. 1999)).

         Factors to consider in determining whether a proposed expert's methodology is scientifically valid or reliable is:

(1) whether the expert's theory can be or has been tested;
(2) whether the theory has been subject to peer review and publication;
(3) the known or potential rate of error of the technique or theory when applied;
(4) the existence and maintenance of standards and controls; and
(5) the degree to which the technique or theory has been generally accepted in the scientific community.

Id. at 593-95. A court must decide whether the Daubert factors are appropriate, use them as a starting point and then ascertain if other factors should be considered. Hathaway v. Bazany, 507 F.3d 312, 318 (5th Cir. 2007).

         In Kumho Tire Company, Limited v. Carmichael, the Supreme Court applied the Daubert principles to technical or specialized expert testimony. 526 U.S. 137 (1999). The Court explained that the overarching goal of Daubert's gate-keeping requirement is to “ensure the reliability and relevancy of expert testimony. It is to make certain an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.” Id. at 152. A trial court has the discretion to exclude expert testimony if there is an “analytical gap” between the expert's reasoning and the conclusion. General Electric Co. v. Joiner, 522 U.S. 136, 118 S.Ct. 512, 177 A.L.R. Fed. 667 (1997).

         “At base, ‘the question of whether the expert is credible or the opinion is correct is generally a question for the fact finder, not the court.'” Eidos Display, LLC v. Chi Mei Innolux Corp., 2017 WL 1079441, at *2 (E.D. Tex. Mar. 22, 2017) (quoting Summit 6, LLC v. Samsung Elecs. Co., Ltd., 802 F.3d 1283, 1296 (Fed. Cir. 2015)). “Under Rule 702, the question is whether the expert relied on facts sufficiently related to the disputed issue.” i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831, 856 (Fed. Cir. 2010), aff'd, 564 U.S. 91 (2011). “To properly carry this burden, the patentee must ‘sufficiently [tie the expert testimony on damages] to the facts of the case.'” Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1315-16 (Fed. Cir. 2011). “Questions about what facts are most relevant or reliable to calculating a reasonable royalty are for the jury.” i4i Ltd. P'ship, 598 F.3d at 856. “The jury [is] entitled to hear the expert testimony and decide for itself what to accept or reject.” Id.

         “Daubert and Rule 702 are safeguards against unreliable or irrelevant opinions, not guarantees of correctness.” Id. at 854. Also, the “existence of other facts . . . does not mean that the facts used failed to meet the minimum standards or reliability.” Id. at 855-56. “Any reasonable royalty analysis necessarily involves an element of approximation and uncertainty.” Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1325 (Fed. Cir. 2009) (citation and internal quotation omitted).

         DISCUSSION

         Plaintiff seeks to exclude Perryman's opinions: (1) regarding royalty stacking; (2) applying definitions from the IEEE's 2015 update to its patent policy; (3) regarding patent holdup; (4) and ...


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