United States District Court, E.D. Texas, Marshall Division
MEMORANDUM OPINION AND ORDER
PAYNE UNITED STATES MAGISTRATE JUDGE.
Wells Fargo Bank, N.A. (“Wells Fargo”) filed a
Motion to Exclude and/or Strike Expert Testimony Provided by
Mr. Calman (the “Motion to Strike Calman”), which
is now before the Court. (Dkt. No. 83.) After consideration,
the Motion to Strike Calman is
GRANTED-IN-PART. The Motion to Strike Calman
is GRANTED as to paragraphs 54-73, 85-133,
and 322-329, and those portions of Mr. Calman's report
are STRICKEN. The Motion to Strike Calman is
before the Court is Part II(a) of Wells Fargo's Motion to
Strike Portions of the Conte Report (the “Motion to
Strike Conte”), which seeks to exclude portions of Dr.
Conte's report that incorporate by reference portions of
Mr. Calman's report challenged in the Motion to Strike
Calman. (Dkt. No. 84 at 2.) After consideration, the Motion
to Strike Conte is GRANTED-IN-PART. The
Motion to Strike Conte is GRANTED to the
extent Dr. Conte's report incorporates the stricken
paragraphs of Mr. Calman's report, and such
incorporations are likewise STRICKEN. Part
II(a) of the Motion to Strike Conte is otherwise
Mr. Calman's Apportionment Opinion
Fargo offers three reasons why Mr. Calman's apportionment
opinions should be excluded. The Court finds none persuasive.
Fargo first argues that Mr. Calman's apportionment
theories should be struck because they directly contradict
Plaintiff United Services Automobile Association's
(“USAA”) 30(b)(6) testimony. According to Wells
Fargo, Mr. Calman opines that “Wells Fargo does not
have commercially viable non-infringing alternatives to the
patents-in-suit, ” whereas USAA's 30(b)(6) witness
admitted that several non-infringing alternatives exist.
(Dkt. No. 83 at 3-4.)
Mr. Calman's opinions and USAA's testimony were
directly contradictory, as Wells Fargo contends, this would
not be a sufficient basis to exclude Mr. Calman's
testimony. “A Rule 30(b)(6) deposition is admissible
against the party designating the representative but is not
‘binding' on the entity for which the witness
testifies in the sense of preclusion or judicial admission. .
. . Testimony given in a Rule 30(b)(6) deposition is
evidence, which, like other deposition testimony, can be
contradicted and used for impeachment purposes.”
Crompton Greaves, Ltd. v. Shippers Stevedoring Co.,
776 F.Supp.2d 375, 392 n.11 (S.D. Tex. 2011); accord Med.
Components, Inc. v. Osiris Med., Inc., 226 F.Supp.3d
753, 765 n.5 (W.D. Tex. 2016). USAA is free to elicit
testimony from Mr. Calman that contradicts its own prior
testimony, and if Wells Fargo believes the testimony is
contradictory, it is free to cross-examine Mr. Calman
Fargo relies upon DAC Surgical Partners P.A. v. United
Healthcare Services, Inc. for the proposition that a
party may not later contradict its own 30(b)(6)
testimony. No. 4:11-cv-1355, 2016 WL 7157522, at *3 (S.D.
Tex. Dec. 7, 2016). However, DAC addressed a motion
to strike summary judgment evidence and thus relied upon an
exception to the general rule-that a party may contradict its
prior testimony-applicable only in the summary judgment
context. See id. at 5. “It is well
settled that this court does not allow a party to defeat a
motion for summary judgment using an affidavit that
impeaches, without explanation, sworn testimony.”
S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489,
495 (5th Cir. 1996). This exception is not applicable here.
Fargo next argues that Mr. Calman has violated the entire
market value rule because “Mr. Calman . . . attributes
all of the profit saved from avoided
duplicate check deposits to the Asserted patents.”
(Dkt. No. 83 at 3 (emphasis in original).) “[A]
patentee may assess damages based on the entire market value
of the accused product only where the patented
feature creates the basis for customer demand or
substantially creates the value of the component
parts.” Virnetx, Inc. v. Cisco Sys., Inc., 767
F.3d 1308, 1326 (Fed. Cir. 2014) (emphasis in original). But
Mr. Calman does not claim the entire market value of the
accused product, which is Wells Fargo's Mobile Deposit
system. Rather, as Wells Fargo itself states, he claims
“the profit saved from avoided duplicate check
deposits.” (Dkt. No. 83 at 3.) The Court is satisfied
that Mr. Calman has done enough “to estimate what
portion of the value of [the accused] product is attributable
to the patented technology.” Virnetx, 767 F.3d
at 1327. Mr. Calman has not violated the entire market value
rule because he does not claim the entire value of Wells
Fargo's Mobile Deposit system.
Court agrees with USAA that “Wells Fargo's
complaint appears to be that, once Mr. Calman apportioned
down to the specific duplicate check-detection technique
claimed by the asserted patents, he attributed all of the
value of that feature to the asserted patents.” (Dkt.
No. 93 at 3.) Wells Fargo argues that this is inappropriate
because other non-infringing alternatives are available to
avoid duplicate check fraud. (Dkt. No. 83 at 4-5; Dkt. No.
103 at 3-4.) This goes to the weight rather than the
admissibility of the evidence.
Wells Fargo argues that Mr. Calman's apportionment
opinion improperly relies upon the “rule of
thumb” because he “attributes 25% of
non-duplicate, non-on-us MRDC fraud prevention to the
Asserted patents.” (Dkt. No. 83 at 5.) USAA disagrees
with Wells Fargo that Mr. Calman “fails to provide any
analytical support-or any justification whatsoever-for this
25% factor.” Rather, USAA argues, Mr. Calman analyzed
data and Wells Fargo's corporate testimony related to
other non-fraud, non-on-us avenues of loss prevention and
found that each relied heavily, if not entirely, on the
Asserted patents. (Dkt. No. 94 at 4-5; see also Dkt.
No. 94-2 ¶ 425.) Accordingly, Mr. Calman
“conservatively estimate[d] that at least a further
25%, and likely more, of the ‘other losses'
category is attributable to the patented inventions.”
(Dkt. No. 94-2 ¶ 425.)
Federal Circuit has held that “[e]vidence relying on
the 25 percent rule of thumb is . . . inadmissible under
Daubert and the Federal Rules of Evidence, because
it fails to tie a reasonable royalty base to the facts of the
case at issue.” Uniloc USA, Inc. v. Microsoft
Corp., 632 F.3d 1292, 1315 (Fed. Cir. 2011). It has not
held that any apportionment of 25% necessarily violates this
rule or even that there should be such a presumption. Rather,
it reiterated the general rule that “the patentee must
‘sufficiently [tie the expert testimony on damages] to
the facts of the case.” Id. (alteration in
original) (citing Daubert v. Merrell Dow Pharm.,
Inc., 509 U.S. 579, 591 (1993)). The Court finds that
Mr. Calman has sufficiently tied his analysis to the facts of
this case and thus has not improperly relied upon the 25
percent rule of thumb.
Mr. Calman's ...