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Wonderland Nurserygoods Co., Ltd. v. Thorley Industries, LLC

United States District Court, Third Circuit

December 5, 2013

WONDERLAND NURSERYGOODS CO., LTD., Plaintiff,
v.
THORLEY INDUSTRIES, LLC, d/b/a 4MOMS, Defendant.

MEMORANDUM OPINION

NORA BARRY FISCHER, District Judge.

I. INTRODUCTION

Plaintiff Wonderland Nursery Goods Co. ("Wonderland") brings this action against Defendant Thorley Industries, LLC d/b/a 4MOMS ("Thorley") for the alleged infringement of U.S. Patent No. 8, 047, 609 ("the '609 Patent"). (Docket No. 1 at 1). The '609 Patent is entitled "Infant Rocking Chair and Driving Device for Driving the Same." Id. at 2. Presently pending before the Court is Thorley's Motion to Strike Portions of the Expert Report of Scott D. Hampton, of Hampton IP and Economic Consultants. (Docket Nos. 112, 114-1, 118, 121). Wonderland has retained Dr. Hampton to assist the jury in calculating the alleged lost profit and reasonable royalty damages that would fully compensate Wonderland for Thorley's alleged infringement of the '609 Patent. (Hampton Report, Docket No. 114-1 at 7). Dr. Hampton is a Certified Public Accountant who has licenses from California, Washington, and Utah. Id. at 5.

Thorley filed its Motion to Strike Portions of Dr. Hampton's Expert Report on July 2, 2013, (Docket No. 112), which it has restyled in its Reply Brief, filed on July 26, 2013, as a Daubert Motion to Exclude portions of Dr. Hampton's testimony because that testimony is not "based on sound economic proof." (Docket No. 121 at 4). Wonderland filed its opposition on July 17, 2013. (Docket No. 118). On August 26, 2013, the Court heard oral argument on Thorley's Motion, (Docket Nos. 143-45), and for the following reasons, said Motion is DENIED.

II. BACKGROUND

A. Motion to Strike

As an initial matter, this Court issued an earlier opinion in this Case, dated June 7, 2013, denying a Motion to Strike Portions of the Expert Report of William W. Clark, filed by Wonderland, (Docket No. 73), because an "expert report is not a pleading, nor for that matter a brief or affidavit, and therefore cannot be stricken by the Court." (Docket No. 93). See Wonderland Nurserygoods Co. v. Thorley Indus. LLC, 2013 U.S. Dist. LEXIS 80003, at *4 (W.D. Pa. June 7, 2013). Thorley's instant Motion before the Court, (Docket No. 112), is very similar to Wonderland's earlier Motion to Strike, (Docket No. 73).

As this Court outlined in its previous Memorandum Opinion, (Docket No. 93), to the extent that Thorley brings its Motion as a "motion to strike, " Thorley's motion is denied. Federal Rule of Civil Procedure 12(f) governs the Court's authority to strike items from the record, and it permits striking matters only from pleadings. FED. R. CIV. P. 12(f); 5C WRIGHT, A. MILLER & M. KANE, Federal Practice and Procedure ยง 1380 (3d ed.). Here, Dr. Hampton's expert report is not a pleading, brief, or affidavit, and therefore cannot be stricken by the Court.

B. Daubert Challenge

For completeness, the Court will also briefly examine Thorley's arguments in support of a "motion to exclude" Dr. Hampton's testimony under Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589-90 (1993). Rule 702 provides that an expert witness may provide opinion testimony if it will assist the trier of fact and "(1) the testimony is based on sufficient facts or data; (2) the testimony is the product of reliable principles and methods; and (3) the expert has reliably applied the principles and methods to the facts of the case." FED. R. EVID. 702.

Thorley moves to exclude portions of the expert report of Dr. Hampton on the issue of lost profits. (Docket No. 113). According to Thorley, Dr. Hampton "does not provide sound economic proof to establish the relevant baby swing market" and "does not provide sound economic proof to establish the market share percentages of the baby swing market." Id. at 2. Thorley maintains that Dr. Hampton's lost profits opinion is based on his discussion with one Graco employee, [1] Kerry Strzelecki, and that Ms. Strzelecki's alleged statements to him contradict her deposition testimony. Id. at 4. Thorley also asserts that Dr. Hampton has not verified his discussions with Ms. Strzelecki, he has not referenced his conversations with a marketing representative, and he has not performed independent research. Id. at 4-5.

In its Reply Brief, Thorley clarifies that it seeks to exclude Dr. Hampton's testimony on lost profits because the anticipated testimony would not meet the standards of Rule 702. (Docket No. 121 at 4-6 & n.2). Thorley contends that Dr. Hampton's opinions do not satisfy Daubert because Dr. Hampton does not provide sound economic proof to support his ultimate conclusions. Id. at 5. Thorley asserts that under Grain Processing Corp. v. Am. Maize-Prods. Co., 185 F.3d 1341, 1350 (Fed. Cir. 1999), the Federal Circuit "requires sound economic proof of the nature of the market and likely outcomes with infringement factored out of the economic picture" for damages calculations. Thorley also asserts that under IP Innovation L.L.C. v. Red Hat, Inc., 705 F.Supp.2d 687, 689 (E.D. Tex. 2010) (J. Rader), the proper remedy is for the Court to exclude that testimony under Rule 702. (Docket No. 121 at 6).

In its opposition, Wonderland asserts that Thorley does not question Dr. Hampton's qualifications or competency as an expert or the reliability of his testimony. (Docket No. 118 at 7). Wonderland contends that the evidence upon which Dr. Hampton relies constitutes sufficient "sound economic proof" because it is of the type that experts routinely rely upon in formulating opinions. Id. at 8. Wonderland maintains that cross-examination is ...


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