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Koninklijke Philips Electronics N.V. v. Zoll LifeCor Corp.

United States District Court, W.D. Pennsylvania

October 20, 2017

KONINKLIJKE PHILIPS ELECTRONICS N.V. and PHILIPS ELECTRONICS NORTH AMERICA CORPORATION, Plaintiffs,
v.
ZOLL LIFECOR CORPORATION, Defendant.

          MEMORANDUM OPINION

          Nora Barry Fischer United States District Judge

         Now pending before the Court is Defendant ZOLL LifeCor's (“ZOLL”) Motion for Show Cause Order Regarding Post-Daubert Damages and supporting attachments, filed on September 5, 2017. (Docket No. 724). Plaintiff Koninklijke Philips (“Philips”) filed a response and supporting attachments on September 20, 2017. (Docket No. 738). On September 27, 2017, ZOLL filed a reply brief and supporting attachments. (Docket No. 742). Philips filed a sur-reply on September 29, 2017, to which ZOLL filed a sur-reply on October 2, 2017. (Docket Nos. 745, 748). Upon Philips's request, the Court held oral argument on October 13, 2017. (Docket Nos. 750, 751). Because the parties will conclude their current settlement negotiations by November 3, 2017, the Court issued its Order immediately after oral argument on October 13, 2017, noting that a written opinion would follow. (Docket No. 752). Specifically, the Court granted ZOLL's motion, ordering Philips to identify the amount and evidentiary basis of record, and/or whether the record requires supplementation, for any damages claim that Philips believes may have survived this Court's Memorandum Order and Opinion regarding the parties' Daubert Motions, on or before October 20, 2017, at 5:00 p.m. (Id.). In support of its Order, the Court's analysis follows.

         Factual and Procedural History[1]

         Philips brings this civil action against ZOLL for patent infringement under 35 U.S.C. § 271. The patents in suit are U.S. Patent Nos. 5, 593, 427; 5, 607, 454; 5, 735, 879; 5, 749, 904; 5, 749, 905; 5, 803, 927; 5, 836, 978, and 6, 047, 212 (the “Patents-in-Suit”). These patents are directed at electrotherapy methods for defibrillators, allegedly including ZOLL's LifeVest wearable defibrillator. ZOLL denies that it infringes any claim of the Patents-in-Suit. ZOLL has also asserted affirmative defenses for non-infringement and invalidity. (Docket No. 24).

         Presently pending before the Court is ZOLL's Motion for Show Cause Order Regarding Post-Daubert Damages. In its motion, ZOLL requests that Philips be required to identify the amount and evidentiary basis for any damages claim that may have survived the Court's Daubert Order dated July 25, 2017. (Docket No. 718). In its Daubert Order, the Court granted, in part, and denied, in part, ZOLL's motion to exclude the testimony of Mr. John Jarosz, Philips's damages expert. (Id. at 12-13). Specifically, the Court excluded the following: (1) Mr. Jarosz's discussion of an alleged reduction in the cost of the accused products; (2) the 50% apportionment rate as expressed in footnote 359 of Mr. Jarosz's report; and (3) the discussion of the importance of the patents-at-issue, Mr. Jarosz's conversation with Dr. Patrick Wolf, and the patented features being a “significant driver” of the “majority of” the value of the WCD 3000. (Id.). The Report and Recommendation of Special Master Gale R. Peterson, (Docket No. 688), was otherwise adopted as the Court's opinion.[2] (Id. at 13). As noted above, ZOLL's motion has been fully briefed, and the Court heard oral argument at Philips's request on October 13, 2017. (Docket Nos. 750, 751). The Court granted ZOLL's motion after argument, ordering Philips to comply with the Court's Order by October 20, 2017, at 5:00 p.m. (Docket No. 752). The Court now turns to the analysis of its Order granting ZOLL's motion.

         Legal Standard

         Although this matter is a patent case, it is governed by the law applicable in the United States Court of Appeals for the Third Circuit. To this end, Federal Rules of Civil Procedure 16 and 26 are applicable. Rule 16 provides, in relevant part, that a case management order may “modify the timing of disclosures under Rules 26(a) and 26(e)(1).” Fed.R.Civ.P. 16(b)(3)(B)(i). In pertinent part, Rule 26 provides:

(a) Required Disclosures.
(1) Initial Disclosure.
(A) In General. Except as exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court, a party must, without awaiting a discovery request, provide to the other parties:
(iii) a computation of each category of damages claimed by the disclosing party-who must also make available for inspection and copying as under Rule 34 the documents or other evidentiary material, unless privileged or protected from disclosure, on which each computation is based, including materials bearing on the nature and extent of injuries suffered.

Fed. R. Civ. P. 26(a)(1)(A)(iii). In applying Rule 26, courts have understood “computation” to require “a specific computation of a plaintiff's damages, ” which includes “a disclosure of evidentiary material upon which the category of damages is based.” Stemrich v. Zabiyaka, No. 1:12-CV-1409, 2013 U.S. Dist. LEXIS 113674, at *3 (M.D. Pa. Aug. 13, 2013) (internal quotations omitted). The computation “requires at least some analysis, ” and “simply reciting a dollar figure clearly is not enough.” Id. at *3-4. However, the rule “does not place a great burden on the plaintiff” because “the plaintiff needs only to disclose what those damages are and how they were calculated.” Id. at *4-5. “The plaintiff must merely disclose the best information available concerning the claim, however limited and potentially changing it may be.” Id. at *5 (internal quotations omitted).

         With respect to the supplementation of disclosures and responses, Rule 26 provides that

(1) In General. A party who has made a disclosure under Rule 26(a)-or who has responded to an interrogatory, request for production, or request for admission- must supplement or correct its disclosure or response:
(A) in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing; or
(B) as ordered by the court.

Fed. R. Civ. P. 26(e)(1)(A)-(B). As to expert witnesses, Rule 26 provides that “[f]or an expert whose report must be disclosed under Rule 26(a)(2)(B), the party's duty to supplement extends both to information included in the report and to information given during the expert's deposition.” Fed.R.Civ.P. 26(e)(2). To satisfy Rule 26(e)(2), a plaintiff “must disclose a computation of each category of damages using the ‘best information available' at the ...


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