The Credibility of Experts Is in the Province of the Jury

Written by: Ari Feinstein and Kathryn M. McCarthy

WILLIS ELECTRIC CO., LTD. v. POLYGROUP LTD. (MACAO COMMERCIAL OFFSHORE)

Before Moore, Stark, and Oetken (sitting by designation). Appeal from the United States District Court for the District of Minnesota.

Summary: Neither the fact that a damages expert’s testimony could have been presented more clearly, nor the fact that the methodology could be subject to reasonable disagreement, is a basis to exclude the expert’s testimony.

Willis Electric Co., Ltd. (Willis) sued Polygroup Ltd. and three other entities (collectively, Polygroup) for patent infringement. The district court denied Polygroup’s Daubert motion to exclude the opinions of Willis’s damages expert. After a jury trial in which a single dependent claim was asserted, the jury awarded Willis $42,494,772 in damages. Polygroup then moved for a new trial on damages, which the district court denied, and Polygroup appealed.

As a threshold matter, Polygroup argued that the asserted claim’s value could not be based on any limitations incorporated from the independent claim from which it depended, because that independent claim had previously been found to be unpatentable at the PTAB under the “broadest reasonable interpretation” claim construction standard, a finding the Federal Circuit affirmed.  The Federal Circuit rejected that argument, however, because the district court adopted a different construction of the independent claim and did not find it to be unpatentable under the Phillips standard.

Turning to the heart of the appeal, Polygroup raised a bevy of challenges to Willis’s damages expert’s analysis.  For example, Polygroup criticized the expert’s income-based apportionment testimony, based on her failure to tell the jury how she had filtered certain data. But, the Federal Circuit explained, the expert’s testimony was not “rendered inadmissible merely because the expert could have” testified “more precisely.” Polygroup also faulted the way in which the expert modeled profitability. That argument fared no better, the Federal Circuit explained, as “[r]easonable minds may disagree on whether the assumptions underlying her averaging methodology sufficiently approximate market reality, but that is a fact question for the jury, not a basis for excluding expert testimony altogether.” The Federal Circuit rejected Polygroup’s similar criticisms of the expert’s market-based apportionment approach.

Finally, Polygroup argued that the expert’s Georgia-Pacific analysis was purely qualitative and therefore could not support a reasonable royalty award. The Federal Circuit rejected that argument too, noting that “[t]he Georgia-Pacific analysis necessarily permits qualitative analysis because multiple factors” (e.g., the parties’ commercial relationship, the advantages of the patented invention over prior art, and the character of the patented embodiment) “do not lend themselves to mathematical precision, even in a hypothetical negotiation.” Polygroup’s criticism, the Federal Circuit explained, went to the weight of the damages expert’s testimony, not its reliability.

Accordingly, the Federal Circuit affirmed the district court’s judgment denying Polygroup’s motion for a new trial on damages.

Editor: Sean Murray