Opinion
Civil Action No. 3:00-CV-1457-D
August 26, 2002
MEMORANDUM OPINION AND ORDER
This is a patent infringement action that relates to U.S. Patent No. 5,763,047 ("the '047 patent"), entitled "Blown-Film Textured Liner Having a Smooth Welding Strip," and U.S. Patent No. 5,804,112 ("the '112 patent"), entitled "Method of Co-Extruding a Blown-Film Textured Liner." Plaintiff-counterdefendant Poly-America, Inc. ("Poly-America") and defendant-counterplaintiff Serrot International, Inc. ("Serrot") have filed several motions that the court now addresses.
In this memorandum opinion and order, the court decides or denies as moot the following motions: Poly-America's March 1, 2002 motions for (1) partial summary judgment, (2) to exclude testimony of Mark M. Newman, and (3) to exclude testimony of Friedrich Struve ("Struve"); (4) Serrot's March 1, 2002 motion to strike the expert testimony of Stanley L. Rawl; (5) Poly-America's April 5, 2002 motion to strike declaration of Struve; (6) Serrot's April 9, 2002 motion for reconsideration; (7) Poly-America's April 26, 2002 motion to strike addendum to expert report of Struve and supplement to motion to exclude testimony of Struve; (8) Poly-America's April 26, 2002 motion to strike motion for reconsideration; and (9) Serrot's May 30, 2002 motion for leave to file motion to realign the parties.
I
The background facts and procedural history of this case are set out in a prior memorandum opinion and order and need not be repeated at length. See Poly-America, Inc. v. Serrot Int'l, Inc., 2001 WL 1335793, at *1 (N.D. Tex. Oct. 18, 2001) (Fitzwater, J.) ("Poly-America I"). The court recounts the background facts and procedural history only to the extent necessary to place the present decision in proper context.The '047 patent concerns a type of liner suitable for use in landfills. The '112 patent pertains to a process that can be used to make the product that is the subject of the '047 patent. Both patents originate from an application filed on April 3, 1996, and each is entitled to the filing date for purposes of evaluating the prior art. Poly-America is the exclusive licensee of each patent. Serrot has asserted affirmative defenses and a counterclaim. Insofar as relevant to today's decision, Serrot alleges that the patents-in-suit are invalid and unenforceable because (1) inventor Jimmy D. Green ("Green") failed to disclose the best mode of carrying out his inventions; (2) the patents do not contain written descriptions sufficient to enable a person skilled in the art to make or use the inventions; (3) the subject matter of each patent was on sale in the United States more than one year before the filing of the April 3, 1996 patent application; and (4) individuals involved in prosecuting the patent engaged in inequitable conduct.
II
Serrot moves the court to reconsider part of its decision in Poly-America I denying its motion for summary judgment. Serrot had sought summary judgment holding the '112 patent invalid based on the "on sale" bar of 35 U.S.C. § 102(b). It maintains that it has produced new evidence that shows that a fundamental premise of the court's ruling should be revisited.
A
In Poly-America I the court declined, in pertinent part, to hold that the 1987 sale by Gloucester Engineering ("Gloucester") to Gundle Lining Systems ("Gundle") of equipment capable of performing a blown-film extrusion process triggered the "on sale" bar so as to render the '112 patent invalid. Id. at *5. The court held that "there is a genuine issue of material fact whether a person skilled in the art would have been capable of practicing the method claimed by the '112 patent using the Gundle machinery." Id. Poly-America and Serrot had submitted conflicting evidence. Serrot relied on the declaration of former Gundle manager Friedrich Struve ("Struve") and supporting documents. Struve averred that "[t]here was never any doubt expressed by either Gloucester Engineering or Gundle engineers that the blown-film process and equipment described above would not work for its intended purpose." Id at *4. This assessment conflicted with the testimony of engineer George M. Hall ("Hall"), who stated:
It is my opinion that because of the placement of the movable chokers and the force necessary to use them, damage to the delicate confluency gap would undoubtedly occur if the chokers were compressed making the die incapable of producing a satisfactory liner making the die incapable of performing the process described in the patent.
Id. at *5.
Serrot moves the court on the basis of new evidence to reconsider Poly-America I. It contends that in early April 2002, after the court decided Poly-America I, Struve supervised two operations of the 1987 Gundle machinery, configured according to its original 1986 design, under the exact method that Poly-America claimed in the '112 patent. Serrot asserts that no modifications of the original design were needed, no operational problems were encountered, and the process operated exactly as claimed in the patent, commercially producing blown-film textured liner identical to that claimed in the '047 patent.
B
The court need not reconsider Poly-America I or decide whether Serrot is essentially seeking to prosecute a second motion for summary judgment that requires leave under N.D. Tex. Civ. R. 56.2(b). Even if the court were to treat Serrot's motion as a successive summary judgment motion, it would deny it on the merits.
Because the court denies Serrot's motion for reconsideration, it denies as moot Poly-America's April 26, 2002 motion to strike motion for reconsideration and its April 26, 2002 motion to strike addendum to expert report of Struve and supplement to motion to exclude testimony of Struve.
The standard for determining whether the "on sale" bar applies is set out in Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 67-68 (1998). In Pfaff the Supreme Court held that the "on sale" bar requires that two conditions be met before the critical date. First, "the product must be the subject of a commercial offer for sale." Id at 67. Second, "the invention must be ready for patenting." Id The court held in Poly-America I that the transaction between Gundle and Gloucester presented no question whether there was a "commercial offer" under the first prong of the Pfaff test. Poly-America I, at *4. There was a genuine issue of material fact, however, whether the process embodied in the Gundle machine was "ready for patenting" under the second-prong of Pfaff Id. at *5. The relevant inquiry to the "ready for patenting" test is whether a person skilled in the art would have been capable of practicing the invention before the critical date. See Pfaff, 525 U.S. at 67. "The fact that a concept is eventually shown to be workable does not retrospectively convert the concept into one that was "ready for patenting" at the time of conception." Space Systems/Loral, Inc. v. Lockheed Martin Corp., 271 F.3d 1076, 1080 (Fed. Cir. 2001).
C
Because Serrot will have the burden at trial of proving invalidity under § 102(b), to obtain summary judgment it "must establish "beyond peradventure all of the essential elements of the claim or defense.'" Bank One, Tex., M.A. v. Prudential Ins. Co. of Am., 875 F. Supp. 943, 962 (N.D. Tex. 1995) (Fitzwater, J.) (quoting Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986)). Serrot must meet the clear and convincing evidence standard to establish the "on sale" bar. See Finnigan Corp. v. Int'l Trade Comm'n, 180 F.3d 1354, 1366-69 (Fed. Cir. 1999). When a heightened proof standard will apply to the trial disposition of an issue, that standard applies at the summary judgment stage. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986) (holding that where clear and convincing evidence standard would apply at trial of libel action, it applied in determining merits of summary judgment motion). Accordingly, not only must Serrot establish beyond peradventure all of the essential elements of the on sale bar, it must do so under a clear and convincing evidence standard.
Serrot's new evidence supports its contention that a person skilled in the art would have been capable of practicing the invention, but it does not establish this fact beyond peradventure, by clear and convincing evidence. Clear and convincing evidence means evidence that persuades the trier of fact that it is highly probable that the claim or defense is true. The evidence must produce in the mind of the trier of fact a firm belief and abiding conviction as to the matter sought to be established. The clear and convincing evidence standard is a heavier burden than the preponderance of the evidence standard. The fact that Gundle machinery performed the process claimed by the '112 patent seven years after the critical date does not retrospectively eliminate the genuine issue of material fact surrounding the "ready for patenting" inquiry. See Space Systems/Loral, 271 F.3d at 1080.
Accordingly, Serrot's newly presented evidence fails to meet its summary judgment burden of establishing beyond peradventure, by clear and convincing evidence, that a person skilled in the art would have been capable of practicing the method claimed by the '112 patent using the Gundle machinery as of the asserted "on sale" date. Serrot's motion for reconsideration of Poly-America 1 is therefore denied.
III
Poly-America moves for partial summary judgment, contending that Serrot literally infringes claims 1 and 3-7 of the '047 patent and claims 1 and 2 of the '112 patent; Green is correctly named as the sole inventor; the patents comply with the best mode and enablement requirements of 35 U.S.C. § 112 ¶ 1; Serrot cannot establish intent to mislead, and thus inequitable conduct before the Patent and Trademark Office ("PTO"); and certain matters cannot be prior art under the "on sale" provision of 35 U.S.C. § 102(b).
In response to the motion, Serrot admits that Green is the sole inventor. Serrot concedes in its May 30, 2002 motion for leave to file motion to realign parties that the process it uses to make the accused product, and the accused product, literally infringe the '047 and '112 patents. See D. Mot. Lv. Realign at 1 ("Serrot decided . . . to affirmatively concede that the process it used to make the accused product met the claim limitations of the '112 patent and that Serrot's accused product also met the limitations of the claims of the '047 patent."). It argues, however, that Green did not disclose the best mode for the inventions; five critical elements are missing from the patent specifications and therefore the enablement requirement is not met; individuals involved in prosecuting the patents failed to make certain material disclosures to the PTO during the patent prosecution process and therefore engaged in inequitable conduct; and the subject matter of each patent was on sale prior to the "critical date" of April 3, 1995.
IV A
A patent application must disclose the "best mode contemplated by the inventor of carrying out his invention." 35 U.S.C. § 112. The determination whether a patentee has fulfilled the best mode requirement involves a two-part inquiry. The first question is whether, as of the filing date, the inventor possessed or contemplated a best mode for practicing the invention. Chemcast Corp. v. Arcolndus. Corp., 913 F.2d 923, 927-28 (Fed. Cir. 1990). This is a subjective question that focuses on the inventor's state of mind. Id at 928. If the answer is affirmative, the second question is whether the patent disclosed the best mode such that one of ordinary skill in the art could practice it. Id.
Poly-America contends that Serrot has no evidence that Green even had a preferred embodiment, and summary judgment is therefore warranted on this issue. See P. PSJ Br. at 11. Because Poly-America will not have the burden of proof at trial on Serot's counterclaim of patent invalidity based on best mode, it can meet its summary judgment obligation by pointing the court to the absence of evidence to support the counterclaim. See Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once it does so, then Serrot must go beyond its pleadings and designate specific facts showing that there is a genuine issue for trial. See id. at 324; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam). Summary judgment is mandatory if it fails to meet this burden. Little, 37 F.3d at 1076. Its failure to adduce proof on any essential element of this counterclaim renders all other facts immaterial. See Celotex, 477 U.S. at 323.
Even if Serrot also relies on best mode as an affirmative defense, the same summary judgment standards apply.
B
Serrot contends that Green did contemplate a best mode, specifically, appropriate shapes for plugs that are essential to the extrusion process and appropriate materials for making the plugs. Although Green disclaimed in his deposition testimony any involvement in the design of the plugs, see D. PSJ App. 382-83, 386, 387, he also admitted that consideration was given to the kind of material that would be used in those plugs and that he played an active role in this process, id. at 404-05. Serrot maintains that Green's testimony indicates that he significantly participated in developing a best mode of practicing his invention, including the appropriate shape of the plug. It argues that inconsistencies in his testimony at least present a fact issue for the jury's assessment at trial.
The deposition testimony that Serrot quotes, which is the only evidence it provides in response to Poly-America's motion, is insufficient to allow a reasonable trier of fact to find that Green had a preferred material and shape in mind for the plugs as of the filing date of the patent applications, and therefore that he contemplated a best mode of carrying out his inventions but failed to disclose it. Green merely admits to being aware of a variety of materials and shapes that might work. Viewed favorably to Serrot, the evidence shows that Green participated in, and perhaps directed work related to, plug shape and design. Serrot has not adduced evidence that would permit a reasonable trier of fact to find that Green believed a particular shape or design, or material, was the best mode. Although Green admitted that an oval-shaped plug would not work, his knowledge of this fact is insufficient to allow a reasonable trier of fact to conclude that Green contemplated a best mode for what would work.
Because Serrot has failed to adduce evidence that would allow a reasonable trier of fact to find that Green possessed or contemplated a best mode for carrying out his inventions as of the filing date, the court grants summary judgment in Poly-America's favor as to the best mode component of Serrot's counterclaim and its invalidity defense.
V
A patent must contain a written description sufficient "to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use" the invention without undue experimentation. 35 U.S.C. § 112; see also Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1365 (Fed. Cir. 1997). Enablement is a question of law based on underlying factual issues. Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d 1524, 1533 (Fed. Cir. 1987). Serrot will have the burden of proof on this issue at trial. Therefore, Poly-America may, as it has done, point the court to the absence of evidence to show lack of enablement. See P. PSJ Br. at 12. This obligates Serrot to present evidence that would permit a reasonable trier of fact to find the underlying facts in its favor.
Serrot contends that Hall testified that several elements, including confluency gaps and knife edge slots, and the shape and design of the chokers, were critical to the design of the blown film die. It maintains that one of ordinary skill in the art would not necessarily have known how to address the critical design elements without undue experimentation. Serrot posits that inventor Green did not know how to incorporate the design elements into a final product, and that Green noted that the shape of the plug is not an element that one of ordinary skill in the art could intuit from the patent.
Green's testimony that he does not know what a confluency gap is and that a person of skill in the relevant art could not intuit the necessary shape of the plugs merely from the patents themselves are immaterial and are thus insufficient to raise a genuine issue of material fact. The proper inquiry is whether a hypothetical person skilled in the relevant art would know, absent language in the patent specifications, about the "critical" elements that Hall described. See Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 454 (Fed. Cir. 1985). Serrot relies solely on the testimony of Green and maintains that, as the inventor, he is "presumably one of ordinary skill in the art." D. PSJ Br. at 13. There is no presumption, however, that the inventor is the equivalent of such a hypothetical person. Standard Oil, 774 F.2d at 454. Because Serrot has neither adduced evidence that he is such a person, nor introduced proof of what a person of ordinary skill in the art would know about the "critical" elements that Hall described, it has failed to present evidence that would permit a reasonable trier of fact to find the factual elements that would permit the legal conclusion that the '047 and '112 patents violate the enablement requirement. The court grants Poly-America's summary judgment motion as to the issue of enablement.
The deposition transcript reflects that the attorney who was questioning Green used the word "congruency" gap. See, e.g., D. PSJ Br. at 13-14 (citing D. PSJ App. 406). Absent any indication in the briefing that the error was made by the attorney rather than by the court reporter, the court will assume that the questioner used the correct term and that Green understood the questions to pertain to a confluency. not congruency, gap.
VI
Poly-America contends it is entitled to summary judgment on Serrot's counterclaim and affirmative defense of unenforceability based on inequitable conduct. It posits that Serrot cannot show that anyone substantively involved in the preparation or prosecution of the patent applications had the requisite intent to mislead the PTO. See P. PSJ Br. at 12-13. Serrot will have the burden of proof on this issue at trial by clear and convincing evidence. Poly-America has pointed the court to the absence of evidence to establish intent to mislead. See P. PSJ Br. at 12-13. Serrot must now present proof that would permit a reasonable trier of fact to find in its favor under a clear and convincing evidence standard. See Anderson, 477 U.S. at 254 (holding that when heightened proof standard will apply at trial, that standard applies at summary judgment stage).
Serrot alleges this as its fifth affirmative defense and as a counterclaim. See Am. Ans. ¶ 27 and Counterclaim ¶ 8(a).
A
Determination of inequitable conduct requires a two step analysis. First, the trial court must determine whether the withheld reference meets a threshold level of materiality. The trial court must then also determine whether the evidence shows a threshold level of intent to mislead the PTO. . . . Once the threshold levels of materiality and intent have been established, the trial court is required to weigh materiality and intent. The more material the omission, the less evidence of intent will be required in order to find that inequitable conduct has occurred. In light of all the circumstances, the court must then determine whether the applicant's conduct is so culpable that the patent should be held unenforceable.
Baxter Int'l, Inc. v. McGaw, Inc., 149 F.3d 1321, 1327 (Fed. Cir. 1998) (citations omitted). "The duty of candor rests on "the inventor . . . and on every other individual who is substantively involved in the preparation or prosecution of the application[.]'" Fox Indus., Inc. v. Structural Preservation Sys., Inc., 922 F.2d 801, 804 (Fed. Cir. 1990) (quoting 37 C.F.R. § 1.56(a)). "Inequitable conduct includes . . . failure to disclose material information . . . coupled with an intent to deceive." Baxter Int'l, 149 F.3d at 1327. For purposes of its motion for partial summary judgment, Poly-America does not directly contend that the references at issue are immaterial. See P. PSJ Br. at 12-13 ("Poly[America] below moves for summary judgment based on Serrot's inability to make a prima facie case that anyone substantively involved in the preparation or prosecution of the patent applications had the requisite intent."); cf. P. PSJ Rep. Br. at 7 n. 9 (replying to Serrot's contention that Poly-America does not dispute that the withheld references are material by contending it is not Poly-America's burden to do so and that Serrot has pointed to no evidence of materiality concerning certain withheld references).
B
Serrot complains initially that it has not obtained necessary discovery on the issue of intent because Poly-America has prevented it. See D. PSJ Br. at 17. It asserts that, due to pending discovery motions, testimony on this issue is still pending from Hall, and that a ruling regarding testimony on the inequitable conduct issue is forthcoming from the magistrate judge. Id Serrot posits that, despite the incomplete state of the evidence, it does have proof of intentional withholding. Id. In a footnote in its brief, Serrot asserts that it cannot provide a complete set of testimony as evidence of intent until it has obtained Hall's deposition concerning inequitable conduct issues and obtains a ruling from the magistrate judge on a motion to compel Green to testify on this subject. D. PSJ Br. at 17 n. 14. Poly-America asserts in its reply brief that Serrot chose not to depose Hall until the week of April 15, 2002, after it filed its summary judgment response. See P. PSJ Rep. Br. at 11 n. 21.
Although Serrot later filed a surreply on another issue, it has not requested an opportunity to supplement the record with evidence from Hall's deposition. Nor has Serrot made any attempt to comply with the procedures prescribed by Rule 56(f) or to move formally for a continuance of its obligation to respond to Poly-America's motion. In contrast to the content of the footnote included in its brief, in the body of the document it argues that it can defeat summary judgment despite the incomplete state of its evidence. See D. PSJ Br. at 17. The court therefore holds that the motion is ripe for decision on the pleadings and record now on file.
C
The court will consider together the second, third, fourth, and fifth references on which Serrot relies: National Seal Company's ("NSC's") Friction Seal product; Gundle's fully-textured liner; a book by Robert M. Koerner, Ph.D. ("Dr. Koerner") related to the geomembrane and geosynthetic industry; and a set of proceedings from the 1994 Geosynthetic Research Institute conference. Serrot's arguments concerning these references focus on what Poly-America and its employees knew about them or the degree of access they had to such references. The evidence that Serrot cites in its brief, see D. PSJ Br. at 18, would not permit a reasonable trier of fact to find that any specific individual who was substantively involved in preparing or prosecuting the '047 and '112 patents knew of this information and of its materiality to the pending applications. Serrot's inequitable conduct defense and counterclaim therefore fail in this respect at this fundamental level of analysis.
D
Serrot also contends that Green and others intentionally misled the PTO by failing to disclose information regarding Poly-America's existing textured product and process. Serrot cites Green's testimony that he met with Poly-America's patent counsel to discuss the patent application, and it complains that, at a deposition taken in the instant case, Poly-America would not permit Green to disclose whether, during the period in which the patent application was pending, he had shown the existing Poly-America process to patent counsel or had informed him of the process. It also relies on an affidavit that Green filed in response to a PTO office action, in which he argued for patentability by stating that the smooth-edge, textured product he had invented was widely accepted in the industry and enjoyed commercial success due solely to the smooth edge. Serrot asserts that, in arguing for patentability, Green stated that the smooth edge, textured product was widely accepted in the industry and enjoyed commercial success due solely to the smooth edge. Serrot complains that nowhere in his declaration did Green provide the PTO with information about the sales of existing Poly-America product or how sales of the smooth-edge product demonstrated success over the existing product. Id. It maintains that Poly-America intentionally withheld material information regarding its own product and process to bolster a commercial success argument and obtain allowance of its application.
Serrot's initial argument concerning Green's meeting with Poly-America's patent counsel would not of itself support a finding of intent to mislead. Serrot focuses only on the fact of the meeting and the inability to obtain discovery concerning what Green may have told the attorney. The court will therefore turn to the argument based on Green's affidavit.
It is well settled that a party must demonstrate a threshold level of intent to prove inequitable conduct. Baxter Int'l, 149 F.3d at 1327. The court does not engage in the process of weighing materiality and intent unless this threshold is satisfied. See id. When the evidence that Serrot cites is examined in its total context, it is pellucid that Serrot has not met the required threshold showing of intent to mislead, and that a reasonable trier of fact could not find inequitable conduct under a clear and convincing evidence standard.
In a March 3, 1997 office action, the examiner rejected claims 1-8 of Poly-America's application as obvious in view of three patents. See D. PSJ App. 234-35. Poly-America responded to the office action by advancing several reasons why these patents did not teach the invention claimed or taught away from it. It also attached an affidavit from Green. Relying on Green's affidavit, Poly-America posited:
Finally, the Applicant has attached the affidavit of the inventor, Jimmy Green, attesting to the great commercial success enjoyed by his textured liner product. To date, more than 12 million pounds of the textured liner has been sold! The sales are due to the ease of welding adjacent sheets together provided by the smooth edge strip. This advantage was recognized by experts in the landfill liner field, such as Dr. Robert Koerner, of the Geosynthethic Research Institute, as evidenced by his letter attached to Mr. Green's affidavit. This evidence of commercial success and the recognition of experts in the field is sufficient to overcome the Examiner's conclusion of obviousness.
Id. at 245.
Serrot's argument that Green intended to mislead the PTO by failing to provide information about sales of existing Poly-America product reflects a misunderstanding of the purpose for the representation about product sales. Green (and, in turn, Poly-America) were not purporting to persuade the PTO of the invention's commercial success by offering comparative sales data of company products that contained and did not contain the invention. Instead, they were positing commercial success based on the fact that millions of pounds of product that contained the invention had been sold, coupled with Green's opinion that these sales were the result of the ease of welding adjacent sheets together and the recognition of this advantage by experts in the relevant art. Because Poly-America did not assert commercial success by comparing sales of its products that contained the invention with sales of those that did not, Serrot has not made a threshold showing that Poly-America or Green acted with intent to mislead the PTO by failing to disclose information regarding sales of Poly-America's other products.
Nor has Serrot made a threshold showing of intent concerning its contention that Green did not explain how the sales of smooth-edge product demonstrated success over the existing product. He in fact undertook this explanation, averring that sales of Poly-America product that contained the invention were made "due to the benefit of having a smooth welding strip at the edge of the textured liner[,]" id at 249, an advantage that one expert had recognized as a significant advancement in the textured liner art.
Serrot has not adduced evidence that meets a threshold level of intent to mislead and thus to trigger the weighing process regarding intent and materiality. The court holds that a reasonable trier of fact could not find by clear and convincing evidence that Poly-America engaged in inequitable conduct by withholding from the Green affidavit the information at issue.
Poly-America is therefore entitled to summary judgment as to Serrot's defense and counterclaim of inequitable conduct.
VII
Poly-America seeks summary judgment that Serrot cannot rely on two communications to establish invalidity based on the "on sale" bar and cannot maintain that the NSC Friction Seal Product, made by a cast process, anticipates the '047 patent under the "on sale" bar.
A
"A person shall be entitled to a patent unless . . . (b) the invention was . . . on sale in this country, more than one year prior to the date of the application for patent in the United States." 35 U.S.C. § 102. Serrot must show that a product embodying the patented invention was the subject of a commercial offer for sale and that the invention was ready for patenting. Pfaff, 525 U.S. at 67. "The ultimate determination that a product was placed on sale under [ 35 U.S.C. § 102(b) (1994)] is a question of law, based on underlying facts." Ferag AG v. Quipp, Inc., 45 F.3d 1562, 1566 (Fed. Cir. 1995). Poly-America argues that there is no evidence that products embodying the patented inventions were subjects of commercial offers for sale before April 3, 1995. Serrot contends (1) a communication between Brampton Engineering ("Brampton") and NSC constitutes a commercial offer for sale of a product embodying the invention protected by the '112 patent; (2) a communication between Gloucester and NSC constitutes a commercial offer for sale of a product embodying the '047 patent; and (3) an NSC cast process liner anticipates the '047 patent under the "on sale" bar.
B
Poly-America contends the Brampton-NSC communication was merely a price quotation and did not constitute a commercial offer for sale, and that Serrot has failed to adduce evidence of such an offer. To qualify as a commercial offer for sale, the communication must have been one that NSC could have made into a binding contract by simple acceptance. See Group One, Ltd v. Hallmark Cards, Inc., 254 F.3d 1041, 1048 (Fed. Cir. 2001). A mere quotation is insufficient. Id. Poly-America points to the communication itself, which clearly identifies itself as a quotation, as evidence that NSC could not have converted it into a binding contract by simple acceptance. See P. PSJ App. 183. This evidence is insufficient to demonstrate entitlement to summary judgment because the form of the communication does not control. Merely because a communication is identified as a quotation does not mean it is one in substance for purposes of determining whether simple acceptance could convert it into a binding contract. Rather, the `parties' objective, expressed intent . . . controls[.]" Linear Tech. Corp. v. Micrel, Inc., 275 F.3d 1040, 1053 (Fed. Cir. 2001). If Brampton and NSC objectively intended the communication to constitute a commercial offer for sale but labeled it a quotation, the court would have to look to that objective intent and conclude that the communication was a commercial offer for sale.
Poly-America points to a clause in the governing terms of the communication that is indicative of Brampton's and NSC's objective intent: "[a]ll orders, unless agreed to in writing by Brampton Engineering . . . have no effect or validity." P. PSJ App. 188 (emphasis added). In other words, by the express terms of the communication, NSC could not convert it into a binding contract by simple acceptance, but was instead required to wait for Brampton to agree to any order in writing before effecting an enforceable bargain. Serrot offers the testimony of Jim Waslowski ("Waslowski"), Brampton's Vice President of Sales, that "if NSC had provided Brampton with a purchase order based on the design contained in the March 23, 1995 quotation, Brampton would have considered that order a sale." D. PSJ App. 436. Serrot has also adduced the testimony of Jack Donaldson ("Donaldson"), NSC's negotiator with Brampton, that it was his "understanding that the price quotes for the detailed engineering were likewise offers for sale and that NSC could have accepted the offers anytime without further negotiations from . . . Brampton." Id at 439.
Viewed in a light most favorable to Serrot as the nonmovant, this evidence provides no reasonable basis for a conclusion that the communication constituted a commercial offer for sale. The express terms of the communication reflect that Brampton was required to agree in writing to any order by NSC before there could be a binding contract. Waslowski's and Donaldson's statements, on the other hand, merely reflect their subjective belief that they thought any NSC order would have been accepted and considered a sale by Brampton. Subjective interpretations are immaterial, especially in light of the clear evidence that Brampton was required to agree in writing. See Linear Tech., 275 F.3d at 1053. The court therefore holds, as a matter of law, that the communication between Brampton and NSC did not constitute a commercial offer for sale.
Because the court grants summary judgment in Poly-America's favor on this ground, it need not reach the issues related to the recent opinion in In re Kollar, 286 F.3d 1326 (Fed. Cir. 2002), which the parties briefed in a surreply and surrebuttal.
C
Poly-America contends the Gloucester-NSC communication was not a commercial offer for sale because Donaldson testified in his deposition that, until June 7, 1995, which is past the "critical date" of April 3, 1995, design details were still being negotiated between the parties, P. PSJ App. 4, and either party could have said, "Hey, we don't want to do this deal[,]" id at 4-5. Serrot responds by offering Donaldson's understanding "that the price quotes for the detailed engineering were likewise offers for sale and that NSC could have accepted the offers anytime without further negotiations from . . . Gloucester[.]" D. PSJ App. 439. Donaldson also testified that "quite often with Gloucester, there will be design details that we will not have finished when we executed the purchase order and are starting down the path to build." Id. at 458-59.Viewed in a light most favorable to Serrot as the nonmovant, this evidence provides no reasonable basis for the conclusion that the communication constituted a commercial offer for sale. Donaldson's statement that either party could have said, "Hey, we don't want to do this deal," is his subjective interpretation of the status of negotiations through June 7, 1995, as is his later declaration that the price quotes were in fact offers for sale that could have been accepted by NSC without further negotiations. These two statements are therefore immaterial in light of the objective evidence that design details were being negotiated until June 7, 1995 and that this was a normal practice between Gloucester and NSC.
Normally, continuing negotiations on something as substantial as the design of a product would preclude a binding contract from coming into existence by mere acceptance of terms discussed in an existing communication. Serrot's evidence that Gloucester and NSC normally continued to discuss design details while "starting down the path to build" is insufficient to permit a reasonable trier of fact to find that, in June 1995, Gloucester and NSC considered a commercial offer already to be on the table despite continuing design detail negotiations. This is especially true since Donaldson's deposition testimony about Gloucester and NSC's normal practices appears a page before his subjective view that either party could have walked away from the deal until June 7, 1995. See P. PSJ App. 3-5. Absent objective evidence that the parties intended a commercial offer for sale to exist, and in light of evidence that design details were being negotiated between the parties well after the "critical date" of April 3, 1995, the court concludes that the communication between Gloucester and NSC was not a commercial offer for sale.
Because the court grants summary judgment in Poly-America's favor on this ground, it need not reach the issues related to Kollar.
D 1
Poly-America seeks summary judgment holding that claim 1 of the '047 patent is not anticipated by the NSC Friction Seal Product, which is made by a cast process, under the "on sale" bar of § 102(b). This aspect of Poly-America's motion for partial summary judgment essentially presents the converse of an issue the court decided in Poly-America I. There the court addressed the question whether Serrot was entitled to summary judgment holding the '047 patent invalid under § 102(b) because the invention was on sale before the critical date in the form of NSC's Friction Seal Product. See Poly-America I, at *1 ("A finding that the Friction Seal product embodied all the limitations of claim 1 and was on sale before the critical date would lead to the conclusion that the '047 patent is invalid under § 102(b)."). The court denied Serrot's motion, holding that because the Friction Seal product was made by a cast process rather than by a blown-film process, even if it satisfied the other limitations of claim 1, its failure to satisfy the blown-film limitation rendered it incapable of anticipating the '047 patent under the § 102(b) "on sale" bar. Id at *3.Serrot argues in opposition to Poly-America's present motion that the court did not construe the term "blown-film" in Poly-America I; it merely held that "blown-film" is a limitation of claim 1. Serrot urges the court to adopt a construction of the term that would include, not only the ordinary meaning of the term and conventional blown-film extrusion techniques using a circular extrusion die, but also by a cast process using a flat (straight) extrusion die.
2
The court agrees with Poly-America's interpretation of Poly-America I. The court construed claim 1 of the '047 patent — the sole independent claim — to include the "blown-film" limitation in the preamble. Id at *2. It ruled that "[r]eview of the entirety of the '047 patent reveals that the preamble language relating to `blown-film' does not state a purpose or intended use of the invention, but rather discloses a fundamental characteristic of the claimed invention that is properly construed as constituting a limitation of the claim itself." Id The court reasoned that "[t]hroughout the patent specification . . . the product's characteristic of having been made via a blown-film process is highlighted as an essential element that demonstrates the enhanced utility of the product and distinguishes it from the prior art." Id It rejected Serrot's argument that the product claimed by the '047 patent could be made by any process, and therefore was not subject to the limitation of having been made via a blown-film process. Id The court held that, because the Friction Seal product was made by a cast process rather than by a blown-film process, even if it satisfied the other limitations of claim 1, its failure to satisfy the blown-film limitation rendered it incapable of anticipating the '047 patent under the § 102(b) "on sale" bar. Id at *3.
Accordingly, because the court has already construed the term "blown-film" to exclude products made by a cast process, the NSC Friction Seal Product cannot anticipate the '047 patent. Poly-America is entitled to partial summary judgment precluding Serrot from asserting the "on sale" bar on that basis.
VIII
Poly-America moves to exclude the testimony of Mark M. Newman ("Newman") on four subjects. In view of the court's decisions today, which do not rely on evidence presented by Newman, it appears that this motion is substantially, if not entirely, moot. Accordingly, the court denies the motion without prejudice to Poly-America's requesting leave to file another such motion if it can demonstrate good cause for doing so.
IX
Poly-America also moves to exclude the testimony of Struve on four subjects: (1) that any of the dependent claims of the '047 patent are invalid; (2) what constitutes prior art based on his views of confidentiality practices and corporate knowledge at companies for whom he never worked; (3) the states of mind of other persons or entities; and (4) the alleged invalidity of claim I of the '047 patent to the extent based on the premise that "blown-film textured liner" is not limited to a liner produced by a blown-film process, but may include a liner made by the cast process, spray-on process, or any other method that bonds three layers together that could be used to make a textured liner.
A
The court may consider preliminary questions concerning the admissibility of evidence before trial. See Fed.R.Evid. 104(a). In performing this function, the court must at times act as a gatekeeper in determining the admissibility of expert testimony. See Watkins v. Teismith, Inc., 121 F.3d 984, 988-89 (5th Cir. 1997); Garcia v. Columbia Med Ctr. of Sherman, 996 F. Supp. 617, 620 (E.D. Tex. 1998). Fed.R.Evid. 702 guides the court in the screening process. See Cuevas v. E.I. DuPont de Nemours Co., 956 F. Supp. 1306, 1308 (S.D. Miss. 1997). The court may admit proffered expert testimony only if the proponent, who bears the burden of proof, demonstrates that (1) the expert is qualified, (2) the evidence is relevant to the suit, and (3) the evidence is reliable. See Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999); Watkins, 121 F.3d at 988-89.
Rule 702:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.
Expert testimony must be based on "scientific, technical, or other specialized knowledge." Fed.R.Evid. 702. It must rest on a reliable foundation. See Kumho, 526 U.S. at 147. Because of the unique effect of an expert witness and the advantageous position he holds at trial, the proponent of the evidence must demonstrate that "the principle supports what it purports to show." United States v. Posado, 57 F.3d 428, 433 (5th Cir. 1995). This ensures that the expert "employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field." Kumho, 526 U.S. at 152; see Garcia, 996 F. Supp. at 620 (noting that reliability requirement ensures that knowledge offered is "supported by appropriate validation" and "establishes a standard of evidentiary reliability"). Although Rule 702 does not require absolute certainty, it does mandate that the proffered knowledge be based on "good grounds." Posado, 57 F.3d at 433 (quoting Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 590 (1993)). The testimony must constitute "more than belief or unsupported speculation." Daubert, 509 U.S. at 590.
In fulfilling its gatekeeping role, the court must make an objective, independent validation of the principles and methods used by the expert to ensure that he has a sound and reliable basis in the knowledge and experience of the discipline at issue. Garcia, 996 F. Supp. at 622. The court is not to focus on the conclusions generated by the expert's methodology. Watkins, 121 F.3d at 989. Instead, it must review only the reasonableness of the expert's use of such an approach, together with his particular method of analyzing the data so obtained, to draw a conclusion regarding the specific matter to which the expert testimony is directly relevant. Kumho, 526 U.S. at 152; see Watkins, 121 F.3d at 989.
When analyzing the reliability of an expert's testimony, the court may consider the following non-exclusive factors: (1) whether the expert's technique can be or has been tested; (2) whether the method has been subjected to peer review and publication; (3) the known or potential rate of error of a 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. Daubert, 509 U.S. at 593-94. "[T]he factors identified in Daubert may or may not be pertinent in assessing reliability, depending on the nature of the issue, the expert's particular expertise, and the subject of the testimony." Kumho, 526 U.S. at 151.
B
Poly-America contends that Struve should not be permitted to testify that any of the dependent claims of the '047 patent are invalid. It maintains that Struve did not address the dependent claims (claims 3-7) in his expert report, and that the validity of a dependent claim cannot be determined only by considering the independent claim on which it depends.
Poly-America's support for the premise that Struve did not address the dependent claims is a single citation to one sentence in his deposition, in which he testified: "I agree that it did not address any of the dependent claims." P. Mot. Exclude Struve App. 127. Serrot responds by citing places in the record that indicate Struve was addressing the dependent claims. D. Br. Mot. Exclude Struve at 5-6. It also maintains that Struve's statement referred only to one prior art reference, the SLT product. Id at 6. In reply, Poly-America has introduced the series of questions and answers that preceded this statement. P. Mot. Exclude Struve App. 150. The court agrees with Serrot that Struve's testimony can be read to refer to the SLT product, not to the dependent claims in their entirety. The court also holds that Struve's report and testimony do not reflect such a fundamental failure to address dependent claims 3-7 as to warrant excluding his testimony about them under Daubert. The court therefore denies the motion to strike in this respect.
C
Poly-America next contends that the court should exclude Struve' s testimony concerning what constitutes prior art. It cites his testimony concerning the confidentiality practices of Gundle, Gloucester, and NSC, see P. Br. Mot. Exclude Struve at 4 n. 5, and argues that he lacks sufficient personal knowledge regarding the practices of these companies. Poly-America maintains that Serrot is using Struve "not only to opine on technical matters, but also to "prove up' certain events (of which he lacks personal knowledge) as prior art." P. Rep. Br. Mot. Exclude Struve at 4.
Although Serrot cites Fed.R.Evid. 703 in its response, see D. Br. Mot. Exclude Struve at 8, it appears to focus on the premise that Struve does have sufficient personal knowledge, see id The court holds that both parties have addressed the issue incorrectly. An expert witness' testimony need not be based on personal knowledge. See Rule 703. Therefore, if Struve is offering an opinion, his testimony should not be excluded if facts or data reasonably relied upon in the particular field are made known to him, and these facts or data would permit him to opine concerning company confidentiality practices. Because the gravamen of Poly-America's motion is the assertion that he does not have personal knowledge, the court cannot say that he will lack a sufficient predicate on which to base an opinion. If Struve is testifying as a lay witness, then he must have personal knowledge. See Rule 602. If Poly-America contends he lacks personal knowledge, this is a matter to be raised by trial objection, not by pretrial Daubert-type motion. The court declines at this pretrial stage to exclude Struve's testimony in this respect.
D
Poly-America argues that the court should not permit Struve to testify about what other persons thought or knew and thus to testify about another person's state of mind. As the court has explained supra at § IX(C), if Struve is testifying as an expert, he may base opinions on evidence or facts or data that fall within Rule 703. The court cannot determine at this stage whether such a predicate will be satisfied and thus cannot conclude that the evidence should be excluded prior to trial. If Struve intends to offer such evidence as a lay witness, his testimony must be based on personal knowledge, but this is an issue to be addressed by trial objection. The court denies this ground of the motion to exclude Struve's testimony.
E
The court considers last Poly-America's contention that Struve' s opinion improperly ignores the court's conclusion in Poly-America I that "blown-film textured liner" is a substantive limitation of claim 1 of the '047 patent that excludes liners other than those made by the blown-film process. Poly-America asserts that because Struve has ignored this construction, his opinions on patent invalidity are unreliable and are not based on sufficient facts or data. It asks the court to preclude him from testifying about invalidity of the '047 patent based on his erroneous claim construction.
Serrot maintains that Struve has not disregarded the court's ruling. It argues, citing the techniques disclosed and prior art incorporated in the patent specification, that Struve has properly opined that none of these references was limited to a blown-film extrusion process using a circular die, and the inventor therefore intended that blown-film includes all methods incorporated in the patent, which are not limited to a specific die.
The court's ruling above, see supra § VII(D)(2), that claim 1 of the '047 patent contains a conventional "blown-film" limitation that does not include products made by a cast process, foreshadows the court's decision here. The "blown-film" limitation is properly construed according to its ordinary meaning — the conventional blown-film extrusion technique that uses a circular extrusion die. Serrot seeks to adduce opinion testimony from Struve concerning meanings of the limitation "blown-film" that vary from the one pronounced by the court. Although this does not, as Poly-America argues, make his testimony unreliable and bereft of sufficient facts or data, it does make the testimony excludable under another Daubert requirement — that the expert's testimony be relevant. See Kumho, 526 U.S. at 147. Accordingly, the court grants Poly-America's request to preclude Struve from testifying on the basis of a blown-film limitation that varies from the one the court has construed.
X
Poly-America also moves to strike the March 14, 2002 declaration of Struve submitted in support of Serrot's opposition to the motion to exclude his testimony. This motion appears to be moot in light of the court's rulings regarding Poly-America's motion to exclude the testimony of Struve, and it is therefore denied as moot.
To the extent it is not moot, the motion presents issues that should be raised by trial objection, if necessary.
XI A
Serrot moves to strike the expert testimony of Stanley L. Rawl ("Rawl"). It contends that Poly-America designated him as a rebuttal expert under Fed.R.Civ.P. 26(a)(2)(C) to come within the rebuttal expert deadline of February 1, 2002, but that Rawl does not qualify as a rebuttal expert. Serrot asks the court to strike his report, preclude him from testifying at trial, and award sanctions in the form of costs and attorney's fees. Serrot contends that Rawl was asked to provide his opinion on the installation and usage of geomembranes, does not identify whose testimony on this topic he is rebutting, and testified at his deposition that he was not rebutting anyone in his report.Poly-America maintains that Rawl's testimony rebuts Struve's testimony that the patents-in-suit are invalid as obvious. It argues that secondary considerations (the Graham factors) are an essential component of the obviousness determination and that Rawl will address them.
Graham v. John Deere Co., 383 U.S. 1 (1966).
B
Rule 26(a)(2)(C) effectively provides that rebuttal disclosures are those that relate to evidence that is "intended solely to contradict or rebut evidence on the same subject matter identified by another party" in its expert disclosure. Although a rebuttal expert witness will often know whose testimony he is rebutting and what is the precise content of that testimony, the Rule does not require such knowledge in every case to qualify as the disclosure of a rebuttal expert. It is sufficient if the evidence disclosed under the rebuttal rubric is intended solely to contradict or rebut evidence on the same subject matter that another party has identified in its expert disclosure. To determine whether a disclosure is properly included under Rule 26(a)(2)(C) rather than under Rule 26(a)(2)(B), it will often be helpful to answer these three questions: First, what evidence does the rebuttal expert purport to contradict or rebut? Second, is the evidence disclosed as rebuttal evidence on the same subject matter as that identified by another party in its Rule 26(a)(2)(B) disclosure? Third, is the evidence disclosed as rebuttal evidence intended solely to contradict or rebut that evidence?
Here, Poly-America has shown that at least some of Rawl's testimony purports to contradict or rebut Struve's opinion that the patents-in-suit are invalid based on obviousness. It does so by addressing certain of the Graham factors via objective evidence. This proof is disclosed as rebuttal evidence on the same subject matter as that identified by Serrot in its Rule 26(a)(2)(B) disclosure. Although Poly-America could have made the precise scope of the disclosure clearer — Rawl states generally that he has been asked to provide his opinion "on the installation and usage of geomembranes," P. Mot. Strike Rawl App. 20 — there is no indication in his statement that he is not purporting to present objective evidence that goes directly to a factor made pertinent by Graham and thus to rebut Struve's obviousness opinion. The evidence that the court deems to fall within Rule 26(a)(2)(C) is intended solely to contradict or rebut Struve's opinion because it has no other stated or apparent purpose.
Under this ruling, Rawl's testimony will be limited to addressing the issue of obviousness under one or more Graham factors. See P. Mot. Strike Rawl Br. at 4 ("Rawl's statement presents evidence of secondary considerations that directly rebuts the obviousness evidence presented by Struve. Poly[-America] intends to offer such evidence to rebut Serrot's obviousness contentions.").
Accordingly, on the assumptions set out, the court denies Serrot's motion to strike.
See supra note 11.
XII
Serrot moves for leave to file a motion to realign the parties. The court grants the motion and directs the clerk of court to file Serrot's motion today.
Although, in briefing the motion for leave, the parties have essentially addressed the merits of the question whether realignment should be permitted, they necessarily have done so without the benefit of the court's rulings today on the other pending motions in this case. By granting the motion for leave, the court will ensure that Poly-America will have a fair opportunity to respond to the motion on the merits, with knowledge of the court's rulings, and that Serrot, based on similar knowledge, will have a fair chance to reply to Poly-America's opposition. Moreover, permitting supplemental briefing will enable the parties to address an issue that materially impacts whether to realign the parties: whether there are any affirmative defenses and counterclaims that remain following the court's decisions today. Because Serrot has pleaded its affirmative defenses and counterclaims under a notice pleading standard, as it is permitted to do, the court has not been able confidently to conclude that they have all been resolved, even after careful study of Serrot' s amended answer and counterclaim.
For that reason, the court has addressed motions to exclude and strike expert testimony that would arguably be moot if only the issue of Poly-America's infringement remedies remains to be litigated at trial.
* * *
For the reasons stated, the court grants Poly-America's March 1, 2002 motion for partial summary judgment, denies Serrot's April 9, 2002 motion for reconsideration; denies as moot Poly-America's April 26, 2002 motion to strike motion for reconsideration and April 26, 2002 motion to strike addendum to expert report of Struve; denies without prejudice Poly-America's March 1, 2002 motion to exclude testimony of Newman; grants in part and denies in part Poly-America's March 1, 2002 motion to exclude testimony of Struve and denies as moot its April 5, 2002 motion to strike declaration of Struve; denies Serrot's March 1, 2002 motion to strike the expert testimony of Rawl; and grants Serrot's May 30, 2002 motion for leave to file motion to realign the parties.SO ORDERED.