Summary
denying bifurcation, in part, where defendants did not show which aspects of calculating reasonable royalty or lost profits damages would be too complex for jurors
Summary of this case from Sprint Commc'ns Co. v. Charter Commc'ns, Inc.Opinion
Civil Action No. 01-7158
January 15, 2004
MEMORANDUM/ORDER
Plaintiffs, Sprinturf, Incorporated ("Sprinturf') and Hank Julicher ("Julicher"), filed a complaint against Southwest Recreational Industries, Incorporated ("Southwest") and Villanova University ("Villanova") for patent infringement. Plaintiffs seek judgment for past infringement and injunctive relief against further infringement of the claims of United States Patent No. 5,976,645, entitled Vertically Draining, Rubber-filled Synthetic Turf and Method of Manufacture ("`645 Patent"). Presently before the court is defendants' Motion to Bifurcate Liability from Damages and to Stay All Proceedings on Damages until a Trial of Liability Has Been Completed (#33). For the reasons set forth below, defendants' motion is hereby denied.
Discussion:
Rule 42(b) of the Federal Rules of Civil Procedure states:
The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of any number of claims . . . or issues, always preserving inviolate the right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States.
The decision to bifurcate is a "matter to be decided on a case-by-case basis and must be subject to an informed discretion by the trial judge in each instance." Lis v. Robert Packer Hosp, 579 F.2d 819, 824 (3d Cir. 1978). The party seeking bifurcation has the burden of demonstrating that judicial economy would be promoted and that no party would be prejudiced by separate trials. Spectra-Physics Lasers, Inc. v. Uniphase Corp., 144 F.R.D. 99, 101 (N.D. Cal. 1992). In order to determine if bifurcation would be appropriate, courts have assessed whether the litigation contains certain features that carry the potential to confuse the jury, such as: (1) the need to review a myriad of documents to resolve damages issues; (2) complex infringement issues; (3) multiple patents, infringing products, claims, counterclaims, or parties; and (4) the probability that the defendant would prevail on the infringement issue. See Real v. Bunn-O-Matic Corp., 195 F.R.D. 618, 621 (N.D. Ill. 2000) (surveying and synthesizing the case law on bifurcation in patent litigation). Additionally, in order to respect the Seventh Amendment guarantee of a fair trial, "separate trial of a particular issue cannot be ordered in the first instance when the issue is so interwoven with the other issues in the case that it cannot be submitted to the jury independently of the others without confusion and uncertainty that would amount to a denial of a fair trial." Wright Miller, Federal Practice § 2391 (1995); Gasoline Prods. Co. v. Champlin Refining Co., 283 U.S. 494, 500 (1931). While courts have held separate trials on liability and damage issues in patent cases with more frequency than in other types of cases, the employment of separate trials remains the exception rather than the rule. Real, 195 F.R.D. at 620.
In attempting to meet their burden, defendants articulate several reasons why this court should grant the Rule 42(b) motion. First, defendants claim that bifurcation carries a great potential to expedite the resolution of this case, either through a favorable verdict for Southwest on the issue of liability or, if Southwest does not prevail, through settlement. Second, defendants claim that bifurcation is necessary because the issue of damages in this case will be complex and, if tried in conjunction with infringement issues, will confuse a jury. Third, defendants claim that bifurcation will not result in the presentation of overlapping issues to different juries, and, therefore, that the Seventh Amendment will not preclude the bifurcation of liability and damages. Fourth, defendants claim that due to the extensive, burdensome, and costly process of discovery pertaining to damages, the delay in holding a separate damages trial until after a verdict on liability will serve the interests of expedition and judicial economy.
Defendants' arguments fail to demonstrate the need for this court to deviate from the conventional single trial rule. Their first assertion is nothing more than speculative. In fact, the validation of this type of self-serving argument, without more, would permit all defendants in all cases to sever liability from damages. See Reading Tube Corp. v. Employers Ins. of Wausau, 944 F. Supp. 398, 404 (E.D. Pa. 1996) (holding that defendant cannot "successfully argue that it should prevail on its motion for separate trials because it believes that [plaintiff] will not be able to meet its burden of establishing liability, and it wishes to avoid issues of damages altogether").
To support their additional arguments, defendants rely upon a series of cases granting bifurcation of liability from damages in the context of patent litigation. See e.g., Smith v. Alyeska Pipeline Serv. Co., 538 F. Supp. 977, 982-83 (D. Del. 1982). Defendants' reliance on Alyeska and its progeny, however, is misplaced. In granting the motion to bifurcate, the Alyeska court reasoned that the "issue of damages is complex and that the issues of liability and damages do not overlap." Id. at 983. The court emphasized that the defendants did not rely on the general assertion of the complexity of the damage issue, but, instead, "expressly represented to the Court that to resolve the damage issue will require a review of millions of documents and require extensive time both during discovery and at trial." Id. at 983-984.
Here, while defendants claim that a determination of damages will be "extremely complex-particularly because the defendants will seek a "reasonably royalty" test to compute damages while the plaintiffs will employ a "lost profits" damage analysis and because each side will retain their own experts-defendants have failed to indicate why the presentation of damages evidence would be any more complex than in the typical patent case and why damages and liability evidence could not be presented together. Additionally, defendants have not identified which aspects of the damages issue will be particularly difficult for jurors to comprehend, and unlike Alyeska, they have not suggested that the damages trial will require the production and inspection of "millions of documents."
In fact, this case is more akin to the scenario in Real, in which the court denied defendant's motion for bifurcation. As in the present case, Real involved one patent, one claim and one allegedly infringing product, and the defendants did not proffer evidence to show the complexity of damages computation, the complexity of the technology and liability issues, or the complexity of procedural issues. See Real, 195 F.R.D. at 620-22. Additionally, in Real, there was an overlapping of issues within the damage and liability phases of a trial, an issue with respect to which the Real court noted that a single trial would serve the interests of judicial economy, whereas with two separate trials, "it is not only possible, but probable, that repeated discovery disputes will arise over whether requested discovery is related to liability, damages, willfulness, or all of these issues," thereby leading to extended delay, unnecessary paperwork, more legal fees, and increased judicial intervention. See id. at 624.
Thus, it is hereby ORDERED that defendants' Motion to Bifurcate Liability from Damages and Motion to Stay All Proceedings on Damages until a Trial of Liability Has Been Completed (#33) is DENIED.