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Buried Broadband and Single Layer Capacitor Competitors Head to Trial

Trial is underway between Plaintiffs American Technical Ceramics Corp. and AVX Corp. (together, “Plaintiffs”) and Defendant Presidio Components, Inc. (“Presidio”), following the Court’s May 30, 2019 ruling on the parties’ Daubert motions and May 31, 2019 ruling on the parties’ various motions in limine.  U.S. District Judge Kiyo A. Matsumoto (E.D.N.Y.) is presiding over the trial that began on June 10, 2019.

As we’ve written about before—regarding the Court’s March 2018 summary judgment decision and its January 2019 estoppel ruling—Plaintiffs are manufacturers of electrical components, and own U.S. Patents No. 6,144,547 and 6,337,791 (together, the “patents-in-suit”).  On November 6, 2014, Plaintiffs sued Presidio, alleging that Presidio’s manufacturing of buried broadband (“BB”) and single layer (“SL”) capacitors infringe the patents-in-suit. 

In its Daubert opinion, the Court granted Plaintiffs’ motion to preclude certain testimony of Presidio’s technical and damages experts.  First, the Court agreed that Presidio’s technical expert could not offer opinions that contradicted the Court’s claim construction order, such as interpreting the claims to require a numerical limit when the Court declined to read such a numerical limit into the claims’ terms.   The Court next precluded Presidio’s experts from testifying about certain non-infringing alternatives to the accused capacitors that, although manufactured after the close of fact discovery, were not disclosed or produced during discovery.  Finally, Plaintiffs moved to preclude testimony regarding the parties’ prior litigation in the Southern District of California, in which Presidio won injunctions and awards of lost profits based on Plaintiffs’ sale of certain capacitors found to infringe a different Presidio patent.  The Court held that, at a minimum, Rule 403 barred discussion of the prior litigations that “would seriously risk misleading the jury based on an infringement determination of an unrelated patent.”

The Court denied Presidio’s motion to exclude Plaintiffs’ infringement expert, but granted Presidio’s motion to exclude testimony regarding a reasonable royalty from Plaintiffs’ damages expert.  Specifically,  Presido argued that because Plaintiffs’ infringement expert only evaluated 100 capacitors out of the millions of accused capacitors, his opinion was based on insufficient data.  The Court rejected this argument because Presidio offered no compelling precedent that a small sample size warranted exclusion, and, during discovery, it had produced samples of BB and SL capacitors that were “representative” of all accused products.

In its ruling on the parties’ motions in limine, the Court agreed with Plaintiffs that testimony regarding the inter partes review of the patents-in-suit—as well as other USPTO proceedings involving other patents—would be confusing to the jury.  The Court rejected, however, Plaintiffs’ argument that Presidio should be judicially estopped from arguing that, for purposes of calculating lost profits, firms other than the parties compete in the high-performance broadband capacitor market.  In so holding, the Court reasoned that a “conclusion that there are no non-infringing alternatives when two suppliers compete head-to-head does not necessarily mean that the high-performance market had only two suppliers during the relevant period.”  Next, the Court held that although the statutory presumption of validity attached to all patents is not evidence to be weighed by the jury, the jury would benefit from some explanation as to why such a presumption attaches.  The Court thus allowed the parties to reference the presumption of validity in their closing arguments.  The Court also considered Presidio’s argument that because Plaintiffs did not raise any allegation of copying of Plaintiffs’ products by Presidio, Plaintiffs should be excluded from bringing it up at trial.  The Court agreed and held that because no evidence was provided that a specific capacitor produced by Presidio in fact practiced the patents-in-suit, evidence of copying that capacitor would not be probative of willful infringement, and would in fact be unduly prejudicial to Presidio.  Finally, as to evidence of willful infringement, the Court agreed with Plaintiffs that, despite not seeking a preliminary injunction, they were entitled to present evidence of post-suit willful infringement.  

The parties’ dispute regarding the relevant market used to calculate lost profits spilled over into discussions of jury instructions.  Plaintiffs request an instruction regarding calculating lost profits using market share, and argue that the jury would “benefit from being correctly instructed on the law that (i) awarding lost profits analysis does not require a finding of a two-supplier market and (ii) damages may be allocated on the basis of market share.  Presidio, however, maintains that no evidence of relative market share has been produced, and such an instruction would confuse the jury.  The Court’s ruling on jury instructions remains pending.  Plaintiffs rested their case on June 14, and Presidio began calling its witnesses on June 17.

Case:  Am. Tech. Ceramics Corp. et al. v. Presidio Components, Inc., No. 14-CV-6544 (E.D.N.Y.).