Alleged infringer didn’t timely disclose expert opinions

Where a company sued for patent infringement submitted a declaration in support of its motion for summary judgment that included multiple paragraphs constituting expert testimony that was neither timely disclosed nor harmless or substantially justified in its nondisclosure, those paragraphs were stricken.

Background

Daedalus Blue LCC alleges that products offered by defendant MicroStrategy Incorporated infringe on its ’172 and ’076 patents. Defendant filed a motion for summary judgement, accompanied by a declaration from Cezary Raczko. The declaration was buttressed by an exhibit of excerpted source code. Plaintiff moved to strike the Raczko declaration, which included a challenge to the accompanying source code exhibit.

The court-appointed special master issued a report and recommendation, or R&R, in which he recommended the court exclude paragraphs 7-12, 23-32 and the source code exhibit, but allow plaintiff time to depose Mr. Raczko regarding the extent of his personal knowledge with respect to the statements in paragraphs 13-22. Defendant filed an objection to the R&R.

Declaration

The special master concluded that paragraphs 7-12 and 23-32 of Raczko’s declaration involved opinion testimony and thus did not meet the personal knowledge threshold required of a lay witness as outlined in Federal Rules of Evidence 602 and 701. He then further determined that these paragraphs constitute expert testimony, and defendant failed to designate Raczko as a Rule 702 expert witness. Finally, the special master concluded that Raczko’s designation as a Rule 30(b)(6) witness does not alter the requirement for personal knowledge testimony.

The court agrees with the special master’s assessment that paragraphs 7-12 and 23-32 of Raczko’s declaration should be excluded, as those paragraphs constitute expert testimony that was neither timely disclosed nor harmless or substantially justified in its nondisclosure. Further, the court holds that the aforementioned paragraphs fail to satisfy the personal knowledge requirement of Federal Rules of Evidence 602 and 701.

Source code

The special master recommends that the court exclude the source code exhibit attached to Raczko’s declaration if the court finds either of two facts to be true: first, that the source code excerpted in the exhibit was not disclosed in defendant’s expert report on invalidity, or, second, if defendant did not disclose the invalidity theory that relies on this source code in its invalidity contentions, as that would mean plaintiff did not have adequate notice of defendant’s invalidity theory. The special master further recommended that, to the extent the court does not strike the source code exhibit, it should allow plaintiff additional time to review it and prepare a rebuttal expert.

The court believes that the issue is much more straightforward than the briefing — or even the R&R — suggests. In the Raczko declaration, the challenged source code exhibit is referenced only at paragraph 25. The court has already concluded that the special master correctly determined that paragraphs 23-32 constitute untimely-disclosed expert testimony and that the motion to strike will be granted as to those paragraphs.

In light of this ruling, defendant cannot use that portion of Raczko’s testimony “to supply evidence on [its] motion” — such evidence here being both the subject of the stricken testimony and the incorporated-by-reference excerpted portion of the source code. Because the source code exhibit only exists in connection to the declaration to buttress the expert portion of Raczko’s testimony, the court will likewise grant the motion to strike as to the source code exhibit.

Paragraphs 13-22

The special master recommends that the court allow plaintiff additional time to depose Raczko regarding his personal knowledge of the information presented in paragraphs 13-22 of the declaration. The court agrees.

It appears that knowledge obtained by Raczko likely came from information gleaned from his capacity as a manager. Whether such knowledge is non-hearsay, admissible hearsay under Federal Rules of Evidence 803 or inadmissible altogether, the current record does not offer sufficient information to determine. This open question supports ordering a supplemental deposition to clarify the source of Raczko’s knowledge and be dispositive as to its admissibility. The court will, however, order that such deposition be limited to the unused portion of time originally allotted for plaintiff’s deposition of Raczko.

Plaintiff’s motion to strike granted in part, denied in part.

Daedalus Blue LCC v. MicroStrategy Incorporated, Case No. 2:20-cv-551, Aug. 18, 2023. EDVA at Norfolk (Young). VLW 023-3-495. 21 pp.