Changing Expert Testimony Earns “Exceptional” +400K Award
Changing expert opinion on cross-examination in a patent dispute was so exceptional that it warranted not only dismissal of the case, but also the award of more than $400,000 in attorneys' fees, a US Federal District Court ruled. While the US Court of Appeal found it unclear whether the trial court applied the proper legal standard and remanded the case for reconsideration, one thing is clear: changing an expert opinion during trial is bound to have negative consequences.
In Intellectual Ventures I LLC v. Trend Micro Inc., (No. 19-1122, Fed. Cir., December 19, 2019), Intellectual Ventures (IV) initially filed a complaint with the U.S. District Court for the District of Delaware in 2010 for patent infringement against Trend Micro, Inc., Symantec Corp., and two other defendants for infringement of claims in several U.S. patents. The district court severed the claims against Trend Micro from the claims against Symantec.
IV, a non-practicing entity (considered by some to be patent trolls), argued that its patents were infringed by Symantec's and Trend Micro's anti-malware and anti-spam software. IV's patents used the word “characteristic” several times, a word which parties to disputed the meaning of during claim construction. Throughout claim construction, and pre-trial proceedings in the case against Symantec, IV's technical and patent expert witness, Patrick McDaniel, PhD, a Professor of Information and Communications Technology, opined that a “characteristic” is “an attribute of the document such as whether it contains a virus or is SPAM or bulk email or includes copyrighted content.” The district court adopted Intellectual Ventures's proposed constructions for the “characteristic” claim terms in the Symantec and Trend Micro actions.
At the Symantec jury trial, during cross-examination, Dr. McDaniel changed his opinion and testified that “bulk email was not a characteristic” of one of the patents. He expounded that he had changed his opinion after preparing for trial with IV's attorneys. The jury found that Symantec did not infringe that patent but had infringed two other patents.
After the Symantec trial, in Intellectual Ventures I LLC v. Trend Micro Incorporated (1:12-cv-01581 District Court, D. Delaware), Trend Micro made a motion for clarification of the court's claim constructions since McDaniel's opinion had changed. At the motion hearing, IV argued that its expert had not changed his opinion, despite the clear trial testimony, and claimed that bulk email “never was” within the scope of the claim because bulk email “does not describe the content” of email. The district court granted Trend Micro's motion for clarification and included “bulk email” as an example of a “characteristic” in its revised constructions as it had “learn[ed] only at the last minute” that IV understood the claim construction to exclude bulk email was excluded from claim 9 when it was clearly. This “was a surprise inconsistent with the representations from” IV, and “not what [the court] had intended” by its original claim construction.
Trend Micro moved for judgment as a matter of law, which the district court granted, cancelling the Trend Micro trial. Trend Micro then moved for attorney fees arguing that the case was exceptional under § 285 due to the changed opinion of IV's expert witness.
The district court agreed that IV's conduct was exceptional “solely with respect to this collection of circumstances regarding [its expert's] changed testimony,” but the court concluded that “it would be wrong to say that [Intellectual Ventures's] case was objectively unreasonable.”
IV appealed, and the Court of Appeals for the Federal Circuit reviewed the decision for abuse-of-discretion and found that the trial court, instead of determining whether the case was exceptional, appeared to have focused on whether “one discrete portion of the case” was exceptional. The Federal Circuit vacated the district court's finding of exceptionality and grant of attorney fees and remanded it to the court “to consider whether the circumstances surrounding the expert's changed testimony render the case exceptional.”
Preparing an expert witness opinion fully before deposition rather than trial might be good advice.