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Apr 28, 2021Legal
Can Previous IPR Testimony Come Back to Haunt a Failed Petitioner?

Previous Testimony May Highlight Infringement

When a failed PTAB petitioner heads back to court, Patent Owners sometimes seek to leverage the broad claim reads proposed at the PTAB to demonstrate infringement. Recently, in ChanBond, LLC v. Atlantic Broadband Group, LLC, et al., (D.DE., Apr. 19, 2021), the district court considered the admissibility of previous IPR testimony to an infringement case.

In Chanbond, (here) the accused infringer disputed the admissibility of a technical expert’s deposition conducted as part of an inter partes review of one of the three patents at issue in the suit.

The court analyzed the admissibility of the evidence under Federal Rule of Evidence 804(b)(1):

" In order for former testimony to be admissible as an exception to the hearsay rule: (1) the declarant must be unavailable; (2) testimony must be taken at a hearing, deposition, or civil action or proceeding; and (3) the party against whom the testimony is now offered must have had an opportunity and similar motive to develop the testimony by direct, cross, or redirect examination.

The dispute between the parties rested on the third point: opportunity and similar motive.

In the IPR, the patent challenger was Cisco. In the litigation in Delaware, Cox Communications was the party sued for infringement and challenging the asserted claims as invalid. Cox was indemnified by Cisco and, as admitted by the parties, Cisco’s successor in interest. While both Cisco and Cox raised the same invalidity defenses regarding the patent, the court’s question was whether Cisco had “similar motive to develop the testimony” in the IPR as Cox would in the Delaware litigation and found that it did not.

Rather than focusing on the invalidity defenses and what Cisco & Cox would be motivated to argue on those grounds, the court ruled:

" [T]he proper motive comparison is between Cisco’s raising of invalidity defenses and Cox’s raising of non-infringement arguments. For invalidity purposes, Cisco/Cox wanted to read the prior art and the claims as broadly as possible; for infringement purposes, Cisco/Cox does not necessarily care about the prior art, but surely wants to read the claims narrowly. Those goals are not the same or similar motivation; they are different motivations.

In other words, because the prior proceeding was only directed to invalidity whereas the Delaware litigation encompassed both infringement and invalidity contentions, the party’s interest was different—and the evidence could not be introduced under F.R.E. 804(b)(1). It is also worth noting that the IPR in this instance was utilizing the “broadest reasonable interpretation” claim construction rather then the Philips standard of the district court (since aligned).

ChanBond also argued that the testimony from the IPR showed infringement and should be admissible under F.R.E. 703. ChanBond’s point here was that its own expert’s infringement analysis rested on statements from the IPR testimony. Even if the testimony itself was inadmissible, the testimony should be admitted as underlying ChanBond’s expert’s analysis, as the testimony’s “probative value in helping the jury evaluate the opinion substantially outweigh[ed its] prejudicial effect.”

But the court found that the testimony a) was not a true basis for ChanBond’s expert’s opinions and b) had not been shown to “substantially outweigh” any prejudicial effect. From the order: “Dr. Nettles does not rely upon the Wechselberger testimony to form any of his opinions. He formed them independently. Rather, he relies upon the Wechselberger testimony as a substitute for cross-examining Cox’s expert (Dr. Cromarty) with someone else’s opinions.” Moreover, ChanBond had not even addressed the prejudicial point, a “predicate for admission.” As such, the court granted Cox’s motion in limine, excluding “not only the testimony but any reference to the testimony.”

As noted above, the PTAB’s change to the Philips claim construction standard, could impact this analysis going forward.  Likewise, where the exact same defendant and expert appear again on the district court side, the admissibility of such testimony would seem a closer call — despite the different focus in the PTAB and district court proceedings.

Scott A. McKeown is an author of the Patents Post Grant

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