Two points of interest about patent suit experts come out of the pretrial ruling in Seitz v. Envirotech Sys., 4:02CV4782 (S.D. Tex. 3/6/2008). The named plaintiff, apparently, had years of experience running his tankless water-heater company, and also, “twenty years of experience in corporate finance and mortgage banking.” On that basis, plaintiff-patentee Seitz sought to act as an expert, and he issued a damages report that quantified lost market share, lost profits and reasonable royalty rates. The district judge disallowed Seitz testifying as an expert on those topics, but did allow him to “provide a lay opinion on lost profits and reasonable royalty rates.” His “financial underwriting work did not involve calculating lost profits from patent infringement.” Yeah, but, courts routinely allow CPA’s and economists to do that for the first time in patent cases. The interesting commentary comes when the judge compares and contrasts the evidence rules on lay and expert opinion. He quotes from Judge Whyte’s recent ruling in Hynix v. Rambus, that the two rules try to provide an “unflinching” separation between what comes in as expert and lay opinion, but then notes that the “advisory committee note …blinks.” Judge Rosenthal blinks and, while refusing to let Seitz speak as an expert, allows his “opinion on damages, based on his personal knowledge of the company’s sales and the [entire] market” to come in. That recalls the old saw, ‘Judge I don’t know what rule this evidence comes in under, but it’s OK as long as it comes in.’
The second point of interest is whether to strike the defendant’s expert, whose report was written, to some extent, by defense counsel. “Envirotech produced fifteen” drafts of the report, but not the “original” draft version. The expert testified in a deposition that he rendered his opinion to counsel “in face-to-face meetings” and by telephone “before any initial written drafts were created.” He “stated that the expert reports reflected the opinions he had previously expressed to counsel,” and that “the initial draft reports …[were] prepared by Envirotech’s counsel.” The judge denied the motion to strike, because the movant had “not met its burden of showing that Dr. Butler had so little involvement in preparing the reports of his opinions as to warrant striking” them.
Perhaps both the plaintiff and the defense lawyers could provide lay opinion testimony.