Patent Litigation Surveys

1. Patent Litigation Surveys Tuesday, September 23, 2008 Austin IPLA Westwood Country Club Robert Cote, Principal McKool Smith

2. Uses of Surveys Traditional: • Trademark Infringement and Lanham Act (customer confusion, genericness of a name, and secondary meaning through polling impressions) New: • Lanham Act (competitor's false statements to customers) Schering Corp. v. Pfizer Inc., 189 F.3d 218 (2nd Cir. 1999)(See App. Tab 6) • Patent Infringement (induced and direct infringement) Applera v. MJ Research, 389 F. Supp. 2d 356 (D. Conn. 2005) (see App. Tabs 5 and 8) • Damages (user preferences for patented feature) Advanced Medical Optics v. Alcon, 2005 U.S. Dist. LEXIS 5803 (D. Del. 2005)

3. 1983 Invention of PCR Feb. 1986 Second Cetus Thermal Cycler for PCR – Son of Cycle Dec. 1985 First Cetus Thermal Cycler for PCR - Mr. Cycle Jul. 1987 First Applera Thermal Cycler for PCR - DNA Thermal Cycler 1991 Applera introduces 9600 Thermal Cycler 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1988 First MJ Research Thermal Cycler - PTC-100 The Applera v. MJ Research Story

4. Induced Infringement § 271 Infringement of Patent * * * * (b) Whoever actively induces infringement of a patent shall be liable as an infringer. (c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer. Patent, Trademark & Copyright Laws, June 2008 Edition

5. PCR Patents: Induced Infringement To prove that MJ has induced infringement of those patents, Applera must show … that MJ took actions that caused, urged, encouraged, or aided MJ’s customers…to perform a process in a manner that you find infringes a claim of the PCR process patents. * * * * Applera must prove that MJ possessed specific intent to encourage their customers’ infringement, not merely that they had knowledge of the customers’ acts which Applera claims constitute infringement. In addition, there can be no inducement of infringement unless MJ’s customers directly infringed a claim of the thermal cycler or PCR process patents. Applera v. MJ Research - Jury Instructions p. 24

6. PCR Patents: Induced Infringement • caused, urged, encouraged, or aided PTX 431

7. PCR Patents: Induced Infringement • caused, urged, encouraged, or aided PTX 1345 pp. 6-2, 6-3

8. PCR Patents: Induced Infringement To prove that MJ has induced infringement of those patents, Applera must show … that MJ took actions that caused, urged, encouraged, or aided MJ’s customers…to perform a process in a manner that you find infringes a claim of the PCR process patents. * * * * Applera must prove that MJ possessed specific intent to encourage their customers’ infringement, not merely that they had knowledge of the customers’ acts which Applera claims constitute infringement. In addition, there can be no inducement of infringement unless MJ’s customers directly infringed a claim of the thermal cycler or PCR process patents. Applera v. MJ Research - Jury Instructions p. 24

9. Is a Survey Needed? Circumstantial evidence is sufficient to establish direct infringement and inducing infringement, and “may also be more certain, satisfying and persuasive than direct evidence.” Moleculon Research Corp. v. CBS Inc., 793 F.2d 1261, 1272 (Fed. Cir. 1986)

10. PCR Patents: Induced Infringement Direct Infringement By MJ’s Customers PTX 901 pp. 11-12

11. PCR Patents: Induced Infringement Direct Infringement By MJ’s Customers PTX 962 p. 52

12. Original Survey

13. Original Survey

14. Original Survey

15. Original Survey

16. Original Survey

17. Excerpt from 2002 Order “Further, the court finds that the survey is inadmissible hearsay.… Schering Corp. v. Pfizer Inc., 189 F.3d 218, 231 (2d Cir. 1999). The survey at issue here presents problems with respect to trustworthiness. The participants were selected from MJ’s sales database. The corresponding telephone number was called, and the interviewer asked to speak with the person possessing the most knowledge about the thermal cyclers used in the respective facility. However, no inquiry was made regarding the person’s expertise, position, responsibilities, or contact with the thermal cyclers. Further, the respondents were told that the responses were being used for marketing research. They therefore had no indication of the interviewer’s need for truthful, thorough, and accurate responses to the questions that potentially could be used to establish a patent infringement claim in so important a case.” 2002 Order (See Tab 2)

18. First Supplemental Survey

19. First Supplemental Survey

20. First Supplemental Survey

21. Second Supplemental Survey

22. Second Supplemental Survey

23. Second Supplemental Survey

24. Excerpt from 2004 Order “The earlier concerns expressed in the opinions of Judge Squatrito regarding the original survey of Gerald Ford, Dr. Gerald Ford, have been satisfied by Dr. Ford’s first supplemental survey, and as well his second supplemental survey, and the Court concludes that the three together otherwise satisfy the requirements for admissibility under fed rule 807, the residual hearsay exception, in light of the Second Circuit’s Schering v. Pfizer, 189 F.3d 218.” 2004 Order (See Tab 5)

25. Relevant Rules of Evidence Rule 803(1). Present sense impression. A statement describing or explaining an event or condition made while the declarant was perceiving the event or condition, or immediately thereafter. Rule 803(3). Then existing mental, emotional, or physical condition. A statement of the declarant's then existing state of mind, emotion, sensation, or physical condition (such as intent, plan, motive, design, mental feeling, pain, and bodily health), but not including a statement of memory or belief to prove the fact remembered or believed unless it relates to the execution, revocation, identification, or terms of declarant's will. Federal Rules of Evidence

26. Relevant Rules of Evidence Rule 807. Residual Exception. A statement not specifically covered by Rule 803 or 804 but having equivalent circumstantialguarantees of trustworthiness, is not excluded by the hearsay rule, if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rules and the interests of justice will best be served by admission of the statement into evidence. However, a statement may not be admitted under this exception unless the proponent of it makes known to the adverse party sufficiently in advance of the trial or hearing to provide the adverse party with a fair opportunity to prepare to meet it, the proponent's intention to offer the statement and the particulars of it, including the name and address of the declarant. Federal Rules of Evidence

27. Trustworthiness: Generally The hearsay rule is generally said to exclude out-of-court statements offered for the truth of the matter asserted because there are four classes of risk peculiar to this kind of evidence: those of (1) insincerity, (2) faulty perception,(3) faulty memory and (4) faulty narration, each of which decreases the reliability of the inference from the statement made to the conclusion for which it is offered. * * * * Survey evidence, for example, is susceptible not only to all four classic hearsay dangers but also to an additional class of risk arising from the fact that parties usually offer surveys to support statistical inferences. These inferences can be subject to methodological error and can sometimes be manipulated through artful data collection or presentation. Schering, 189 F.3d at 232-33.

28. Trustworthiness: Proper Methodology Proper survey methodology can, however, help ensure the reliability of the statistical inferences for which a survey is offered.  Proper survey methodology can also help reduce two of the four classic hearsay dangers.  In particular, the risk of insincerity can ordinarily be reduced if the interviewers and those questioned lack knowledge of the litigation and the purpose of the survey....Similarly, surveyors can reduce the risk of faulty narration by framing questions in a clear, precise and non-leading manner. Schering, 189 F.3d at 233-34.

29. Trustworthiness: Proper Methodology The criteria are as follows: • The population must be properly chosen and defined. • The sample chosen must be representative of that population. • The methodology for gathering data must be established to create accuracy and objectivity and the appropriate control groups must be instituted. • The questions must be clear and developed so as to be result-neutral, not leading, and not suggestive of any answer. • The respondents must be allowed to explain the reasons for their answers. • The survey must be conducted by qualified persons following proper interview procedures. • The process must be conducted so as to ensure objectivity. • The data must be analyzed in accordance with accepted statistical standards. Reference Manual on Scientific Evidence.

30. More Probative Rule 807(B)'s so-called "necessity" criterion nevertheless requires courts to compare the reliability, or trustworthiness, of a survey with that of other evidence that a proponent might reasonably obtain to establish the same fact.  See Zippo, 216 F. Supp. at 683 (noting that inquiry "requires a comparison of the probative value of the survey with the evidence, if any, which as a practical matter could be used if the survey were excluded"). Schering, 189 F.3d at 236-37.

31. Interests of Justice In the context of survey evidence, the interests of justice and the general purposes of the rules of evidence are generally best served by the admission of surveys that meet these two criteria (trustworthiness and necessity). Schering, 189 F.3d at 237-38.

32. Relevant Rules of Evidence Rule 702. Testimony by Experts. If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. Federal Rules of Evidence

33. Relevant Rules of Evidence Rule 703. Bases of Opinion Testimony by Experts. The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence in order for the opinion or inference to be admitted. Facts or data that are otherwise inadmissible shall not be disclosed to the jury by the proponent of the opinion or inference unless the court determines that their probative value in assisting the jury to evaluate the expert's opinion substantially outweighs their prejudicial effect. Federal Rules of Evidence