MEMC and PHARMASTEM (Daubert for Patent Experts) - 1

MEMC and PHARMASTEM (Daubert for Patent Experts) - 1

Scientific Evidence and Expert Testimony - Patent Litigation

Prof. MorrisOctober 23, 2009

last saved 10/23/09 6:20 pm

DAUBERT for PATENT LIABILITY EXPERTS: MEMC and Pharmastem

07107.1730 rjm

MEMC and PHARMASTEM (Daubert for Patent Experts) - 1

Daubert is the leading Supreme Court case on expert testimony. Before Daubert, an expert's opinion was admissible if it was based on a method of analysis that was "generally accepted" as reliable in the relevant scientific community. After Daubert, the test is whether the expert testimony, based on whatever methodology the expert chooses to use, is "relevant and reliable."

"[T]he trial judge must determine at the outset ...

whether the expert is proposing to testify to

(1) scientific knowledge that

(2) will assist the trier of fact to

understand or determine a fact in issue.

This entails a preliminary assessment

- of whether the reasoning or methodology underlying the testimony is scientifically valid and

- of whether that reasoning or methodology properly can be applied to the facts in issue.

... Many factors will bear on the inquiry, and we do not presume to set out a definitive checklist or test. But some general observations are appropriate.

Ordinarily, a key question to be answered in determining whether a theory or technique is scientific knowledge that will assist the trier of fact will be whether it can be (and has been) tested."

509 US at 593. Other factors mentioned by the Supreme Court include: whether the theory has been tested, whether the experts have published the results in peer-reviewed journal, what the rate of error is for the particular test applied by the experts, general acceptance in the relevant scientific community, and so on.

Daubert was a products liability suit brought by children who had limb-reduction defects, allegedly caused by an anti-nausea drug their mothers had taken while pregnant. The plaintiffs' experts, all of whom had excellent credentials, had submitted affidavits opposing a summary judgment motion brought by the drug company. The experts analyzed the drug's effects using 3 sources of data: animal studies, in vitro studies, and re-analysis using combined data from epidemiological studies. The trial court held that this analysis did not meet the 'generally accepted' standard (and saw no genuine issues of material fact on that score) and therefore granted summary judgment for the defendants, since the plaintiffs had no other proof of causation of their injury. The Ninth Circuit affirmed. The plaintiffs successfully petitioned the Supreme Court for review, arguing that the OLD rule was not correct. They won - and lost on remand, because their experts' methodology did no better under the new rule.

(In California state courts, "generally acceptance" is still the rule.)

As you can guess, scientific experts in patent cases, whose testimony concerns the technology of the patent in suit, the prior art or the accused device, are rarely the subject of Daubert motions. The two sides' experts may disagree in their conclusions, but their approach to the subject is usually the same. (Daubert motions are more common against the patent damages experts. Why?) Occasionally, however, Daubert motions are effective weapons in patent litigation. Here are excerpts from two patent cases where expert testimony was successfully attacked.

As usual, DOCS/EDITNOTE.DOC explains my editing policies.

MEMC ELECTRONIC MATERIALS, INC., Plaintiff-Appellant, v.

MITSUBISHI MATERIALS SILICON CORPORATION, MITSUBISHI SILICON AMERICA CORPORATION, SUMITOMO MITSUBISHI SILICON CORPORATION (also known as Sumco), SUMCO USA CORPORATION (also known as Sumco USA), and SUMCO USA SALES CORPORATION (also known as Sumco USA Sales), Defendants-Cross Appellants.

20061305, 20061326

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

248 Fed. Appx. 199

September 20, 2007, Decided

NOTICE: THIS DECISION WAS ISSUED AS UNPUBLISHED OR NONPRECENDENTIAL AND MAY NOT BE CITED AS PRECEDENT. PLEASE REFER TO FEDERAL RULES OF APPELLATE PROCEDURE RULE 32.1 GOVERNING TyHE CITATION TO UNPUBLISHED OPINIONS.

Appealed from: United States District Court for the Northern District of California. Judge Saundra Brown Armstrong (N.D. Cal., Aug. 13, 2007)

Before SCHALL, Circuit Judge, PLAGER, Senior Circuit Judge, and DYK, Circuit Judge.

OPINION

PLAGER, Senior Circuit Judge.

In this patent infringement case, once again on appeal to this court, MEMC Electronic Materials, Inc. ("MEMC"), a supplier of silicon wafers to the semiconductor industry, filed suit in ... the Northern District of California against [various entities related to Mitsubishi and Sumitomo] (collectively, "SUMCO") alleg[ing] that, inter alia, SUMCO [infringed] U.S. Patent No. 5,919,302 (the "'302 patent"), assigned to MEMC. SUMCO asserted affirmative defenses of

non-infringement and

invalidity

of the patent. On remand, following an earlier appeal, the trial court on cross-motions for summary judgment

- held that the asserted claims of the '302 patent were

-- invalid for lack of enablement and

-- not invalid for anticipation or obviousness.

- and with respect to the issue of

infringement,

the trial court granted SUMCO's motion[s]:

-- to exclude the expert report and testimony of MEMC's expert witness and

-- for summary judgment that its products did not infringe the asserted claims of the '302 patent.

We conclude that the trial court did not abuse its discretion in excluding the expert report and testimony of MEMC's expert witness, and thus on this record we affirm the judgment of non-infringement. {That means SUMCO wins, at least as to the accused devices in this lawsuit. The Court did find, however, that there were 'genuine issues of material fact' as to enablement, and therefore remanded for trial on that validity issue only. Thus the patent claims lived to see another day. The rest of the decision concerning validity is omitted. -RJM}

BACKGROUND

The '302 patent purports to disclose a method

for producing

semiconductor-grade single crystal silicon wafers

that are

substantially free of

agglomerated vacancy intrinsic point defects.

Prior art methods often resulted in such defects, which can severely impact the yield of the silicon wafers.

The only independent claim at issue is claim 1, which claims the silicon wafer itself, not the method for producing it. Claim 1 requires the wafer to have

"axially symmetric" vacancy-dominated regions

that are

"substantially free of agglomerated vacancy

intrinsic point defects."

'302 patent 23:1821. The patent expressly defines

"substantially free of agglomerated intrinsic point defects"

as

"a concentration of agglomerated defects which is less than the detection limit of these defects, which is currently about 103 defects/cm 2."

15:4649.

MEMC filed suit against SUMCO in 2001, alleging that SUMCO [infringed, both directly and by inducing a Samsung company to infringe]. During discovery, MEMC submitted the expert report of

Dr. Mule'Stagno, an MEMC employee,

{We can call him Dr. M. My best guess for pronunciation is Moo-LAY-stahn-yo, where 'stahn' rhymes with chron as in chronology. According to (visited 10/23/2009) he is currently at the University of Malta. From 1996 to 2006 he was Director of Worldwide Technology at MEMC: an insider. -RJM}

who tested the accused SUMCO wafers and concluded that 43 out of 45 tested wafers infringed the claims of the '302 patent. SUMCO filed a motion to exclude the expert report and testimony of Dr. Mule'Stagno with regard to the issue of infringement on the ground that they were inadmissible under Federal Rule of Evidence 702 and the standards set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). In a March 2004 ruling, the trial court gave MEMC the opportunity to cure the alleged defects in Dr. Mule'Stagno's expert report by submitting objective evidence that his testing methodology was generally accepted by at least a recognized minority of scientists in his field. MEMC subsequently submitted additional declarations from Dr. Mule'Stagno [only].

[After a trip to the Federal Circuit, the case returned to NDCal and] SUMCO filed a second motion to exclude Dr. Mule'Stagno's expert report and testimony on Daubert grounds. This time the trial court granted the motion, finding that the additional declarations submitted by Dr. Mule'Stagno failed to provide objective verification of his testing methodology. ... The trial court granted SUMCO's motion for summary judgment of non-infringement, concluding that [SUMCO's wafers] did not literally infringe the claims of the '302 patent. ...

MEMC challenges the trial court's ruling to exclude Dr. Mule'Stagno's expert report and testimony and appeals the non-infringement judgment. ...

DISCUSSION

1. Exclusion of Expert Testimony

The trial court excluded Dr. Mule'Stagno's expert report and declarations regarding infringement because MEMC failed to demonstrate that his testing methodology was scientifically reliable for establishing that SUMCO's wafers have

[1] "axially symmetric" vacancy-dominated regions that are

[2] "substantially free of agglomerated vacancy intrinsic point defects"

as required by the claims. We review the trial court's exclusion of expert scientific testimony for abuse of discretion. Kennedy v. Collagen Corp., 161 F.3d 1226, 1227 (9th Cir. 1998).

MEMC contends that the various tests performed by Dr. Mule'Stagno are conventional industry tests for analyzing the physical characteristics of silicon wafers. SUMCO does not disagree, but responds that MEMC did not provide objectively reliable evidence that the tests may be used to show what MEMC alleges they show, i.e., that the accused wafers satisfy the claim limitations. In particular, SUMCO argues that Dr. Mule'Stagno cannot show whether a wafer has fewer than 1000 defects per cubic centimeter

-- the patentees' definition of "substantially free of agglomerated intrinsic point defects" --

since the detection limit of the test on which he relies is 3300 defects per cubic centimeter. Dr. Mule'Stagno asserted that he reduced the detection limit by looking at multiple views through the microscope, but SUMCO responds that MEMC has not provided verification that this modified methodology is scientifically reliable. SUMCO also challenges

- Dr. Mule'Stagno's decision to disregard certain test results as noise or contamination and

- his assumption, in lieu of actual evidence, that the wafers are axially symmetric.

Under Daubert and Rule 702, expert opinion evidence must be both reliable and relevant to the issue before the trial court. Daubert, 509 U.S. at 59495. While the various tests carried out by Dr. Mule'Stagno may be commonly used in the industry to examine defects in silicon wafers, the record indicates that the results of those tests cannot prove that all the claim limitations are met. To the extent that Dr. Mule'Stagno varied the standard testing methodology, the record supports the trial court's conclusion that such modifications rendered the tests unreliable. Although the issue is a close one, under our deferential standard of review we cannot say the trial court abused its discretion in concluding that Dr. Mule'Stagno's expert report and testimony relating to infringement failed to meet the standards of relevance and reliability required by Rule 702.

2. Non-infringement

In the absence of Dr. Mule'Stagno's expert report and related declarations, which were properly excluded by the trial court, the evidence relied upon by MEMC is insufficient to create genuine issues of material fact with regard to infringement.

{I omit the rest of the discussion of the quality of the evidence MEMC is able to muster without the Mule'Stagno report. RJM}

* * *

PHARMASTEM THERAPEUTICS, INC., Plaintiff-Appellant, v. VIACELL, INC., Defendant-Cross Appellant, and CRYO-CELLINTERNATIONAL, INC., CORCELL, INC., Defendants-Cross Appellants, and CBR SYSTEMS, INC. (formerly known as Cord Blood Registry, Inc.), Defendant-Cross Appellant, and BIRTHCELLS TECHNOLOGY, INC. and BIO-CELL, INC., Defendants.

051490, 051551

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

491 F.3d 1342

July 9, 2007, Decided

Appealed from: United States District Court for the District of Delaware, Chief Judge Gregory M. Sleet, (decisions of 12/14/04 and 9/15/04)

Before NEWMAN, BRYSON, and PROST, Circuit Judges. Opinion for the court filed by Circuit Judge BRYSON. Dissenting opinion filed by Circuit Judge NEWMAN.

OPINION

BRYSON, Circuit Judge.

This patent infringement action was brought by appellant PharmaStem Therapeutics, Inc., in the United States District Court for the District of Delaware. [PO] PharmaStem sued six [AIs] defendants (four of which are appellees before us in this appeal), alleging that the defendants had infringed two patents owned by PharmaStem,

- U.S. Patent No. B1 5,004,681 ("the '681 patent") and

- U.S. Patent No. 5,192,553 ("the '553 patent"), a continuation-in-part of the '681 patent.

At the conclusion of the trial, the jury returned verdicts for PharmaStem on both patents, finding both patents infringed and not invalid. The jury also rejected the defendants' counterclaims of inequitable conduct and violation of the antitrust laws.

The defendants filed motions for judgment as a matter of law ("JMOL") and a new trial. In response, the district court

- on the '681 patent, first granted a new trial and then changed it to a JMOL of noninfringement; and

- on the '553 patent, granted a JMOL of noninfringement.

PharmaStem now appeals ... We affirm the district court's judgment as to the infringement issues.

[The AIs had also unsuccessfully moved for JMOL of invalidity. They cross-appealed on that and were succesfful: the Federal Circuit directed entry of a judgment of obviousness invalidity as a matter of law.]

I

[Background Facts]

The two patents in suit recite compositions and methods relating to a medical procedure for treating persons with compromised blood and immune systems. The treatment is based on the discovery that blood from a newborn infant's umbilical cord is a rich source of a type of stem cells useful for rebuilding an individual's blood and immune system after that system has been compromised by disease or a medical treatment such as chemotherapy.

* * *

As to infringement of the asserted '681 patent claims, the district court focused on the requirement that the recited compositions contain stem cells

"in an amount sufficient to effect hematopoietic reconstitution of a human adult."

To prove infringement, the court explained, PharmaStem was required to adduce evidence that the defendants' cord blood units contained a sufficient supply of stem cells to effect successful reconstitution of an adult. The court concluded that PharmaStem had failed to do so.

In addressing the sufficiency of the evidence on that issue, the trial court first ruled that it should have excluded the trial testimony of Dr. Mary Hendrix,PharmaStem's expert witness on infringement. The court noted that although Dr. Hendrix was "an accomplished stem cell biologist," she based her infringement opinion

"entirely on an analysis of the defendants' marketing materials, without ever considering any data regarding the composition of the defendants' cord blood units."

The court explained that Dr. Hendrix was not qualified as an expert in marketing or advertising and, in any event,

"her so-called analysis of the defendants' marketing materials was well within the jury's common knowledge, common sense and common experience."

The court pointed out that Dr. Hendrix's opinion that all of the defendants' cord blood units infringe was based on her conclusion that the defendants' promotional materials

"promise stem cells for pediatric and adult transplantation."

In that respect, according to the court,

"her opinion of infringement is no more than a lay-person's interpretation of the defendants' marketing materials."

The court therefore ruled that her testimony should have been excluded and that

"permitting PharmaStem to couch its presentation of this evidence in the form of an expert opinion was an error."

The district court then pointed out that the evidence at trial overwhelmingly indicated that not all units of cord blood obtained from a single individual at birth contain enough stem cells to reconstitute an adult. The court explained that PharmaStem did not attempt to prove by testing or by reference to data collected by the defendants that at least some of the cord blood samples preserved by the defendants satisfied that requirement. Instead, the court noted, PharmaStem adopted the strategy of trying to prove, principally through representations made by the defendants in their marketing materials and other documents, that all of the preserved cord blood samples infringed. As a consequence, the court explained, PharmaStem

"presented no evidence to the jury from which it could conclude that any specific cord blood unit or units stored by any of the defendants contained stem cells in a sufficient amount to reconstitute a human adult."

Because there was

"no legally sufficient evidentiary basis for a reasonable jury to find that all, or any specific number, of the defendants' cord blood units infringe the '681 patent,"

the court granted the defendants' motion for JMOL as to the '681 patent claims.

* * *

III

With respect to infringement of the '681 patent, ... PharmaStem contends that all of the cord blood samples the defendants have preserved infringe claim 1 of the '681 patent because the evidence at trial was sufficient to show that all those cord blood units contained enough stem cells to effect the hematopoietic reconstitution of a human adult. The defendants contend that PharmaStem failed to prove that any of their cryopreserved samples satisfy that limitation.

As the district court noted, PharmaStem did not attempt to use direct testing or other scientific evidence to prove that any particular cord blood sample or group of samples preserved by any of the defendants contained enough stem cells to reconstitute a human adult. Instead, PharmaStem relied on indirect evidence in the form of

- advertising and other materials generated by the defendants,

- scientific evidence relating to stem cell research in general,

- testimony from representatives of the defendants, and

testimony by their own expert witness, Dr. Hendrix.

The district court, however, concluded that PharmaStem's evidence did not constitute substantial evidence in support of PharmaStem's theory of infringement.