Alifax Holding SPA v. Alcor Scientific Inc.

          MEMORANDUM AND ORDER

          William E. Smith Chief Judge

         Before the Court is Defendants' Motion to Exclude the Opinions of Expert Witness Christopher J. Bokhart (ECF No. 230). Mr. Bokhart has proffered opinions concerning damages for the Plaintiffs' claims of patent infringement, copyright infringement, and trade secret misappropriation. The Defendants have asked the Court to exclude Mr. Bokhart's opinions in their entirety. The Court heard extensive argument on this motion over two days; the motion was granted in part and denied in part in two earlier rulings.^[1]

         The Court kept the remainder of the motion under advisement and bifurcated the trial into a liability phase and a damages phase. During trial, the claims narrowed. The copyright claim fell away with the exclusion of Mr. Bokhart's damages testimony; the patent infringement claim was withdrawn (with the Court entering judgment for the Defendants) after the evidence fell short of proving the allegations. Thus, the case has been narrowed to one alleging trade secret misappropriation and breach of a confidential relationship.

         The Court held a lengthy conference with the parties to discuss the scope and admissibility of Mr. Bokhart's opinions after the jury returned a verdict finding liability on April 30, 2019. This order now addresses the last subject of Mr. Bokhart's opinions: damages for trade secret misappropriation.

         For the reasons that follow, the Defendants' motion is GRANTED IN PART and Mr. Bokhart's opinions concerning trade secret misappropriation damages are EXCLUDED in their entirety. I. Bokhart's Trade Secret Damages Opinion Mr. Bokhart advances two damages theories based on these claims: (1) a general opinion that Alifax is entitled to recover “all earned revenue”^[2] from the sale of Alcor's iSED analyzers (including convoyed sales) from fiscal year 2012 through at least September 30, 2018, as unjust enrichment damages attributable to misappropriation of all “trade secrets”; and (2) a narrower opinion that Alifax is entitled to “head start” damages, i.e., unjust enrichment specifically arising from any temporal advantage obtained by the misappropriation of one particular trade secret - “the trade secret related to software and firmware . . . .”^[3] See Expert Report of Christopher J. Bokhart (“Bokhart Rpt.”) ¶¶ 189-93, ECF No. 237; Suppl. Expert Report of Christopher J. Bokhart (“Suppl. Rpt.”) ¶ 11, Ex. 8.2A S n.3, ECF No. 237-1.

         On April 30, 2019, the jury returned a verdict finding that the Defendants willfully misappropriated three trade secrets:

(1) Using a clear, plastic capillary photometer sensor (“CPS”) in an automated ESR analyzer, but only through February 6, 2014;

(2) Portions of computer program source code concerning the conversion of photometric measurements, including source code containing four specific conversion constants; and

(3) Information concerning an anemia factor set forth in trial exhibits 34 and 19.^[4]

See Trial Tr. Vol. 10 at 14:21-15:18, 15:25-16:16. An earlier formulation of the “source code” trade secret included alleged code used by Alifax to obtain or acquire photometric measurements. See, e.g., Pl.'s Second Am. Identification of Misappropriated Trade Secrets ¶ 5, ECF No. 137-27. Over Alifax's objection, the Court declined to allow Alifax's “acquisition” theory to be presented to the jury due to a failure of proof at trial. See Charge Conf. Tr. at 11:9-16:4. Only “conversion” source code evidence was presented by Alifax during the liability phase.

         II. Legal Standard

         Rule 702 of the Federal Rules of Evidence instructs that an expert may only provide opinion testimony if:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.

See also Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 592-93 (1993). The Court, acting as gatekeeper, may exercise wide discretion to admit or exclude such testimony consistent with its obligation to ensure that the jury receives only relevant and reliable expert evidence. Morris v. Rhode Island Hosp., C.A. No. 13-304-ML, 2014 WL 3107296, *5 (D.R.I. July 7, 2014) (citing Gen. Elec. Co. v. Joiner, 522 U.S. 136, 143 (1997)). And “while methodology remains the central focus of a Daubert inquiry . . . trial judges may evaluate the data offered to support an expert's bottom-line opinions to determine if that data provides adequate support to mark the expert's testimony as reliable.” Ruiz-Troche v. Pepsi Cola of P.R. Bottling Co., 161 F.3d ...