Court Partially Allows Forensic Accountant Testimony in Patent Case

The defendant hired an accountant to provide expert witness testimony on damages in this patent infringement case.  The plaintiff filed a motion to exclude the testimony.

Facts: This case (Deflecto, LLC v. Dundas*Jafine Inc. – United States District Court – Western District of Missouri – November 4th, 2015) involves patent infringement.  The defendant, Dundas Jafine Inc has filed a motion to exclude the expert witness testimony of Marc Vianello, a forensic accounting expert witness on numerous grounds.  Mr. Vianello was hired to provide testimony on damages.

Discussion: First, the defense argues that Mr. Vianello did not correctly apply the law in terms of pre-suit damages.  They claim that Mr. Vianello analyzed the damages based on a start date of constructive notice, even though the plaintiff had admitted that it did not provide constructive notice.  In addition, they maintain that Mr. Vianello testified incorrectly that a marking defense was the same thing as a laches defense.  Also, in regard to pre-suit damages, the defendant argues that Mr. Vianello stated that the plaintiff was entitled to damages for more than the six allowable years prior to the filing of the lawsuit.  The court rejected all of these arguments, stating that most of them go to weight of the opinions and not their admissibility.

Second, the defense argues that Mr. Vianello did not properly utilize the Panduit test to show damages for lost profits.  The Panduit test, there are four pieces that the plaintiff must show in order to obtain lost damages: 1) the demand for the product; 2) absence of non-infringing substitutes; 3) manufacturing and marketing capability to exploit the demand; and 4) the amount of profit it would have made if not for the infringement.  The defendant, in turn, provided its own analysis of the data for the Panduit test.  The court opined that Mr. Vianello still utilized the correct test, but the defendant just used different data, which is not proper avenue to pursue inadmissibility of expert witness testimony.

Third, a patent owner is also entitled to lost profits it would have also made on non-patented items if it is usually sold with the patented item.  The unpatented components must work with the patented pieces in a manner which produces the desired output product.  This is known as a convoyed sale.  The defendant stated that Mr. Vianello’s testimony on convoyed sales should be excluded because he 1) stated the wrong legal standard for these type of sales and 2) wrongly determined that certain unpatented products are convoyed products.  The court disagreed and stated that this type of argument is not grounds for exclusion and goes to the weight of the opinions, not their admissibility.

Also, the defendant argued that Mr. Vianello’s testimony on future damages should be excluded for three reasons: 1) future damages are not available when the plaintiff seeks an injunction; 2) he utilized unreliable forecasts from National Association of Home Builders and the Association of Home Appliance Manufacturers; and 3) the use of a software program to determine future damages.  The court, again, disagreed, stating that these arguments also go to the weight of the testimony and not its admissibility.

Last, the defendants stated that the plaintiff should get “transition damages” based on the roll-out of the product for Home Depot.  Here, the court agreed with the defendant in that this portion of the testimony should be excluded as plaintiff dis not cite to any legal authority on this issue.

Held: Defendant’s motion to exclude the testimony of Marc Vianello is granted in part and denied in part.