Expert witness testimony is a frequent (almost ubiquitous) feature of patent litigation, if only because questions of the state of the art or the understanding of one having ordinary skill in the art are almost always at issue for claim construction, infringement, and invalidity issues. In HVLPO2, LLC v. Oxygen Frog, LLC, the Federal Circuit addressed whether opinion testimony from a witness not qualified as an expert is admissible, deciding that it is not.
The case arose in patent infringement litigation over U.S. Patent Nos. 8,876,941 and 9,372,488, directed to "methods and devices for controlling an oxygen-generating system, which is used to sustain and manage airflow for torch glass artists who use surface mix glass torches." Claim 1 of the '488 patent is representative:
1. An apparatus for managing an oxygen generating system, the oxygen generating system configured for supplying a sustained flow of a gaseous mixture comprising mostly oxygen, the apparatus comprising: a controller device configured to: receive a first pressure signal associated with a first pressure; determine the first pressure to be less than or equal to a startup threshold pressure, said first pressure associated with a gaseous pressure of an oil-less tank; send a signal to switch a first circuit on, said first circuit for providing electrical power to a bank of at least two oxygen generators; send a signal to switch a second circuit on, said second circuit for providing electrical power to an oil-less air compressor; receive a second pressure signal associated with a second pressure; determine the second pressure to be greater than or equal to a shutoff threshold pressure, said second pressure associated with a gaseous pressure of the oil-less tank; send a signal to switch the first circuit off; and send a signal to switch the second circuit off.
The District Court granted summary judgment to HVLPO2 on infringement and had a jury trial on Oxygen Frog's assertions that the claims were obvious. The jury considered testimony from a lay witness, who was deposed as a fact witness and was not qualified as an expert, who testified that the invention would have been obvious to him based on the prior art (which consisted in part of an on-line video that the witness posted himself). HVLPO2 objected to this testimony as expert witness testimony by a lay witness, but the District Court permitted the jury to consider the evidence over the objection, giving instead a limiting instruction ("a witness such as [the witness] certainly can offer his observations and explain to you how a system works and what he thinks would occur to him from his perspective would or would not be obvious"). The jury found the claims to be obvious, the District Court denied HVLPO2's motion for a new trial, and this appeal followed.
The Federal Circuit reversed, in an opinion by Judge Moore, joined by Judges Newman and Chen. The panel held that the District Court's denial of HVLPO2's motion for a new trial was an abuse of discretion (under 11th Circuit law), on the grounds that it was error to permit the jury to hear the lay witness's testimony and rely on that testimony to find the claims in suit obvious. "Under the circumstances here," according to the opinion, "that determination was plainly wrong; the district court's limiting instruction was insufficient to cure the substantial prejudice caused by [the lay witness's] testimony."
The opinion cites Federal Rule of Evidence 702 in support of its decision, regarding the qualifications required to establish a witness as an expert, finding that this standard "precisely describes testimony which would pertain to an obviousness invalidity challenge in a patent trial." An expert's role is to assist the fact finder "to understand the evidence or to determine a fact at issue," citing Sundance, Inc. v. DeMonte Fabricating Ltd, 550 F.3d 1356, 1361-62 (Fed. Cir. 2008) (which considered the prohibition against expert testimony in an obviousness determination).
The opinion also cites Federal Rule of Civil Procedure 26, which requires that a party disclose an expert witness to an opposing party and provide a written expert report containing "all opinions of the expert, the reasons and bases for those opinions, and all facts relied upon in the formation of the opinion." Fed. R. Civ. P. 26(a)(2). Here, Oxygen Frog did not comply with these requirements, but argued on appeal that the requirements did not apply because its witness was not proffered as an expert. The Federal Circuit disagreed, saying that this testimony "was directed to the central legal HVO's asserted patent claims were invalid for obviousness."
The panel rejected Oxygen Frog's argument that permitting the jury to consider the lay witness's testimony was mere harmless error. The panel held that this was an error that caused "substantial prejudice" because it was the basis for the jury returning a verdict that the claims at issue were obvious. And the panel considered this prejudice in context:
There is no way to know whether [the lay witness's] improper testimony provided some or all of the basis for the jury's decision. Not only did the district court's admission of [the lay witness's] improper testimony deprive HVO of its right to have the question of obviousness decided based on admissible, qualified expert testimony, it prejudiced HVO by not affording it the appropriate procedures for testing such testimony.
In addition, the panel notes that expert testimony is subject to challenge under Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993). And the opinion notes HVLPO2 was not afforded the procedural protections of the Federal Rules by the District Court's admission of expert testimony by a lay witness, which worked "significant prejudice" to HVLPO2.
Finally, while acknowledging that in some circumstances a district court can cure improper admission of inadmissible testimony, in this case the panel found that the instruction was no cure because it "improperly permit[ted] the jury to consider [the lay witness's] testimony as evidence of obviousness" and was "no different than an instruction for how a jury should consider expert testimony" (emphasis in opinion).
HVLPO2, LLC v. Oxygen Frog, LLC (Fed. Cir. 2020)
Panel: Circuit Judges Newman, Moore, and Chen
Opinion by Circuit Judge Moore