Crocs, Inc. v. Effervescent, Inc.

• Decision Date: 30 March 2022
• Docket Number: 16-cv-02004-PAB-STV,Civil Action 06-cv-00605-PAB-MEH
• Parties: CROCS, INC., Plaintiff, v. EFFERVESCENT, INC., et al., Defendants. U.S.A. DAWGS, INC., et al., Plaintiffs, v. RONALD SNYDER, et al., Defendants.
• Court: U.S. District Court — District of Colorado

CROCS, INC., Plaintiff, v. EFFERVESCENT, INC., et al., Defendants.

U.S.A. DAWGS, INC., et al., Plaintiffs, v. RONALD SNYDER, et al., Defendants.

Civil Action Nos. 06-cv-00605-PAB-MEH, 16-cv-02004-PAB-STV,

United States District Court, D. Colorado

March 30, 2022

ORDER

PHILIP A. BRIMMER CHIEF UNITED STATES DISTRICT JUDGE.

This matter is before the Court on Counterclaim Plaintiffs' Motion to Exclude Certain Expert Testimony [Docket No. 1026]. Crocs, Inc. (“Crocs”) responded, Docket No. 1059 and counterclaim plaintiffs, U.S.A. Dawgs, Inc., Double Diamond Distribution, Ltd., and Mojave Desert Holdings, LLC (collectively, “Dawgs”), replied. Docket No 1079.

I. BACKGROUND

The Court assumes familiarity with this fifteen-year-long dispute and will not detail the procedural history or background facts beyond what is necessary to resolve this motion. Additional background can be found in previous orders and recommendations. See, e.g., Docket Nos. 673, 897, 1071.

Dawgs seeks to exclude Crocs's expert from “opining about the scope of two of the asserted patents in this case or the rulings” of the United States International Trade Commission (“ITC”) or United States Court of Appeals for the Federal Circuit. Docket No. 1026 at 2.^[1] Dawgs also seeks to preclude Crocs's damages expert, Peter Schwechheimer, from testifying about (1) whether Dawgs is a “knockoff” or “fast follower, ” (2) the quality of Dawgs's financial statements or the intent behind its “discovery discrepancies, ” and (3) pre-issuance damages. Id.^[2]

II. LEGAL STANDARD

Rule 702 of the Federal Rules of Evidence provides that:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise 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.

Fed. R. Evid. 702. As the rule makes clear, while required, it is not sufficient that an expert be qualified based upon knowledge, skill, experience, training, or education to give opinions in a particular subject area. Rather, the Court must “perform[] a two-step analysis.” 103 Investors I, L.P. v. Square D Co., 470 F.3d 985, 990 (10th Cir. 2006). After determining whether the expert is qualified, the proffered opinions must be assessed for reliability. See id.; Fed.R.Evid. 702 (requiring that the testimony be “based on sufficient facts or data, ” be the “product of reliable principles and methods, ” and reflect a reliable application of “the principles and methods to the facts of the case”).

In ruling on a Rule 702 motion, the district court has a “gatekeeper function to ‘ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable.'” United States v. Gabaldon, 389 F.3d 1090, 1098 (10th Cir. 2004) (quoting Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 589 (1993)). To perform that function, a court must “assess the reasoning and methodology underlying the expert's opinion, and determine whether it is both scientifically valid and applicable to a particular set of facts.” Dodge v. Cotter Corp., 328 F.3d 1212, 1221 (10th Cir. 2003) (citing Daubert, 509 U.S. at 592-93). Where an expert witness relies on experience, the expert “must explain how that experience leads to the conclusion reached, why that experience is a sufficient basis for the opinion, and how that experience is reliably applied to the facts.” United States v. Medina-Copete, 757 F.3d 1092, 1104 (10th Cir. 2014) (quoting Fed.R.Evid. 702, advisory committee notes). When examining an expert's method, however, the inquiry should not be aimed at the “exhaustive search for cosmic understanding but for the particularized resolution of legal disputes.” Daubert, 509 U.S. at 597. It is the specific relationship between an expert's method, the proffered conclusions, and the particular factual circumstances of the dispute that renders testimony both reliable and relevant.

In addition to the witness having appropriate qualifications and methods, the proponent of the witness's opinions must demonstrate that the process by which the witness derived his or her opinions is reliable. United States v. Crabbe, 556 F.Supp.2d 1217, 1220 (D. Colo. 2008). “[T]he trial judge must have considerable leeway in deciding in a particular case how to go about determining whether particular expert testimony is reliable.” Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999). Ultimately, the test requires that the expert “employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.” Id.

While the proponent of the challenged testimony has the burden of establishing admissibility, the proffer is tested against the standard of reliability, not correctness, see Allstate Sweeping, LLC v. City & Cnty. of Denver, No. 10-cv-00290-WJM-MJW, 2011 WL 2173997, at *3 (D. Colo. June 2, 2011); the proponent need only prove that “the witness has sufficient expertise to choose and apply a methodology, that the methodology applied was reliable, that sufficient facts and data as required by the methodology were used and that the methodology was otherwise reliably applied.” Crabbe, 556 F.Supp.2d at 1221.

Assuming the standard for reliability is met, the Court must also ensure that the proffered testimony will assist the trier of fact. See Kumho Tire, 526 U.S. at 156; United States v. Rodriguez-Felix, 450 F.3d 1117, 1122-23 (10th Cir. 2006). “Relevant expert testimony must logically advance[] a material aspect of the case and be sufficiently tied to the facts of the case that it will aid the jury in resolving a factual dispute.” United States v. Garcia, 635 F.3d 472, 476 (10th Cir. 2011) (quotations and citations omitted). In assessing whether expert testimony will assist the trier of fact, a court should also consider “whether the testimony ‘is within the juror's common knowledge and experience,' and ‘whether it will usurp the juror's role of evaluating a witness's credibility.'” Id. at 476-77 (quoting Rodriguez-Felix, 450 F.3d at 1123).

Finally, Federal Rule of Evidence 403 permits a court to “exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” Fed.R.Evid. 403.

III. ANALYSIS

As mentioned earlier, Dawgs seeks to exclude Crocs's experts from testifying about the '858 and '789 patents, the ITC decision, or the Federal Circuit decision. Docket No. 1026 at 2. Dawgs also seeks to exclude certain opinions of Mr. Schwechheimer. Id.

A. Testimony about the Patents and Court Decisions

Dawgs argues that Crocs experts, Dr. Chiagouris, Sarah Butler, and Mr. Schwechheimer, who are not lawyers or patent experts, should be precluded from testifying about “what they ‘understand' is covered by the asserted '858 or '789 patents and what the ITC or Federal Circuit previously ruled on about the same.” Docket No. 1026 at 6. Dawgs asserts that, not only are the ITC and Federal Circuit decisions highly prejudicial and irrelevant under Rule 403, none of the experts is qualified to offer legal conclusions or interpret the patents or decisions. Id. Dawgs identifies eight opinions that it believes should be excluded. Id. at 7-8.^[3] These opinions are:

1. “[I] am informed that Crocs does have design and utility patents, including U.S. Patent No. 6, 993, 858 (the '858 patent), and that claims 1 and 2 of the '858 patent both claim ‘a base section including an upper and a sole formed as a single part manufactured from a moldable foam material;' and a strap section made from a ‘moldable foam material.' I am further informed that, in prior litigation, the Federal Circuit recognized that a key difference between Crocs and other footwear was the foam-on-foam friction created by the passive restraint system described in the '858 patent . . . . Mr. Shuster provides no reason why consumers have not also drawn the same connection between this patent-protected foam-pivoting strap and references in the marketplace like ‘patented foam material, Croslite' which appear throughout the documents he relies on.” Docket No. 1026-2 at 6-7, ¶ 122 (Chiagouris Report).

2. “I have been advised that Dawgs asserts it implemented a redesign of its accused Dawgs's Clogs so as to avoid the four corners of the '858 patent asserted by Crocs . . . . While Dawgs contends that it implemented the redesign (i.e., which I understand included the addition of washers to disrupt the direct connection, or foam-to-foam connection claimed in the '858 patent[)].” Docket No. 1026-5 at 17-18, ¶ 57 (Schwechheimer Opening Report).

3. “Contrary to Mr. Malackowski's claims, Dawgs didn't merely ‘stop selling' its Beach Dawg clogs in the United States in 2011, it was explicitly ordered to cease and desist from ‘importing selling, marketing, advertising, distributing, offering for sale . . .' its Beach/Groovy/Big DAWGS products ‘for the remaining term of the relevant '858 or '789 patent' under the ITC's General Exclusion Order (‘GEO') specifically because it was determined that Dawgs infringed Crocs's asserted patents.” Docket No. 1026-6 at 17, ¶ 63 (Schwechheimer Rebuttal Report).

4. “I further agree with the United States Court of Appeals for the Federal Circuit that the '858 patent was not obvious over the prior art.” Docket No. 1026-7 at 3, ¶ 58 (Whatley

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