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Visteon Global Technologies, Inc. v. Garmin International, Inc.

United States District Court, E.D. Michigan, Southern Division

November 10, 2016

VISTEON GLOBAL TECHNOLOGIES, INC. AND VISTEON TECHNOLOGIES, LLC, Plaintiffs,
v.
GARMIN INTERNATIONAL, INC., Defendant.

          David R. Grand United States Magistrate Judge.

          OPINION AND ORDER (1) GRANTING IN PART GARMIN'S MOTION IN LIMINE NO. 6 TO EXCLUDE EVIDENCE REGARDING GARMIN'S REVENUES AND PROFITS (ECF NO. 265); AND (2) DENYING GARMIN'S MOTION FOR LEAVE TO FILE SUPPLEMENTAL EXPERT REPORT OF JOHN LAVRAKAS (ECF NO. 341)

          PAUL D. BORMAN UNITED STATES DISTRICT JUDGE.

         Plaintiffs Visteon Global Technologies, Inc. and Visteon Technologies, LLC's (“Visteon”) and Defendant Garmin International, Inc.'s (“Garmin”), have filed numerous motions in limine in this patent infringement action. Presently before the Court are: (1) Garmin's Motion In Limine No. 6 to Exclude Evidence Regarding Garmin's Overall Revenue and Profits (ECF No. 265); and (2) Garmin's Motion for Leave to Serve the Supplemental Expert Report of John Lavrakas (ECF No. 341). The Court has determined that oral argument will not assist in resolution of the matters raised in these motions and accordingly will decide these matters on the parties' written submissions. See E.D. Mich. L.R. 7.1(f)(2).

         I. BACKGROUND

         This is an action for patent infringement. In the claims that remain for trial, Plaintiffs Visteon Global Technologies, Inc. and Visteon Technologies, LLC (“Visteon”) contend that Defendant Garmin International, Inc. (“Garmin”) infringes, either directly or indirectly, U.S. Patent No. 5, 544, 060 (“the ‘060 patent”), U.S. Patent No. 5, 654, 892 (“the ‘892 patent”) and U.S. Patent No. 5, 832, 408 (“the ‘408 patent”). In general, the '060 patent is directed to a method of navigating a human driven vehicle whereby a user can generate an optimal path and then switch to an alternate navigation path before beginning on the optimal path. Visteon contends that Garmin directly infringes Claims 3, 4, and 6 and indirectly infringes Claim 3 of the ‘060 patent. In general, the ‘892 patent is directed to a method for assisting the navigation of a vehicle whereby a complex arrow icon is generated and displayed to the driver at a predetermined time or distance before the driver reaches a particular maneuver. Visteon contends that Garmin directly and indirectly infringes Claim 8 of the ‘892 patent. In general, the ‘408 patent is directed to a navigation system which allows the user to search for a destination either from a list of categories or from an alphanumeric search. Visteon contends that Garmin directly and indirectly infringes Claims 4 and 5 of the ‘408 patent.

         Visteon contends that a variety of Garmin navigation products (“the accused products”) infringe one or more the asserted claims literally and under the doctrine of equivalents. Visteon contends that Garmin directly infringes, actively induces infringement and/or contributorily infringes one or more of the asserted claims of the asserted patents, and that Garmin's infringement is and has been willful. Visteon seeks damages in the form of a reasonable royalty for Garmin's alleged infringement. Visteon also seeks prejudgment interest, enhanced damages, attorneys' fees, and costs, including without limitation any fees and costs associated with participating in multiple ex parte proceedings at the United States Patent and Trademark Office (“USPTO”) as initiated by Garmin in this action. Garmin denies that it directly, indirectly or contributorily infringed or induced infringement of any of the patents in suit and affirmatively asserts a host of invalidity defenses. Garmin seeks judgment in its favor and requests that it be awarded its costs and reasonable attorneys' fees incurred in defending against Visteon's Complaint.

         II. STANDARD OF REVIEW

         “The Federal Rules of Evidence, the Federal Rules of Criminal and Civil Procedure and interpretive rulings of the Supreme Court and this court all encourage, and in some cases require, parties and the court to utilize extensive pretrial procedures - including motions in limine - in order to narrow the issues remaining for trial and to minimize disruptions at trial.” United States v. Brawner, 173 F.3d 966, 970 (6th Cir. 1999). District courts have broad discretion over matters involving the admissibility of evidence at trial. United States v. Seago, 930 F.2d 482, 494 (6th Cir. 1991).

         III. ANALYSIS

         A. Garmin's Motion in Limine No. 6 to Exclude Evidence of Garmin's Overall Revenue and Profits (ECF No. 265)

         Visteon's Response to this motion indicates that Visteon intends to introduce evidence of Garmin's profit margins only, not evidence of Garmin's overall profits. (ECF No. 286, Visteon's Resp. 3-5.) Garmin does not object to the introduction of evidence regarding its profit margins. (ECF No. 324, Garmin's Reply 5-6.) Accordingly, the Court GRANTS the motion to exclude evidence of Garmin's overall profits but will permit evidence of Garmin's profit margins, assuming that such evidence meets all other rules for admissibility at the time of trial.

         With regard to Garmin's motion to exclude evidence of its overall revenues, it is not entirely clear whether Garmin's motion is an indirect challenge to Visteon's damages methodology that relies on the MITAC license (which Garmin did not challenge in a Daubert motion) or whether Garmin's motion is strictly challenging the evidentiary basis for admission into evidence of the actual overall revenue figures themselves. In seeking exclusion, Garmin relies on the Federal Circuit's recognition of the “danger of admitting consideration of the entire market value of the accused [product] where the patented component does not create the basis for customer demand.” Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1320 (Fed. Cir. 2011) (alteration added). “The disclosure that a company has made $19 billion dollars in revenue from an infringing product cannot help but skew the damages horizon for the jury, regardless of the contribution of the patented component to this revenue.” Id. There is no argument here by Visteon that the entire market value rule applies or that the accused patented features drive demand for the Garmin accused devices. Indeed Visteon's expert, Peter Smith, states in his Report: “Because it is my opinion that the entire market value rule does not apply in this case, I do not believe that sales revenue is an appropriate royalty base for the purposes of the damages calculation.” ECF No. 268, Ex. M, Expert Report of Peter Smith 29. Indeed, this Court has already acknowledged that the accused patented features that remain in suit here do not drive consumer demand for Garmin's PNDs and has ruled that Visteon is required to “give evidence tending to separate or apportion the defendant's profits and the patentee's damages between the patented feature and the unpatented features” of the accused devices. Garretson v. Clark, 111 U.S. 120, 121 (1884) (internal quotation marks omitted).

         It is also well established, however, that “[a]ctual licenses to the patented technology are highly probative as to what constitutes a reasonable royalty for those patent rights because such actual licenses most clearly reflect the economic value of the patented technology in the marketplace.” Laser Dynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 79 (Fed. Cir. 2012). The MITAC license agreement is such a license here, as it includes a license to the very patents that remain in suit (among others). (ECF No. 268, Ex. B, Newell Report ¶¶ 123-126.) Garmin's expert challenges the comparability of the MITAC license, but this Court has also ruled that comparability is an issue for cross-examination, not a basis for exclusion. Indeed Garmin's expert, Mr. Newell, in his rebuttal report, describes the MITAC license as a “relevant benchmark license agreement[] for the patents in suit” and found the MITAC license “informative, ” although he concludes that it is “less informative” than another comparable license. Id. Moreover, Garmin did not move to exclude Mr. Smith's damages model based on the MITAC license and cannot seriously question that it is “relevant” in a broad sense to the reasonable royalty issue. The problem here is that the MITAC model employed by Mr. Smith relies on Garmin's overall revenues, creating a tension between the high probative value of a prior license to the very patents in suit and the evidentiary principle that disclosure of an alleged infringer's overall revenues to the jury, in a case where the accused patented features admittedly do not drive consumer demand for the end product, is highly prejudicial.

         Visteon urges the Court to consider Mondis Tech., Ltd. v. LG Elec. Inc., No. 07-cv-565, 2011 WL 2417367 (E.D. Tex. June 14, 2011), in which the court permitted an expert opinion that employed total revenues even though there was no showing that the accused features provided the basis for customer demand of the end product. Mondis is certainly instructive in its recognition of the inherent challenge faced by a patentee who concedes that the accused features do not drive demand for the alleged infringer's product yet attempts to rely on arguably relevant licenses to the very same technology that were negotiated based upon the entire value of the end product. Acknowledging the Federal ...


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