Richards Layton & Finger
 

Chief Judge Stark Denies Summary Judgment Motions and Motions to Preclude Expert Testimony

December 15, 2016

In Andover Healthcare, Inc. v. 3M Company, C.A. No. 13-843-LPS (D. Del. Oct. 18, 2016), Chief Judge Stark denied the parties’ cross-motions for summary judgment on the defendant’s laches and equitable estoppel defenses, as well as the defendant’s motion for summary judgment of indefiniteness, noninfringement and willfulness, defendant’s motion to preclude the plaintiff’s CEO from testifying as an expert, and defendant’s motion to preclude certain opinions of the plaintiff’s damages expert. Defendant 3M Company (“3M”) argued that the Court should grant summary judgment under the doctrine of laches and equitable estoppel due to discussions that the parties had in the late 1990s and plaintiff Andover Healthcare Inc.’s (“Andover”) subsequent silence. Despite 3M’s allegations of economic prejudice stemming from investment and marketing costs associated with the accused product, Andover argued that 3M made such expenditures for business purposes not related to Andover’s silence or conduct. Andover also countered 3M’s claims of evidentiary prejudice in the form of lost memories, records and prior art formulations by pointing to the significant number of documents produced in discovery, the depositions of all relevant witnesses in the case, and the product testing data available to the parties.

Although noting that a presumption of prejudice applies to 3M’s laches defense in light of Andover’s six-year-plus delay in pursuing the infringement action, Chief Judge Stark held that genuine disputes of material fact exist regarding the extent of 3M’s prejudice. Specifically, the Court commented that sufficient evidence existed to support both parties’ arguments, including Andover’s position that it had rebutted the presumption of material prejudice to 3M. Accordingly, Chief Judge Stark denied the parties’ cross-motions with respect to laches. Similarly, Chief Judge Stark denied the parties’ cross-motions with respect to equitable estoppel based on the same dispute over why 3M made the marketing and investment expenditures that it did.

The Court also denied the defendant’s summary judgment motions of indefiniteness, noninfringement and willfulness based on disputes on the record, and denied 3M’s motion to preclude the testimony of Andover’s CEO as an expert witness. In its motion to preclude, 3M asserted that allowing the plaintiff’s CEO to testify as an expert despite his financial interest in the outcome of the case was akin to retaining an expert who was entitled to greater compensation depending on the outcome of an action. The Court explained that any recovery in the case would go to Andover directly, not its CEO, and that any indirect financial interest by Andover’s CEO could be addressed during his cross-examination at trial.

Key Points:  Although a presumption of prejudice to the defendant arises where a patentee waits six years or more to bring suit for infringement, the patentee may rebut that presumption by presenting evidence that the defendant’s marketing and development efforts were undertaken for business purposes and not as a result of the patentee’s decision not to sue.