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`IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
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`) 1:17CV687
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`OPTOLUM, INC.,
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`Plaintiff,
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`v.
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`CREE, INC.,
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`Defendant.
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`OMINIBUS ORDER ON DAUBERT MOTIONS AND MOTIONS IN LIMINE
`
`For reasons that will be more fully explained in written
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`opinions or opinions issued from the bench at a later date, this
`court issues its findings as to the pending pretrial motions.
`The findings as to the parties’ Daubert motions, (Docs.
`193, 197, and 199), addressed as items 1-3 below, are final
`orders, entered with prejudice, and will not be considered
`further unless appropriate for reconsideration. Similarly, this
`court’s findings as to item 5, OptoLum’s motion to exclude
`evidence related to standing, (Doc. 241), is a final order
`entered with prejudice, and will not be considered further
`unless appropriate for reconsideration.
`The orders that follow with respect to the pending motions
`in limine, item numbers 4 and 6-14, are preliminary, and the
`orders are entered without prejudice. This is so because given
`the complexity of the patent and related issues, it is difficult
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 1 of 16
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`to determine how the facts and circumstances presented at trial
`might otherwise clarify the issue and thereby affect the
`analysis. If a motion has been granted and evidence is excluded
`under the terms of this order and a party wishes to be heard
`further, the party may make such a request prior to the
`otherwise relevant time for introduction of the evidence, and
`the court will receive brief additional argument. Similarly, if
`a motion has been denied and a party wishes to be heard further
`in objection to the evidence, the party may make such a request
`prior to the introduction of the evidence, and the court will
`receive brief additional argument.
`This court finds as follows:
`1. Cree’s motion to exclude certain testimony of William B.
`
`Scally, (Doc. 193): The motion is GRANTED IN PART. Mr. Scally
`will not be permitted to testify as to a royalty rate that
`includes any increase in brand value. This court finds the
`testimony should be excluded under Fed. R. Evid. 702, 104, and
`Daubert. The additional relief requested in the motion is
`DENIED. This court does not find Mr. Scally’s royalty rate
`testimony should be excluded as a matter of law. Cree has
`presented evidence that the value of the technology should not
`be subject to the entire market value rule because features such
`as omni-directional light, similar form to incandescent bulbs,
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`
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`-2-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 2 of 16
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`and price point were the features which drove demand. On the
`other hand, OptoLum has forecast evidence that the Filament
`Tower™ - the accused technology in the Cree bulbs - drives
`demand for the accused products. Mr. Scally’s report notes a
`statement by Cree that the Filament Tower™ is “game changing”
`and allowed “LED bulbs to be introduced at a retail price point
`that gave consumers a reason to switch to LED lighting.” (Doc.
`299 at 24.) Mr. Scally’s report identifies a statement from
`Cree’s corporate marketing that describes the “the Filament
`Tower™ technology as an ‘elegant solution’ that not only . . .
`but also created the traditional ‘omni-directional’ light of
`incandescent A-type bulbs.” (Id. at 45.) Mr. Scally’s report
`also notes that Cree has said “Cree LED Filament Tower
`Technology™ represents a breakthrough in LED bulb design. It
`provides an optically centered and balanced light source within
`a real glass bulb that is nearly indistinguishable from a
`traditional incandescent filament.” (Id. at 52.) This court is
`unable to find, as a matter of law, on the record as presently
`constituted, that Plaintiff will be unable to show that the
`infringing technology is subject to the entire market value
`rule.
`
`2. Cree’s motion to exclude certain testimony of Charles
`McCreary, (Doc. 197): The motion is DENIED.
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`
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`-3-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 3 of 16
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`3. OptoLum’s motion to exclude certain testimony of Dr.
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`Eric Bretschneider, (Doc. 199): The motion is DENIED.
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`4. OptoLum’s Motion in Limine #1, (Doc. 240): The motion is
`DENIED. The issue of whether Plaintiff offered for sale the BL-
`800 is an issue of fact for trial. While the screenshots do not
`establish as a matter of law that Plaintiff offered the BL-800
`for sale, those screenshots appear to have some tendency to
`establish that Plaintiff made the BL-800 and offered it for sale
`without the proper marking, and this court is not persuaded the
`evidence is more prejudicial than probative or unfairly
`prejudicial.
`
`5. OptoLum’s Motion in Limine #2, (Doc. 241): The motion is
`GRANTED. At summary judgment, this court found that Defendant
`failed to establish that no genuine issue of fact existed as to
`this issue. This court finds additional evidence at trial, and
`before the jury, is irrelevant and improper.
`First, “the ultimate question of whether a party has
`standing is one of law, not fact.” 1000 Friends of Maryland v.
`Browner, 265 F.3d 216, 227 (4th Cir. 2001) (citation omitted).
`The question of standing is a jurisdictional question. Rite-Hite
`Corp. v. Kelley Co., 56 F.3d 1538, 1551 (Fed. Cir. 1995)
`(citation omitted). “The federal courts are under an independent
`obligation to examine their own jurisdiction, and standing ‘is
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`
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`-4-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 4 of 16
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`perhaps the most important of [the jurisdictional] doctrines.’”
`FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990)
`(alteration in original) (quoting Allen v. Wright, 468 U.S. 737,
`750 (1984)), holding modified by City of Littleton v. Z.J. Gifts
`D-4, L.L.C., 541 U.S. 774 (2004). Defendant has presented no
`evidence which might otherwise forecast a lack of standing. Nor
`has Defendant forecast evidence of any deficiency in Mr. Dry’s
`assignment for which a jury determination is required.
`Therefore, neither standing nor the related issues is relevant
`for the jury’s consideration.
`Second, this issue has come up in an unusual procedural
`posture as a result of this court’s order denying summary
`judgment. This court denied Defendant’s motion for summary
`judgment on the issue of standing. This court found that Mr. Dry
`assigned all his interest in the ‘028 Patent to OptoLum, and
`Cree presented no evidence of a breach of fiduciary duty by Mr.
`Dry or any other evidence that might support a finding that a
`third-party retained or currently holds an interest in the ‘028
`Patent. (See Doc. 230 at 8-16.) Unfortunately, the language of
`this court’s finding, that Cree “has failed to demonstrate that
`there is no genuine issue of material fact that Martha Baker
`retained an ownership interest in the ‘028 Patent,” (Doc. 230 at
`16), might be somewhat misleading. It is more accurate to state
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`
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`-5-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 5 of 16
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`that Defendant has presented no persuasive or compelling
`argument of fact or law to suggest Mr. Dry’s transfer of the
`‘028 Patent to OptoLum was invalid, and to the extent this
`court’s previous order is misunderstood, it is clarified here.
`Under these circumstances, this court finds that to permit
`Defendant to present additional evidence relating to the issue
`of standing is neither relevant nor proper as the court, not the
`jury, determines standing.
`
`Furthermore, this court finds that any evidence to the jury
`on the issue of standing should be excluded pursuant to Federal
`Rule of Evidence 403 as confusing and unfairly prejudicial.
`Based on this court’s finding as to the law of Arizona, (see
`Doc. 230), and OptoLum’s presentation of Mr. Dry’s assignment of
`the ‘028 Patent, (Doc. 191-9), Defendant has not proffered any
`evidence to suggest standing does not exist. Instead, Defendant
`makes unsupported conclusory allegations. This court finds
`standing has been previously established, albeit admittedly in a
`somewhat confusing fashion. If Defendant wishes to challenge
`Plaintiff’s standing now or in the future, Defendant may file a
`motion challenging jurisdiction in accordance with the Federal
`Rules of Civil Procedure.
`
`6. OptoLum’s Motion in Limine #3, (Doc. 242): The motion is
`GRANTED IN PART AND DENIED IN PART. First, Mr. Lenkszus’s
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`
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`-6-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 6 of 16
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`proffered testimony on the terms “protrusions” and “fins”
`appears to be inadmissible because this court has already
`interpreted those terms. Second, his testimony on the terms
`“solid state light sources” and “power supply” appears to be
`inadmissible because this court does not find Mr. Lenkszus to be
`a person of ordinary skill in the art (“POSA”), and therefore he
`cannot reliably opine on how a POSA would understand undefined
`claim terms. This court preliminarily finds that Mr. Lenkszus’s
`proffered testimony on terminal disclaimer to be relevant and
`admissible. This court is unpersuaded by Plaintiff’s argument
`that because Defendant did not rely on Mr. Lenkszus’s testimony
`at summary judgment that Defendant cannot use that testimony at
`trial.
`
`7. OptoLum’s Motion in Limine #4, (Doc. 245): The motion is
`GRANTED IN PART AND DENIED IN PART.
`
`To perhaps assist the parties in understanding and
`evaluating this court’s analysis of certain issues raised in
`several of these motions in limine relating to the testimony of
`experts, or POSAs, this court offers a brief explanation of its
`understanding of the permissible testimony of a POSA.
`Courts have imposed several limitations to the introduction
`of evidence at trial of the plain and ordinary meaning of terms.
`Testimony about the plain and ordinary meaning of terms
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`
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`-7-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 7 of 16
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`supported by reference to the specification and prosecution
`history is inappropriate and disallowed. MediaTek Inc. v.
`Freescale Semiconductor, Inc., No. 11-cv-5341, 2014 WL 971765,
`at *5 (N.D. Cal. March 5, 2014) (noting that testimony that
`discusses the prosecution history or the specification to
`establish the plain and ordinary meaning of a term is not to be
`heard by the jury); Cordis Corp. v. Boston Sci. Corp., 561 F.3d
`1319, 1337 (Fed. Cir. 2009) (holding the district court properly
`excluded the defendant’s claim construction argument before the
`jury where the defendant sought to use the prosecution history
`as evidence of a claim term); Not Dead Yet Mfg., Inc. v. Pride
`Sols., LLC, 222 F. Supp. 3d 657, 661-62 (N.D. Ill. 2016)
`(disallowing expert testimony at trial where the expert’s
`proposed definition of a term was not based on his technical
`expertise but “on an interpretation of the language used in [one
`of the patent’s claims] in light of the language used in the
`patent’s specification”). Additionally, any evidence
`contradicting how the court has interpreted a term is
`inadmissible. Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d
`1312, 1321 (Fed. Cir. 2009) (“Once a district court has
`construed the relevant claim terms, and unless altered by the
`district court, then that legal determination governs for
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`
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`-8-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 8 of 16
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`purposes of trial. No party may contradict the court's
`construction to a jury.”).
`
`As a result of the forgoing, experts or POSAs will not be
`permitted to testify in a manner contrary to, or to contradict,
`the constructions previously entered by this court. Similarly,
`the experts are further bound by the definitions given those
`terms upon which the parties have agreed.
`
`Turning specifically to the pending motion, (Doc. 245),
`this court first finds that Dr. Bretschneider’s proffered
`testimony on the definitions of “outer surface,” “electrical
`conductors carried by said elongate thermally conductive
`member,” and “configured to conduct” appears to be impermissible
`claim construction testimony and therefore excluded. Dr.
`Bretschneider relies on extrinsic evidence, including the patent
`prosecution history and the patent specification, to define
`these terms, which is impermissible claim construction. Second,
`Dr. Bretschneider’s proffered testimony on the doctrine of
`equivalents preliminarily appears to be admissible. His reliance
`on the patent prosecution history is in rebuttal to Plaintiff’s
`range of equivalents. Therefore, this court will allow Dr.
`Bretschneider to testify to the patent prosecution history to
`the extent he is rebutting testimony of Plaintiff’s experts on
`the doctrine of equivalents and not offering claim construction
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`
`
`-9-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 9 of 16
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`testimony. Third, Dr. Bretschneider’s proffered testimony on the
`terms “carried on” and “carried by” is not excluded. This court
`finds Dr. Bretschneider’s testimony comports with this court’s
`construction of “carried on” and the joint construction of
`“carried by.”
`
`8. OptoLum’s Motion in Limine #5, (Doc. 243): The motion is
`DENIED. Under Federal Rule of Evidence 703, an expert is
`permitted to express an opinion in reliance upon evidence that
`is otherwise inadmissible if it is the type of evidence that
`would be relied on by someone in their field. This court finds
`that Plaintiff has not demonstrated prior to trial that it was
`not reasonable for Dr. Bretschneider to rely on the statements
`of Mr. Gardner in forming his opinions, and further finds
`Plaintiff has not shown it was not reasonable for Mr. Yerman to
`rely on the statements of Mr. Schwab in forming his opinions.
`Plaintiff has not shown that the statements of Mr. Gardner or
`Mr. Schwab would not be relied on by those in the same field of
`expertise as Dr. Bretschneider and Mr. Yerman. Federal Rule of
`Evidence 703 addresses separately the question of whether
`inadmissible facts or data may be disclosed to the jury.
`
`9. OptoLum’s Motion in Limine #6, (Doc. 244): The motion is
`DENIED. This court finds that the items of prior art referenced
`in Dr. Bretschneider’s Amended Rebuttal Report are being offered
`
`
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`-10-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 10 of 16
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`to rebut arguments from Plaintiff’s experts. This court finds
`Dr. Bretschneider listed Cronin in his Amended Rebuttal Report
`to show the state of the prior art as known by a POSA, and that
`he discussed indefiniteness to rebut Mr. York’s testimony.
`Therefore, Dr. Bretschneider is not offering new items of prior
`art.
`10. OptoLum’s Motion in Limine, #7, (Doc. 246): The motion
`
`is GRANTED. Evidence of subjective intent is not an element of
`infringement, and therefore evidence regarding the subjective
`intent of the designers of the accused products is irrelevant
`and likely to confuse and mislead the jury.
`
`11. OptoLum’s Motion in Limine #8, (Doc. 247). The motion
`is GRANTED IN PART AND DENIED IN PART. First, this court finds
`that Dr. Bretschneider’s proffered testimony regarding the
`function of the LED diode “by itself” is relevant to an
`understanding of whether the Cree LEDs, when combined with their
`surrounding infrastructure, are the equivalent of the OptoLum
`LEDs, and is therefore admissible. Second, this court finds that
`Dr. Bretschneider’s proffered testimony comparing the Cree LEDs
`to the hypothetical equivalent structures appears to be an
`improper comparison under the doctrine of equivalence. This
`court finds the proper comparison under SanDisk Corp. v.
`Kingston Tech. Co., 695 F.3d 1348, 1363 (Fed. Cir. 2012), to be
`
`
`
`-11-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 11 of 16
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`a comparison of the accused product to the claimed elements in
`the asserted patents. Because Dr. Bretschneider appears to make
`the wrong comparison, his proffered testimony is likely to
`confuse and mislead the jury and is therefore inadmissible.
`Third, this court finds that Dr. Bretschneider’s proffered
`testimony regarding the viability of OptoLum’s doctrine of
`equivalents claim to be an inadmissible legal conclusion. Dr.
`Bretschneider is tendered as an expert in design of LEDs, not
`the law of the doctrine of equivalents. Therefore, he is not
`qualified to testify on the viability of Plaintiff’s doctrine of
`equivalents claim, and his proffered testimony on that subject
`is inadmissible.
`
`12. Cree’s motion in limine #1, (Doc. 249): The motion is
`TAKEN UNDER ADVISEMENT. It appears to the court this issue is
`more appropriately addressed at the conclusion of Plaintiff’s
`evidence.
`At summary judgment, this court found as a matter of law
`that Cree’s Single Ring Bulbs did not literally infringe the
`Patents. (Doc. 230 at 35.) Therefore, OptoLum is precluded from
`arguing literal infringement by the Single Ring Bulbs. Second,
`this court found during claim construction that OptoLum
`disclaimed rejected the application as anticipated by the ‘819
`Patent, (Doc. 152 at 19), and disclaimed the invention from one
`
`
`
`-12-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 12 of 16
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`in which the LED placement may be described as being in a single
`plane perpendicular to the axis of the elongate thermally
`conductive member, (Doc. 152 at 21-24).
`This court agrees with Defendant that where a patentee
`surrenders claim scope during the patent prosecution,
`prosecution history estoppel prevents expanding a claim
`limitation to include subject matter disclaimed during patent
`prosecution. See Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973,
`981 (Fed. Cir. 1999); Spectrum Pharms. Inc. v. Sandoz Inc., 802
`F.3d 1326, 1337 (Fed. Cir. 2015).
`Here, Cree contends that OptoLum disclaimed claim scope and
`the Cree’s Single Ring bulbs are arranged in a single plane,
`(Doc. 250 at 20), which is precisely the subject matter which
`Optolum disclaimed, (id. at 21). OptoLum contends that the
`“individual diodes within each package on the Accused Products
`are in multiple planes perpendicular to the axis of the ETCM”
`and that “OptoLum has alleged that the Accused Single-Ring
`Products infringe under the DOE.” (Doc. 262 at 2.)
`The complexity of the diode placements and what does or
`does not constitute a single plane perpendicular to the axis of
`the elongate thermally conductive member is complex, and without
`additional testimony this court is not able to rule, as a matter
`of law in the current procedural posture that OptoLum is
`
`
`
`-13-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 13 of 16
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`improperly using the Doctrine of Equivalents to recapture claim
`scope that was previously disclaimed.
`
`13. Cree’s motion in limine #2, (Doc. 251): The motion is
`GRANTED IN PART AND DENIED IN PART. Mr. Scally’s proffered
`testimony on brand value is excluded because his expert report
`lacks sufficient analysis of the methodology used to determine a
`5% additional royalty for brand value. As will be further
`addressed at trial, this court finds presently that Mr.
`Swoboda’s proffered testimony about building Cree’s brand may be
`relevant and admissible to provide background context and show
`Cree’s state of mind leading up to the alleged infringement on
`the issue of willful infringement.
`
`14. Cree’s motion in limine #3, (Doc. 253): The motion is
`GRANTED IN PART AND DENIED IN PART. Cree’s motion to preclude
`evidence of Cree’s business plan generally to use the LED bulb
`to build its brand and the manner in which the accused products
`were designed is DENIED. That evidence is preliminarily adjudged
`to possibly have some relevance to the question of willful
`infringement. Cree’s arguments as to the evidence, at least in
`the generalities reflected in the First Amended Complaint are
`not persuasive.
`
`However, the denial of this motion by Cree or denial of
`related motions relating to this evidence should not be
`
`
`
`-14-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 14 of 16
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`understood by Plaintiff that it will be granted an unfettered
`right to present evidence of Cree’s business, business plan, or
`other similar facts under its willfulness claim. That evidence
`will be further addressed as presented and will be limited to
`evidence that has any tendency to make a fact of consequence
`more or less probable, Fed. R. Evid. 401, and is not unfairly
`prejudicial, confusing, misleading, unduly delaying, cumulative,
`or a waste of time, Fed. R. Evid. 403. Furthermore, this court
`intends to give a limiting instruction as this evidence is
`presented.
`
`To the extent any specific items of evidence are determined
`relevant and admissible as presented at trial, Plaintiff should
`proceed with the presentation of that evidence in accordance
`with Fed. R. Evid. 403.
`
`Cree’s motion to preclude evidence of the unasserted
`patents and any comparison of those patents with any Cree
`Patents is GRANTED. Plaintiff concedes it is not going to
`introduce evidence comparing OptoLum’s unasserted patents to any
`Cree patents.
`
`Cree’s motion to preclude evidence that Cree did not cite
`the ‘536 Patent as prior art is GRANTED. Plaintiff concedes it
`does not plan to introduce evidence of the ‘536 Patent for the
`
`
`
`-15-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 15 of 16
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`purposes of showing Cree did not cite the ‘536 Patent as prior
`art.
`Cree’s motion to preclude evidence of the ‘536 Patent to
`
`prove willfulness is DENIED. Evidence of knowledge of a related
`patent, including knowledge of the parent patent, is relevant to
`a jury finding of willfulness. See, e.g., Commscope Techs. LLC
`v. Dali Wireless, Inc., 3:16-cv-0477-M, 2020 WL 11626079, at *12
`(N.D. Tex. April 21, 2020).
`
`Cree’s motion to preclude evidence of a USPTO denial of
`inter partes review is DENIED. This court finds that the denial
`of inter partes review is relevant to determining invalidity.
`This court will issue a limiting instruction as necessary
`instructing the jury on the different standards of proof and
`presumption at a PTAB proceeding versus the instant proceeding.
`
`Cree’s motion to preclude the expert reports as evidence is
`DENIED. In addition to the arguments raised by OptoLum, this
`court notes that the parties have stated that all experts will
`be testifying at trial, and therefore their out-of-court
`statements do not appear to be hearsay under certain
`circumstances. See Fed. R. Evid. 801(d).
`
`This the 24th day of October, 2021.
`
`
`
`
`__s/William L. Osteen, Jr.__
`United States District Judge
`-16-
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`Case 1:17-cv-00687-WO-JLW Document 315 Filed 10/24/21 Page 16 of 16
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