Tuesday, April 06, 2021

The CAFC tackles evidentiary rules in the Wi-Lan case

Wi-Lan lost at the CAFC:

Wi-LAN Inc. appeals two related judgments of the United States District Court for the District of Delaware, on summary judgment in one instance and by stipulation in the other, holding that Sharp Electronics Corporation and Vizio, Inc. did not infringe the asserted claims of U.S. Patent No. 6,359,654 (“the ’654 patent”) and U.S. Patent No. 6,490,250 (“the ’250 patent”). We affirm.

One has an interesting issue on declarations as evidence in summary judgment:

As Wi-LAN notes, declarations are typically used at summary judgment as a proxy for trial testimony. But declarations cannot be used for this purpose unless the witness will be available to testify at trial. Under Federal Rule of Civil Procedure 56(c)(2), Wi-LAN was required to “explain the admissible form that is anticipated.” Fed. R. Civ. P. 56(c)(2) advisory committee’s notes on 2010 amendments. Wi-LAN argued that it met this burden by explaining that the declarants were available to testify at trial. The district court, however, found the opposite. Indeed, when asked by the court at the summary judgment hearing whether the declarants would appear at trial, Wi-LAN’s counsel responded that Wi-LAN did not “think that [it would be] able to force them to come to trial.” J.A. 15,398–99.

Wi-LAN thus did not establish that the declarants would be available to testify at trial and, as a result, the declarations could not be used as a substitute for trial testimony. E.g., Fraternal Order of Police, Lodge 1 v. City of Camden, 842 F.3d 231, 238 (3d Cir. 2016) (testimony admissible if declarants were available to testify at trial); J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1542 (3d Cir. 1990) (“[H]earsay evidence produced in an affidavit opposing summary judgment may be considered if the out-ofcourt declarant could later present the evidence through direct testimony, i.e., in a form that ‘would be admissible at trial.’” (quoting Williams v. Borough of West Chester, 891 F.2d 458, 465 n.12 (3d Cir. 1989)).

Wi-LAN also seems to argue that it properly authenticated the source code printout because the declarations were custodial declarations that were themselves admissible as business records under Rule 803(6). Wi-LAN, however, admits that it obtained the source code printout and declarations by filing lawsuits against the manufacturers and then dismissing the lawsuits without prejudice after the manufacturers provided Wi-LAN with the source code printout and declarations it sought. Wi-LAN even explains that “[t]he lawsuits were necessary to secure production of the source code and declarations because [the system-onchip manufacturers] had refused to cooperate in discovery.” Appellant’s Br. 51. The declarations thus do not constitute a “record [that] was kept in the course of a regularly conducted activity of a business.” Fed. R. Evid. 803(6)(B). Instead, the declarations were created and prepared for the purposes of litigation, placing them outside the scope of the exception. As a result, the declarations were not admissible as business records for use to authenticate the source code printout. Wi-LAN argues alternatively that, under Third Circuit law, these deficiencies in the declarations did not preclude their use. It bases its theory on the Third Circuit’s view that “the testimony of the custodian or another qualified witness” under Rule 803(6)(D) “can be met by documentary evidence, affidavits, or admissions of the parties, i.e., by circumstantial evidence, or by a combination of direct and circumstantial evidence.” In re Japanese Elec. Prods. Antitrust Litig., 723 F.2d 238, 288 (3d Cir. 1983), rev’d on other grounds sub nom. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). The Third Circuit adopted this view after concluding that “[i]t would make little sense to require live witness testimony every time a business record is offered when, from the other materials open for the court’s consideration, it can make the required finding to its own satisfaction.” Id. The Third Circuit’s approach runs counter to the text of Rule 803(6), which requires the conditions of the Rule to be shown “by the testimony of the custodian or another qualified witness[] or by a certification that complies with Rule 902(11) or (12) or with a statute permitting certification.” Fed. R. Evid. 803(6)(D). Its view appears not to have been widely adopted. See 5 Weinstein’s Federal Evidence § 803.08[c] & n.76. But even under this approach, the declarations do not suffice because Wi-LAN does not meet Rule 803(6)’s final requirement that “the opponent does not show that the source of information or the method or circumstance of preparation indicate a lack of trustworthiness.” Fed. R. Evid. 803(6)(E). The district court concluded that Sharp and Vizio “have demonstrated a lack of trustworthiness in the materials; the source code contains inconsistent dates in the metadata, copyright, and revisions histories as well as added commentary on the printed excerpts.” J.A. 29. The court also found that Wi-LAN “failed to obtain change logs, file comparisons, or other evidence of code revisions that might clear up the inconsistencies in the code.” J.A. 29. And the district court found that

[t]he circumstances surrounding the production, including the fact that the [system-on-chip] manufacturers originally claimed that they could not produce one version of source code for all [system on-chips] at issue in the case, raise[d] further concern as to the credibility of both the source code and the [system-on-chip] declarations seeking to authenticate the code.
SEPARATELY Wi-LAN’s argument presents two separate and distinct questions: (1) whether the source code printout was admissible because it was relied on by the expert and (2) whether the expert’s testimony relying on the source code was admissible to establish infringement. The answer to the first question is “no” because expert reliance does not translate to admissibility. The answer to the second question is also “no” because Wi-LAN did not establish that experts in the field “reasonably rely on” unauthenticated source code. As to the first question, “Rule 703 does not make admissible otherwise inadmissible evidence.” 4 Weinstein’s Federal Evidence § 703.05 n.12. That is because “Rule 703 is not, itself, an exception to or exclusion from the hearsay rule or any other evidence rule that makes the underlying information inadmissible.” Id. § 703.05. Rule 703 does not authorize admitting inadmissible evidence “on the pretense that it is the basis for expert opinion when, in fact, the expert adds nothing to the [inadmissible evidence] other than transmitting [it] to the jury.” 29 Charles Alan Wright, Arthur R. Miller & Victor J. Gold, Federal Practice and Procedure § 6274 (2d ed. 2020). “In such a case, Rule 703 is simply inapplicable and the usual rules regulating the admissibility of evidence control.” Id. Rule 703 permits the proponent of an expert’s opinion to disclose the underlying material to a jury if “experts in the particular field would reasonably rely on” the underlying material and “if [the underlying material’s] probative value in helping the jury evaluate the opinion substantially outweighs [its] prejudicial effect.” Fed. R. Evid. 703. But “the trial judge must give a limiting instruction upon request, informing the jury that the underlying information must not be used for substantive purposes.” Fed. R. Evid. 703 advisory committee’s notes to the 2000 amendments. These principles have been reaffirmed repeatedly.

As to the second question (the admissibility of the expert’s testimony as to infringement), under Rule 703, “[d]ata relied on by the expert ‘need not be admissible for the opinion to be admitted’ if experts in the field would reasonably rely on such data.” Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348, 1373 (Fed. Cir. 2013) (quoting Fed. R. Evid. 703). “[I]t is the judge who makes the determination of reasonable reliance, and . . . for the judge to make the factual determination under Rule 104(a) that an expert is basing his or her opinion on a type of data reasonably relied upon by experts, the judge must conduct an independent evaluation into reasonableness.” In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 748 (3d Cir. 1994). The burden to establish reasonable reliance is on the proponent of challenged expert testimony. See id. at 743–44, 747–48. Wi-LAN argues that experts typically rely on material, like source code, in reaching opinions about infringement. That is obviously correct. But Wi-LAN has not made a showing that source code experts reasonably rely on unauthenticated source code printouts.


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