Federal Circuit Finds District Court Abused Its Discretion in Admitting Lay Testimony

By Steve Brachmann
February 10, 2020

“Oxygen Frog proffered Piebes’ testimony as a lay witness offering views based on perception and experience. However, this testimony was ‘directed to the central legal and technical question at trial… [which is] in the clear purview of experts, and lay witness testimony on such issues does not comply with the Federal Rules of Evidence or Civil Procedure.’”

https://depositphotos.com/10042948/stock-illustration-red-boxing-glove-conceptual-vector.htmlOn February 5, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in HVLPO2, LLC v. Oxygen Frog, LLC in which the appellate court reversed a decision from the Northern District of Florida to deny a motion for a new trial after a jury verdict found patent claims asserted by HVLPO2 to be invalid for obviousness. HVLPO2 challenged those obviousness findings on motions for judgment as a matter of law (JMOL) and a new trial, both of which the district court denied. The Federal Circuit’s recent decision found that the district court abused its discretion in denying those motions because the court had admitted lay testimony regarding obviousness.

Jury Trial and Limiting Instruction

The patent claims at issue include claims 1 and 7 of the following patents owned by HVLPO2:

  • U.S. Patent No. 8876941, Method and Apparatus for Managing Oxygen Generating System. Claim 1 of this patent covers a method for supplying a sustained flow of oxygen gas by receiving a signal indicating a pressure level, determining if the pressure is below a threshold level, sending a signal to a circuit that provides electrical power to at least two oxygen generators, sending a second signal to a circuit that provides electrical power to an air compressor, receiving a second pressure signal and then sending signals to turn off both circuits if the second pressure signal is above a threshold level.
  • U.S. Patent No. 9372488, same title as the ‘941 patent. Claim 1 covers an apparatus configured for supplying a sustained oxygen flow with the use of a controller device to receive pressure signals and send signals to circuits delivering electrical power to air compressors.

HVLPO2 filed suit in Northern Florida against Oxygen Frog asserting claims of the ‘941 and ‘488 patents. HVLPO2’s infringement claims went to a jury trial where Oxygen Frog challenged the validity of the asserted claims as obvious over two prior art references: the “Cornette reference,” a post from an internet forum on glass blowing which discloses an oxygen system for glass blowing; and the “Low Tide video,” an online video posted by a glass blowing artist.

During the jury trial, Tyler Piebes, the artist who posted the Low Tide video, provided deposition testimony as a fact witness. HVLPO2 objected to several questions posed during the deposition by counsel for Oxygen Frog, including a question asking Piebes whether he thought that modifying the Cornette reference in a way that supports two circuits was obvious; Piebes answered that this motivation did appear to be obvious. The Northern Florida court overruled HVLPO2’s objection as to improper expert witness testimony and sent a limiting instruction to the jury indicating that Piebes was qualified to give his opinion on the potential obviousness of the system. While the district court further instructed the jury that Piebes’ testimony didn’t answer the ultimate question of obviousness, the jury observed a recording of Piebes’ testimony and then entered a verdict finding the challenged claims invalid as obvious. The district court denied HVLPO2’s motion for a new trial by holding that the court did not err in admitting Piebes’ testimony as evidence to the jury.

CAFC: District Court Got It Wrong

On appeal, the Federal Circuit panel of Circuit Judges Pauline Newman, Kimberly Moore and Raymond Chen determined that the district court did err in admitting Piebes’ testimony on obviousness and found the limiting instruction sent to the jury to be insufficient to cure the error. Citing to Federal Rule of Evidence 702 on expert witness testimony, the Federal Circuit noted that such testimony is permitted because of its usefulness in providing the jury with helpful information from someone skilled in the technical subject matter in the case. The appellate court also acknowledged that witnesses who aren’t qualified as experts cannot assist the jury as factfinders on issues of infringement and validity, citing to its own decision in Sundance Inc. v. DeMonte Fabricating Ltd. (2008) in support of this idea. Sundance held that the admission of non-expert witness testimony on subjects reserved for expert witnesses was an abuse of discretion.

The panel further found that the admission of Piebes’ testimony on obviousness violated requirements on presenting expert testimony prescribed by Federal Rule of Civil Procedure 26. HVLPO2 wasn’t provided with disclosures required under Rule 26, such as a written report of the expert’s opinions and factual bases for the opinion. Oxygen Frog proffered Piebes’ testimony as a lay witness offering views based on perception and experience. However, this testimony was “directed to the central legal and technical question at trial… This testimony from Mr. Piebes is thus in the clear purview of experts and lay witness testimony on such issues does not comply with the Federal Rules of Evidence or Civil Procedure.” Therefore, his testimony was inadmissible. In a footnote, the Federal Circuit also dismissed Oxygen Frog’s argument that the district court’s final decision on the issue rendered any error harmless. Although the district court dismissed HVLPO2’s motion for a new trial, such a motion “does not convert the jury verdict into a bench trial” as the court doesn’t make an independent inquiry in such situations.

New Trial Necessary

In discussing the ineffectiveness of the limiting instruction to the jury, the Federal Circuit found that within the Eleventh Circuit, which includes Northern Illinois where the case originated, a new trial is required in cases where court error “has caused substantial prejudice to the affected party,” using language from the Eleventh Circuit’s 2004 decision in Peat, Inc. v. Vanguard Research, Inc. By not following disclosure rules required of parties presenting expert testimony, HVLPO2 was deprived of the chance to raise an objection under Rule 26 or bring a Daubert challenge. The circumvention of disclosure requirements is not harmless error, the Federal Circuit found. This error wasn’t cured when the district court judge told the jury “that it is for the jury, not a witness, to decide obviousness,” as this was essentially what a court would inform a jury when it considers expert testimony on a subject. The Federal Circuit remanded the case to the Northern District of Illinois for a new trial without reaching any of the other issues on appeal.


Image Source: Deposit Photos
Vector ID: 10042948
Copyright: almoond 

The Author

Steve Brachmann

Steve Brachmann is a freelance journalist located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He writes about technology and innovation. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients and is available for research projects and freelance work.

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