IBM v. Groupon, Inc.

IBM v. Groupon, Inc.

Opinion

MEMORANDUM ORDER

At Wilmington this 15th day of June, 2018, having reviewed the proposed pretrial order and exhibits to it (D.I. 305) ("PTO"),¹ IT IS HEREBY ORDERED that:

1. Plaintiff International Business Machines Corporation's ("IBM" or "Plaintiff") motion in limine ("MIL") No. 1, to exclude any reference, argument, evidence, or testimony concerning the workload or disparagement of the PTO, is GRANTED IN PART and DENIED IN PART. As Defendant Groupon, Inc. ("Groupon" or "Defendant") [*2]  agrees (see Def. Resp. at 1), neither party will be permitted to disparage the PTO.² The parties may, however, present evidence and argument consistent with what the jury will learn from the Federal Judicial Center video (e.g., "Examiners have a lot of work to do, and no process is perfect."): for example, the PTO has a heavy workload and all institutions make mistakes. Neither party, however, may present evidence or argument to the effect that the PTO and/or individual examiners have an incentive (financial or otherwise) to issue patents. The evidence and argument the Court is permitting is probative of the validity of the patents-in-suit, which is a subject of the forthcoming trial, and that probative value is not substantially outweighed by unfair prejudice or any other concern of Federal Rule of Evidence 403.

2. IBM's MIL #2, to preclude reference, argument, evidence, or testimony concerning IBM's allegedly declining revenue or profits, is DENIED. IBM evidently intends to introduce itself to the jury, including presenting evidence as to its "current profits or revenue" (Pl. Reply at 1 n.7), history of innovation, investment in research and development, and patent portfolio. Evidence of IBM's purportedly [*3]  declining revenues is probative to place IBM's "background" evidence in context. Issues relating to IBM's licensing and enforcement of its patent portfolio may also be pertinent to non-obviousness and damages. None of the concerns of Rule 403 — including unfair prejudice and risk of jury confusion — substantially outweigh the probative value.

3. IBM's MIL #3, to preclude Groupon from offering evidence or argument relating to opinions or advice of counsel regarding Groupon's defenses prior to this lawsuit, and Groupon's MIL #1, to preclude IBM from presenting reference, evidence, argument and testimony regarding the substance of the parties' pre-suit exchanges and failure to obtain advice of counsel, are both GRANTED. IBM filed this lawsuit on March 2, 2016. Prior to the lawsuit, the parties entered into a Confidential Disclosure Agreement ("Agreement"), providing (among other things) that IBM "ha[s] not demanded, nor do[es] [it] expect [that Groupon] will cease or terminate any" use and provision of its products and services and further providing that IBM "shall not seek to enhance [] damages by asserting willful patent infringement" with respect to the period of August 12, 2014 through June [*4]  30, 2015. The substance of pre-suit communications occurring during this period is not relevant to any issue being litigated at the forthcoming trial (including willfulness and indirect infringement), particularly given that Groupon has stipulated to the dates on which it became aware of each of the patents-in-suit. Even were there probative value, it would be substantially outweighed by the unfair prejudice to Groupon, which reasonably relied on the parties' Agreement in (among other things) choosing not to assert reliance on advice of counsel as a defense to willfulness. Additionally, admitting the substance of the parties' presuit communications would he inconsistent with Federal Rule of Evidence 408. As IBM recognizes, 35 U.S.C. § 298 provides: "The failure of an infringer to obtain the advice of counsel . . . may not be used to prove that the accused infringer willfully infringed." Groupon is precluded from presenting evidence that it obtained advice of counsel given its decision not to assert reliance on advice of counsel in a timely manner in the course of this litigation.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.