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Exmark Manufacturing Company Inc. v. Briggs & Stratton Corp.

United States District Court, D. Nebraska

December 10, 2018

EXMARK MANUFACTURING COMPANY INC., Plaintiff,
v.
BRIGGS & STRATTON CORPORATION, Defendant.

          ORDER

          JOSEPH F. BATAILLON, SENIOR UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the parties' motions in limine, Briggs & Stratton Corporation's (“Briggs”) Filing Nos. 789, and Exmark Manufacturing Company Inc.'s (“Exmark”) motions in Limine Filing No. 794 and No. 5 Filing No. 864.

         I. LAW

         Although the motion in limine is an important tool available to the trial judge to ensure the expeditious and evenhanded management of the trial proceedings, performing a gatekeeping function and sharpening the focus for later trial proceedings, some evidentiary submissions, cannot be evaluated accurately or sufficiently by the trial judge in such a procedural environment. Jonasson v. Lutheran Child and Family Servs., 115 F.3d 436, 440 (7th Cir. 1997). A motion in limine is appropriate for “evidentiary submissions that clearly ought not be presented to the jury because they clearly would be inadmissible for any purpose.” Id. In other instances, it is necessary to defer ruling until during trial, when the trial judge can better estimate the impact of the evidence on the jury. Id. The Eighth Circuit has noted that “[e]videntiary rulings made by a trial court during motions in limine are preliminary and may change depending on what actually happens at trial.” Walzer v. St. Joseph State Hosp., 231 F.3d 1108, 1113 (8th Cir. 2000). To the extent that a party challenges the probative value of the evidence, an attack upon the probative sufficiency of evidence relates not to admissibility but to the weight of the evidence and is a matter for the trier of fact to resolve. United States v. Beasley, 102 F.3d 1440, 1451 (8th Cir. 1996).

         II. DISCUSSION

         A. Briggs's Motion in Limine (Filing No. 789)

         1. Motion in Limine to Exclude References to, Evidence of, and Argument regarding the MTD, Husqvarna, and Schiller Agreements

         Briggs moves to preclude three sets of settlement and license agreements-a November 25, 2015 Settlement Agreement between Exmark and Briggs's former co-defendant Schiller (Filing No. 792-2, Exhibit (“Ex.”) 1); a January 1, 2018 Settlement and License Agreements between Toro/Exmark and MTD (Filing No. 792-3, Filing No. 792-4, Exs. 2-3), and April 1, 2018 Settlement and License Agreements between Toro/Exmark and Husqvarna (Filing No. 792-5, Filing No. 792-6, Exs. 4-5) (together, the “Agreements”). The Court is advised that the parties have reached an agreement with respect to the MTD and Husqvarna agreements and the motion will be denied as moot with respect to those agreements.

         With respect to the Schiller agreement, Briggs argues that the Schiller agreement was premised on the jury verdict award from the 2015 trial, which in turn was premised on expert testimony that was later rejected by the Court of Appeals for the Federal Circuit (“Federal Circuit”). Further, it contends the Schiller agreement was entered into under threat of bankruptcy and sixteen years after the hypothetical negotiation at issue. It argues the agreement has little, if any, probative value and will unfairly prejudice Briggs.

         Exmark opposes the motion saying there is evidence that the settlement was not, in fact, based on the 2015 verdict. It also contends the evidence is probative and argues that Briggs intends to rely on the Scag agreement which was also entered into years after the hypothetical negotiation and covers patents beyond the '863 patent. It argues that similarities and differences between the Schiller agreement and the circumstances of the hypothetical negotiation go to the weight of the agreement in the jury's damages analysis, not its admissibility.

         Depending on the circumstances, a license agreement entered into in settling an earlier patent suit sometimes is admissible in a later patent suit involving the value of the patented technology, and sometimes is not. Prism Techs. LLC v. Sprint Spectrum L.P., 849 F.3d 1360, 1368-69 (Fed. Cir.), cert. denied, 138 S.Ct. 429 (2017). Rule 403 provides for the exclusion of otherwise relevant evidence when the probative value of that evidence is substantially outweighed by the danger of unfair prejudice, confusing the issues, or misleading the jury. LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 77 (Fed. Cir. 2012). The particulars of the case that was settled and the settlement, as well as of the case in which the settlement is offered as evidence, matter to the Rule 403 balance. Prism Techs., 849 F.3d at 1370. The Federal Circuit has approved reliance on licenses, which often will not be in identical circumstances, as long as reasonable adjustments for differences in contexts are made. Chrimar Holding Co., LLC v. ALE USA Inc., 732 Fed.Appx. 876, 887 (Fed. Cir. 2018); see, e.g., Prism Techs., 849 F.3d at 1368-70 (noting a strong showing in favor of admission). Circumstances that weigh in favor of admission of a settlement agreement include a showing of comparable uses of the patent's technology, that the agreement was reached after the litigation was far enough along that the record was fully developed (enhancing the reliability of the basis on which the parties were assessing the likely outcome); the timing of the agreement is such that a large share of litigation costs is already spent (reducing the role of litigation-cost avoidance in the settlement decision), and absence of a risk of enhanced damages. See, e.g., Prism Techs., 849 F.3d at 1369-71. The formulation of the normal settlement calculus for litigants-"enumerating ‘the cost of the predicted judgment,' ‘its probability,' and ‘costs of further litigation'- helps identify why and when a district court, conducting the inquiry required by Rule 403, can find earlier patent-suit settlements admissible in valuing a patented technology.” Id. at 1369 (quoting Evans v. Jeff D., 475 U.S. 717, 734 (1986)).

         The Court is unable to assess the probative value of the challenged agreement in the context of a pretrial motion. Accordingly, the motion will be denied at this time without prejudice to reassertion at trial.

         2. Motion in Limine to Exclude References to, Evidence of, and Argument regarding Constructions of Claim Terms that Deviate from the Court's Constructions

         Briggs argues that other claim constructions are improper because they are irrelevant under Federal Rule of Civil Procedure 401, unfairly prejudicial, confusing, and misleading pursuant to Rule 403, and would rely on different constructions than those used to find infringement in contravention of Federal Circuit precedent. Exmark agrees that the parties should not deviate from the Court's constructions, and contends that an order to that effect is necessary. Accordingly, the Court finds the motion should be granted.

         3. Motion in Limine to Exclude Argument that Mulching Mowers are not Prior Art

         Briggs argues that mulching mowers are relevant to damages to show the nominal or incremental value of the baffle claimed in the ‘863 patent, which Exmark argues was a big advance over the prior art and is a market differentiator. Exmark contends the evidence is relevant only to the invalidity defense and is now moot.

         After the first trial, the Federal Circuit affirmed this Court's evidentiary ruling limiting prior art evidence on damages to side-discharge mowers, finding that Claim 1 of the '863 patent was directed only to side-discharge mowers. SeeExmark Mfg. Co. v. Briggs & Stratton Power Prods. Grp, LLC, 879 F.3d 1332, 1352 (Fed. Cir. 2018). The Court sees no reason to depart from its prior ruling but will reserve ruling to see how the evidence develops. The proponent of the evidence will be required to establish relevance and ...


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