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Cardiaq Valve Technologies, Inc. v. Neovasc Inc.

United States District Court, D. Massachusetts

April 25, 2016

CARDIAQ VALVE TECHNOLOGIES, INC., Plaintiff,
v.
NEOVASC INC. and NEOVASC TIARA INC., Defendants.

OMNIBUS MEMORANDUM AND ORDER RESOLVING MOTIONS TO EXCLUDE AND MOTIONS IN LIMINE

ALLISON D. BURROUGHS, UNITED STATES DISTRICT COURT JUDGE

Plaintiff CardiAQ Valve Technologies, Inc. (“CardiAQ”) and Defendants Neovasc Inc. and Neovasc Tiara Inc. (collectively “Neovasc”) have filed several motions to exclude testimony and motions in limine. [ECF Nos. 340, 344, 345, 349, 351, 352, 354, 358]. On April 11, 2016, the parties appeared at a pre-trial conference and supplemented their briefing with oral argument. As previewed at the conference and explained further below, the court now rules as follows:

I. CARDIAQ’S MOTIONS

a. CardiAQ’s Motion in Limine No. 1 to Exclude any Exhibit or Other Evidence Using Neovasc’s “Public Doman” Production Prefix [ECF No. 345]

As discussed at the pre-trial conference, trial exhibits may not bear the “PUBLICDOMAIN” production prefix. This prefix is unduly prejudicial given the issues in this case. The parties do not need to remove the “CONFIDENTIAL” or “ATTORNEY’S EYES ONLY” production prefix from trial exhibits given the minimal prejudice, the work it would require to remove that information from every trial exhibit, and the limiting instruction that will be given to the jury. To the extent either party is particularly concerned with the “CONFIDENTIAL” or “ATTORNEY’S EYES ONLY” production prefix being included on a specific trial exhibit, however, the opposing counsel should be notified.

b. CardiAQ’s Motion in Limine No. 2 to Exclude Evidence or Argument Regarding the Sufficiency of CardiAQ’s Revised Disclosure of Trade Secrets [ECF No. 349]

During the pre-trial conference, the parties were generally in agreement regarding Motion in Limine No. 2. During discovery, CardiAQ disclosed a list of its alleged trade secrets, and at trial, Neovasc may challenge whether these are in fact trade secrets and whether they actually match what CardiAQ possessed in 2009-2010. Neovasc can contest, question and challenge the accuracy of CardiAQ’s written list of alleged trade secret claims. The process through which the list came about-during discovery and following motion practice-is irrelevant. Neovasc can establish that CardiAQ created the list after the litigation began, but otherwise, any evidence regarding the discovery dispute and whether the list fulfilled CardiAQ’s discovery obligations is excluded.

c. CardiAQ’s Motion in Limine No. 3 to Exclude any Argument or Evidence Regarding the Safety of the CardiAQ TMVI Device [ECF No. 351]

As discussed at the pre-trial conference, this issue will largely be resolved on a case-by-case basis at trial. Generally, the Court will not allow Dr. Little to opine about the overall safety of CardiAQ’s device, because such testimony is irrelevant and unduly prejudicial. Dr. Little may only discuss the safety of CardiAQ’s device as it relates to individual patient outcomes and only to the extent it is directly relevant to the functioning of the anchoring mechanism at issue in this case.

d. CardiAQ’s Motion in Limine No. 4 to Preclude Neovasc From Offering Any Evidence or Argument Regarding CardiAQ’s Request for Injunctive Relief or the Financial Impact of Any Damages Award [ECF No. 352]

As discussed at the pre-trial conference, any evidence and testimony concerning CardiAQ’s request for injunctive relief will be excluded at trial. Because the jury will not decide whether to impose an injunction, testimony and evidence regarding an injunction, and its potential impacts, are irrelevant and inadmissible at trial.[1]

In addition, Neovasc may not present any evidence about its ability to pay a damages award or the impact of any damages award. Typically, “the financial standing of the defendant is inadmissible as evidence in determining the amount of compensatory damages to be awarded.” Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977). Neovasc contends that this is a special case-that because CardiAQ is seeking a “reasonable royalty” measure of damages, its financial condition is relevant to the royalty it would have been willing to pay during a hypothetical negotiation. “A comprehensive (but unprioritized and often overlapping) list of relevant factors for a reasonable royalty calculation appears in Georgia-Pacific Corp. v. United States Plywood Corp., 318 F.Supp. 1116, 1120 (S.D.N.Y. 1970).” Trustees of Boston Univ. v. Everlight Elecs. Co., No. CV 12-11935-PBS, 2015 WL 6408118, at *1 (D. Mass. Oct. 23, 2015) (quoting ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010)). The parties’ financial condition is not one of the fifteen factors listed in Georgia-Pacific Corp. Nonetheless, Neovasc cites two non-binding decisions that allowed the defendant’s financial condition to be taken into account for calculating a reasonable royalty. See Innovention Toys, LLC v. MGA Entm’t Inc., No. 01-6510, 2012 U.S. Dist. LEXIS 156733, at *12 (E.D. La. Nov. 1, 2012); Century Wrecker Corp. v. E.R. Buske Mfg. Co., 898 F.Supp. 1334, 1338 (N.D. Iowa 1995), on reconsideration in part (Sept. 29, 1995). The Court is not persuaded by either case. In Innovention Toys, plaintiff requested that defendant’s financial condition be admissible, only after the defendant had “put their wealth and size at issue by arguing that Plaintiff [was] too small to compete.” 2012 U.S. Dist. LEXIS 156733, at *10. And in Century Wrecker Corp., though evidence of defendant’s financial condition was allowed, it was “entitled to very little weight.” 898 F.Supp. at 1338. The Court finds that the relevance of Neovasc’s financial condition, which even under Neovasc’s theory would be one of many factors considered to compute the reasonable royalty, is outweighed by the potential danger that the jury could award damages unduly based on Neovasc’s ability to pay. See C & C Jewelry Mfg., Inc. v. West, No. C09-01303 JF HRL, 2011 WL 2559638, at *1 (N.D. Cal. June 28, 2011) (finding that plaintiff’s overall profitability, including revenues derived from non-accused products, was irrelevant to the determination of a reasonable royalty).

Neovasc’s request that evidence of its financial condition be admitted for purposes of determining any punitive damages is similarly denied. Neovasc cites two non-binding cases, arising under different statutes and contexts. It has not identified a single case in which the parties’ financial condition was admitted for purposes of determining whether (1) double or treble damages should be awarded under Mass. Gen. L. ch. 93A or (2) double damages should be awarded under Mass. Gen. L. ch. 93, § 42, which are the punitive damages sought by CardiAQ. The language of the statutes, and case law interpreting the statutes, does not support admitting the parties’ financial status. See, e.g., Haddad Motor Grp., Inc. v. Karp, Ackerman, Skabowski & Hogan, P.C., 603 F.3d 1, 4 n.3 (1st Cir. 2010) (“[Chapter 93A] permits the award of double or treble actual damages at the judge’s discretion for ...


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