Probatter Sports, LLC v. Sports Tutor, Inc.

          MEMORANDUM OF DECISION ON MOTION TO EXCLUDE ALL EVIDENCE AND ARGUMENT CONCERNING DAMAGES [DKT. 511]

          HON. VANESSA L. BRYANT, UNITED STATES DISTRICT JUDGE

         Plaintiff ProBatter Sports, LLC (“ProBatter”) brings this patent infringement action against Defendant Sports Tutor, Inc. (“Sports Tutor”). The Court granted summary judgment in ProBatter's favor on the question of infringement and thereafter conducted a five-day bench trial on the questions of invalidity and relief finding in ProBatter's favor again. The case proceeded to the damages phase and the parties commenced damages discovery. Before the Court is Sports Tutor's Motion to Exclude All Evidence and Argument Concerning Damages. Sports Tutor argues that the Court should preclude all evidence and argument on damages because ProBatter failed to produce a royalty-free license to Sports Tutor in discovery and purposefully failed to disclose its existence in response to direct questioning by the Court. For the foregoing reasons, Sports Tutor's Motion is GRANTED IN PART AND DENIED IN PART.

         Procedural and Factual Background

         ProBatter initially disclosed lost profits as the measure of damages. Nearly seven years later and long after the close of discovery, ProBatter disclosed reasonable royalty as the measure of damages in its proposed findings of fact and conclusions of law, submitted in conjunction with the joint trial memorandum. In a hearing on Sports Tutor's objection to changing the measure of damages, ProBatter represented to the Court that it granted only one license which was to third-party Joyner Technologies. ProBatter produced this license to Sports Tutor. Three years ago, on March 23, 2016, this Court denied Sports Tutor's motion to preclude evidence of a reasonable royalty to prove damages and ruled that all interests would be best served by providing Sports Tutor with two additional months to conduct discovery on damages measured by the reasonable royalty and ProBatter one month to conduct discovery only with respect to the new evidence. [Dkt. No. 469 (Mem. of Decision)].

         More than two years after the Court's order, in April 2018, Sports Tutor issued a subpoena to Sports Attack, LLC (”Sports Attack”) and deposed its corporate representative, Amanda Pratt, the following month. Sports Attack produced an agreement between ProBatter and Sports Attack dated October 21, 2008 (the “2008 Agreement”). Sports Tutor now maintains that ProBatter was dishonest in its representations to the Court because the 2008 Agreement is a royalty-free license to Sports Attack. Sports Tutor also argues that ProBatter purposefully failed to produce the 2008 Agreement in discovery. It claims that ProBatter only produced the 2008 Agreement when it realized that Sports Attack would produce the document in response to Sports Tutor's subpoena. As a sanction for ProBatter's conduct, Sports Tutor asks the Court to exclude all evidence and argument concerning damages.

         Sports Tutor argues that ProBatter had no excuse for failing to disclose this relevant and comparable license. Sports Tutor claims that it suffered added costs and unnecessary litigation risks as a result of ProBatter's conduct. In response, ProBatter claims that its damages case cannot be excluded because it had no obligation to disclose the 2008 Agreement. ProBatter argues that the 2008 Agreement is not a binding and enforceable license under Connecticut law because it was subject to entering into a formal agreement and the parties did not take such action until July 2018.

         The issue before the Court therefore is whether the agreement ProBatter entered into with Sports Attack which ProBatter failed to disclose and told the Court did not exist was a license agreement.

         The first paragraph of the 2008 Agreement states:

This will outline our relationship with respect to joint collaboration on Sports Attack's programmable, 3 wheel pitching machine currently in development (“the E-Hack Attack Machine”) and its adaption for use in combination with a ProBatter video conversion system (“the ProBatter Video Kit”). The following general terms are intended to be the basis for a formal agreement between ProBatter Sports and Sports Attack, LLC. In the interim, however, this letter shall [sic] it be construed as a binding agreement.

         The following paragraph discusses the consulting arrangement between the parties and their respective rights and obligations:

ProBatter will provide Sports Attack with reasonable consulting services to further its development of the Programmable Hack Attack machine and facilitate its adaptation with the ProBatter Video Kit. Such services will include, but not be limited to, consulting provided by ProBatter's engineering department and outside programmers and control engineers as well as access to ProBatter's object and source codes and databases for different pitches. ProBatter will not charge Sports Attack for engineering time provided by internal ProBatter engineering and test personnel but if the use of ProBatter's outside engineering consultants and programmers are required, Sports Attack shall pay for the actual cost of such consultants and programmers subject, of course, to prior written approval by Sports Attack. ProBatter engineering agrees to make an annual trip to Nevada to work with Sports Attack at ProBatter's own cost and expense but if additional trips are required, Sports Attack shall reimburse ProBatter for any reasonable travel expenses associated therewith. All rights in and to the work performed by ProBatter on or in conjunction with the E-Hack Attack Machine relating to non-video technology shall be deemed owned by Sports Attack. In that connection, ProBatter will, without any requirement of further consideration, assign any right, title, or interest it may have or claim to have in such work product to Sports Attack and will take such further actions, including the execution and delivery of instruments of conveyance, as may be appropriate to protect Sports Attack's rights in such work product. However, ProBatter shall be deemed to own all right, title and interest in and to video technology. In that connection, Sports Attack will, without any requirement of further consideration, assign any right, title, or interest it may have or claim to have in such work product to ProBatter and will take such further actions, including the execution and delivery of instruments of conveyance, as may be appropriate to protect ProBatter's rights is [sic] such work product.

         The next paragraph states:

For so long as the parties are working together, ProBatter shall grant Sports Attack a royalty free license under its U.S. and international patents for programmable pitching machines subject to entering into an appropriate license agreement. ProBatter agrees to take reasonable steps to enforce its right in such patents against third party infringers.

         In the final two paragraphs, the parties agree that Sports Attack shall sell the E-Hack Attack Machine to ProBatter at its lowest dealer or “favored customer price.” The parties also state that Sports Attack intends for ProBatter to be its exclusive video customer for at least two years subject to certain terms and during the exclusivity period Sports Attack agrees not to sell the E-Hack Attack Machine to any entity that it knows or has reason to know intends to incorporate a video conversion kit with such E-Hack Attack Machine.

         Analysis

         A. The Parties Intended to be Bound by the 2008 Agreement.

         The threshold issue is whether the 2008 Agreement is binding. The Court considers the general rules of contract interpretation and the law surrounding license agreements to determine whether the parties intended to be bound by the 2008 Agreement. The Connecticut Appellate ...