United States District Court, D. Connecticut
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 ...