Cutsforth, Inc. v. LEMM Liquidating Company, LLC et al, 0-12-cv-01200 (MND March 15, 2017, Order) (Brisbois, MJ)
Monday, March 20, 2017
Market Participant's Subjective Beliefs Not Relevant to Lost Profits Claim
The court granted a third party customer's motion to quash defendants' deposition subpoenas regarding plaintiff's lost profits claim because the discovery was not relevant. "Defendants argue that showing that [their customer] would not have purchased Plaintiff’s [product] even if the [accused product] was not on the market would defeat Plaintiff’s lost-profits claim to the extent that it is based on Defendants’ sales to [their customer] because it would demonstrate that Plaintiff would not have made the sales 'but for' the [accused product]. . . . Defendants contend that there is no need to look to [a] hypothetical marketplace when evidence about a what market participant would have done is available from the market participant itself -- in this case, [defendant's customer]. . . . The parties have not provided, nor has this Court’s independent research discovered any case law directly addressing the relevance of a market participant’s belief that if the infringing product had not been available, the market participant would have purchased no product rather than purchasing the patented product. . . . [T]he focus is not the subjective desires or retroactive beliefs of market participants, but rather the appropriate focus is the objective analysis of whether other acceptable noninfringing substitutes were available. . . . None of the factors for consideration under either the Panduit test or the two-supplier market test includes contemplation of subjective buying decisions by market participants, which is the information Defendants’ subpoena seeks to elicit."